diff --git a/cluster/images/kubelet/Dockerfile b/cluster/images/kubelet/Dockerfile
index b9d9526109..423a7bae65 100644
--- a/cluster/images/kubelet/Dockerfile
+++ b/cluster/images/kubelet/Dockerfile
@@ -1,8 +1,7 @@
 FROM centos
 ADD kubelet /kubelet
 RUN chmod a+rx /kubelet
-ADD nsenter /nsenter
-RUN chmod a+rx /nsenter
+RUN cp /usr/bin/nsenter /nsenter
 
 VOLUME /var/lib/docker
 VOLUME /var/lib/kubelet
diff --git a/cluster/images/kubelet/Makefile b/cluster/images/kubelet/Makefile
index bdbc82eae1..b1aa4a06d2 100644
--- a/cluster/images/kubelet/Makefile
+++ b/cluster/images/kubelet/Makefile
@@ -2,15 +2,19 @@
 
 # TODO: figure out the best base image
 # TODO: figure out how to best source the nsenter binary, if necessary
-
+# TODO: figure out how to make a single source of version info for these
+#       images
 VERSION=v0.16
 
-release:
+release: clean
 	curl -O https://storage.googleapis.com/kubernetes-release/release/${VERSION}/bin/linux/amd64/kubelet
 	docker build -t gcr.io/google_containers/kubelet:${VERSION} .
 	gcloud preview docker push gcr.io/google_containers/kubelet:${VERSION}
 
 local:
-	docker build -t gcr.io/google_containers/kubelet:${VERSION} .
+	docker build -t gcr.io/google_containers/kubelet .
+
+clean:
+	rm -f kubelet
 
 .PHONY: release
diff --git a/hack/local-up-cluster.sh b/hack/local-up-cluster.sh
index 59fa145dd7..9cdc0eb53c 100755
--- a/hack/local-up-cluster.sh
+++ b/hack/local-up-cluster.sh
@@ -20,6 +20,7 @@
 DOCKER_OPTS=${DOCKER_OPTS:-""}
 DOCKER_NATIVE=${DOCKER_NATIVE:-""}
 DOCKER=(docker ${DOCKER_OPTS})
+DOCKERIZE_KUBELET=${DOCKERIZE_KUBELET:-""}
 
 KUBE_ROOT=$(dirname "${BASH_SOURCE}")/..
 cd "${KUBE_ROOT}"
@@ -95,13 +96,28 @@ case "$(uname -m)" in
 esac
 
 GO_OUT="${KUBE_ROOT}/_output/local/bin/${host_os}/${host_arch}"
+KUBELET_CIDFILE=/tmp/kubelet.cid
+
+cleanup_dockerized_kubelet()
+{
+  if [[ -e $KUBELET_CIDFILE ]]; then 
+    docker kill $(<$KUBELET_CIDFILE) > /dev/null
+    rm -f $KUBELET_CIDFILE
+  fi
+}
 
 cleanup()
 {
     echo "Cleaning up..."
     [[ -n "${APISERVER_PID-}" ]] && sudo kill "${APISERVER_PID}"
     [[ -n "${CTLRMGR_PID-}" ]] && sudo kill "${CTLRMGR_PID}"
-    [[ -n "${KUBELET_PID-}" ]] && sudo kill "${KUBELET_PID}"
+    
+    if [[ -n "$DOCKERIZE_KUBELET" ]]; then
+      cleanup_dockerized_kubelet
+    else 
+      [[ -n "${KUBELET_PID-}" ]] && sudo kill "${KUBELET_PID}"
+    fi
+
     [[ -n "${PROXY_PID-}" ]] && sudo kill "${PROXY_PID}"
     [[ -n "${SCHEDULER_PID-}" ]] && sudo kill "${SCHEDULER_PID}"
 
@@ -143,16 +159,37 @@ sudo -E "${GO_OUT}/kube-controller-manager" \
 CTLRMGR_PID=$!
 
 KUBELET_LOG=/tmp/kubelet.log
-sudo -E "${GO_OUT}/kubelet" \
-  --v=${LOG_LEVEL} \
-  --container_runtime="${CONTAINER_RUNTIME}" \
-  --chaos_chance="${CHAOS_CHANCE}" \
-  --hostname_override="127.0.0.1" \
-  --address="127.0.0.1" \
-  --api_servers="${API_HOST}:${API_PORT}" \
-  --auth_path="${KUBE_ROOT}/hack/.test-cmd-auth" \
-  --port="$KUBELET_PORT" >"${KUBELET_LOG}" 2>&1 &
-KUBELET_PID=$!
+if [[ -z "${DOCKERIZE_KUBELET}" ]]; then
+  sudo -E "${GO_OUT}/kubelet" \
+    --v=${LOG_LEVEL} \
+    --chaos_chance="${CHAOS_CHANCE}" \
+    --container_runtime="${CONTAINER_RUNTIME}" \
+    --hostname_override="127.0.0.1" \
+    --address="127.0.0.1" \
+    --api_servers="${API_HOST}:${API_PORT}" \
+    --auth_path="${KUBE_ROOT}/hack/.test-cmd-auth" \
+    --port="$KUBELET_PORT" >"${KUBELET_LOG}" 2>&1 &
+  KUBELET_PID=$!
+else
+  # Docker won't run a container with a cidfile (container id file)
+  # unless that file does not already exist; clean up an existing
+  # dockerized kubelet that might be running.
+  cleanup_dockerized_kubelet
+
+  docker run \
+    --volume=/:/rootfs:ro \
+    --volume=/var/run:/var/run:rw \
+    --volume=/sys:/sys:ro \
+    --volume=/var/lib/docker/:/var/lib/docker:ro \
+    --volume=/var/lib/kubelet/:/var/lib/kubelet:rw \
+    --volume=/tmp/kubelet.log:/tmp/kubelet.log:rw \
+    --net=host \
+    --privileged=true \
+    -i \
+    --cidfile=$KUBELET_CIDFILE \
+    gcr.io/google_containers/kubelet \
+    /kubelet --v=3 --containerized --chaos-chance="${CHAOS_CHANCE}" --hostname-override="127.0.0.1" --address="127.0.0.1" --api-servers="${API_HOST}:${API_PORT}" --port="$KUBELET_PORT" --resource-container="" &> $KUBELET_LOG &
+fi
 
 PROXY_LOG=/tmp/kube-proxy.log
 sudo -E "${GO_OUT}/kube-proxy" \
@@ -172,9 +209,9 @@ Local Kubernetes cluster is running. Press Ctrl-C to shut it down.
 Logs:
   ${APISERVER_LOG}
   ${CTLRMGR_LOG}
-  ${KUBELET_LOG}
   ${PROXY_LOG}
   ${SCHEDULER_LOG}
+  ${KUBELET_LOG}
 
 To start using your cluster, open up another terminal/tab and run: