diff --git a/Dockerfile.dapper b/Dockerfile.dapper
index 3dc56203..757fb749 100644
--- a/Dockerfile.dapper
+++ b/Dockerfile.dapper
@@ -2,7 +2,7 @@ FROM ubuntu:15.10
 
 RUN apt-get update && \
     apt-get -y install locales sudo vim less curl wget git rsync build-essential syslinux isolinux xorriso \
-        libblkid-dev libmount-dev libselinux1-dev cpio genisoimage qemu-kvm python-pip ca-certificates
+        libblkid-dev libmount-dev libselinux1-dev cpio genisoimage qemu-kvm python-pip ca-certificates pkg-config
 
 RUN locale-gen en_US.UTF-8
 ENV LANG en_US.UTF-8
diff --git a/Makefile b/Makefile
index 0964f695..cb2d0dde 100644
--- a/Makefile
+++ b/Makefile
@@ -27,6 +27,9 @@ assets/docker:
 	curl -L "$(DOCKER_BINARY_URL)" > $@
 	chmod +x $@
 
+assets/selinux/policy.29:
+	mkdir -p $(dir $@)
+	curl -L "$(SELINUX_POLICY_URL)" > $@
 
 ifdef COMPILED_KERNEL_URL
 
@@ -43,7 +46,7 @@ $(BUILD)/kernel/:
 	curl -L "$(COMPILED_KERNEL_URL)" | tar -xzf - -C $@
 
 
-$(DIST)/artifacts/initrd: bin/ros assets/docker $(BUILD)/kernel/ $(BUILD)/images.tar
+$(DIST)/artifacts/initrd: bin/ros assets/docker assets/selinux/policy.29 $(BUILD)/kernel/ $(BUILD)/images.tar
 	mkdir -p $(dir $@)
 	ARCH=$(ARCH) DFS_IMAGE=$(DFS_IMAGE) DEV_BUILD=$(DEV_BUILD) ./scripts/mk-initrd.sh $@
 
diff --git a/assets/selinux/config b/assets/selinux/config
new file mode 100644
index 00000000..35ea6f5e
--- /dev/null
+++ b/assets/selinux/config
@@ -0,0 +1,2 @@
+SELINUX=permissive
+SELINUXTYPE=ros
diff --git a/assets/selinux/failsafe_context b/assets/selinux/failsafe_context
new file mode 100644
index 00000000..b87dbdf0
--- /dev/null
+++ b/assets/selinux/failsafe_context
@@ -0,0 +1 @@
+system_r:kernel_t:s0
diff --git a/assets/selinux/lxc_contexts b/assets/selinux/lxc_contexts
new file mode 100644
index 00000000..bf3fcc1a
--- /dev/null
+++ b/assets/selinux/lxc_contexts
@@ -0,0 +1,3 @@
+process = "system_u:system_r:svirt_lxc_net_t:s0"
+content = "system_u:object_r:virt_var_lib_t:s0"
+file = "system_u:object_r:svirt_lxc_file_t:s0"
diff --git a/assets/selinux/seusers b/assets/selinux/seusers
new file mode 100644
index 00000000..1ca7c9ea
--- /dev/null
+++ b/assets/selinux/seusers
@@ -0,0 +1 @@
+__default__:system_u:s0-s0
diff --git a/build.conf b/build.conf
index c52b54c8..a95db5f8 100644
--- a/build.conf
+++ b/build.conf
@@ -1,3 +1,4 @@
 IMAGE_NAME=rancher/os
 VERSION=v0.4.4-dev
 DFS_IMAGE=rancher/docker:v1.10.1
+SELINUX_POLICY_URL=https://github.com/rancher/refpolicy/releases/download/v0.0.1/policy.29
diff --git a/init/init.go b/init/init.go
index ddc9b2ef..59cb5dfd 100644
--- a/init/init.go
+++ b/init/init.go
@@ -220,6 +220,10 @@ func RunInit() error {
 			return config.LoadConfig()
 		},
 		loadModules,
+		func(c *config.CloudConfig) (*config.CloudConfig, error) {
+			return c, dockerlaunch.PrepareFs(&mountConfig)
+		},
+		initializeSelinux,
 		sysInit,
 	}
 
@@ -236,5 +240,6 @@ func RunInit() error {
 	if err != nil {
 		return err
 	}
+
 	return pidOne()
 }
diff --git a/init/selinux.go b/init/selinux.go
new file mode 100644
index 00000000..afdfc271
--- /dev/null
+++ b/init/selinux.go
@@ -0,0 +1,32 @@
+// +build linux
+
+package init
+
+import (
+	log "github.com/Sirupsen/logrus"
+	"github.com/rancher/os/config"
+	"github.com/rancher/os/selinux"
+	"io/ioutil"
+)
+
+func initializeSelinux(c *config.CloudConfig) (*config.CloudConfig, error) {
+	ret, _ := selinux.InitializeSelinux()
+
+	if ret != 0 {
+		log.Debug("Unable to initialize SELinux")
+		return c, nil
+	}
+
+	// Set allow_execstack boolean to true
+	if err := ioutil.WriteFile("/sys/fs/selinux/booleans/allow_execstack", []byte("1"), 0644); err != nil {
+		log.Debug(err)
+		return c, nil
+	}
+
+	if err := ioutil.WriteFile("/sys/fs/selinux/commit_pending_bools", []byte("1"), 0644); err != nil {
+		log.Debug(err)
+		return c, nil
+	}
+
+	return c, nil
+}
diff --git a/os-config.yml b/os-config.yml
index 6f01af2e..886c77c2 100644
--- a/os-config.yml
+++ b/os-config.yml
@@ -262,6 +262,7 @@ rancher:
       - /etc/resolv.conf:/etc/resolv.conf
       - /etc/rkt:/etc/rkt
       - /etc/ssl/certs/ca-certificates.crt:/etc/ssl/certs/ca-certificates.crt.rancher
+      - /etc/selinux:/etc/selinux
       - /lib/firmware:/lib/firmware
       - /lib/modules:/lib/modules
       - /run:/run
diff --git a/scripts/mk-initrd.sh b/scripts/mk-initrd.sh
index ba52d5f4..fcc6fac9 100755
--- a/scripts/mk-initrd.sh
+++ b/scripts/mk-initrd.sh
@@ -20,6 +20,7 @@ INITRD_DIR=${BUILD}/initrd
 rm -rf ${INITRD_DIR}/{usr,init}
 mkdir -p ${INITRD_DIR}/usr/{bin,share/ros}
 mkdir -p ${INITRD_DIR}/var/lib/system-docker
+mkdir -p ${INITRD_DIR}/usr/etc/selinux/ros/{policy,contexts}
 
 if [ "$IS_ROOTFS" == "0" ]; then
   cp -rf ${BUILD}/kernel/lib ${INITRD_DIR}/usr/
@@ -34,6 +35,12 @@ ln -s usr/bin/ros          ${INITRD_DIR}/init
 ln -s bin                  ${INITRD_DIR}/usr/sbin
 ln -s usr/sbin             ${INITRD_DIR}/sbin
 
+cp assets/selinux/config            ${INITRD_DIR}/usr/etc/selinux/
+cp assets/selinux/policy.29         ${INITRD_DIR}/usr/etc/selinux/ros/policy/
+cp assets/selinux/seusers           ${INITRD_DIR}/usr/etc/selinux/ros/
+cp assets/selinux/lxc_contexts      ${INITRD_DIR}/usr/etc/selinux/ros/contexts/
+cp assets/selinux/failsafe_context  ${INITRD_DIR}/usr/etc/selinux/ros/contexts/
+
 DFS_ARCH=$(docker create ${DFS_ARCH_IMAGE})
 trap "docker rm -fv ${DFS_ARCH}" EXIT
 
diff --git a/selinux/selinux.go b/selinux/selinux.go
new file mode 100644
index 00000000..5a1cb2e9
--- /dev/null
+++ b/selinux/selinux.go
@@ -0,0 +1,13 @@
+// +build linux
+
+package selinux
+
+// #cgo pkg-config: libselinux libsepol
+// #include <selinux/selinux.h>
+import "C"
+
+func InitializeSelinux() (int, error) {
+	enforce := C.int(0)
+	ret, err := C.selinux_init_load_policy(&enforce)
+	return int(ret), err
+}
diff --git a/trash.yml b/trash.yml
index dd8b52a2..b499e802 100644
--- a/trash.yml
+++ b/trash.yml
@@ -66,7 +66,7 @@ import:
   version: 1349b37bd56f4f5ce2690b5b2c0f53f88a261c67
 
 - package: github.com/rancher/docker-from-scratch
-  version: v1.10.1
+  version: 62ceebcf43725e484e598b2879d1aa33b4a5133a
 
 - package: github.com/rancher/netconf
   version: d7d620ef4ea62a9d04b51c7b3d9dc83fe7ffaa1b
diff --git a/vendor/github.com/rancher/docker-from-scratch/Dockerfile.dapper b/vendor/github.com/rancher/docker-from-scratch/Dockerfile.dapper
index 3894f875..a2e06377 100644
--- a/vendor/github.com/rancher/docker-from-scratch/Dockerfile.dapper
+++ b/vendor/github.com/rancher/docker-from-scratch/Dockerfile.dapper
@@ -1,5 +1,6 @@
 FROM golang:1.5.3
 
+RUN apt-get update && apt-get -y install libselinux-dev pkg-config
 RUN curl -o /usr/local/bin/docker -L https://get.docker.com/builds/Linux/x86_64/docker-1.9.1 && \
     chmod +x /usr/local/bin/docker
 
diff --git a/vendor/github.com/rancher/docker-from-scratch/scratch.go b/vendor/github.com/rancher/docker-from-scratch/scratch.go
index 6ded8bf7..3a5ecf09 100644
--- a/vendor/github.com/rancher/docker-from-scratch/scratch.go
+++ b/vendor/github.com/rancher/docker-from-scratch/scratch.go
@@ -14,6 +14,7 @@ import (
 
 	log "github.com/Sirupsen/logrus"
 	"github.com/docker/libnetwork/resolvconf"
+	"github.com/rancher/docker-from-scratch/selinux"
 	"github.com/rancher/docker-from-scratch/util"
 	"github.com/rancher/netconf"
 )
@@ -37,6 +38,9 @@ var (
 		{"none", "/sys", "sysfs", ""},
 		{"none", "/sys/fs/cgroup", "tmpfs", ""},
 	}
+	optionalMounts = [][]string{
+		{"none", "/sys/fs/selinux", "selinuxfs", ""},
+	}
 	systemdMounts = [][]string{
 		{"systemd", "/sys/fs/cgroup/systemd", "cgroup", "none,name=systemd"},
 	}
@@ -56,6 +60,7 @@ type Config struct {
 	EmulateSystemd  bool
 	NoFiles         uint64
 	Environment     []string
+	GraphDirectory  string
 }
 
 func createMounts(mounts ...[]string) error {
@@ -70,6 +75,16 @@ func createMounts(mounts ...[]string) error {
 	return nil
 }
 
+func createOptionalMounts(mounts ...[]string) {
+	for _, mount := range mounts {
+		log.Debugf("Mounting %s %s %s %s", mount[0], mount[1], mount[2], mount[3])
+		err := util.Mount(mount[0], mount[1], mount[2], mount[3])
+		if err != nil {
+			log.Debugf("Unable to mount %s %s %s %s: %s", mount[0], mount[1], mount[2], mount[3], err)
+		}
+	}
+}
+
 func createDirs(dirs ...string) error {
 	for _, dir := range dirs {
 		if _, err := os.Stat(dir); os.IsNotExist(err) {
@@ -213,6 +228,22 @@ func copyDefault(folder, name string) error {
 	return nil
 }
 
+func copyDefaultFolder(folder string) error {
+	defaultFolder := path.Join(defaultPrefix, folder)
+	files, _ := ioutil.ReadDir(defaultFolder)
+	for _, file := range files {
+		if file.IsDir() {
+			continue
+		}
+
+		if err := copyDefault(folder, file.Name()); err != nil {
+			return err
+		}
+	}
+
+	return nil
+}
+
 func defaultFiles(files ...string) error {
 	for _, file := range files {
 		dir := path.Dir(file)
@@ -225,6 +256,14 @@ func defaultFiles(files ...string) error {
 	return nil
 }
 
+func defaultFolders(folders ...string) error {
+	for _, folder := range folders {
+		copyDefaultFolder(folder)
+	}
+
+	return nil
+}
+
 func CopyFile(src, folder, name string) error {
 	if _, err := os.Stat(src); os.IsNotExist(err) {
 		return nil
@@ -330,6 +369,8 @@ func ParseConfig(config *Config, args ...string) []string {
 			if err != nil {
 				config.BridgeMtu = mtu
 			}
+		} else if strings.HasPrefix(arg, "-g") || strings.HasPrefix(arg, "--graph") {
+			config.GraphDirectory = util.GetValue(i, args)
 		}
 	}
 
@@ -363,11 +404,17 @@ func PrepareFs(config *Config) error {
 		return err
 	}
 
+	createOptionalMounts(optionalMounts...)
+
 	if err := mountCgroups(config.CgroupHierarchy); err != nil {
 		return err
 	}
 
-	if err := createLayout(); err != nil {
+	if err := createLayout(config); err != nil {
+		return err
+	}
+
+	if err := firstPrepare(); err != nil {
 		return err
 	}
 
@@ -405,11 +452,23 @@ func touchSockets(args ...string) error {
 	return nil
 }
 
-func createLayout() error {
+func createLayout(config *Config) error {
 	if err := createDirs("/tmp", "/root/.ssh", "/var"); err != nil {
 		return err
 	}
 
+	graphDirectory := config.GraphDirectory
+
+	if config.GraphDirectory == "" {
+		graphDirectory = "/var/lib/docker"
+	}
+
+	if err := createDirs(graphDirectory); err != nil {
+		return err
+	}
+
+	selinux.SetFileContext(graphDirectory, "system_u:object_r:var_lib_t:s0")
+
 	return CreateSymlinks([][]string{
 		{"usr/lib", "/lib"},
 		{"usr/sbin", "/sbin"},
@@ -417,7 +476,7 @@ func createLayout() error {
 	})
 }
 
-func prepare(config *Config, docker string, args ...string) error {
+func firstPrepare() error {
 	os.Setenv("PATH", "/sbin:/usr/sbin:/usr/bin")
 
 	if err := defaultFiles(
@@ -428,6 +487,15 @@ func prepare(config *Config, docker string, args ...string) error {
 		return err
 	}
 
+	if err := defaultFolders(
+		"/etc/selinux",
+		"/etc/selinux/ros",
+		"/etc/selinux/ros/policy",
+		"/etc/selinux/ros/contexts",
+	); err != nil {
+		return err
+	}
+
 	if err := createPasswd(); err != nil {
 		return err
 	}
@@ -436,6 +504,11 @@ func prepare(config *Config, docker string, args ...string) error {
 		return err
 	}
 
+	return nil
+}
+
+func secondPrepare(config *Config, docker string, args ...string) error {
+
 	if err := setupNetworking(config); err != nil {
 		return err
 	}
@@ -548,7 +621,7 @@ func setUlimit(cfg *Config) error {
 }
 
 func runOrExec(config *Config, docker string, args ...string) (*exec.Cmd, error) {
-	if err := prepare(config, docker, args...); err != nil {
+	if err := secondPrepare(config, docker, args...); err != nil {
 		return nil, err
 	}
 
diff --git a/vendor/github.com/rancher/docker-from-scratch/selinux/selinux.go b/vendor/github.com/rancher/docker-from-scratch/selinux/selinux.go
new file mode 100644
index 00000000..fe46d482
--- /dev/null
+++ b/vendor/github.com/rancher/docker-from-scratch/selinux/selinux.go
@@ -0,0 +1,10 @@
+package selinux
+
+// #cgo pkg-config: libselinux
+// #include <selinux/selinux.h>
+import "C"
+
+func SetFileContext(path string, context string) (int, error) {
+	ret, err := C.setfilecon(C.CString(path), C.CString(context))
+	return int(ret), err
+}