diff --git a/cluster/gce/gci/configure-helper.sh b/cluster/gce/gci/configure-helper.sh
index 12f7b6ec77..99a563c081 100644
--- a/cluster/gce/gci/configure-helper.sh
+++ b/cluster/gce/gci/configure-helper.sh
@@ -34,6 +34,11 @@ function setup-os-params {
 
 function config-ip-firewall {
   echo "Configuring IP firewall rules"
+
+  # Do not consider loopback addresses as martian source or destination while
+  # routing. This enables the use of 127/8 for local routing purposes.
+  sysctl -w net.ipv4.conf.all.route_localnet=1
+
   # The GCI image has host firewall which drop most inbound/forwarded packets.
   # We need to add rules to accept all TCP/UDP/ICMP packets.
   if iptables -L INPUT | grep "Chain INPUT (policy DROP)" > /dev/null; then