diff --git a/apis/core/v1alpha1/policies.go b/apis/core/v1alpha1/policies.go
index 2f159c0..a85a65a 100644
--- a/apis/core/v1alpha1/policies.go
+++ b/apis/core/v1alpha1/policies.go
@@ -30,3 +30,17 @@ const (
 	// will be retained when the managed resource is deleted.
 	ReclaimRetain ReclaimPolicy = "Retain"
 )
+
+// A DeletionPolicy determines what should happen to the underlying external
+// resource when a managed resource is deleted.
+type DeletionPolicy string
+
+const (
+	// DeletionOrphan means the external resource will orphaned when its managed
+	// resource is deleted.
+	DeletionOrphan DeletionPolicy = "Orphan"
+
+	// DeletionDelete means both the  external resource will be deleted when its
+	// managed resource is deleted.
+	DeletionDelete DeletionPolicy = "Delete"
+)
diff --git a/apis/core/v1alpha1/resource.go b/apis/core/v1alpha1/resource.go
index dc9e2de..3c77c43 100644
--- a/apis/core/v1alpha1/resource.go
+++ b/apis/core/v1alpha1/resource.go
@@ -201,6 +201,14 @@ type ResourceSpec struct {
 	// observe, update, and delete this managed resource.
 	ProviderReference Reference `json:"providerRef"`
 
+	// DeletionPolicy specifies what will happen to the underlying external
+	// when this managed resource is deleted. The "Orphan" policy is used when
+	// no policy is specified.
+	//
+	// +optional
+	// +kubebuilder:validation:Enum=Orphan;Delete
+	DeletionPolicy DeletionPolicy `json:"deletionPolicy,omitempty"`
+
 	// ReclaimPolicy specifies what will happen to this managed resource when
 	// its resource claim is deleted, and what will happen to the underlying
 	// external resource when the managed resource is deleted. The "Delete"
@@ -211,6 +219,10 @@ type ResourceSpec struct {
 	// resource claim is deleted, and in turn causes the external resource to be
 	// retained when its managed resource is deleted. The "Retain" policy is
 	// used when no policy is specified.
+	//
+	// Deprecated. DeletionPolicy takes precedence when both are set.
+	// See https://github.com/crossplane/crossplane-runtime/issues/179.
+	//
 	// +optional
 	// +kubebuilder:validation:Enum=Retain;Delete
 	ReclaimPolicy ReclaimPolicy `json:"reclaimPolicy,omitempty"`
diff --git a/pkg/reconciler/managed/reconciler.go b/pkg/reconciler/managed/reconciler.go
index d5a6a28..7f83cca 100644
--- a/pkg/reconciler/managed/reconciler.go
+++ b/pkg/reconciler/managed/reconciler.go
@@ -545,7 +545,7 @@ func (r *Reconciler) Reconcile(req reconcile.Request) (reconcile.Result, error)
 	if meta.WasDeleted(managed) {
 		log = log.WithValues("deletion-timestamp", managed.GetDeletionTimestamp())
 
-		if observation.ResourceExists && managed.GetReclaimPolicy() == v1alpha1.ReclaimDelete {
+		if observation.ResourceExists && shouldDelete(managed) {
 			if err := external.Delete(externalCtx, managed); err != nil {
 				// We'll hit this condition if we can't delete our external
 				// resource, for example if our provider credentials don't have
@@ -695,3 +695,16 @@ func (r *Reconciler) Reconcile(req reconcile.Request) (reconcile.Result, error)
 	managed.SetConditions(v1alpha1.ReconcileSuccess())
 	return reconcile.Result{RequeueAfter: r.longWait}, errors.Wrap(r.client.Status().Update(ctx, managed), errUpdateManagedStatus)
 }
+
+// TODO(negz): ReclaimPolicy will be deprecated alongside resource claims; this
+// should be inlined when claims (and thus reclaim policies) are removed.
+func shouldDelete(mg resource.Managed) bool {
+	switch {
+	case mg.GetDeletionPolicy() == v1alpha1.DeletionDelete:
+		return true
+	case mg.GetDeletionPolicy() == v1alpha1.DeletionOrphan:
+		return false
+	}
+
+	return mg.GetReclaimPolicy() == v1alpha1.ReclaimDelete
+}
diff --git a/pkg/reconciler/managed/reconciler_test.go b/pkg/reconciler/managed/reconciler_test.go
index 537d78a..81deaf6 100644
--- a/pkg/reconciler/managed/reconciler_test.go
+++ b/pkg/reconciler/managed/reconciler_test.go
@@ -759,3 +759,58 @@ func TestReconciler(t *testing.T) {
 		})
 	}
 }
+
+func TestShouldDelete(t *testing.T) {
+	cases := map[string]struct {
+		reason string
+		mg     resource.Managed
+		want   bool
+	}{
+		"DeletionPolicyDelete": {
+			reason: "The delete deletion policy should take precedence over the reclaim policy.",
+			mg: &fake.Managed{
+				Deletable: fake.Deletable{Policy: v1alpha1.DeletionDelete},
+				Reclaimer: fake.Reclaimer{Policy: v1alpha1.ReclaimRetain},
+			},
+			want: true,
+		},
+		"DeletionPolicyOrphan": {
+			reason: "The orphan deletion policy should take precedence over the reclaim policy.",
+			mg: &fake.Managed{
+				Deletable: fake.Deletable{Policy: v1alpha1.DeletionOrphan},
+				Reclaimer: fake.Reclaimer{Policy: v1alpha1.ReclaimDelete},
+			},
+			want: false,
+		},
+		"ReclaimPolicyDelete": {
+			reason: "The delete reclaim policy should take effect when no deletion policy exists.",
+			mg: &fake.Managed{
+				Reclaimer: fake.Reclaimer{Policy: v1alpha1.ReclaimDelete},
+			},
+			want: true,
+		},
+		"ReclaimPolicyRetain": {
+			reason: "The retain reclaim policy should take effect when no deletion policy exists.",
+			mg: &fake.Managed{
+				Reclaimer: fake.Reclaimer{Policy: v1alpha1.ReclaimRetain},
+			},
+			want: false,
+		},
+		"NoPolicy": {
+			reason: "Resources should not be deleted when no deletion or reclaim policy is specified.",
+			mg: &fake.Managed{
+				Reclaimer: fake.Reclaimer{},
+			},
+			want: false,
+		},
+	}
+
+	for name, tc := range cases {
+		t.Run(name, func(t *testing.T) {
+			got := shouldDelete(tc.mg)
+			if diff := cmp.Diff(tc.want, got); diff != "" {
+				t.Errorf("\nReason: %s\nshouldDelete(...): -want, +got:\n%s", tc.reason, diff)
+			}
+		})
+	}
+}
diff --git a/pkg/resource/fake/mocks.go b/pkg/resource/fake/mocks.go
index 0e8d9f7..dcd75b8 100644
--- a/pkg/resource/fake/mocks.go
+++ b/pkg/resource/fake/mocks.go
@@ -135,6 +135,15 @@ func (m *Reclaimer) SetReclaimPolicy(p v1alpha1.ReclaimPolicy) { m.Policy = p }
 // GetReclaimPolicy gets the ReclaimPolicy.
 func (m *Reclaimer) GetReclaimPolicy() v1alpha1.ReclaimPolicy { return m.Policy }
 
+// Deletable implements the Deletable interface.
+type Deletable struct{ Policy v1alpha1.DeletionPolicy }
+
+// SetDeletionPolicy sets the DeletionPolicy.
+func (m *Deletable) SetDeletionPolicy(p v1alpha1.DeletionPolicy) { m.Policy = p }
+
+// GetDeletionPolicy gets the DeletionPolicy.
+func (m *Deletable) GetDeletionPolicy() v1alpha1.DeletionPolicy { return m.Policy }
+
 // CredentialsSecretReferencer is a mock that satisfies CredentialsSecretReferencer
 // interface.
 type CredentialsSecretReferencer struct{ Ref v1alpha1.SecretKeySelector }
@@ -272,6 +281,7 @@ type Managed struct {
 	ClaimReferencer
 	ProviderReferencer
 	ConnectionSecretWriterTo
+	Deletable
 	Reclaimer
 	v1alpha1.ConditionedStatus
 	v1alpha1.BindingStatus
diff --git a/pkg/resource/interfaces.go b/pkg/resource/interfaces.go
index afc54fc..caa4a36 100644
--- a/pkg/resource/interfaces.go
+++ b/pkg/resource/interfaces.go
@@ -84,6 +84,12 @@ type Reclaimer interface {
 	GetReclaimPolicy() v1alpha1.ReclaimPolicy
 }
 
+// A Deletable may specify a DeletionPolicy.
+type Deletable interface {
+	SetDeletionPolicy(p v1alpha1.DeletionPolicy)
+	GetDeletionPolicy() v1alpha1.DeletionPolicy
+}
+
 // A CredentialsSecretReferencer may refer to a credential secret in an arbitrary
 // namespace.
 type CredentialsSecretReferencer interface {
@@ -187,6 +193,7 @@ type Managed interface {
 	ClaimReferencer
 	ProviderReferencer
 	ConnectionSecretWriterTo
+	Deletable
 	Reclaimer
 
 	Conditioned