diff --git a/gns3server/compute/docker/docker_vm.py b/gns3server/compute/docker/docker_vm.py
index 4ba038b3..6b7c3c7f 100644
--- a/gns3server/compute/docker/docker_vm.py
+++ b/gns3server/compute/docker/docker_vm.py
@@ -337,11 +337,10 @@ class DockerVM(BaseNode):
             params["Env"].append("DISPLAY=:{}".format(self._display))
             params["HostConfig"]["Binds"].append("/tmp/.X11-unix/:/tmp/.X11-unix/")
 
-        if self._extra_hosts is not None and self._extra_hosts.strip() != "":
-            params["HostConfig"]["ExtraHosts"] = [h.strip()
-                                                  for h in self._extra_hosts.split("\n")
-                                                  if h.strip() != "" ]
-
+        if self._extra_hosts:
+            extra_hosts = self._format_extra_hosts(self._extra_hosts)
+            if extra_hosts:
+                params["Env"].append("GNS3_EXTRA_HOSTS={}".format(extra_hosts))
 
         result = yield from self.manager.query("POST", "containers/create", data=params)
         self._cid = result['Id']
@@ -349,6 +348,20 @@ class DockerVM(BaseNode):
             name=self._name, id=self._id))
         return True
 
+    def _format_extra_hosts(self, extra_hosts):
+        lines = [h.strip() for h in self._extra_hosts.split("\n") if h.strip() != ""]
+        hosts = []
+        try:
+            for host in lines:
+                hostname, ip = host.split(":")
+                hostname = hostname.strip()
+                ip = ip.strip()
+                if hostname and ip:
+                    hosts.append((hostname, ip))
+        except ValueError:
+            raise DockerError("Can't apply `ExtraHosts`, wrong format: {}".format(extra_hosts))
+        return "\n".join(["{}\t{}".format(h[1], h[0]) for h in hosts])
+
     @asyncio.coroutine
     def update(self):
         """
diff --git a/gns3server/compute/docker/resources/init.sh b/gns3server/compute/docker/resources/init.sh
index ee98bebd..9c317559 100755
--- a/gns3server/compute/docker/resources/init.sh
+++ b/gns3server/compute/docker/resources/init.sh
@@ -60,6 +60,14 @@ ff02::1	ip6-allnodes
 ff02::2	ip6-allrouters
 __EOF__
 
+# imitate docker's `ExtraHosts` behaviour
+sed -i '/GNS3_EXTRA_HOSTS_START/,/GNS3_EXTRA_HOSTS_END/d' /etc/hosts
+[ -n "$GNS3_EXTRA_HOSTS" ] && cat >> /etc/hosts << __EOF__
+# GNS3_EXTRA_HOSTS_START
+$GNS3_EXTRA_HOSTS
+# GNS3_EXTRA_HOSTS_END
+__EOF__
+
 # configure loopback interface
 ip link set dev lo up
 
diff --git a/tests/compute/docker/test_docker_vm.py b/tests/compute/docker/test_docker_vm.py
index 60487ff6..8360b2ff 100644
--- a/tests/compute/docker/test_docker_vm.py
+++ b/tests/compute/docker/test_docker_vm.py
@@ -61,6 +61,7 @@ def test_json(vm, project):
         'console_resolution': '1024x768',
         'console_http_port': 80,
         'console_http_path': '/',
+        'extra_hosts': None,
         'aux': vm.aux,
         'start_command': vm.start_command,
         'environment': vm.environment,
@@ -210,20 +211,46 @@ def test_create_with_extra_hosts(loop, project, manager):
         "Warnings": []
     }
 
-    with asyncio_patch("gns3server.compute.docker.Docker.list_images", return_value=[{"image": "ubuntu"}]) as mock_list_images:
+    with asyncio_patch("gns3server.compute.docker.Docker.list_images", return_value=[{"image": "ubuntu"}]):
         with asyncio_patch("gns3server.compute.docker.Docker.query", return_value=response) as mock:
             vm = DockerVM("test", str(uuid.uuid4()), project, manager, "ubuntu", extra_hosts=extra_hosts)
-            vm._start_vnc = MagicMock()
-            vm._display = 42
             loop.run_until_complete(asyncio.async(vm.create()))
             called_kwargs = mock.call_args[1]
-            assert called_kwargs["data"]["HostConfig"]["ExtraHosts"] == [
-                "test:199.199.199.1",
-                "test2:199.199.199.1"
-            ]
+            assert "GNS3_EXTRA_HOSTS=199.199.199.1\ttest\n199.199.199.1\ttest2" in called_kwargs["data"]["Env"]
         assert vm._extra_hosts == extra_hosts
 
 
+def test_create_with_extra_hosts_wrong_format(loop, project, manager):
+    extra_hosts = "test"
+
+    response = {
+        "Id": "e90e34656806",
+        "Warnings": []
+    }
+
+    with asyncio_patch("gns3server.compute.docker.Docker.list_images", return_value=[{"image": "ubuntu"}]):
+        with asyncio_patch("gns3server.compute.docker.Docker.query", return_value=response):
+            vm = DockerVM("test", str(uuid.uuid4()), project, manager, "ubuntu", extra_hosts=extra_hosts)
+            with pytest.raises(DockerError):
+                loop.run_until_complete(asyncio.async(vm.create()))
+
+
+def test_create_with_empty_extra_hosts(loop, project, manager):
+    extra_hosts = "test:\n"
+
+    response = {
+        "Id": "e90e34656806",
+        "Warnings": []
+    }
+
+    with asyncio_patch("gns3server.compute.docker.Docker.list_images", return_value=[{"image": "ubuntu"}]):
+        with asyncio_patch("gns3server.compute.docker.Docker.query", return_value=response) as mock:
+            vm = DockerVM("test", str(uuid.uuid4()), project, manager, "ubuntu", extra_hosts=extra_hosts)
+            loop.run_until_complete(asyncio.async(vm.create()))
+            called_kwargs = mock.call_args[1]
+            assert len([ e for e in called_kwargs["data"]["Env"] if "GNS3_EXTRA_HOSTS" in e]) == 0
+
+
 def test_create_start_cmd(loop, project, manager):
 
     response = {