diff --git a/init/Android.bp b/init/Android.bp
index 7dfb828..197f93a 100644
--- a/init/Android.bp
+++ b/init/Android.bp
@@ -117,6 +117,7 @@
         "firmware_handler.cpp",
         "first_stage_init.cpp",
         "first_stage_mount.cpp",
+        "fscrypt_init_extensions.cpp",
         "import_parser.cpp",
         "init.cpp",
         "interface_utils.cpp",
diff --git a/init/builtins.cpp b/init/builtins.cpp
index 7076926..c3bdc53 100644
--- a/init/builtins.cpp
+++ b/init/builtins.cpp
@@ -55,7 +55,6 @@
 #include <cutils/android_reboot.h>
 #include <fs_mgr.h>
 #include <fscrypt/fscrypt.h>
-#include <fscrypt/fscrypt_init_extensions.h>
 #include <libgsi/libgsi.h>
 #include <selinux/android.h>
 #include <selinux/label.h>
@@ -64,6 +63,7 @@
 
 #include "action_manager.h"
 #include "bootchart.h"
+#include "fscrypt_init_extensions.h"
 #include "init.h"
 #include "mount_namespace.h"
 #include "parser.h"
diff --git a/init/fscrypt_init_extensions.cpp b/init/fscrypt_init_extensions.cpp
new file mode 100644
index 0000000..956228a
--- /dev/null
+++ b/init/fscrypt_init_extensions.cpp
@@ -0,0 +1,194 @@
+/*
+ * Copyright (C) 2016 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+#include "fscrypt_init_extensions.h"
+
+#include <android-base/file.h>
+#include <android-base/logging.h>
+#include <android-base/stringprintf.h>
+#include <android-base/strings.h>
+#include <cutils/properties.h>
+#include <cutils/sockets.h>
+#include <dirent.h>
+#include <errno.h>
+#include <fts.h>
+#include <fscrypt/fscrypt.h>
+#include <keyutils.h>
+#include <logwrap/logwrap.h>
+#include <sys/mount.h>
+#include <sys/stat.h>
+#include <unistd.h>
+
+#include <string>
+#include <vector>
+
+
+#define TAG "fscrypt"
+
+static int set_system_de_policy_on(char const* dir);
+
+int fscrypt_install_keyring()
+{
+    key_serial_t device_keyring = add_key("keyring", "fscrypt", 0, 0,
+                                          KEY_SPEC_SESSION_KEYRING);
+
+    if (device_keyring == -1) {
+        PLOG(ERROR) << "Failed to create keyring";
+        return -1;
+    }
+
+    LOG(INFO) << "Keyring created with id " << device_keyring << " in process " << getpid();
+
+    return 0;
+}
+
+// TODO(b/139378601): use a single central implementation of this.
+static void delete_dir_contents(const char* dir) {
+    char* const paths[2] = {const_cast<char*>(dir), nullptr};
+    FTS* fts = fts_open(paths, FTS_PHYSICAL | FTS_NOCHDIR | FTS_XDEV, nullptr);
+    FTSENT* cur;
+    while ((cur = fts_read(fts)) != nullptr) {
+        if (cur->fts_info == FTS_ERR) {
+            PLOG(ERROR) << "fts_read";
+            break;
+        }
+        if (strcmp(dir, cur->fts_path) == 0) {
+            continue;
+        }
+        switch (cur->fts_info) {
+            case FTS_D:
+                break;  // Ignore these
+            case FTS_DP:
+                if (rmdir(cur->fts_path) == -1) {
+                    PLOG(ERROR) << "rmdir " << cur->fts_path;
+                }
+                break;
+            default:
+                PLOG(ERROR) << "FTS unexpected type " << cur->fts_info << " at " << cur->fts_path;
+                if (rmdir(cur->fts_path) != -1) break;
+                // FALLTHRU (for gcc, lint, pcc, etc; and following for clang)
+                FALLTHROUGH_INTENDED;
+            case FTS_F:
+            case FTS_SL:
+            case FTS_SLNONE:
+                if (unlink(cur->fts_path) == -1) {
+                    PLOG(ERROR) << "unlink " << cur->fts_path;
+                }
+                break;
+        }
+    }
+
+    if (fts_close(fts) != 0) {
+        PLOG(ERROR) << "fts_close";
+    }
+}
+
+int fscrypt_set_directory_policy(const char* dir)
+{
+    const std::string prefix = "/data/";
+
+    if (!dir || strncmp(dir, prefix.c_str(), prefix.size())) {
+        return 0;
+    }
+
+    // Special-case /data/media/obb per b/64566063
+    if (strcmp(dir, "/data/media/obb") == 0) {
+        // Try to set policy on this directory, but if it is non-empty this may fail.
+        set_system_de_policy_on(dir);
+        return 0;
+    }
+
+    // Only set policy on first level /data directories
+    // To make this less restrictive, consider using a policy file.
+    // However this is overkill for as long as the policy is simply
+    // to apply a global policy to all /data folders created via makedir
+    if (strchr(dir + prefix.size(), '/')) {
+        return 0;
+    }
+
+    // Special case various directories that must not be encrypted,
+    // often because their subdirectories must be encrypted.
+    // This isn't a nice way to do this, see b/26641735
+    std::vector<std::string> directories_to_exclude = {
+        "lost+found",
+        "system_ce", "system_de",
+        "misc_ce", "misc_de",
+        "vendor_ce", "vendor_de",
+        "media",
+        "data", "user", "user_de",
+        "apex", "preloads", "app-staging",
+        "gsi",
+    };
+    for (const auto& d: directories_to_exclude) {
+        if ((prefix + d) == dir) {
+            LOG(INFO) << "Not setting policy on " << dir;
+            return 0;
+        }
+    }
+    int err = set_system_de_policy_on(dir);
+    if (err == 0) {
+        return 0;
+    }
+    // Empty these directories if policy setting fails.
+    std::vector<std::string> wipe_on_failure = {
+        "rollback", "rollback-observer",  // b/139193659
+    };
+    for (const auto& d : wipe_on_failure) {
+        if ((prefix + d) == dir) {
+            LOG(ERROR) << "Setting policy failed, deleting: " << dir;
+            delete_dir_contents(dir);
+            err = set_system_de_policy_on(dir);
+            break;
+        }
+    }
+    return err;
+}
+
+static int set_system_de_policy_on(char const* dir) {
+    std::string ref_filename = std::string("/data") + fscrypt_key_ref;
+    std::string policy;
+    if (!android::base::ReadFileToString(ref_filename, &policy)) {
+        LOG(ERROR) << "Unable to read system policy to set on " << dir;
+        return -1;
+    }
+
+    auto type_filename = std::string("/data") + fscrypt_key_mode;
+    std::string modestring;
+    if (!android::base::ReadFileToString(type_filename, &modestring)) {
+        LOG(ERROR) << "Cannot read mode";
+    }
+
+    std::vector<std::string> modes = android::base::Split(modestring, ":");
+
+    if (modes.size() < 1 || modes.size() > 2) {
+        LOG(ERROR) << "Invalid encryption mode string: " << modestring;
+        return -1;
+    }
+
+    LOG(INFO) << "Setting policy on " << dir;
+    int result = fscrypt_policy_ensure(dir, policy.c_str(), policy.length(),
+                                       modes[0].c_str(),
+                                       modes.size() >= 2 ?
+                                            modes[1].c_str() : "aes-256-cts");
+    if (result) {
+        LOG(ERROR) << android::base::StringPrintf(
+            "Setting %02x%02x%02x%02x policy on %s failed!",
+            policy[0], policy[1], policy[2], policy[3], dir);
+        return -1;
+    }
+
+    return 0;
+}
diff --git a/init/fscrypt_init_extensions.h b/init/fscrypt_init_extensions.h
new file mode 100644
index 0000000..2b6c46e
--- /dev/null
+++ b/init/fscrypt_init_extensions.h
@@ -0,0 +1,33 @@
+/*
+ * Copyright (C) 2016 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+#ifndef _FSCRYPT_INIT_EXTENSIONS_H_
+#define _FSCRYPT_INIT_EXTENSIONS_H_
+
+#include <sys/cdefs.h>
+#include <stdbool.h>
+#include <cutils/multiuser.h>
+
+__BEGIN_DECLS
+
+// These functions assume they are being called from init
+// They will not operate properly outside of init
+int fscrypt_install_keyring();
+int fscrypt_set_directory_policy(const char* path);
+
+__END_DECLS
+
+#endif // _FSCRYPT_INIT_EXTENSIONS_H_