diff --git a/docker/api/build.py b/docker/api/build.py
index f9678a39..42a1a296 100644
--- a/docker/api/build.py
+++ b/docker/api/build.py
@@ -19,7 +19,7 @@ class BuildApiMixin(object):
               forcerm=False, dockerfile=None, container_limits=None,
               decode=False, buildargs=None, gzip=False, shmsize=None,
               labels=None, cache_from=None, target=None, network_mode=None,
-              squash=None):
+              squash=None, extra_hosts=None):
         """
         Similar to the ``docker build`` command. Either ``path`` or ``fileobj``
         needs to be set. ``path`` can be a local path (to a directory
@@ -101,6 +101,8 @@ class BuildApiMixin(object):
                 build
             squash (bool): Squash the resulting images layers into a
                 single layer.
+            extra_hosts (dict): Extra hosts to add to /etc/hosts in building
+                containers, as a mapping of hostname to IP address.
 
         Returns:
             A generator for the build output.
@@ -229,6 +231,17 @@ class BuildApiMixin(object):
                     'squash was only introduced in API version 1.25'
                 )
 
+        if extra_hosts is not None:
+            if utils.version_lt(self._version, '1.27'):
+                raise errors.InvalidVersion(
+                    'extra_hosts was only introduced in API version 1.27'
+                )
+
+            encoded_extra_hosts = [
+                '{}:{}'.format(k, v) for k, v in extra_hosts.items()
+            ]
+            params.update({'extrahosts': encoded_extra_hosts})
+
         if context is not None:
             headers = {'Content-Type': 'application/tar'}
             if encoding:
diff --git a/docker/models/images.py b/docker/models/images.py
index 2aae46d8..82ca5413 100644
--- a/docker/models/images.py
+++ b/docker/models/images.py
@@ -153,6 +153,10 @@ class ImageCollection(Collection):
                 Dockerfile
             network_mode (str): networking mode for the run commands during
                 build
+            squash (bool): Squash the resulting images layers into a
+                single layer.
+            extra_hosts (dict): Extra hosts to add to /etc/hosts in building
+                containers, as a mapping of hostname to IP address.
 
         Returns:
             (:py:class:`Image`): The built image.
diff --git a/tests/integration/api_build_test.py b/tests/integration/api_build_test.py
index d0aa5c21..21464ff6 100644
--- a/tests/integration/api_build_test.py
+++ b/tests/integration/api_build_test.py
@@ -244,6 +244,38 @@ class BuildTest(BaseAPIIntegrationTest):
         with pytest.raises(errors.NotFound):
             self.client.inspect_image('dockerpytest_nonebuild')
 
+    @requires_api_version('1.27')
+    def test_build_with_extra_hosts(self):
+        img_name = 'dockerpytest_extrahost_build'
+        self.tmp_imgs.append(img_name)
+
+        script = io.BytesIO('\n'.join([
+            'FROM busybox',
+            'RUN ping -c1 hello.world.test',
+            'RUN ping -c1 extrahost.local.test',
+            'RUN cp /etc/hosts /hosts-file'
+        ]).encode('ascii'))
+
+        stream = self.client.build(
+            fileobj=script, tag=img_name,
+            extra_hosts={
+                'extrahost.local.test': '127.0.0.1',
+                'hello.world.test': '8.8.8.8',
+            }, decode=True
+        )
+        for chunk in stream:
+            if 'errorDetail' in chunk:
+                pytest.fail(chunk)
+
+        assert self.client.inspect_image(img_name)
+        ctnr = self.run_container(img_name, 'cat /hosts-file')
+        self.tmp_containers.append(ctnr)
+        logs = self.client.logs(ctnr)
+        if six.PY3:
+            logs = logs.decode('utf-8')
+        assert '127.0.0.1\textrahost.local.test' in logs
+        assert '8.8.8.8\thello.world.test' in logs
+
     @requires_experimental(until=None)
     @requires_api_version('1.25')
     def test_build_squash(self):