diff --git a/contrib/cygwin/ssh-host-config b/contrib/cygwin/ssh-host-config
index db6aaa08..d934d09b 100644
--- a/contrib/cygwin/ssh-host-config
+++ b/contrib/cygwin/ssh-host-config
@@ -63,6 +63,7 @@ sshd_config_configured=no
 port_number=22
 service_name=sshd
 strictmodes=yes
+privsep_used=yes
 cygwin_value=""
 user_account=
 password_value=
@@ -139,21 +140,33 @@ sshd_strictmodes() {
 
 # ======================================================================
 # Routine: sshd_privsep
-# Try to create ssshd user account
+#  MODIFIES: privsep_used
 # ======================================================================
 sshd_privsep() {
   local ret=0
 
   if [ "${sshd_config_configured}" != "yes" ]
   then
-    if ! csih_create_unprivileged_user sshd
+    echo
+    csih_inform "Privilege separation is set to 'sandbox' by default since"
+    csih_inform "OpenSSH 6.1.  This is unsupported by Cygwin and has to be set"
+    csih_inform "to 'yes' or 'no'."
+    csih_inform "However, using privilege separation requires a non-privileged account"
+    csih_inform "called 'sshd'."
+    csih_inform "For more info on privilege separation read /usr/share/doc/openssh/README.privsep."
+    if csih_request "Should privilege separation be used?"
     then
-      csih_error_recoverable "Could not create user 'sshd'!"
-      csih_error_recoverable "You will not be able to run an sshd service"
-      csih_error_recoverable "under a privileged account successfully."
-      csih_error_recoverable "Make sure to create a non-privileged user 'sshd'"
-      csih_error_recoverable "manually before trying to run the service!"
-      let ++ret
+      privsep_used=yes
+      if ! csih_create_unprivileged_user sshd
+      then
+	csih_error_recoverable "Couldn't create user 'sshd'!"
+	csih_error_recoverable "Privilege separation set to 'no' again!"
+	csih_error_recoverable "Check your ${SYSCONFDIR}/sshd_config file!"
+	let ++ret
+	privsep_used=no
+      fi
+    else
+      privsep_used=no
     fi
   fi
   return $ret
@@ -189,6 +202,18 @@ sshd_config_tweak() {
       let ++ret
     fi
   fi
+  if [ "${sshd_config_configured}" != "yes" ]
+  then
+    /usr/bin/sed -i -e "
+      s/^#\?UsePrivilegeSeparation .*/UsePrivilegeSeparation ${privsep_used}/" \
+      ${SYSCONFDIR}/sshd_config
+    if [ $? -ne 0 ]
+    then
+      csih_warning "Setting privilege separation failed!"
+      csih_warning "Check your ${SYSCONFDIR}/sshd_config file!"
+      let ++ret
+    fi
+  fi
   return $ret
 } # --- End of sshd_config_tweak --- #
 
@@ -668,7 +693,7 @@ then
   fi
 fi
 
-# handle sshd_config
+# handle sshd_config (and privsep)
 csih_install_config "${SYSCONFDIR}/sshd_config" "${SYSCONFDIR}/defaults" || let ++warning_cnt
 if ! /usr/bin/cmp "${SYSCONFDIR}/sshd_config" "${SYSCONFDIR}/defaults/${SYSCONFDIR}/sshd_config" >/dev/null 2>&1
 then
diff --git a/servconf.c b/servconf.c
index 0f0d0906..a63cec91 100644
--- a/servconf.c
+++ b/servconf.c
@@ -590,7 +590,7 @@ static struct {
 	{ "clientalivecountmax", sClientAliveCountMax, SSHCFG_ALL },
 	{ "authorizedkeysfile", sAuthorizedKeysFile, SSHCFG_ALL },
 	{ "authorizedkeysfile2", sDeprecated, SSHCFG_ALL },
-	{ "useprivilegeseparation", sDeprecated, SSHCFG_GLOBAL},
+	{ "useprivilegeseparation", sUsePrivilegeSeparation, SSHCFG_GLOBAL},
 	{ "acceptenv", sAcceptEnv, SSHCFG_ALL },
 	{ "permittunnel", sPermitTunnel, SSHCFG_ALL },
 	{ "permittty", sPermitTTY, SSHCFG_ALL },
@@ -1130,6 +1130,13 @@ static const struct multistate multistate_gatewayports[] = {
 	{ "no",				0 },
 	{ NULL, -1 }
 };
+static const struct multistate multistate_privsep[] = {
+	{ "yes",			PRIVSEP_NOSANDBOX },
+	{ "sandbox",			PRIVSEP_ON },
+	{ "nosandbox",			PRIVSEP_NOSANDBOX },
+	{ "no",				PRIVSEP_OFF },
+	{ NULL, -1 }
+};
 static const struct multistate multistate_tcpfwd[] = {
 	{ "yes",			FORWARD_ALLOW },
 	{ "all",			FORWARD_ALLOW },
@@ -1563,6 +1570,11 @@ process_server_config_line(ServerOptions *options, char *line,
 		intptr = &options->disable_forwarding;
 		goto parse_flag;
 
+	case sUsePrivilegeSeparation:
+		intptr = &use_privsep;
+		multistate_ptr = multistate_privsep;
+		goto parse_multistate;
+
 	case sAllowUsers:
 		while ((arg = strdelim(&cp)) && *arg != '\0') {
 			if (match_user(NULL, NULL, NULL, arg) == -1)
@@ -2289,6 +2301,8 @@ fmt_intarg(ServerOpCodes code, int val)
 		return fmt_multistate_int(val, multistate_gatewayports);
 	case sCompression:
 		return fmt_multistate_int(val, multistate_compression);
+	case sUsePrivilegeSeparation:
+		return fmt_multistate_int(val, multistate_privsep);
 	case sAllowTcpForwarding:
 		return fmt_multistate_int(val, multistate_tcpfwd);
 	case sAllowStreamLocalForwarding:
@@ -2480,6 +2494,7 @@ dump_config(ServerOptions *o)
 	dump_cfg_fmtint(sDisableForwarding, o->disable_forwarding);
 	dump_cfg_fmtint(sAllowStreamLocalForwarding, o->allow_streamlocal_forwarding);
 	dump_cfg_fmtint(sStreamLocalBindUnlink, o->fwd_opts.streamlocal_bind_unlink);
+	dump_cfg_fmtint(sUsePrivilegeSeparation, use_privsep);
 	dump_cfg_fmtint(sFingerprintHash, o->fingerprint_hash);
 	dump_cfg_fmtint(sExposeAuthInfo, o->expose_userauth_info);
 
diff --git a/sshd.c b/sshd.c
index fd95b681..697f5a8b 100644
--- a/sshd.c
+++ b/sshd.c
@@ -228,7 +228,6 @@ int startup_pipe;		/* in child */
 int use_privsep = -1;
 struct monitor *pmonitor = NULL;
 int privsep_is_preauth = 1;
-static int privsep_chroot = 1;
 
 /* global authentication context */
 Authctxt *the_authctxt = NULL;
@@ -541,7 +540,7 @@ privsep_preauth_child(void)
 	demote_sensitive_data();
 
 	/* Demote the child */
-	if (privsep_chroot) {
+	if (getuid() == 0 || geteuid() == 0) {
 		/* Change our root directory */
 		if (chroot(_PATH_PRIVSEP_CHROOT_DIR) == -1)
 			fatal("chroot(\"%s\"): %s", _PATH_PRIVSEP_CHROOT_DIR,
@@ -1641,9 +1640,8 @@ main(int ac, char **av)
 	);
 
 	/* Store privilege separation user for later use if required. */
-	privsep_chroot = use_privsep && (getuid() == 0 || geteuid() == 0);
 	if ((privsep_pw = getpwnam(SSH_PRIVSEP_USER)) == NULL) {
-		if (privsep_chroot || options.kerberos_authentication)
+		if (use_privsep || options.kerberos_authentication)
 			fatal("Privilege separation user %s does not exist",
 			    SSH_PRIVSEP_USER);
 	} else {
@@ -1801,7 +1790,7 @@ main(int ac, char **av)
 		    key_type(key));
 	}
 
-	if (privsep_chroot) {
+	if (use_privsep) {
 		struct stat st;
 
 		if ((stat(_PATH_PRIVSEP_CHROOT_DIR, &st) == -1) ||
diff --git a/sshd_config b/sshd_config
index 3109d5d7..018b5eb2 100644
--- a/sshd_config
+++ b/sshd_config
@@ -92,6 +92,7 @@ AuthorizedKeysFile	.ssh/authorized_keys
 #PrintLastLog yes
 #TCPKeepAlive yes
 #UseLogin no
+#UsePrivilegeSeparation sandbox
 #PermitUserEnvironment no
 #Compression delayed
 #ClientAliveInterval 0
diff --git a/sshd_config.5 b/sshd_config.5
index e3c7c393..20a185f0 100644
--- a/sshd_config.5
+++ b/sshd_config.5
@@ -1542,6 +1542,28 @@ is enabled, you will not be able to run
 as a non-root user.
 The default is
 .Cm no .
+.It Cm UsePrivilegeSeparation
+Specifies whether
+.Xr sshd 8
+separates privileges by creating an unprivileged child process
+to deal with incoming network traffic.
+After successful authentication, another process will be created that has
+the privilege of the authenticated user.
+The goal of privilege separation is to prevent privilege
+escalation by containing any corruption within the unprivileged processes.
+The argument must be
+.Cm yes ,
+.Cm no ,
+or
+.Cm sandbox .
+If
+.Cm UsePrivilegeSeparation
+is set to
+.Cm sandbox
+then the pre-authentication unprivileged process is subject to additional
+restrictions.
+The default is
+.Cm sandbox .
 .It Cm VersionAddendum
 Optionally specifies additional text to append to the SSH protocol banner
 sent by the server upon connection.