diff --git a/docs/formatnetwork.html.in b/docs/formatnetwork.html.in
index ca0e20709c902657534fff01369cb1f44c0cc940..7cf3f69d52049a498db087258bb664f2a44410c9 100644
--- a/docs/formatnetwork.html.in
+++ b/docs/formatnetwork.html.in
@@ -82,7 +82,7 @@
     <pre>
         ...
         &lt;bridge name="virbr0" stp="on" delay="5" macTableManager="libvirt"/&gt;
-        &lt;domain name="example.com"/&gt;
+        &lt;domain name="example.com" localOnly="no"/&gt;
         &lt;forward mode="nat" dev="eth0"/&gt;
         ...</pre>
 
@@ -151,6 +151,16 @@
         a <code>&lt;forward&gt;</code> mode of "nat" or "route" (or an
         isolated network with no <code>&lt;forward&gt;</code>
         element). <span class="since">Since 0.4.5</span>
+
+        <p>
+          If the optional <code>localOnly</code> attribute on the
+          <code>domain</code> element is "yes", then DNS requests under
+          this domain will only be resolved by the virtual network's own
+          DNS server - they will not be forwarded to the host's upstream
+          DNS server.  If <code>localOnly</code> is "no", and by
+          default, unresolved requests <b>will</b> be forwarded.
+          <span class="since">Since 1.2.12</span>
+        </p>
       </dd>
       <dt><code>forward</code></dt>
       <dd>Inclusion of the <code>forward</code> element indicates that
diff --git a/docs/schemas/network.rng b/docs/schemas/network.rng
index a6b8cb2be7d63cbeaf8a1d2928cec26fd6b4857d..56b6086d8ffd250e1a96ce4b3a8fbc9aa6433d80 100644
--- a/docs/schemas/network.rng
+++ b/docs/schemas/network.rng
@@ -234,6 +234,9 @@
         <optional>
           <element name="domain">
             <attribute name="name"><ref name="dnsName"/></attribute>
+            <optional>
+              <attribute name="localOnly"><ref name="virYesNo"/></attribute>
+            </optional>
           </element>
         </optional>
 
diff --git a/src/conf/network_conf.c b/src/conf/network_conf.c
index 23ec369c0e8b397b671474f6d891da7b22e88c66..f947d89108f5c4659c5d5948d85cb21032f09cc8 100644
--- a/src/conf/network_conf.c
+++ b/src/conf/network_conf.c
@@ -1854,6 +1854,18 @@ virNetworkDefParseXML(xmlXPathContextPtr ctxt)
 
     /* Parse network domain information */
     def->domain = virXPathString("string(./domain[1]/@name)", ctxt);
+    tmp = virXPathString("string(./domain[1]/@localOnly)", ctxt);
+    if (tmp) {
+        def->domainLocalOnly = virTristateBoolTypeFromString(tmp);
+        if (def->domainLocalOnly <= 0) {
+            virReportError(VIR_ERR_XML_ERROR,
+                           _("Invalid domain localOnly setting '%s' "
+                             "in network '%s'"),
+                           tmp, def->name);
+            goto error;
+        }
+        VIR_FREE(tmp);
+    }
 
     if ((bandwidthNode = virXPathNode("./bandwidth", ctxt)) &&
         virNetDevBandwidthParse(&def->bandwidth, bandwidthNode, -1) < 0)
@@ -2560,8 +2572,24 @@ virNetworkDefFormatBuf(virBufferPtr buf,
         virBufferAsprintf(buf, "<mac address='%s'/>\n", macaddr);
     }
 
-    if (def->domain)
-        virBufferAsprintf(buf, "<domain name='%s'/>\n", def->domain);
+    if (def->domain) {
+        virBufferAsprintf(buf, "<domain name='%s'", def->domain);
+
+        /* default to "no", but don't format it in the XML */
+        if (def->domainLocalOnly) {
+            const char *local = virTristateBoolTypeToString(def->domainLocalOnly);
+
+            if (!local) {
+                virReportError(VIR_ERR_INTERNAL_ERROR,
+                               _("Unknown localOnly type %d in network"),
+                               def->domainLocalOnly);
+                return -1;
+            }
+            virBufferAsprintf(buf, " localOnly='%s'", local);
+        }
+
+        virBufferAddLit(buf, "/>\n");
+    }
 
     if (virNetworkDNSDefFormat(buf, &def->dns) < 0)
         goto error;
diff --git a/src/conf/network_conf.h b/src/conf/network_conf.h
index b113e14e64594767e61d3a4dee31eab900aea5b9..484522e6a85cf77825e39585bfc3680f8807f1fc 100644
--- a/src/conf/network_conf.h
+++ b/src/conf/network_conf.h
@@ -225,6 +225,7 @@ struct _virNetworkDef {
     char *bridge;       /* Name of bridge device */
     int  macTableManager; /* enum virNetworkBridgeMACTableManager */
     char *domain;
+    int domainLocalOnly; /* enum virTristateBool: yes disables dns forwarding */
     unsigned long delay;   /* Bridge forward delay (ms) */
     bool stp; /* Spanning tree protocol */
     virMacAddr mac; /* mac address of bridge device */
diff --git a/src/network/bridge_driver.c b/src/network/bridge_driver.c
index 7b84e279d701a7cdb33d79160fd01897af88e66c..94e32ecad2138f27a9ebc726d771d609c3542d1d 100644
--- a/src/network/bridge_driver.c
+++ b/src/network/bridge_driver.c
@@ -928,6 +928,11 @@ networkDnsmasqConfContents(virNetworkObjPtr network,
     }
 
     if (network->def->domain) {
+        if (network->def->domainLocalOnly == VIR_TRISTATE_BOOL_YES) {
+            virBufferAsprintf(&configbuf,
+                              "local=/%s/\n",
+                              network->def->domain);
+        }
         virBufferAsprintf(&configbuf,
                           "domain=%s\n"
                           "expand-hosts\n",
diff --git a/tests/networkxml2confdata/nat-network-dns-local-domain.conf b/tests/networkxml2confdata/nat-network-dns-local-domain.conf
new file mode 100644
index 0000000000000000000000000000000000000000..5f41b9186cbca33c71e8b6c549d11f331664d1bc
--- /dev/null
+++ b/tests/networkxml2confdata/nat-network-dns-local-domain.conf
@@ -0,0 +1,14 @@
+##WARNING:  THIS IS AN AUTO-GENERATED FILE. CHANGES TO IT ARE LIKELY TO BE
+##OVERWRITTEN AND LOST.  Changes to this configuration should be made using:
+##    virsh net-edit default
+## or other application using the libvirt API.
+##
+## dnsmasq conf file created by libvirt
+strict-order
+local=/example.com/
+domain=example.com
+expand-hosts
+except-interface=lo
+bind-dynamic
+interface=virbr0
+addn-hosts=/var/lib/libvirt/dnsmasq/default.addnhosts
diff --git a/tests/networkxml2confdata/nat-network-dns-local-domain.xml b/tests/networkxml2confdata/nat-network-dns-local-domain.xml
new file mode 100644
index 0000000000000000000000000000000000000000..a92d71f1f2f6e165a9e07a99ddeff2ba75edbcc9
--- /dev/null
+++ b/tests/networkxml2confdata/nat-network-dns-local-domain.xml
@@ -0,0 +1,9 @@
+<network>
+  <name>default</name>
+  <uuid>81ff0d90-c91e-6742-64da-4a736edb9a9c</uuid>
+  <forward dev='eth0' mode='nat'/>
+  <bridge name='virbr0' stp='on' delay='0' />
+  <domain name='example.com' localOnly='yes'/>
+  <ip address='192.168.122.1' netmask='255.255.255.0'>
+  </ip>
+</network>
diff --git a/tests/networkxml2conftest.c b/tests/networkxml2conftest.c
index 267513f6372c11654fa6f0ebc985c5232c381ca2..280db306b6d6f421500560138e0041259fc86fdb 100644
--- a/tests/networkxml2conftest.c
+++ b/tests/networkxml2conftest.c
@@ -134,6 +134,7 @@ mymain(void)
     DO_TEST("nat-network-dns-hosts", full);
     DO_TEST("nat-network-dns-forward-plain", full);
     DO_TEST("nat-network-dns-forwarders", full);
+    DO_TEST("nat-network-dns-local-domain", full);
     DO_TEST("dhcp6-network", dhcpv6);
     DO_TEST("dhcp6-nat-network", dhcpv6);
     DO_TEST("dhcp6host-routed-network", dhcpv6);