diff --git a/CHANGELOG.md b/CHANGELOG.md
index bece3471a..d528c95eb 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -37,6 +37,9 @@ IMPROVEMENTS:
   (`persistent_kvstore`) (name "dummy" is deprecated and will not work in
   release after this one)
 
+FEATURES:
+- [config] added the `--p2p.private_peer_ids` flag and `PrivatePeerIDs` config variable (see config for description)
+
 ## 0.16.0 (February 20th, 2017)
 
 BREAKING CHANGES:
diff --git a/cmd/tendermint/commands/run_node.go b/cmd/tendermint/commands/run_node.go
index 0e18be03a..0fcab3e39 100644
--- a/cmd/tendermint/commands/run_node.go
+++ b/cmd/tendermint/commands/run_node.go
@@ -31,11 +31,12 @@ func AddNodeFlags(cmd *cobra.Command) {
 
 	// p2p flags
 	cmd.Flags().String("p2p.laddr", config.P2P.ListenAddress, "Node listen address. (0.0.0.0:0 means any interface, any port)")
-	cmd.Flags().String("p2p.seeds", config.P2P.Seeds, "Comma delimited host:port seed nodes")
-	cmd.Flags().String("p2p.persistent_peers", config.P2P.PersistentPeers, "Comma delimited host:port persistent peers")
+	cmd.Flags().String("p2p.seeds", config.P2P.Seeds, "Comma-delimited ID@host:port seed nodes")
+	cmd.Flags().String("p2p.persistent_peers", config.P2P.PersistentPeers, "Comma-delimited ID@host:port persistent peers")
 	cmd.Flags().Bool("p2p.skip_upnp", config.P2P.SkipUPNP, "Skip UPNP configuration")
 	cmd.Flags().Bool("p2p.pex", config.P2P.PexReactor, "Enable/disable Peer-Exchange")
 	cmd.Flags().Bool("p2p.seed_mode", config.P2P.SeedMode, "Enable/disable seed mode")
+	cmd.Flags().String("p2p.private_peer_ids", config.P2P.PrivatePeerIDs, "Comma-delimited private peer IDs")
 
 	// consensus flags
 	cmd.Flags().Bool("consensus.create_empty_blocks", config.Consensus.CreateEmptyBlocks, "Set this to false to only produce blocks when there are txs or when the AppHash changes")
diff --git a/config/config.go b/config/config.go
index a433047f7..6b3f87b57 100644
--- a/config/config.go
+++ b/config/config.go
@@ -250,8 +250,8 @@ type P2PConfig struct {
 	// We only use these if we can’t connect to peers in the addrbook
 	Seeds string `mapstructure:"seeds"`
 
-	// Comma separated list of persistent peers to connect to
-	// We always connect to these
+	// Comma separated list of nodes to keep persistent connections to
+	// Do not add private peers to this list if you don't want them advertised
 	PersistentPeers string `mapstructure:"persistent_peers"`
 
 	// Skip UPNP port forwarding
@@ -289,6 +289,9 @@ type P2PConfig struct {
 
 	// Authenticated encryption
 	AuthEnc bool `mapstructure:"auth_enc"`
+
+	// Comma separated list of peer IDs to keep private (will not be gossiped to other peers)
+	PrivatePeerIDs string `mapstructure:"private_peer_ids"`
 }
 
 // DefaultP2PConfig returns a default configuration for the peer-to-peer layer
diff --git a/config/toml.go b/config/toml.go
index 35e0985f9..305e98d13 100644
--- a/config/toml.go
+++ b/config/toml.go
@@ -127,6 +127,7 @@ laddr = "{{ .P2P.ListenAddress }}"
 seeds = ""
 
 # Comma separated list of nodes to keep persistent connections to
+# Do not add private peers to this list if you don't want them advertised
 persistent_peers = ""
 
 # Path to address book
@@ -162,6 +163,9 @@ seed_mode = {{ .P2P.SeedMode }}
 # Authenticated encryption
 auth_enc = {{ .P2P.AuthEnc }}
 
+# Comma separated list of peer IDs to keep private (will not be gossiped to other peers)
+private_peer_ids = {{ .P2P.PrivatePeerIDs }}
+
 ##### mempool configuration options #####
 [mempool]
 
diff --git a/docs/specification/configuration.rst b/docs/specification/configuration.rst
index 983ac87cf..2a9ad794e 100644
--- a/docs/specification/configuration.rst
+++ b/docs/specification/configuration.rst
@@ -89,6 +89,7 @@ like the file below, however, double check by inspecting the
     seeds = ""
 
     # Comma separated list of nodes to keep persistent connections to
+    # Do not add private peers to this list if you don't want them advertised
     persistent_peers = ""
 
     # Path to address book
@@ -124,6 +125,9 @@ like the file below, however, double check by inspecting the
     # Authenticated encryption
     auth_enc = true
 
+    # Comma separated list of peer IDs to keep private (will not be gossiped to other peers)
+    private_peer_ids = ""
+
     ##### mempool configuration options #####
     [mempool]
 
diff --git a/node/node.go b/node/node.go
index dffdb83e8..d978dcde2 100644
--- a/node/node.go
+++ b/node/node.go
@@ -281,8 +281,15 @@ func NewNode(config *cfg.Config,
 		if config.P2P.Seeds != "" {
 			seeds = strings.Split(config.P2P.Seeds, ",")
 		}
+		var privatePeerIDs []string
+		if config.P2P.PrivatePeerIDs != "" {
+			privatePeerIDs = strings.Split(config.P2P.PrivatePeerIDs, ",")
+		}
 		pexReactor := pex.NewPEXReactor(addrBook,
-			&pex.PEXReactorConfig{Seeds: seeds, SeedMode: config.P2P.SeedMode})
+			&pex.PEXReactorConfig{
+				Seeds:          seeds,
+				SeedMode:       config.P2P.SeedMode,
+				PrivatePeerIDs: privatePeerIDs})
 		pexReactor.SetLogger(p2pLogger)
 		sw.AddReactor("PEX", pexReactor)
 	}
diff --git a/p2p/pex/pex_reactor.go b/p2p/pex/pex_reactor.go
index 441010aa7..2abf25930 100644
--- a/p2p/pex/pex_reactor.go
+++ b/p2p/pex/pex_reactor.go
@@ -74,6 +74,10 @@ type PEXReactorConfig struct {
 	// Seeds is a list of addresses reactor may use
 	// if it can't connect to peers in the addrbook.
 	Seeds []string
+
+	// PrivatePeerIDs is a list of peer IDs, which must not be gossiped to other
+	// peers.
+	PrivatePeerIDs []string
 }
 
 type _attemptsToDial struct {
@@ -152,7 +156,9 @@ func (r *PEXReactor) AddPeer(p Peer) {
 		// Let the ensurePeersRoutine handle asking for more
 		// peers when we need - we don't trust inbound peers as much.
 		addr := p.NodeInfo().NetAddress()
-		r.book.AddAddress(addr, addr)
+		if !isAddrPrivate(addr, r.config.PrivatePeerIDs) {
+			r.book.AddAddress(addr, addr)
+		}
 	}
 }
 
@@ -252,7 +258,7 @@ func (r *PEXReactor) ReceiveAddrs(addrs []*p2p.NetAddress, src Peer) error {
 
 	srcAddr := src.NodeInfo().NetAddress()
 	for _, netAddr := range addrs {
-		if netAddr != nil {
+		if netAddr != nil && !isAddrPrivate(netAddr, r.config.PrivatePeerIDs) {
 			r.book.AddAddress(netAddr, srcAddr)
 		}
 	}
@@ -580,6 +586,16 @@ func (r *PEXReactor) attemptDisconnects() {
 	}
 }
 
+// isAddrPrivate returns true if addr is private.
+func isAddrPrivate(addr *p2p.NetAddress, privatePeerIDs []string) bool {
+	for _, id := range privatePeerIDs {
+		if string(addr.ID) == id {
+			return true
+		}
+	}
+	return false
+}
+
 //-----------------------------------------------------------------------------
 // Messages
 
diff --git a/p2p/pex/pex_reactor_test.go b/p2p/pex/pex_reactor_test.go
index f5d815037..95cedfea5 100644
--- a/p2p/pex/pex_reactor_test.go
+++ b/p2p/pex/pex_reactor_test.go
@@ -268,6 +268,25 @@ func TestPEXReactorCrawlStatus(t *testing.T) {
 	// TODO: test
 }
 
+func TestPEXReactorDoesNotAddPrivatePeersToAddrBook(t *testing.T) {
+	peer := p2p.CreateRandomPeer(false)
+
+	pexR, book := createReactor(&PEXReactorConfig{PrivatePeerIDs: []string{string(peer.NodeInfo().ID())}})
+	defer teardownReactor(book)
+
+	// we have to send a request to receive responses
+	pexR.RequestAddrs(peer)
+
+	size := book.Size()
+	addrs := []*p2p.NetAddress{peer.NodeInfo().NetAddress()}
+	msg := wire.BinaryBytes(struct{ PexMessage }{&pexAddrsMessage{Addrs: addrs}})
+	pexR.Receive(PexChannel, peer, msg)
+	assert.Equal(t, size, book.Size())
+
+	pexR.AddPeer(peer)
+	assert.Equal(t, size, book.Size())
+}
+
 func TestPEXReactorDialPeer(t *testing.T) {
 	pexR, book := createReactor(&PEXReactorConfig{})
 	defer teardownReactor(book)
@@ -376,7 +395,7 @@ func createReactor(config *PEXReactorConfig) (r *PEXReactor, book *addrBook) {
 	book = NewAddrBook(filepath.Join(dir, "addrbook.json"), true)
 	book.SetLogger(log.TestingLogger())
 
-	r = NewPEXReactor(book, &PEXReactorConfig{})
+	r = NewPEXReactor(book, config)
 	r.SetLogger(log.TestingLogger())
 	return
 }
diff --git a/rpc/core/net.go b/rpc/core/net.go
index 14e7389d5..9b04926ab 100644
--- a/rpc/core/net.go
+++ b/rpc/core/net.go
@@ -2,6 +2,7 @@ package core
 
 import (
 	"github.com/pkg/errors"
+
 	ctypes "github.com/tendermint/tendermint/rpc/core/types"
 )