diff --git a/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/WorldConfiguration.java b/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/WorldConfiguration.java
index c0e419b8..3714cbfe 100644
--- a/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/WorldConfiguration.java
+++ b/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/WorldConfiguration.java
@@ -145,6 +145,7 @@ public class WorldConfiguration {
     public int maxClaimVolume;
     public boolean claimOnlyInsideExistingRegions;
     public int maxRegionCountPerPlayer;
+    public boolean boundedLocationFlags;
     public boolean antiWolfDumbness;
     public boolean signChestProtection;
     public boolean disableSignChestProtectionCheck;
@@ -462,6 +463,7 @@ private void loadConfiguration() {
         regionWand = getInt("regions.wand", 334);
         maxClaimVolume = getInt("regions.max-claim-volume", 30000);
         claimOnlyInsideExistingRegions = getBoolean("regions.claim-only-inside-existing-regions", false);
+        boundedLocationFlags = getBoolean("regions.location-flags-only-inside-regions", false);
 
         maxRegionCountPerPlayer = getInt("regions.max-region-count-per-player.default", 7);
         maxRegionCounts = new HashMap<String, Integer>();
diff --git a/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/commands/region/RegionCommands.java b/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/commands/region/RegionCommands.java
index d9a4b92f..7ce0c522 100644
--- a/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/commands/region/RegionCommands.java
+++ b/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/commands/region/RegionCommands.java
@@ -540,7 +540,7 @@ public void flag(CommandContext args, CommandSender sender) throws CommandExcept
             // Parse the [-g group] separately so entire command can abort if parsing
             // the [value] part throws an error.
             try {
-                groupValue = groupFlag.parseInput(FlagContext.create().setSender(sender).setInput(group).build());
+                groupValue = groupFlag.parseInput(FlagContext.create().setSender(sender).setInput(group).setObject("region", existing).build());
             } catch (InvalidFlagFormat e) {
                 throw new CommandException(e.getMessage());
             }
diff --git a/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/permission/RegionPermissionModel.java b/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/permission/RegionPermissionModel.java
index 6aaa3bb9..da017a04 100644
--- a/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/permission/RegionPermissionModel.java
+++ b/worldguard-legacy/src/main/java/com/sk89q/worldguard/bukkit/permission/RegionPermissionModel.java
@@ -99,6 +99,10 @@ public boolean mayLookup(ProtectedRegion region) {
     public boolean mayTeleportTo(ProtectedRegion region) {
         return hasPatternPermission("teleport", region);
     }
+
+    public boolean mayOverrideLocationFlagBounds(ProtectedRegion region) {
+        return hasPatternPermission("locationoverride", region);
+    }
     
     public boolean mayList() {
         return hasPluginPermission("region.list");
diff --git a/worldguard-legacy/src/main/java/com/sk89q/worldguard/protection/flags/LocationFlag.java b/worldguard-legacy/src/main/java/com/sk89q/worldguard/protection/flags/LocationFlag.java
index 7677ae75..d6753f53 100644
--- a/worldguard-legacy/src/main/java/com/sk89q/worldguard/protection/flags/LocationFlag.java
+++ b/worldguard-legacy/src/main/java/com/sk89q/worldguard/protection/flags/LocationFlag.java
@@ -22,6 +22,10 @@
 import com.sk89q.worldedit.Location;
 import com.sk89q.worldedit.Vector;
 import com.sk89q.worldedit.bukkit.BukkitUtil;
+import com.sk89q.worldguard.bukkit.WorldGuardPlugin;
+import com.sk89q.worldguard.bukkit.permission.RegionPermissionModel;
+import com.sk89q.worldguard.protection.regions.ProtectedRegion;
+import org.bukkit.ChatColor;
 import org.bukkit.World;
 import org.bukkit.entity.Player;
 
@@ -43,8 +47,9 @@ public Location parseInput(FlagContext context) throws InvalidFlagFormat {
         String input = context.getUserInput();
         Player player = context.getPlayerSender();
 
+        Location loc = null;
         if ("here".equalsIgnoreCase(input)) {
-            return toLazyLocation(player.getLocation());
+            loc = toLazyLocation(player.getLocation());
         } else if ("none".equalsIgnoreCase(input)) {
             return null;
         } else {
@@ -58,13 +63,29 @@ public Location parseInput(FlagContext context) throws InvalidFlagFormat {
                     final float yaw = split.length < 4 ? 0 : Float.parseFloat(split[3]);
                     final float pitch = split.length < 5 ? 0 : Float.parseFloat(split[4]);
 
-                    return new LazyLocation(world.getName(), new Vector(x, y, z), yaw, pitch);
+                    loc = new LazyLocation(world.getName(), new Vector(x, y, z), yaw, pitch);
                 } catch (NumberFormatException ignored) {
                 }
             }
-
-            throw new InvalidFlagFormat("Expected 'here' or x,y,z.");
         }
+        if (loc != null) {
+            Object obj = context.get("region");
+            if (obj instanceof ProtectedRegion) {
+                ProtectedRegion rg = (ProtectedRegion) obj;
+                if (WorldGuardPlugin.inst().getGlobalStateManager().get(player.getWorld()).boundedLocationFlags) {
+                    if (!rg.contains(loc.getPosition()) && new RegionPermissionModel(WorldGuardPlugin.inst(), player).mayOverrideLocationFlagBounds(rg)) {
+                        player.sendMessage(ChatColor.GRAY + "WARNING: Flag location is outside of region.");
+                    } else {
+                        // no permission
+                        throw new InvalidFlagFormat("You can't set that flag outside of the region boundaries.");
+                    }
+                    // clamp height to world limits
+                    loc.setPosition(loc.getPosition().clampY(0, player.getWorld().getMaxHeight()));
+                    return loc;
+                }
+            }
+        }
+        throw new InvalidFlagFormat("Expected 'here' or x,y,z.");
     }
 
     private Location toLazyLocation(org.bukkit.Location location) {