diff --git a/hw/virtio/meson.build b/hw/virtio/meson.build
index fbff9bc9d4..bdcdc82e13 100644
--- a/hw/virtio/meson.build
+++ b/hw/virtio/meson.build
@@ -18,6 +18,7 @@ virtio_ss.add(when: 'CONFIG_VIRTIO_BALLOON', if_true: files('virtio-balloon.c'))
 virtio_ss.add(when: 'CONFIG_VIRTIO_CRYPTO', if_true: files('virtio-crypto.c'))
 virtio_ss.add(when: ['CONFIG_VIRTIO_CRYPTO', 'CONFIG_VIRTIO_PCI'], if_true: files('virtio-crypto-pci.c'))
 virtio_ss.add(when: 'CONFIG_VHOST_USER_FS', if_true: files('vhost-user-fs.c'))
+virtio_ss.add(when: 'CONFIG_VHOST_USER_FS', if_true: libcap_ng)
 virtio_ss.add(when: ['CONFIG_VHOST_USER_FS', 'CONFIG_VIRTIO_PCI'], if_true: files('vhost-user-fs-pci.c'))
 virtio_ss.add(when: 'CONFIG_VIRTIO_PMEM', if_true: files('virtio-pmem.c'))
 virtio_ss.add(when: 'CONFIG_VHOST_VSOCK', if_true: files('vhost-vsock.c', 'vhost-vsock-common.c'))
diff --git a/hw/virtio/vhost-user-fs.c b/hw/virtio/vhost-user-fs.c
index 23bb8436e1..09947257f1 100644
--- a/hw/virtio/vhost-user-fs.c
+++ b/hw/virtio/vhost-user-fs.c
@@ -13,6 +13,8 @@
 
 #include "qemu/osdep.h"
 #include <sys/ioctl.h>
+#include <cap-ng.h>
+#include <sys/syscall.h>
 #include "standard-headers/linux/virtio_fs.h"
 #include "qapi/error.h"
 #include "hw/qdev-properties.h"
@@ -91,6 +93,84 @@ static bool check_slave_message_entries(const VhostUserFSSlaveMsg *sm,
     return true;
 }
 
+/*
+ * Helpers for dropping and regaining effective capabilities. Returns 0
+ * on success, error otherwise
+ */
+static int drop_effective_cap(const char *cap_name, bool *cap_dropped)
+{
+    int cap, ret;
+
+    cap = capng_name_to_capability(cap_name);
+    if (cap < 0) {
+        ret = -errno;
+        error_report("capng_name_to_capability(%s) failed:%s", cap_name,
+                     strerror(errno));
+        goto out;
+    }
+
+    if (capng_get_caps_process()) {
+        ret = -errno;
+        error_report("capng_get_caps_process() failed:%s", strerror(errno));
+        goto out;
+    }
+
+    /* We dont have this capability in effective set already. */
+    if (!capng_have_capability(CAPNG_EFFECTIVE, cap)) {
+        ret = 0;
+        goto out;
+    }
+
+    if (capng_update(CAPNG_DROP, CAPNG_EFFECTIVE, cap)) {
+        ret = -errno;
+        error_report("capng_update(DROP,) failed");
+        goto out;
+    }
+    if (capng_apply(CAPNG_SELECT_CAPS)) {
+        ret = -errno;
+        error_report("drop:capng_apply() failed");
+        goto out;
+    }
+
+    ret = 0;
+    if (cap_dropped) {
+        *cap_dropped = true;
+    }
+
+out:
+    return ret;
+}
+
+static int gain_effective_cap(const char *cap_name)
+{
+    int cap;
+    int ret = 0;
+
+    cap = capng_name_to_capability(cap_name);
+    if (cap < 0) {
+        ret = -errno;
+        error_report("capng_name_to_capability(%s) failed:%s", cap_name,
+                     strerror(errno));
+        goto out;
+    }
+
+    if (capng_update(CAPNG_ADD, CAPNG_EFFECTIVE, cap)) {
+        ret = -errno;
+        error_report("capng_update(ADD,) failed");
+        goto out;
+    }
+
+    if (capng_apply(CAPNG_SELECT_CAPS)) {
+        ret = -errno;
+        error_report("gain:capng_apply() failed");
+        goto out;
+    }
+    ret = 0;
+
+out:
+    return ret;
+}
+
 uint64_t vhost_user_fs_slave_map(struct vhost_dev *dev, int message_size,
                                  VhostUserFSSlaveMsg *sm, int fd)
 {
@@ -238,6 +318,7 @@ uint64_t vhost_user_fs_slave_io(struct vhost_dev *dev, int message_size,
     unsigned int i;
     int res = 0;
     size_t done = 0;
+    bool cap_fsetid_dropped = false;
 
     if (fd < 0) {
         error_report("Bad fd for map");
@@ -245,8 +326,10 @@ uint64_t vhost_user_fs_slave_io(struct vhost_dev *dev, int message_size,
     }
 
     if (sm->flags & VHOST_USER_FS_GENFLAG_DROP_FSETID) {
-        error_report("Dropping CAP_FSETID is not supported");
-        return (uint64_t)-ENOTSUP;
+        res = drop_effective_cap("FSETID", &cap_fsetid_dropped);
+        if (res != 0) {
+            return (uint64_t)res;
+        }
     }
 
     for (i = 0; i < sm->count && !res; i++) {
@@ -313,6 +396,11 @@ uint64_t vhost_user_fs_slave_io(struct vhost_dev *dev, int message_size,
     }
     close(fd);
 
+    if (cap_fsetid_dropped) {
+        if (gain_effective_cap("FSETID")) {
+            error_report("Failed to gain CAP_FSETID");
+        }
+    }
     trace_vhost_user_fs_slave_io_exit(res, done);
     if (res < 0) {
         return (uint64_t)res;
diff --git a/meson.build b/meson.build
index c6f4b0cf5e..71899d0993 100644
--- a/meson.build
+++ b/meson.build
@@ -1081,6 +1081,12 @@ elif get_option('virtfs').disabled()
   have_virtfs = false
 endif
 
+if config_host.has_key('CONFIG_VHOST_USER_FS')
+  if not libcap_ng.found()
+    error('vhost-user-fs requires libcap-ng-devel')
+  endif
+endif
+
 config_host_data.set_quoted('CONFIG_BINDIR', get_option('prefix') / get_option('bindir'))
 config_host_data.set_quoted('CONFIG_PREFIX', get_option('prefix'))
 config_host_data.set_quoted('CONFIG_QEMU_CONFDIR', get_option('prefix') / qemu_confdir)
