diff --git a/scripts/vagrant/Vagrantfile_vhost_vm b/scripts/vagrant/Vagrantfile_vhost_vm
new file mode 100644
index 000000000..2fd355402
--- /dev/null
+++ b/scripts/vagrant/Vagrantfile_vhost_vm
@@ -0,0 +1,111 @@
+# -*- mode: ruby -*-
+# vi: set ft=ruby :
+
+Vagrant.configure(2) do |config|
+
+  # Pick the right distro and bootstrap, default is ubuntu1604
+  distro = ( ENV['SPDK_VAGRANT_DISTRO'] || "ubuntu16")
+  case distro
+  when "ubuntu16"
+    # See: https://app.vagrantup.com/puppetlabs/boxes/ubuntu-16.04-64-nocm
+    config.vm.box = "puppetlabs/ubuntu-16.04-64-nocm"
+    config.vm.box_version = "1.0.0"
+  when "ubuntu18"
+    # See: https://app.vagrantup.com/bento/boxes/ubuntu-18.04
+    config.vm.box = "bento/ubuntu-18.04"
+    config.vm.box_version = "201808.24.0"
+  else
+    "Invalid argument #{distro}"
+    abort("Invalid argument!")
+  end
+  config.vm.box_check_update = false
+
+  # vagrant-cachier caches apt/yum etc to speed subsequent
+  # vagrant up
+  # to enable, run
+  # vagrant plugin install vagrant-cachier
+  #
+  if Vagrant.has_plugin?("vagrant-cachier")
+    config.cache.scope = :box
+  end
+
+  # use http proxy if avaiable
+  if ENV['http_proxy'] && Vagrant.has_plugin?("vagrant-proxyconf")
+   config.proxy.http     = ENV['http_proxy']
+   config.proxy.https    = ENV['https_proxy']
+   config.proxy.no_proxy = "localhost,127.0.0.1"
+  end
+
+  vmcpu=(ENV['SPDK_VAGRANT_VMCPU'] || 2)
+  vmram=(ENV['SPDK_VAGRANT_VMRAM'] || 4096)
+  ssh_key_dir=(ENV['SPDK_VAGRANT_SSH_KEY'])
+  spdk_dir=(ENV['SPDK_DIR'] || "none")
+  install_deps=(ENV['INSTALL_DEPS'] || "false")
+
+  config.ssh.forward_agent = true
+  config.ssh.forward_x11 = true
+
+  # Change root passwd and allow root SSH
+  config.vm.provision "shell", inline: 'echo -e "root\nroot" | sudo passwd root'
+  config.vm.provision "shell", inline: 'sudo sh -c "echo \"PermitRootLogin yes\" >> /etc/ssh/sshd_config"'
+
+  # Use previously generated SSH keys for setting up a key pair
+  $ssh_key_gen_script = <<-SCRIPT
+  sudo mkdir -p /root/.ssh
+  cat /vagrant/ssh_keys/spdk_vhost_id_rsa.pub > /root/.ssh/authorized_keys
+  sudo chmod 644 /root/.ssh/authorized_keys
+  SCRIPT
+  config.vm.provision "shell", inline: $ssh_key_gen_script
+
+  # Install needed deps
+  $apt_script = <<-SCRIPT
+  sudo apt -y update
+  sudo DEBIAN_FRONTEND=noninteractive apt -y -o Dpkg::Options::="--force-confdef" -o Dpkg::Options::="--force-confold" upgrade
+  sudo apt -y install -y fio sg3-utils bc
+  SCRIPT
+  config.vm.provision "shell", inline: $apt_script
+
+  # Modify GRUB options
+  # console=ttyS0 earlyprintk=ttyS0 - reroute output to serial dev, so that QEMU can write output to file
+  # scsi_mod.use_blk_mq=1 - for multiqueue use
+  # net.ifnames=0 biosdevname=0 - do not rename NICs on boot. That way we ensure that addded NIC is always eth0.
+  #     Reason for these options is that NIC can have different udev name during provisioning with Vagrant
+  #     and then some other name while running SPDK tests which use Qemu without any hypervisor like vbox or libvirt
+  #     so no corresponding configuration for this NIC name will be present in /etc.
+  config.vm.provision "shell", inline: 'sudo sed -ir s#GRUB_CMDLINE_LINUX=\"\"#GRUB_CMDLINE_LINUX=\"console=ttyS0\ earlyprintk=ttyS0\ scsi_mod.use_blk_mq=1\ net.ifnames=0\ biosdevname=0\"#g /etc/default/grub'
+  config.vm.provision "shell", inline: 'sudo update-grub'
+
+  # TODO: Next 2 lines break any future ssh communication via "vagrant ssh"
+  # I'd be good to check NIC names in ifconfig and then sed them in /etc/network/interfaces to eht0, eht1, and so on
+  config.vm.provision "shell", inline: 'sudo sh -c "echo \"auto eth0\" >> /etc/network/interfaces"'
+  config.vm.provision "shell", inline: 'sudo sh -c "echo \"iface eth0 inet dhcp\" >> /etc/network/interfaces"'
+
+  if distro.include? "ubuntu18"
+    # This is to avoid annoying "Start job is running for wait for network to be configured" 2 minute timeout
+    # in case of not-so-perfect NIC and virtual network configuration for the VM
+    config.vm.provision "shell", inline: 'systemctl disable systemd-networkd-wait-online.service'
+    config.vm.provision "shell", inline: 'systemctl mask systemd-networkd-wait-online.service'
+  end
+
+  config.vm.provider "virtualbox" do |vb|
+    vb.customize ["modifyvm", :id, "--ioapic", "on"]
+    vb.memory = "#{vmram}"
+    vb.cpus = "#{vmcpu}"
+
+    #support for the SSE4.x instruction is required in some versions of VB.
+    vb.customize ["setextradata", :id, "VBoxInternal/CPUM/SSE4.1", "1"]
+    vb.customize ["setextradata", :id, "VBoxInternal/CPUM/SSE4.2", "1"]
+  end
+
+  if spdk_dir != "none"
+    config.vm.synced_folder "#{spdk_dir}", "/home/vagrant/spdk_repo/spdk", type: "rsync", rsync__auto: false
+    if install_deps.include? "true"
+      config.vm.provision "shell", inline: 'sudo /home/vagrant/spdk_repo/spdk/scripts/pkgdep.sh'
+    end
+  end
+
+  # Copy in the user's tools if they exists
+  if File.directory?(File.expand_path("~/vagrant_tools"))
+    config.vm.synced_folder "~/vagrant_tools", "/home/vagrant/tools", type: "rsync", rsync__auto: false
+  end
+end
diff --git a/scripts/vagrant/create_vhost_vm.sh b/scripts/vagrant/create_vhost_vm.sh
new file mode 100755
index 000000000..e87faa6cd
--- /dev/null
+++ b/scripts/vagrant/create_vhost_vm.sh
@@ -0,0 +1,129 @@
+#!/usr/bin/env bash
+
+# create_vhost_vm.sh
+#
+# Creates a virtual machine image used as a dependency for running vhost tests
+
+set -e
+
+VAGRANT_TARGET="$PWD"
+
+DIR="$( cd "$( dirname $0 )" && pwd )"
+SPDK_DIR="$( cd "${DIR}/../../" && pwd )"
+USE_SSH_DIR=""
+MOVE_TO_DEFAULT_DIR=false
+INSTALL_DEPS=false
+
+# The command line help
+display_help() {
+	echo
+	echo " Usage: ${0##*/} <distro>"
+	echo
+	echo "  distro = <ubuntu16 | ubuntu18> "
+	echo
+	echo "  --use-ssh-dir=<dir path>    Use existing spdk_vhost_id_rsa keys from specified directory"
+	echo "                              for setting up SSH key pair on VM"
+	echo "  --install-deps              Install SPDK build dependencies on VM. Needed by some of the"
+	echo "                              vhost and vhost initiator tests. Default: false."
+	echo "  --move-to-default-dir           Move generated files to default directories used by vhost test scripts."
+	echo "                              Default: false."
+	echo "  --http-proxy                Default: \"${SPDK_VAGRANT_HTTP_PROXY}\""
+	echo "  -h help"
+	echo
+	echo " Examples:"
+	echo
+}
+
+while getopts ":h-:" opt; do
+	case "${opt}" in
+		-)
+		case "${OPTARG}" in
+			use-ssh-dir=*) USE_SSH_DIR="${OPTARG#*=}" ;;
+			move-to-default-dir) MOVE_TO_DEFAULT_DIR=true ;;
+			install-deps) INSTALL_DEPS=true ;;
+			http-proxy=*)
+				http_proxy=$OPTARG
+				https_proxy=$http_proxy
+				SPDK_VAGRANT_HTTP_PROXY="${http_proxy}"
+			;;
+			*)
+				echo "  Invalid argument -$OPTARG" >&2
+				echo "  Try \"$0 -h\"" >&2
+				exit 1
+				;;
+		esac
+		;;
+		h)
+			display_help >&2
+			exit 0
+		;;
+		*)
+			echo "  Invalid argument: -$OPTARG" >&2
+			echo "  Try: \"$0 -h\"" >&2
+			exit 1
+		;;
+	esac
+done
+export SPDK_DIR
+export SPDK_VAGRANT_HTTP_PROXY
+export INSTALL_DEPS
+
+
+shift "$((OPTIND-1))"   # Discard the options and sentinel --
+SPDK_VAGRANT_DISTRO="$@"
+
+case "$SPDK_VAGRANT_DISTRO" in
+	ubuntu16)
+		export SPDK_VAGRANT_DISTRO
+	;;
+	ubuntu18)
+		export SPDK_VAGRANT_DISTRO
+	;;
+	*)
+		echo "  Invalid argument \"${SPDK_VAGRANT_DISTRO}\""
+		echo "  Try: \"$0 -h\"" >&2
+		exit 1
+	;;
+esac
+
+mkdir -vp "${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}"
+cp ${DIR}/Vagrantfile_vhost_vm ${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/Vagrantfile
+
+# Copy or generate SSH keys to the VM
+mkdir -vp "${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/ssh_keys"
+
+if [[ -n $USE_SSH_DIR ]]; then
+	cp ${USE_SSH_DIR}/spdk_vhost_id_rsa* "${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/ssh_keys"
+else
+	ssh-keygen -f "${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/ssh_keys/spdk_vhost_id_rsa" -N "" -q
+fi
+export SPDK_VAGRANT_SSH_KEY="${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/ssh_keys/spdk_vhost_id_rsa"
+
+pushd "${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}"
+if [ ! -z "${http_proxy}" ]; then
+	export http_proxy
+	export https_proxy
+	if vagrant plugin list | grep -q vagrant-proxyconf; then
+		echo "vagrant-proxyconf already installed... skipping"
+	else
+		vagrant plugin install vagrant-proxyconf
+	fi
+fi
+VBoxManage setproperty machinefolder "${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}"
+vagrant up
+vagrant halt
+VBoxManage setproperty machinefolder default
+
+# Convert Vbox .vmkd image to qcow2
+vmdk_img=$(find ${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO} -name "*.vmdk")
+qemu-img convert -f vmdk -O qcow2 ${vmdk_img} ${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/vhost_vm_image.qcow2
+
+if $MOVE_TO_DEFAULT_DIR; then
+	sudo mkdir -p /home/sys_sgsw
+	sudo mv -f ${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/vhost_vm_image.qcow2 /home/sys_sgsw/vhost_vm_image.qcow2
+	sudo mv -f ${VAGRANT_TARGET}/${SPDK_VAGRANT_DISTRO}/ssh_keys/spdk_vhost_id_rsa* ~/.ssh/
+fi
+
+echo ""
+echo "  SUCCESS!"
+echo ""
diff --git a/test/common/config/README.md b/test/common/config/README.md
index c45c8ecba..609f9de80 100644
--- a/test/common/config/README.md
+++ b/test/common/config/README.md
@@ -40,6 +40,26 @@ configuration file. For a full list of the variable declarations available for a
 The Vhost tests also require the creation of a second virtual machine nested inside of the test VM.
 Please follow the directions below to complete that installation. Note that host refers to the Fedora VM
 created above and guest or VM refer to the Ubuntu VM created in this section.
+
+1. Follow instructions from spdk/scripts/vagrant/README.md
+	- install all needed packages mentioned in "Mac OSX Setup" or "Windows 10 Setup" sections
+	- follow steps from "Configure Vagrant" section
+
+2. Use Vagrant scripts located in spdk/scripts/vagrant to automatically generate
+	VM image to use in SPDK vhost tests.
+	Example command:
+	~~~{.sh}
+	spdk/scripts/vagrant/create_vhost_vm.sh --move-to-def-dirs ubuntu16
+	~~~
+	This command will:
+		- Download a Ubuntu 16.04 image file
+		- upgrade the system and install needed dependencies (fio, sg3-utils, bc)
+		- add entry to VM's ~/.ssh/autorized_keys
+		- add appropriate options to GRUB command line and update grub
+		- convert the image to .qcow2 format
+		- move .qcow2 file and ssh keys to default locations used by vhost test scripts
+
+Alternatively it is possible to create the VM image manually using following steps:
 1. Create an image file for the VM. It does not have to be large, about 3.5G should suffice.
 2. Create an ssh keypair for host-guest communications (performed on the host):
     - Generate an ssh keypair with the name spdk_vhost_id_rsa and save it in `/root/.ssh`.