diff --git a/ansible/roles/ironic/defaults/main.yml b/ansible/roles/ironic/defaults/main.yml
index 6e1628ffa7..dd45736dea 100644
--- a/ansible/roles/ironic/defaults/main.yml
+++ b/ansible/roles/ironic/defaults/main.yml
@@ -53,6 +53,7 @@ ironic_services:
       - "{{ node_config_directory }}/ironic-inspector/:{{ container_config_directory }}/:ro"
       - "/etc/localtime:/etc/localtime:ro"
       - "kolla_logs:/var/log/kolla"
+      - "ironic_inspector_dhcp_hosts:/var/lib/ironic-inspector/dhcp-hostsdir"
       - "{{ kolla_dev_repos_directory ~ '/ironic-inspector/ironic_inspector:/var/lib/kolla/venv/lib/python2.7/site-packages/ironic_inspector' if ironic_dev_mode | bool else '' }}"
     dimensions: "{{ ironic_inspector_dimensions }}"
     haproxy:
@@ -99,6 +100,7 @@ ironic_services:
       - "{{ node_config_directory }}/ironic-dnsmasq/:{{ container_config_directory }}/:ro"
       - "/etc/localtime:/etc/localtime:ro"
       - "kolla_logs:/var/log/kolla"
+      - "ironic_inspector_dhcp_hosts:/etc/dnsmasq/dhcp-hostsdir:ro"
     dimensions: "{{ ironic_dnsmasq_dimensions }}"
 
 
@@ -180,6 +182,7 @@ ironic_console_serial_speed: "115200n8"
 ironic_ipxe_url: http://{{ api_interface_address }}:{{ ironic_ipxe_port }}
 ironic_enable_rolling_upgrade: "yes"
 ironic_inspector_kernel_cmdline_extras: []
+ironic_inspector_pxe_filter: iptables
 
 ####################
 ## Kolla
diff --git a/ansible/roles/ironic/templates/ironic-dnsmasq.conf.j2 b/ansible/roles/ironic/templates/ironic-dnsmasq.conf.j2
index 95e5242c0a..89a54f9ba1 100644
--- a/ansible/roles/ironic/templates/ironic-dnsmasq.conf.j2
+++ b/ansible/roles/ironic/templates/ironic-dnsmasq.conf.j2
@@ -20,4 +20,6 @@ dhcp-option=tag:ipxe,option:bootfile-name,{{ ironic_ipxe_url }}/inspector.ipxe
 dhcp-option=tag:efi,tag:!ipxe,option:bootfile-name,ipxe.efi
 {% endif %}
 dhcp-option=option:bootfile-name,{{ ironic_dnsmasq_boot_file }}
-
+{% if ironic_inspector_pxe_filter == 'dnsmasq' %}
+dhcp-hostsdir=/etc/dnsmasq/dhcp-hostsdir
+{% endif %}
diff --git a/ansible/roles/ironic/templates/ironic-inspector.conf.j2 b/ansible/roles/ironic/templates/ironic-inspector.conf.j2
index de883eeb6f..679e6a9d5f 100644
--- a/ansible/roles/ironic/templates/ironic-inspector.conf.j2
+++ b/ansible/roles/ironic/templates/ironic-inspector.conf.j2
@@ -34,11 +34,16 @@ memcached_servers = {% for host in groups['memcached'] %}{{ hostvars[host]['ansi
 policy_file = {{ ironic_policy_file }}
 {% endif %}
 
-[iptables]
-dnsmasq_interface = {{ ironic_dnsmasq_interface }}
-
 [database]
 connection = mysql+pymysql://{{ ironic_inspector_database_user }}:{{ ironic_inspector_database_password }}@{{ ironic_inspector_database_address }}/{{ ironic_inspector_database_name }}
 
 [processing]
 ramdisk_logs_dir = /var/log/kolla/ironic-inspector
+
+[pxe_filter]
+driver = {{ ironic_inspector_pxe_filter }}
+
+{% if ironic_inspector_pxe_filter == 'iptables' %}
+[iptables]
+dnsmasq_interface = {{ ironic_dnsmasq_interface }}
+{% endif %}
diff --git a/releasenotes/notes/ironic-inspector-dnsmasq-pxe-filter-ab012028bcd7d332.yaml b/releasenotes/notes/ironic-inspector-dnsmasq-pxe-filter-ab012028bcd7d332.yaml
new file mode 100644
index 0000000000..9b0fad9e02
--- /dev/null
+++ b/releasenotes/notes/ironic-inspector-dnsmasq-pxe-filter-ab012028bcd7d332.yaml
@@ -0,0 +1,8 @@
+---
+features:
+  - |
+    Adds support for the `Ironic Inspector dnsmasq PXE filter
+    <https://docs.openstack.org/ironic-inspector/latest/admin/dnsmasq-pxe-filter.html>`__
+    that provides improved scalability over the default IPTables PXE filter.
+    This can be enabled by setting ``ironic_inspector_pxe_filter`` to
+    ``dnsmasq``.