diff --git a/instack_undercloud/tests/test_undercloud.py b/instack_undercloud/tests/test_undercloud.py
index bbbda0176..de832cd0b 100644
--- a/instack_undercloud/tests/test_undercloud.py
+++ b/instack_undercloud/tests/test_undercloud.py
@@ -203,7 +203,8 @@ class TestCheckHostname(BaseTestCase):
             undercloud._check_hostname()
             mock_run_command.assert_called_with([
                 'sudo', '/bin/bash', '-c',
-                'echo 127.0.0.1 test.hostname test >> /etc/hosts'],
+                'sed -i "s/127.0.0.1\(\s*\)/127.0.0.1\\1test.hostname test /" '
+                '/etc/hosts'],
                 name='hostname-to-etc-hosts')
 
     @mock.patch('instack_undercloud.undercloud._run_command')
@@ -219,7 +220,8 @@ class TestCheckHostname(BaseTestCase):
             undercloud._check_hostname()
             mock_run_command.assert_called_with([
                 'sudo', '/bin/bash', '-c',
-                'echo 127.0.0.1 test.hostname test >> /etc/hosts'],
+                'sed -i "s/127.0.0.1\(\s*\)/127.0.0.1\\1test.hostname test /" '
+                '/etc/hosts'],
                 name='hostname-to-etc-hosts')
 
     @mock.patch('instack_undercloud.undercloud._run_command')
@@ -237,7 +239,9 @@ class TestCheckHostname(BaseTestCase):
             undercloud._check_hostname()
         mock_run_command.assert_called_with([
             'sudo', '/bin/bash', '-c',
-            'echo 127.0.0.1 test-hostname.domain test-hostname >> /etc/hosts'],
+            'sed -i "s/127.0.0.1\(\s*\)/'
+            '127.0.0.1\\1test-hostname.domain test-hostname /" '
+            '/etc/hosts'],
             name='hostname-to-etc-hosts')
 
     @mock.patch('instack_undercloud.undercloud._run_command')
diff --git a/instack_undercloud/undercloud.py b/instack_undercloud/undercloud.py
index d657c3503..8e2b9be71 100644
--- a/instack_undercloud/undercloud.py
+++ b/instack_undercloud/undercloud.py
@@ -636,9 +636,10 @@ def _check_hostname():
             if short_hostname == detected_static_hostname:
                 raise RuntimeError('Configured hostname is not fully '
                                    'qualified.')
-            echo_cmd = ('echo 127.0.0.1 %s %s >> /etc/hosts' %
-                        (detected_static_hostname, short_hostname))
-            args = ['sudo', '/bin/bash', '-c', echo_cmd]
+            sed_cmd = ('sed -i "s/127.0.0.1\(\s*\)/127.0.0.1\\1%s %s /" '
+                       '/etc/hosts' %
+                       (detected_static_hostname, short_hostname))
+            args = ['sudo', '/bin/bash', '-c', sed_cmd]
             _run_command(args, name='hostname-to-etc-hosts')
             LOG.info('Added hostname %s to /etc/hosts',
                      detected_static_hostname)
diff --git a/releasenotes/notes/set-valid-hosts-file-49d6aa96365908a7.yaml b/releasenotes/notes/set-valid-hosts-file-49d6aa96365908a7.yaml
new file mode 100644
index 000000000..edea8c785
--- /dev/null
+++ b/releasenotes/notes/set-valid-hosts-file-49d6aa96365908a7.yaml
@@ -0,0 +1,7 @@
+---
+fixes:
+  - When the hostname was written to /etc/hosts, it resulted in an invalid
+    /etc/hosts file due to 127.0.0.1 being specified twice on different lines.
+    That issue is now corrected such that the hostnames will be added to the
+    existing line for 127.0.0.1, which results in valid syntax for /etc/hosts.
+    See https://bugs.launchpad.net/tripleo/+bug/1709460