diff --git a/defaults/main.yml b/defaults/main.yml
index d12169e..f8c4324 100644
--- a/defaults/main.yml
+++ b/defaults/main.yml
@@ -31,6 +31,8 @@ lxc_container_vg_name: lxc
 
 lxc_container_default_mtu: "1500"
 
+lxc_container_domain: "openstack.local"
+
 # LXC image server
 lxc_image_cache_server: images.linuxcontainers.org
 
diff --git a/releasenotes/notes/RFC-1034-and-1035-container-update-6e880e4b45e11cf0.yaml b/releasenotes/notes/RFC-1034-and-1035-container-update-6e880e4b45e11cf0.yaml
new file mode 100644
index 0000000..ee12045
--- /dev/null
+++ b/releasenotes/notes/RFC-1034-and-1035-container-update-6e880e4b45e11cf0.yaml
@@ -0,0 +1,15 @@
+---
+features:
+  - LXC containers will now have a proper RFC1034/5 hostname set during post
+    build tasks. A localhost entry for 127.0.1.1 will be created by converting
+    all of the "_" in the ``inventory_hostname`` to "-". Containers will be
+    created with a default domain of *openstack.local*.
+    This domain name can be customized to meet your deployment needs by
+    setting the option ``lxc_container_domain``.
+upgrade:
+  - LXC containers will now have a proper RFC1034/5 hostname set during post
+    build tasks. A localhost entry for 127.0.1.1 will be created by converting
+    all of the "_" in the ``inventory_hostname`` to "-". Containers will be
+    created with a default domain of *openstack.local*.
+    This domain name can be customized to meet your deployment needs by
+    setting the option ``lxc_container_domain``.
diff --git a/tasks/container_create.yml b/tasks/container_create.yml
index bb52ab3..6f66920 100644
--- a/tasks/container_create.yml
+++ b/tasks/container_create.yml
@@ -190,3 +190,44 @@
     - global_environment_variables is defined
   tags:
     - lxc-container-proxy
+
+- name: Create localhost config
+  lineinfile:
+    dest: "/etc/hosts"
+    regexp: "^127.0.0.1"
+    line: "127.0.0.1 localhost"
+    owner: "root"
+    group: "root"
+    mode: "0644"
+  remote_user: root
+  tags:
+    - lxc-container-hostname
+
+- name: Create domain config
+  lineinfile:
+    dest: "/etc/hosts"
+    regexp: "^127.0.1.1"
+    line: "127.0.1.1 {{ inventory_hostname | replace('_', '-') }}.{{ lxc_container_domain }} {{ inventory_hostname | replace('_', '-') }}"
+    owner: "root"
+    group: "root"
+    mode: "0644"
+  remote_user: root
+  tags:
+    - lxc-container-hostname
+
+- name: Create hostname
+  copy:
+    dest: "/etc/hostname"
+    content: "{{ inventory_hostname | replace('_', '-') }}"
+    owner: "root"
+    group: "root"
+    mode: "0644"
+  remote_user: root
+  tags:
+    - lxc-container-hostname
+
+- name: Setup hostname
+  command: hostname -F /etc/hostname
+  remote_user: root
+  tags:
+    - lxc-container-hostname