diff -rup libvirt-0.7.7/src/qemu/libvirtd_qemu.aug new/src/qemu/libvirtd_qemu.aug
--- libvirt-0.7.7/src/qemu/libvirtd_qemu.aug	2010-06-17 12:38:52.998946000 -0400
+++ new/src/qemu/libvirtd_qemu.aug	2010-06-17 12:39:28.504148000 -0400
@@ -39,6 +39,7 @@ module Libvirtd_qemu =
                  | str_entry "hugetlbfs_mount"
                  | bool_entry "relaxed_acs_check"
                  | bool_entry "vnc_allow_host_audio"
+                 | bool_entry "clear_emulator_capabilities"
 
    (* Each enty in the config is one of the following three ... *)
    let entry = vnc_entry
diff -rup libvirt-0.7.7/src/qemu/qemu.conf new/src/qemu/qemu.conf
--- libvirt-0.7.7/src/qemu/qemu.conf	2010-06-17 12:38:53.001953000 -0400
+++ new/src/qemu/qemu.conf	2010-06-17 12:39:28.508149000 -0400
@@ -178,3 +178,12 @@
 # QEMU_AUDIO_DRV environment variable when using VNC.
 #
 # vnc_allow_host_audio = 0
+
+# If clear_emulator_capabilities is enabled, libvirt will drop all
+# privileged capabilities of the QEmu/KVM emulator. This is enabled by
+# default.
+#
+# Warning: Disabling this option means that a compromised guest can
+# exploit the privileges and possibly do damage to the host.
+#
+# clear_emulator_capabilities = 1
diff -rup libvirt-0.7.7/src/qemu/qemu_conf.c new/src/qemu/qemu_conf.c
--- libvirt-0.7.7/src/qemu/qemu_conf.c	2010-06-17 12:38:53.010946000 -0400
+++ new/src/qemu/qemu_conf.c	2010-06-17 12:39:28.526151000 -0400
@@ -103,6 +103,7 @@ int qemudLoadDriverConfig(struct qemud_d
 
     /* Setup critical defaults */
     driver->dynamicOwnership = 1;
+    driver->clearEmulatorCapabilities = 1;
 
     if (!(driver->vncListen = strdup("127.0.0.1"))) {
         virReportOOMError();
@@ -354,6 +355,10 @@ int qemudLoadDriverConfig(struct qemud_d
     CHECK_TYPE ("vnc_allow_host_audio", VIR_CONF_LONG);
     if (p) driver->vncAllowHostAudio = p->l;
 
+    p = virConfGetValue (conf, "clear_emulator_capabilities");
+    CHECK_TYPE ("clear_emulator_capabilities", VIR_CONF_LONG);
+    if (p) driver->clearEmulatorCapabilities = p->l;
+
     virConfFree (conf);
     return 0;
 }
diff -rup libvirt-0.7.7/src/qemu/qemu_conf.h new/src/qemu/qemu_conf.h
--- libvirt-0.7.7/src/qemu/qemu_conf.h	2010-06-17 12:38:53.015945000 -0400
+++ new/src/qemu/qemu_conf.h	2010-06-17 12:39:28.531146000 -0400
@@ -129,8 +129,8 @@ struct qemud_driver {
     ebtablesContext *ebtables;
 
     unsigned int relaxedACS : 1;
-
     unsigned int vncAllowHostAudio : 1;
+    unsigned int clearEmulatorCapabilities : 1;
 
     virCapsPtr caps;
 
diff -rup libvirt-0.7.7/src/qemu/qemu_driver.c new/src/qemu/qemu_driver.c
--- libvirt-0.7.7/src/qemu/qemu_driver.c	2010-06-17 12:38:52.988953000 -0400
+++ new/src/qemu/qemu_driver.c	2010-06-17 12:39:28.542147000 -0400
@@ -2699,7 +2699,7 @@ static int qemudStartVMDaemon(virConnect
                               int stdin_fd) {
     const char **argv = NULL, **tmp;
     const char **progenv = NULL;
-    int i, ret;
+    int i, ret, runflags;
     struct stat sb;
     int *tapfds = NULL;
     int ntapfds = 0;
@@ -2893,9 +2893,16 @@ static int qemudStartVMDaemon(virConnect
     for (i = 0 ; i < ntapfds ; i++)
         FD_SET(tapfds[i], &keepfd);
 
+    VIR_DEBUG("Clear emulator capabilities: %d",
+              driver->clearEmulatorCapabilities);
+    runflags = VIR_EXEC_NONBLOCK;
+    if (driver->clearEmulatorCapabilities) {
+        runflags |= VIR_EXEC_CLEAR_CAPS;
+    }
+
     ret = virExecDaemonize(argv, progenv, &keepfd, &child,
                            stdin_fd, &logfile, &logfile,
-                           VIR_EXEC_NONBLOCK | VIR_EXEC_CLEAR_CAPS,
+                           runflags,
                            qemudSecurityHook, &hookData,
                            pidfile);
     VIR_FREE(pidfile);
diff -rup libvirt-0.7.7/src/qemu/test_libvirtd_qemu.aug new/src/qemu/test_libvirtd_qemu.aug
--- libvirt-0.7.7/src/qemu/test_libvirtd_qemu.aug	2010-06-17 12:38:53.018948000 -0400
+++ new/src/qemu/test_libvirtd_qemu.aug	2010-06-17 12:39:28.546145000 -0400
@@ -99,6 +99,8 @@ hugetlbfs_mount = \"/dev/hugepages\"
 relaxed_acs_check = 1
 
 vnc_allow_host_audio = 1
+
+clear_emulator_capabilities = 0
 "
 
    test Libvirtd_qemu.lns get conf =
@@ -208,3 +210,5 @@ vnc_allow_host_audio = 1
 { "relaxed_acs_check" = "1" }
 { "#empty" }
 { "vnc_allow_host_audio" = "1" }
+{ "#empty" }
+{ "clear_emulator_capabilities" = "0" }