diff --git a/api-ref/source/v1/parameters.yaml b/api-ref/source/v1/parameters.yaml
index d61866794c..0a9db587c7 100644
--- a/api-ref/source/v1/parameters.yaml
+++ b/api-ref/source/v1/parameters.yaml
@@ -115,7 +115,7 @@ deployment_server_id_query:
 global_tenant:
   description: |
     Set to ``true`` to include stacks from all tenants (projects) in the stack
-    list. Specify policy requirements in the Orchestration ``policy.json``
+    list. Specify policy requirements in the Orchestration ``policy.yaml``
     file.
   in: query
   required: false
diff --git a/doc/source/admin/stack-domain-users.rst b/doc/source/admin/stack-domain-users.rst
index fa869d943f..4818554d2c 100644
--- a/doc/source/admin/stack-domain-users.rst
+++ b/doc/source/admin/stack-domain-users.rst
@@ -124,7 +124,7 @@ The following steps are run during stack creation:
    perspective) to the stack owners project. The users who are created
    in the stack domain are still assigned the ``heat_stack_user`` role, so
    the API surface they can access is limited through
-   the :file:`policy.json` file.
+   the :file:`policy.yaml` file.
    For more  information, see :keystone-doc:`OpenStack Identity documentation
    <>`.
 
@@ -133,7 +133,7 @@ The following steps are run during stack creation:
    retrieved. Details are retrieved from the database for
    both the stack owner's project (the default
    API path to the stack) and the stack domain project, subject to the
-   :file:`policy.json` restrictions.
+   :file:`policy.yaml` restrictions.
 
 This means there are now two paths that
 can result in the same data being retrieved through the Orchestration API.
diff --git a/doc/source/configuration/sample_policy.rst b/doc/source/configuration/sample_policy.rst
index 78814abe82..0b9ce0976e 100644
--- a/doc/source/configuration/sample_policy.rst
+++ b/doc/source/configuration/sample_policy.rst
@@ -2,6 +2,14 @@
 Heat Sample Policy
 ==================
 
+.. warning::
+
+   JSON formatted policy file is deprecated since Heat 17.0.0 (Xena).
+   This `oslopolicy-convert-json-to-yaml`__ tool will migrate your existing
+   JSON-formatted policy file to YAML in a backward-compatible way.
+
+.. __: https://docs.openstack.org/oslo.policy/latest/cli/oslopolicy-convert-json-to-yaml.html
+
 The following is a sample heat policy file that has been auto-generated
 from default policy values in code. If you're using the default policies, then
 the maintenance of this file is not necessary, and it should not be copied into
diff --git a/heat/api/cfn/v1/stacks.py b/heat/api/cfn/v1/stacks.py
index 245c8d57d9..881c43d88b 100644
--- a/heat/api/cfn/v1/stacks.py
+++ b/heat/api/cfn/v1/stacks.py
@@ -49,7 +49,7 @@ class StackController(object):
         raise exception.HeatInvalidActionError()
 
     def _enforce(self, req, action):
-        """Authorize an action against the policy.json and policies in code."""
+        """Authorize an action against the policy.yaml and policies in code."""
         try:
             self.policy.enforce(req.context, action, is_registered_policy=True)
         except heat_exception.Forbidden:
diff --git a/heat/api/openstack/v1/actions.py b/heat/api/openstack/v1/actions.py
index 3a99a445e2..553c09a67f 100644
--- a/heat/api/openstack/v1/actions.py
+++ b/heat/api/openstack/v1/actions.py
@@ -25,7 +25,7 @@ class ActionController(object):
 
     Implements the API for stack actions
     """
-    # Define request scope (must match what is in policy.json or policies in
+    # Define request scope (must match what is in policy.yaml or policies in
     # code)
     REQUEST_SCOPE = 'actions'
 
diff --git a/heat/api/openstack/v1/build_info.py b/heat/api/openstack/v1/build_info.py
index 2743f621b2..923d38225d 100644
--- a/heat/api/openstack/v1/build_info.py
+++ b/heat/api/openstack/v1/build_info.py
@@ -24,7 +24,7 @@ class BuildInfoController(object):
 
     Returns build information for current app.
     """
-    # Define request scope (must match what is in policy.json or policies in
+    # Define request scope (must match what is in policy.yaml or policies in
     # code)
     REQUEST_SCOPE = 'build_info'
 
diff --git a/heat/api/openstack/v1/events.py b/heat/api/openstack/v1/events.py
index 87aa000a83..7c0527408d 100644
--- a/heat/api/openstack/v1/events.py
+++ b/heat/api/openstack/v1/events.py
@@ -83,7 +83,7 @@ class EventController(object):
 
     Implements the API actions.
     """
-    # Define request scope (must match what is in policy.json or policies in
+    # Define request scope (must match what is in policy.yaml or policies in
     # code)
     REQUEST_SCOPE = 'events'
 
diff --git a/heat/api/openstack/v1/resources.py b/heat/api/openstack/v1/resources.py
index 199f778e40..f6d7cd8cba 100644
--- a/heat/api/openstack/v1/resources.py
+++ b/heat/api/openstack/v1/resources.py
@@ -74,7 +74,7 @@ class ResourceController(object):
 
     Implements the API actions.
     """
-    # Define request scope (must match what is in policy.json or policies in
+    # Define request scope (must match what is in policy.yaml or policies in
     # code)
     REQUEST_SCOPE = 'resource'
 
diff --git a/heat/api/openstack/v1/services.py b/heat/api/openstack/v1/services.py
index c51167b7c6..4c61e2aed0 100644
--- a/heat/api/openstack/v1/services.py
+++ b/heat/api/openstack/v1/services.py
@@ -25,7 +25,7 @@ from heat.rpc import client as rpc_client
 
 class ServiceController(object):
     """WSGI controller for reporting the heat engine status in Heat v1 API."""
-    # Define request scope (must match what is in policy.json or policies in
+    # Define request scope (must match what is in policy.yaml or policies in
     # code)
     REQUEST_SCOPE = 'service'
 
diff --git a/heat/api/openstack/v1/stacks.py b/heat/api/openstack/v1/stacks.py
index 1da8265099..80b8e90b59 100644
--- a/heat/api/openstack/v1/stacks.py
+++ b/heat/api/openstack/v1/stacks.py
@@ -183,7 +183,7 @@ class StackController(object):
 
     Implements the API actions.
     """
-    # Define request scope (must match what is in policy.json or policies in
+    # Define request scope (must match what is in policy.yaml or policies in
     # code)
     REQUEST_SCOPE = 'stacks'
 
diff --git a/heat/cmd/status.py b/heat/cmd/status.py
index 3281176f1e..4bf48d017b 100644
--- a/heat/cmd/status.py
+++ b/heat/cmd/status.py
@@ -15,6 +15,7 @@
 import sys
 
 from oslo_config import cfg
+from oslo_upgradecheck import common_checks
 from oslo_upgradecheck import upgradecheck
 
 from heat.common.i18n import _
@@ -28,11 +29,6 @@ class Checks(upgradecheck.UpgradeCommands):
     and added to _upgrade_checks tuple.
     """
 
-    def _check_placeholder(self):
-        # This is just a placeholder for upgrade checks, it should be
-        # removed when the actual checks are added
-        return upgradecheck.Result(upgradecheck.Code.SUCCESS)
-
     # The format of the check functions is to return an
     # oslo_upgradecheck.upgradecheck.Result
     # object with the appropriate
@@ -41,8 +37,8 @@ class Checks(upgradecheck.UpgradeCommands):
     # in the returned Result's "details" attribute. The
     # summary will be rolled up at the end of the check() method.
     _upgrade_checks = (
-        # In the future there should be some real checks added here
-        (_('Placeholder'), _check_placeholder),
+        (_('Policy File JSON to YAML Migration'),
+         (common_checks.check_policy_json, {'conf': cfg.CONF})),
     )
 
 
diff --git a/heat/common/config.py b/heat/common/config.py
index 1c03b6f1b8..e978fdb407 100644
--- a/heat/common/config.py
+++ b/heat/common/config.py
@@ -19,6 +19,7 @@ from oslo_config import cfg
 from oslo_db import options as oslo_db_ops
 from oslo_log import log as logging
 from oslo_middleware import cors
+from oslo_policy import opts as policy_opts
 from osprofiler import opts as profiler
 
 from heat.common import exception
@@ -596,3 +597,7 @@ def set_config_defaults():
                        'DELETE',
                        'PATCH']
     )
+    # TODO(gmann): Remove setting the default value of config policy_file
+    # once oslo_policy change the default value to 'policy.yaml'.
+    # https://github.com/openstack/oslo.policy/blob/a626ad12fe5a3abd49d70e3e5b95589d279ab578/oslo_policy/opts.py#L49
+    policy_opts.set_defaults(cfg.CONF, 'policy.yaml')
diff --git a/heat/common/policy.py b/heat/common/policy.py
index 38971e0017..9b72e833a2 100644
--- a/heat/common/policy.py
+++ b/heat/common/policy.py
@@ -19,6 +19,7 @@
 
 from oslo_config import cfg
 from oslo_log import log as logging
+from oslo_policy import opts
 from oslo_policy import policy
 from oslo_utils import excutils
 
@@ -33,6 +34,12 @@ LOG = logging.getLogger(__name__)
 DEFAULT_RULES = policy.Rules.from_dict({'default': '!'})
 DEFAULT_RESOURCE_RULES = policy.Rules.from_dict({'default': '@'})
 
+# TODO(gmann): Remove setting the default value of config policy_file
+# once oslo_policy change the default value to 'policy.yaml'.
+# https://github.com/openstack/oslo.policy/blob/a626ad12fe5a3abd49d70e3e5b95589d279ab578/oslo_policy/opts.py#L49
+DEFAULT_POLICY_FILE = 'policy.yaml'
+opts.set_defaults(CONF, DEFAULT_POLICY_FILE)
+
 ENFORCER = None
 
 
diff --git a/heat/tests/cmd/test_status.py b/heat/tests/cmd/test_status.py
index ede3ba63b0..8f73a525da 100644
--- a/heat/tests/cmd/test_status.py
+++ b/heat/tests/cmd/test_status.py
@@ -12,6 +12,8 @@
 #    License for the specific language governing permissions and limitations
 #    under the License.
 
+from unittest import mock
+
 from oslo_upgradecheck.upgradecheck import Code
 
 from heat.cmd import status
@@ -24,7 +26,13 @@ class TestUpgradeChecks(common.HeatTestCase):
         super(TestUpgradeChecks, self).setUp()
         self.cmd = status.Checks()
 
-    def test__check_placeholder(self):
-        check_result = self.cmd._check_placeholder()
-        self.assertEqual(
-            Code.SUCCESS, check_result.code)
+    @mock.patch('oslo_utils.fileutils.is_json')
+    def test_checks(self, mock_util):
+        mock_util.return_value = False
+        for name, func in self.cmd._upgrade_checks:
+            if isinstance(func, tuple):
+                func_name, kwargs = func
+                result = func_name(self, **kwargs)
+            else:
+                result = func(self)
+            self.assertEqual(Code.SUCCESS, result.code)
diff --git a/heat/tests/common.py b/heat/tests/common.py
index b3c1fdc995..baafe94be7 100644
--- a/heat/tests/common.py
+++ b/heat/tests/common.py
@@ -81,7 +81,7 @@ class HeatTestCase(testscenarios.WithScenarios,
                    testtools.TestCase, FakeLogMixin):
 
     def setUp(self, mock_keystone=True, mock_resource_policy=True,
-              quieten_logging=True):
+              quieten_logging=True, mock_find_file=True):
         super(HeatTestCase, self).setUp()
         self.setup_logging(quieten=quieten_logging)
         self.warnings = self.useFixture(fixtures.WarningsCapture())
@@ -126,6 +126,9 @@ class HeatTestCase(testscenarios.WithScenarios,
                         '/etc/heat/templates',
                         templ_path)
 
+        if mock_find_file:
+            self.mock_find_file = self.patchobject(
+                cfg.ConfigOpts, 'find_file')
         if mock_keystone:
             self.stub_keystoneclient()
         if mock_resource_policy:
diff --git a/heat/tests/convergence/framework/reality.py b/heat/tests/convergence/framework/reality.py
index dcd7a79c7a..055782b389 100644
--- a/heat/tests/convergence/framework/reality.py
+++ b/heat/tests/convergence/framework/reality.py
@@ -11,6 +11,8 @@
 #    License for the specific language governing permissions and limitations
 #    under the License.
 
+from unittest import mock
+
 from heat.common import exception
 from heat.db.sqlalchemy import api as db_api
 from heat.tests import utils
@@ -49,4 +51,5 @@ class RealityStore(object):
         return res_data.value
 
 
-reality = RealityStore()
+with mock.patch("oslo_config.cfg.ConfigOpts.find_file"):
+    reality = RealityStore()
diff --git a/heat/tests/test_common_context.py b/heat/tests/test_common_context.py
index 01604c6652..31f5bb736f 100644
--- a/heat/tests/test_common_context.py
+++ b/heat/tests/test_common_context.py
@@ -391,7 +391,7 @@ class RequestContextMiddlewareTest(common.HeatTestCase):
     )]
 
     def setUp(self):
-        super(RequestContextMiddlewareTest, self).setUp()
+        super(RequestContextMiddlewareTest, self).setUp(mock_find_file=False)
         self.fixture = self.useFixture(config_fixture.Config())
         self.fixture.conf(args=['--config-dir', policy_path])
         policy_opts.set_defaults(cfg.CONF, 'check_admin.json')
diff --git a/heat/tests/test_common_policy.py b/heat/tests/test_common_policy.py
index eb2753c4ac..99c23c436d 100644
--- a/heat/tests/test_common_policy.py
+++ b/heat/tests/test_common_policy.py
@@ -33,7 +33,8 @@ policy_path = os.path.dirname(os.path.realpath(__file__)) + "/policy/"
 class TestPolicyEnforcer(common.HeatTestCase):
 
     def setUp(self):
-        super(TestPolicyEnforcer, self).setUp(mock_resource_policy=False)
+        super(TestPolicyEnforcer, self).setUp(
+            mock_resource_policy=False, mock_find_file=False)
         self.fixture = self.useFixture(config_fixture.Config())
         self.fixture.conf(args=['--config-dir', policy_path])
 
diff --git a/lower-constraints.txt b/lower-constraints.txt
index 47b9cac968..25c90e155d 100644
--- a/lower-constraints.txt
+++ b/lower-constraints.txt
@@ -66,7 +66,7 @@ os-service-types==1.2.0
 osc-lib==1.10.0
 oslo.cache==1.26.0
 oslo.concurrency==3.26.0
-oslo.config==6.0.0
+oslo.config==6.8.0
 oslo.context==2.22.0
 oslo.db==6.0.0
 oslo.i18n==3.20.0
@@ -77,12 +77,12 @@ oslo.policy==3.7.0
 oslo.reports==1.18.0
 oslo.serialization==2.25.0
 oslo.service==1.24.0
-oslo.upgradecheck==0.1.0
-oslo.utils==3.40.0
+oslo.upgradecheck==1.3.0
+oslo.utils==4.5.0
 oslo.versionedobjects==1.31.2
 oslotest==3.2.0
 osprofiler==1.4.0
-packaging==17.1
+packaging==20.4
 paramiko==2.7.1
 Paste==2.0.3
 PasteDeploy==1.5.0
@@ -132,9 +132,9 @@ python-zunclient==3.4.0
 pytz==2013.6
 PyYAML==5.1
 repoze.lru==0.7
-requests==2.14.2
+requests==2.23.0
 requestsexceptions==1.4.0
-rfc3986==1.1.0
+rfc3986==1.2.0
 Routes==2.3.1
 simplejson==3.13.2
 six==1.10.0
diff --git a/releasenotes/notes/deprecate-json-formatted-policy-file-ac2f98b31ece0baf.yaml b/releasenotes/notes/deprecate-json-formatted-policy-file-ac2f98b31ece0baf.yaml
new file mode 100644
index 0000000000..00519ae7be
--- /dev/null
+++ b/releasenotes/notes/deprecate-json-formatted-policy-file-ac2f98b31ece0baf.yaml
@@ -0,0 +1,20 @@
+---
+upgrade:
+  - |
+    The default value of ``[oslo_policy] policy_file`` config option has
+    been changed from ``policy.json`` to ``policy.yaml``.
+    Operators who are utilizing customized or previously generated
+    static policy JSON files (which are not needed by default), should
+    generate new policy files or convert them in YAML format. Use the
+    `oslopolicy-convert-json-to-yaml
+    <https://docs.openstack.org/oslo.policy/latest/cli/oslopolicy-convert-json-to-yaml.html>`_
+    tool to convert a JSON to YAML formatted policy file in
+    backward compatible way.
+deprecations:
+  - |
+    Use of JSON policy files was deprecated by the ``oslo.policy`` library
+    during the Victoria development cycle. As a result, this deprecation is
+    being noted in the Xena cycle with an anticipated future removal of support
+    by ``oslo.policy``. As such operators will need to convert to YAML policy
+    files. Please see the upgrade notes for details on migration of any
+    custom policy files.
diff --git a/requirements.txt b/requirements.txt
index 46ef806465..2f54c37aaa 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -16,7 +16,7 @@ netaddr>=0.7.18 # BSD
 neutron-lib>=1.14.0  # Apache-2.0
 openstacksdk>=0.11.2 # Apache-2.0
 oslo.cache>=1.26.0 # Apache-2.0
-oslo.config>=6.0.0 # Apache-2.0
+oslo.config>=6.8.0 # Apache-2.0
 oslo.concurrency>=3.26.0 # Apache-2.0
 oslo.context>=2.22.0 # Apache-2.0
 oslo.db>=6.0.0 # Apache-2.0
@@ -28,8 +28,8 @@ oslo.policy>=3.7.0 # Apache-2.0
 oslo.reports>=1.18.0 # Apache-2.0
 oslo.serialization>=2.25.0 # Apache-2.0
 oslo.service!=1.28.1,>=1.24.0 # Apache-2.0
-oslo.upgradecheck>=0.1.0 # Apache-2.0
-oslo.utils>=3.40.0 # Apache-2.0
+oslo.upgradecheck>=1.3.0 # Apache-2.0
+oslo.utils>=4.5.0 # Apache-2.0
 osprofiler>=1.4.0 # Apache-2.0
 oslo.versionedobjects>=1.31.2 # Apache-2.0
 PasteDeploy>=1.5.0 # MIT
@@ -59,7 +59,7 @@ python-zaqarclient>=1.3.0 # Apache-2.0
 python-zunclient>=3.4.0 # Apache-2.0
 pytz>=2013.6 # MIT
 PyYAML>=5.1 # MIT
-requests>=2.14.2 # Apache-2.0
+requests>=2.23.0 # Apache-2.0
 tenacity>=6.1.0 # Apache-2.0
 Routes>=2.3.1 # MIT
 SQLAlchemy!=1.1.5,!=1.1.6,!=1.1.7,!=1.1.8,>=1.0.10 # MIT