diff --git a/builder.go b/builder.go
index 9124f76ac1..5ccce8293e 100644
--- a/builder.go
+++ b/builder.go
@@ -3,6 +3,7 @@ package docker
 import (
 	"fmt"
 	"github.com/dotcloud/docker/utils"
+	"io/ioutil"
 	"os"
 	"path"
 	"time"
@@ -119,7 +120,31 @@ func (builder *Builder) Create(config *Config) (*Container, error) {
 	if err := container.ToDisk(); err != nil {
 		return nil, err
 	}
-	// Step 3: register the container
+
+	// Step 3: if hostname, build hostname and hosts files
+	container.HostnamePath = path.Join(container.root, "hostname")
+	ioutil.WriteFile(container.HostnamePath, []byte(container.Config.Hostname+"\n"), 0644)
+
+	hostsContent := []byte("127.0.0.1\tlocalhost\n" +
+		"::1\t\tlocalhost ip6-localhost ip6-loopback\n" +
+		"fe00::0\t\tip6-localnet\n" +
+		"ff00::0\t\tip6-mcastprefix\n" +
+		"ff02::1\t\tip6-allnodes\n" +
+		"ff02::2\t\tip6-allrouters\n")
+
+	container.HostsPath = path.Join(container.root, "hosts")
+
+	if container.Config.Domainname != "" {
+		hostsContent = append([]byte("127.0.0.1\t"+container.Config.Hostname+"."+container.Config.Domainname+" "+container.Config.Hostname+"\n"+
+			"::1\t\t"+container.Config.Hostname+"."+container.Config.Domainname+" "+container.Config.Hostname+"\n"), hostsContent...)
+	} else {
+		hostsContent = append([]byte("127.0.0.1\t"+container.Config.Hostname+"\n"+
+			"::1\t\t"+container.Config.Hostname+"\n"), hostsContent...)
+	}
+
+	ioutil.WriteFile(container.HostsPath, hostsContent, 0644)
+
+	// Step 4: register the container
 	if err := builder.runtime.Register(container); err != nil {
 		return nil, err
 	}
diff --git a/container.go b/container.go
index 488cba3229..ecbf8e561f 100644
--- a/container.go
+++ b/container.go
@@ -42,6 +42,8 @@ type Container struct {
 
 	SysInitPath    string
 	ResolvConfPath string
+	HostnamePath   string
+	HostsPath      string
 
 	cmd       *exec.Cmd
 	stdout    *utils.WriteBroadcaster
@@ -702,9 +704,6 @@ func (container *Container) Start(hostConfig *HostConfig) error {
 		params = append(params, "-e", "TERM=xterm")
 	}
 
-	params = append(params, "-h", container.Config.Hostname)
-	params = append(params, "-d", container.Config.Domainname)
-
 	// Setup environment
 	params = append(params,
 		"-e", "HOME=/",
diff --git a/lxc_template.go b/lxc_template.go
index d357c02b43..7013581232 100644
--- a/lxc_template.go
+++ b/lxc_template.go
@@ -30,6 +30,10 @@ lxc.network.ipv4 = {{.NetworkSettings.IPAddress}}/{{.NetworkSettings.IPPrefixLen
 {{$ROOTFS := .RootfsPath}}
 lxc.rootfs = {{$ROOTFS}}
 
+# enable domain name support
+lxc.mount.entry = {{.HostnamePath}} {{$ROOTFS}}/etc/hostname none bind,ro 0 0
+lxc.mount.entry = {{.HostsPath}} {{$ROOTFS}}/etc/hosts none bind,ro 0 0
+
 # use a dedicated pts for the container (and limit the number of pseudo terminal
 # available)
 lxc.pts = 1024
diff --git a/sysinit.go b/sysinit.go
index fe741382c3..34f1cbdac6 100644
--- a/sysinit.go
+++ b/sysinit.go
@@ -4,7 +4,6 @@ import (
 	"flag"
 	"fmt"
 	"github.com/dotcloud/docker/utils"
-	"io/ioutil"
 	"log"
 	"os"
 	"os/exec"
@@ -93,8 +92,7 @@ func SysInit() {
 	var u = flag.String("u", "", "username or uid")
 	var gw = flag.String("g", "", "gateway address")
 	var workdir = flag.String("w", "", "workdir")
-	var hostname = flag.String("h", "", "hostname")
-	var domainname = flag.String("d", "", "domainname")
+
 	var flEnv ListOpts
 	flag.Var(&flEnv, "e", "Set environment variables")
 
@@ -103,7 +101,6 @@ func SysInit() {
 	cleanupEnv(flEnv)
 	setupNetworking(*gw)
 	setupWorkingDirectory(*workdir)
-	setupHostname(*hostname, *domainname)
 	changeUser(*u)
 	executeProgram(flag.Arg(0), flag.Args())
 }