diff --git a/nova/common/policy.py b/nova/common/policy.py
new file mode 100644
index 000000000000..9d811c784f4c
--- /dev/null
+++ b/nova/common/policy.py
@@ -0,0 +1,202 @@
+# vim: tabstop=4 shiftwidth=4 softtabstop=4
+
+# Copyright (c) 2011 OpenStack, LLC.
+# All Rights Reserved.
+#
+#    Licensed under the Apache License, Version 2.0 (the "License"); you may
+#    not use this file except in compliance with the License. You may obtain
+#    a copy of the License at
+#
+#         http://www.apache.org/licenses/LICENSE-2.0
+#
+#    Unless required by applicable law or agreed to in writing, software
+#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#    License for the specific language governing permissions and limitations
+#    under the License.
+
+"""Common Policy Engine Implementation"""
+
+import json
+import urllib
+import urllib2
+
+
+class NotAllowed(Exception):
+    pass
+
+
+_BRAIN = None
+
+
+def set_brain(brain):
+    """Set the brain used by enforce().
+
+    Defaults use Brain() if not set.
+
+    """
+    global _BRAIN
+    _BRAIN = brain
+
+
+def reset():
+    """Clear the brain used by enforce()."""
+    global _BRAIN
+    _BRAIN = None
+
+
+def enforce(match_list, target_dict, credentials_dict):
+    """Enforces authorization of some rules against credentials.
+
+    :param match_list: nested tuples of data to match against
+    The basic brain supports three types of match lists:
+        1) rules
+            looks like: ('rule:compute:get_instance',)
+            Retrieves the named rule from the rules dict and recursively
+            checks against the contents of the rule.
+        2) roles
+            looks like: ('role:compute:admin',)
+            Matches if the specified role is in credentials_dict['roles'].
+        3) generic
+            ('tenant_id:%(tenant_id)s',)
+            Substitutes values from the target dict into the match using
+            the % operator and matches them against the creds dict.
+
+    Combining rules:
+        The brain returns True if any of the outer tuple of rules match
+        and also True if all of the inner tuples match. You can use this to
+        perform simple boolean logic.  For example, the following rule would
+        return True if the creds contain the role 'admin' OR the if the
+        tenant_id matches the target dict AND the the creds contains the
+        role 'compute_sysadmin':
+
+        {
+            "rule:combined": (
+                'role:admin',
+                ('tenant_id:%(tenant_id)s', 'role:compute_sysadmin')
+            )
+        }
+
+
+    Note that rule and role are reserved words in the credentials match, so
+    you can't match against properties with those names. Custom brains may
+    also add new reserved words. For example, the HttpBrain adds http as a
+    reserved word.
+
+    :param target_dict: dict of object properties
+    Target dicts contain as much information as we can about the object being
+    operated on.
+
+    :param credentials_dict: dict of actor properties
+    Credentials dicts contain as much information as we can about the user
+    performing the action.
+
+    :raises NotAllowed if the check fails
+
+    """
+    global _BRAIN
+    if not _BRAIN:
+        _BRAIN = Brain()
+    if not _BRAIN.check(match_list, target_dict, credentials_dict):
+        raise NotAllowed()
+
+
+class Brain(object):
+    """Implements policy checking."""
+    @classmethod
+    def load_json(cls, data):
+        """Init a brain using json instead of a rules dictionary."""
+        rules_dict = json.loads(data)
+        return cls(rules=rules_dict)
+
+    def __init__(self, rules=None):
+        self.rules = rules or {}
+
+    def add_rule(self, key, match):
+        self.rules[key] = match
+
+    def _check(self, match, target_dict, cred_dict):
+        match_kind, match_value = match.split(':', 1)
+        try:
+            f = getattr(self, '_check_%s' % match_kind)
+        except AttributeError:
+            if not self._check_generic(match, target_dict, cred_dict):
+                return False
+        else:
+            if not f(match_value, target_dict, cred_dict):
+                return False
+        return True
+
+    def check(self, match_list, target_dict, cred_dict):
+        """Checks authorization of some rules against credentials.
+
+        Detailed description of the check with examples in policy.enforce().
+
+        :param match_list: nested tuples of data to match against
+        :param target_dict: dict of object properties
+        :param credentials_dict: dict of actor properties
+
+        :returns: True if the check passes
+
+        """
+        if not match_list:
+            return True
+        for and_list in match_list:
+            if isinstance(and_list, basestring):
+                and_list = (and_list,)
+            if all([self._check(item, target_dict, cred_dict)
+                    for item in and_list]):
+                return True
+        return False
+
+    def _check_rule(self, match, target_dict, cred_dict):
+        """Recursively checks credentials based on the brains rules."""
+        try:
+            new_match_list = self.rules[match]
+        except KeyError:
+            return False
+        return self.check(new_match_list, target_dict, cred_dict)
+
+    def _check_role(self, match, target_dict, cred_dict):
+        """Check that there is a matching role in the cred dict."""
+        return match in cred_dict['roles']
+
+    def _check_generic(self, match, target_dict, cred_dict):
+        """Check an individual match.
+
+        Matches look like:
+
+            tenant:%(tenant_id)s
+            role:compute:admin
+
+        """
+
+        # TODO(termie): do dict inspection via dot syntax
+        match = match % target_dict
+        key, value = match.split(':', 1)
+        if key in cred_dict:
+            return value == cred_dict[key]
+        return False
+
+
+class HttpBrain(Brain):
+    """A brain that can check external urls for policy.
+
+    Posts json blobs for target and credentials.
+
+    """
+
+    def _check_http(self, match, target_dict, cred_dict):
+        """Check http: rules by calling to a remote server.
+
+        This example implementation simply verifies that the response is
+        exactly 'True'. A custom brain using response codes could easily
+        be implemented.
+
+        """
+        url = match % target_dict
+        data = {'target': json.dumps(target_dict),
+                'credentials': json.dumps(cred_dict)}
+        post_data = urllib.urlencode(data)
+        f = urllib2.urlopen(url, post_data)
+        return f.read() == "True"
diff --git a/nova/exception.py b/nova/exception.py
index f2df97964046..8ec942a76979 100644
--- a/nova/exception.py
+++ b/nova/exception.py
@@ -207,6 +207,10 @@ class AdminRequired(NotAuthorized):
     message = _("User does not have admin privileges")
 
 
+class PolicyNotAllowed(NotAuthorized):
+    message = _("Policy Doesn't allow %(action)s to be performed.")
+
+
 class InstanceBusy(NovaException):
     message = _("Instance %(instance_id)s is busy. (%(task_state)s)")
 
diff --git a/nova/policy.py b/nova/policy.py
new file mode 100644
index 000000000000..2ebe6a69c2e4
--- /dev/null
+++ b/nova/policy.py
@@ -0,0 +1,78 @@
+# vim: tabstop=4 shiftwidth=4 softtabstop=4
+
+# Copyright (c) 2011 OpenStack, LLC.
+# All Rights Reserved.
+#
+#    Licensed under the Apache License, Version 2.0 (the "License"); you may
+#    not use this file except in compliance with the License. You may obtain
+#    a copy of the License at
+#
+#         http://www.apache.org/licenses/LICENSE-2.0
+#
+#    Unless required by applicable law or agreed to in writing, software
+#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#    License for the specific language governing permissions and limitations
+#    under the License.
+
+"""Policy Engine For Nova"""
+
+from nova import exception
+from nova import flags
+from nova import utils
+from nova.common import policy
+
+FLAGS = flags.FLAGS
+flags.DEFINE_string('policy_file', 'policy.json',
+                    _('JSON file representing policy'))
+
+_POLICY_PATH = None
+_POLICY_CACHE = {}
+
+
+def reset():
+    global _POLICY_PATH
+    global _POLICY_CACHE
+    _POLICY_PATH = None
+    _POLICY_CACHE = {}
+    policy.reset()
+
+
+def init():
+    global _POLICY_PATH
+    global _POLICY_CACHE
+    if not _POLICY_PATH:
+        _POLICY_PATH = utils.find_config(FLAGS.policy_file)
+    data = utils.read_cached_file(_POLICY_PATH, _POLICY_CACHE,
+                                  reload_func=_set_brain)
+
+
+def _set_brain(data):
+    policy.set_brain(policy.HttpBrain.load_json(data))
+
+
+def enforce(context, action, target):
+    """Verifies that the action is valid on the target in this context.
+
+       :param context: nova context
+       :param action: string representing the action to be checked
+           this should be colon separated for clarity.
+           i.e. compute:create_instance
+                compute:attach_volume
+                volume:attach_volume
+
+       :param object: dictionary representing the object of the action
+           for object creation this should be a dictionary representing the
+           location of the object e.g. {'project_id': context.project_id}
+
+       :raises: `nova.exception.PolicyNotAllowed` if verification fails.
+
+    """
+    init()
+    match_list = ('rule:%s' % action,)
+    target_dict = target
+    credentials_dict = context.to_dict()
+    try:
+        policy.enforce(match_list, target_dict, credentials_dict)
+    except policy.NotAllowed:
+        raise exception.PolicyNotAllowed(action=action)
diff --git a/nova/tests/fake_flags.py b/nova/tests/fake_flags.py
index fc7bb059a0d8..b95aa77d0dcc 100644
--- a/nova/tests/fake_flags.py
+++ b/nova/tests/fake_flags.py
@@ -41,3 +41,5 @@ FLAGS['sqlite_db'].SetDefault("tests.sqlite")
 FLAGS['use_ipv6'].SetDefault(True)
 FLAGS['flat_network_bridge'].SetDefault('br100')
 FLAGS['sqlite_synchronous'].SetDefault(False)
+flags.DECLARE('policy_file', 'nova.policy')
+FLAGS['policy_file'].SetDefault('nova/tests/policy.json')
diff --git a/nova/tests/policy.json b/nova/tests/policy.json
new file mode 100644
index 000000000000..47c3d870e019
--- /dev/null
+++ b/nova/tests/policy.json
@@ -0,0 +1,11 @@
+{
+    "true" : [],
+    "compute:create_instance" :          [],
+    "compute:attach_network" :  [],
+    "compute:attach_volume" :   [],
+    "compute:list_instances":   [],
+    "compute:get_instance":     [],
+    "network:attach_network" :  [],
+    "volume:create_volume":     [],
+    "volume:attach_volume":     []
+}
diff --git a/nova/tests/test_policy.py b/nova/tests/test_policy.py
new file mode 100644
index 000000000000..39dca2ae7059
--- /dev/null
+++ b/nova/tests/test_policy.py
@@ -0,0 +1,139 @@
+# vim: tabstop=4 shiftwidth=4 softtabstop=4
+
+# Copyright 2011 Piston Cloud Computing, Inc.
+# All Rights Reserved.
+
+#    Licensed under the Apache License, Version 2.0 (the "License"); you may
+#    not use this file except in compliance with the License. You may obtain
+#    a copy of the License at
+#
+#         http://www.apache.org/licenses/LICENSE-2.0
+#
+#    Unless required by applicable law or agreed to in writing, software
+#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#    License for the specific language governing permissions and limitations
+#    under the License.
+
+"""Test of Policy Engine For Nova"""
+
+import StringIO
+import tempfile
+import urllib2
+
+from nova.common import policy as common_policy
+from nova import context
+from nova import exception
+from nova import flags
+from nova import policy
+from nova import test
+
+FLAGS = flags.FLAGS
+
+
+class PolicyFileTestCase(test.TestCase):
+    def setUp(self):
+        super(PolicyFileTestCase, self).setUp()
+        policy.reset()
+        _, self.tmpfilename = tempfile.mkstemp()
+        self.flags(policy_file=self.tmpfilename)
+        self.context = context.RequestContext('fake', 'fake')
+        self.target = {}
+
+    def tearDown(self):
+        super(PolicyFileTestCase, self).tearDown()
+        policy.reset()
+
+    def test_modified_policy_reloads(self):
+        action = "example:test"
+        with open(self.tmpfilename, "w") as policyfile:
+            policyfile.write("""{"example:test": []}""")
+        policy.enforce(self.context, action, self.target)
+        with open(self.tmpfilename, "w") as policyfile:
+            policyfile.write("""{"example:test": ["false:false"]}""")
+        # NOTE(vish): reset stored policy cache so we don't have to sleep(1)
+        policy._POLICY_CACHE = {}
+        self.assertRaises(exception.PolicyNotAllowed, policy.enforce,
+                          self.context, action, self.target)
+
+
+class PolicyTestCase(test.TestCase):
+    def setUp(self):
+        super(PolicyTestCase, self).setUp()
+        policy.reset()
+        # NOTE(vish): preload rules to circumvent reloading from file
+        policy.init()
+        rules = {
+            "true": [],
+            "example:allowed": [],
+            "example:denied": [["false:false"]],
+            "example:get_http": [["http:http://www.example.com"]],
+            "example:my_file": [["role:compute_admin"],
+                                ["project_id:%(project_id)s"]],
+            "example:early_and_fail": [["false:false", "rule:true"]],
+            "example:early_or_success": [["rule:true"], ["false:false"]],
+            "example:sysadmin_allowed": [["role:admin"], ["role:sysadmin"]],
+        }
+        # NOTE(vish): then overload underlying brain
+        common_policy.set_brain(common_policy.HttpBrain(rules))
+        self.context = context.RequestContext('fake', 'fake', roles=['member'])
+        self.admin_context = context.RequestContext('admin',
+                                                    'fake',
+                                                    roles=['admin'],
+                                                    is_admin=True)
+        self.target = {}
+
+    def tearDown(self):
+        policy.reset()
+        super(PolicyTestCase, self).tearDown()
+
+    def test_enforce_nonexistent_action_throws(self):
+        action = "example:noexist"
+        self.assertRaises(exception.PolicyNotAllowed, policy.enforce,
+                          self.context, action, self.target)
+
+    def test_enforce_bad_action_throws(self):
+        action = "example:denied"
+        self.assertRaises(exception.PolicyNotAllowed, policy.enforce,
+                          self.context, action, self.target)
+
+    def test_enforce_good_action(self):
+        action = "example:allowed"
+        policy.enforce(self.context, action, self.target)
+
+    def test_enforce_http_true(self):
+
+        def fakeurlopen(url, post_data):
+            return StringIO.StringIO("True")
+        self.stubs.Set(urllib2, 'urlopen', fakeurlopen)
+        action = "example:get_http"
+        target = {}
+        result = policy.enforce(self.context, action, target)
+        self.assertEqual(result, None)
+
+    def test_enforce_http_false(self):
+
+        def fakeurlopen(url, post_data):
+            return StringIO.StringIO("False")
+        self.stubs.Set(urllib2, 'urlopen', fakeurlopen)
+        action = "example:get_http"
+        target = {}
+        self.assertRaises(exception.PolicyNotAllowed, policy.enforce,
+                          self.context, action, target)
+
+    def test_templatized_enforcement(self):
+        target_mine = {'project_id': 'fake'}
+        target_not_mine = {'project_id': 'another'}
+        action = "example:my_file"
+        policy.enforce(self.context, action, target_mine)
+        self.assertRaises(exception.PolicyNotAllowed, policy.enforce,
+                          self.context, action, target_not_mine)
+
+    def test_early_AND_enforcement(self):
+        action = "example:early_and_fail"
+        self.assertRaises(exception.PolicyNotAllowed, policy.enforce,
+                          self.context, action, self.target)
+
+    def test_early_OR_enforcement(self):
+        action = "example:early_or_success"
+        policy.enforce(self.context, action, self.target)