diff --git a/nixos/modules/config/users-groups.nix b/nixos/modules/config/users-groups.nix
index 2aed620eb154..967ad0846d75 100644
--- a/nixos/modules/config/users-groups.nix
+++ b/nixos/modules/config/users-groups.nix
@@ -685,7 +685,7 @@ in {
       shadow.gid = ids.gids.shadow;
     };
 
-    system.activationScripts.users = {
+    system.activationScripts.users = if !config.systemd.sysusers.enable then {
       supportsDryActivation = true;
       text = ''
         install -m 0700 -d /root
@@ -694,7 +694,7 @@ in {
         ${pkgs.perl.withPackages (p: [ p.FileSlurp p.JSON ])}/bin/perl \
         -w ${./update-users-groups.pl} ${spec}
       '';
-    };
+    } else ""; # keep around for backwards compatibility
 
     system.activationScripts.update-lingering = let
       lingerDir = "/var/lib/systemd/linger";
@@ -711,7 +711,9 @@ in {
     '';
 
     # Warn about user accounts with deprecated password hashing schemes
-    system.activationScripts.hashes = {
+    # This does not work when the users and groups are created by
+    # systemd-sysusers because the users are created too late then.
+    system.activationScripts.hashes = if !config.systemd.sysusers.enable then {
       deps = [ "users" ];
       text = ''
         users=()
@@ -729,7 +731,7 @@ in {
           printf ' - %s\n' "''${users[@]}"
         fi
       '';
-    };
+    } else ""; # keep around for backwards compatibility
 
     # for backwards compatibility
     system.activationScripts.groups = stringAfter [ "users" ] "";
diff --git a/nixos/modules/module-list.nix b/nixos/modules/module-list.nix
index e6fffd4716de..698514410560 100644
--- a/nixos/modules/module-list.nix
+++ b/nixos/modules/module-list.nix
@@ -1486,6 +1486,7 @@
   ./system/boot/systemd/repart.nix
   ./system/boot/systemd/shutdown.nix
   ./system/boot/systemd/sysupdate.nix
+  ./system/boot/systemd/sysusers.nix
   ./system/boot/systemd/tmpfiles.nix
   ./system/boot/systemd/user.nix
   ./system/boot/systemd/userdbd.nix
diff --git a/nixos/modules/system/boot/systemd/sysusers.nix b/nixos/modules/system/boot/systemd/sysusers.nix
new file mode 100644
index 000000000000..c619c2d91eb0
--- /dev/null
+++ b/nixos/modules/system/boot/systemd/sysusers.nix
@@ -0,0 +1,169 @@
+{ config, lib, pkgs, utils, ... }:
+
+let
+
+  cfg = config.systemd.sysusers;
+  userCfg = config.users;
+
+  sysusersConfig = pkgs.writeTextDir "00-nixos.conf" ''
+    # Type Name ID GECOS Home directory Shell
+
+    # Users
+    ${lib.concatLines (lib.mapAttrsToList
+      (username: opts:
+        let
+          uid = if opts.uid == null then "-" else toString opts.uid;
+        in
+          ''u ${username} ${uid}:${opts.group} "${opts.description}" ${opts.home} ${utils.toShellPath opts.shell}''
+      )
+      userCfg.users)
+    }
+
+    # Groups
+    ${lib.concatLines (lib.mapAttrsToList
+      (groupname: opts: ''g ${groupname} ${if opts.gid == null then "-" else toString opts.gid}'') userCfg.groups)
+    }
+
+    # Group membership
+    ${lib.concatStrings (lib.mapAttrsToList
+      (groupname: opts: (lib.concatMapStrings (username: "m ${username} ${groupname}\n")) opts.members ) userCfg.groups)
+    }
+  '';
+
+  staticSysusersCredentials = pkgs.runCommand "static-sysusers-credentials" { } ''
+    mkdir $out; cd $out
+    ${lib.concatLines (
+      (lib.mapAttrsToList
+        (username: opts: "echo -n '${opts.initialHashedPassword}' > 'passwd.hashed-password.${username}'")
+        (lib.filterAttrs (_username: opts: opts.initialHashedPassword != null) userCfg.users))
+        ++
+      (lib.mapAttrsToList
+        (username: opts: "echo -n '${opts.initialPassword}' > 'passwd.plaintext-password.${username}'")
+        (lib.filterAttrs (_username: opts: opts.initialPassword != null) userCfg.users))
+        ++
+      (lib.mapAttrsToList
+        (username: opts: "cat '${opts.hashedPasswordFile}' > 'passwd.hashed-password.${username}'")
+        (lib.filterAttrs (_username: opts: opts.hashedPasswordFile != null) userCfg.users))
+      )
+    }
+  '';
+
+  staticSysusers = pkgs.runCommand "static-sysusers"
+    {
+      nativeBuildInputs = [ pkgs.systemd ];
+    } ''
+    mkdir $out
+    export CREDENTIALS_DIRECTORY=${staticSysusersCredentials}
+    systemd-sysusers --root $out ${sysusersConfig}/00-nixos.conf
+  '';
+
+in
+
+{
+
+  options = {
+
+    # This module doesn't set it's own user options but reuses the ones from
+    # users-groups.nix
+
+    systemd.sysusers = {
+      enable = lib.mkEnableOption (lib.mdDoc "systemd-sysusers") // {
+        description = lib.mdDoc ''
+          If enabled, users are created with systemd-sysusers instead of with
+          the custom `update-users-groups.pl` script.
+
+          Note: This is experimental.
+        '';
+      };
+    };
+
+  };
+
+  config = lib.mkIf cfg.enable {
+
+    assertions = [
+      {
+        assertion = config.system.activationScripts.users == "";
+        message = "system.activationScripts.users has to be empty to use systemd-sysusers";
+      }
+      {
+        assertion = config.users.mutableUsers -> config.system.etc.overlay.enable;
+        message = "config.users.mutableUsers requires config.system.etc.overlay.enable.";
+      }
+    ];
+
+    systemd = lib.mkMerge [
+      ({
+
+        # Create home directories, do not create /var/empty even if that's a user's
+        # home.
+        tmpfiles.settings.home-directories = lib.mapAttrs'
+          (username: opts: lib.nameValuePair opts.home {
+            d = {
+              mode = opts.homeMode;
+              user = username;
+              group = opts.group;
+            };
+          })
+          (lib.filterAttrs (_username: opts: opts.home != "/var/empty") userCfg.users);
+      })
+
+      (lib.mkIf config.users.mutableUsers {
+        additionalUpstreamSystemUnits = [
+          "systemd-sysusers.service"
+        ];
+
+        services.systemd-sysusers = {
+          # Enable switch-to-configuration to restart the service.
+          unitConfig.ConditionNeedsUpdate = [ "" ];
+          requiredBy = [ "sysinit-reactivation.target" ];
+          before = [ "sysinit-reactivation.target" ];
+          restartTriggers = [ "${config.environment.etc."sysusers.d".source}" ];
+
+          serviceConfig = {
+            LoadCredential = lib.mapAttrsToList
+              (username: opts: "passwd.hashed-password.${username}:${opts.hashedPasswordFile}")
+              (lib.filterAttrs (_username: opts: opts.hashedPasswordFile != null) userCfg.users);
+            SetCredential = (lib.mapAttrsToList
+              (username: opts: "passwd.hashed-password.${username}:${opts.initialHashedPassword}")
+              (lib.filterAttrs (_username: opts: opts.initialHashedPassword != null) userCfg.users))
+            ++
+            (lib.mapAttrsToList
+              (username: opts: "passwd.plaintext-password.${username}:${opts.initialPassword}")
+              (lib.filterAttrs (_username: opts: opts.initialPassword != null) userCfg.users))
+            ;
+          };
+        };
+      })
+    ];
+
+    environment.etc = lib.mkMerge [
+      (lib.mkIf (!userCfg.mutableUsers) {
+        "passwd" = {
+          source = "${staticSysusers}/etc/passwd";
+          mode = "0644";
+        };
+        "group" = {
+          source = "${staticSysusers}/etc/group";
+          mode = "0644";
+        };
+        "shadow" = {
+          source = "${staticSysusers}/etc/shadow";
+          mode = "0000";
+        };
+        "gshadow" = {
+          source = "${staticSysusers}/etc/gshadow";
+          mode = "0000";
+        };
+      })
+
+      (lib.mkIf userCfg.mutableUsers {
+        "sysusers.d".source = sysusersConfig;
+      })
+    ];
+
+  };
+
+  meta.maintainers = with lib.maintainers; [ nikstur ];
+
+}
diff --git a/nixos/tests/all-tests.nix b/nixos/tests/all-tests.nix
index 25ee587e8f7a..5abb85c224bb 100644
--- a/nixos/tests/all-tests.nix
+++ b/nixos/tests/all-tests.nix
@@ -864,6 +864,8 @@ in {
   systemd-repart = handleTest ./systemd-repart.nix {};
   systemd-shutdown = handleTest ./systemd-shutdown.nix {};
   systemd-sysupdate = runTest ./systemd-sysupdate.nix;
+  systemd-sysusers-mutable = runTest ./systemd-sysusers-mutable.nix;
+  systemd-sysusers-immutable = runTest ./systemd-sysusers-immutable.nix;
   systemd-timesyncd = handleTest ./systemd-timesyncd.nix {};
   systemd-timesyncd-nscd-dnssec = handleTest ./systemd-timesyncd-nscd-dnssec.nix {};
   systemd-user-tmpfiles-rules = handleTest ./systemd-user-tmpfiles-rules.nix {};
diff --git a/nixos/tests/systemd-sysusers-immutable.nix b/nixos/tests/systemd-sysusers-immutable.nix
new file mode 100644
index 000000000000..42cbf84d175e
--- /dev/null
+++ b/nixos/tests/systemd-sysusers-immutable.nix
@@ -0,0 +1,64 @@
+{ lib, ... }:
+
+let
+  rootPassword = "$y$j9T$p6OI0WN7.rSfZBOijjRdR.$xUOA2MTcB48ac.9Oc5fz8cxwLv1mMqabnn333iOzSA6";
+  normaloPassword = "$y$j9T$3aiOV/8CADAK22OK2QT3/0$67OKd50Z4qTaZ8c/eRWHLIM.o3ujtC1.n9ysmJfv639";
+  newNormaloPassword = "mellow";
+in
+
+{
+
+  name = "activation-sysusers-immutable";
+
+  meta.maintainers = with lib.maintainers; [ nikstur ];
+
+  nodes.machine = {
+    systemd.sysusers.enable = true;
+    users.mutableUsers = false;
+
+    # Override the empty root password set by the test instrumentation
+    users.users.root.hashedPasswordFile = lib.mkForce null;
+    users.users.root.initialHashedPassword = rootPassword;
+    users.users.normalo = {
+      isNormalUser = true;
+      initialHashedPassword = normaloPassword;
+    };
+
+    specialisation.new-generation.configuration = {
+      users.users.new-normalo = {
+        isNormalUser = true;
+        initialPassword = newNormaloPassword;
+      };
+    };
+  };
+
+  testScript = ''
+    with subtest("Users are not created with systemd-sysusers"):
+      machine.fail("systemctl status systemd-sysusers.service")
+      machine.fail("ls /etc/sysusers.d")
+
+    with subtest("Correct mode on the password files"):
+      assert machine.succeed("stat -c '%a' /etc/passwd") == "644\n"
+      assert machine.succeed("stat -c '%a' /etc/group") == "644\n"
+      assert machine.succeed("stat -c '%a' /etc/shadow") == "0\n"
+      assert machine.succeed("stat -c '%a' /etc/gshadow") == "0\n"
+
+    with subtest("root user has correct password"):
+      print(machine.succeed("getent passwd root"))
+      assert "${rootPassword}" in machine.succeed("getent shadow root"), "root user password is not correct"
+
+    with subtest("normalo user is created"):
+      print(machine.succeed("getent passwd normalo"))
+      assert machine.succeed("stat -c '%U' /home/normalo") == "normalo\n"
+      assert "${normaloPassword}" in machine.succeed("getent shadow normalo"), "normalo user password is not correct"
+
+
+    machine.succeed("/run/current-system/specialisation/new-generation/bin/switch-to-configuration switch")
+
+
+    with subtest("new-normalo user is created after switching to new generation"):
+      print(machine.succeed("getent passwd new-normalo"))
+      print(machine.succeed("getent shadow new-normalo"))
+      assert machine.succeed("stat -c '%U' /home/new-normalo") == "new-normalo\n"
+  '';
+}
diff --git a/nixos/tests/systemd-sysusers-mutable.nix b/nixos/tests/systemd-sysusers-mutable.nix
new file mode 100644
index 000000000000..e69cfe23a59a
--- /dev/null
+++ b/nixos/tests/systemd-sysusers-mutable.nix
@@ -0,0 +1,71 @@
+{ lib, ... }:
+
+let
+  rootPassword = "$y$j9T$p6OI0WN7.rSfZBOijjRdR.$xUOA2MTcB48ac.9Oc5fz8cxwLv1mMqabnn333iOzSA6";
+  normaloPassword = "hello";
+  newNormaloPassword = "$y$j9T$p6OI0WN7.rSfZBOijjRdR.$xUOA2MTcB48ac.9Oc5fz8cxwLv1mMqabnn333iOzSA6";
+in
+
+{
+
+  name = "activation-sysusers-mutable";
+
+  meta.maintainers = with lib.maintainers; [ nikstur ];
+
+  nodes.machine = { pkgs, ... }: {
+    systemd.sysusers.enable = true;
+    users.mutableUsers = true;
+
+    # Prerequisites
+    system.etc.overlay.enable = true;
+    boot.initrd.systemd.enable = true;
+    boot.kernelPackages = pkgs.linuxPackages_latest;
+
+    # Override the empty root password set by the test instrumentation
+    users.users.root.hashedPasswordFile = lib.mkForce null;
+    users.users.root.initialHashedPassword = rootPassword;
+    users.users.normalo = {
+      isNormalUser = true;
+      initialPassword = normaloPassword;
+    };
+
+    specialisation.new-generation.configuration = {
+      users.users.new-normalo = {
+        isNormalUser = true;
+        initialHashedPassword = newNormaloPassword;
+      };
+    };
+  };
+
+  testScript = ''
+    machine.wait_for_unit("systemd-sysusers.service")
+
+    with subtest("systemd-sysusers.service contains the credentials"):
+      sysusers_service = machine.succeed("systemctl cat systemd-sysusers.service")
+      print(sysusers_service)
+      assert "SetCredential=passwd.plaintext-password.normalo:${normaloPassword}" in sysusers_service
+
+    with subtest("Correct mode on the password files"):
+      assert machine.succeed("stat -c '%a' /etc/passwd") == "644\n"
+      assert machine.succeed("stat -c '%a' /etc/group") == "644\n"
+      assert machine.succeed("stat -c '%a' /etc/shadow") == "0\n"
+      assert machine.succeed("stat -c '%a' /etc/gshadow") == "0\n"
+
+    with subtest("root user has correct password"):
+      print(machine.succeed("getent passwd root"))
+      assert "${rootPassword}" in machine.succeed("getent shadow root"), "root user password is not correct"
+
+    with subtest("normalo user is created"):
+      print(machine.succeed("getent passwd normalo"))
+      assert machine.succeed("stat -c '%U' /home/normalo") == "normalo\n"
+
+
+    machine.succeed("/run/current-system/specialisation/new-generation/bin/switch-to-configuration switch")
+
+
+    with subtest("new-normalo user is created after switching to new generation"):
+      print(machine.succeed("getent passwd new-normalo"))
+      assert machine.succeed("stat -c '%U' /home/new-normalo") == "new-normalo\n"
+      assert "${newNormaloPassword}" in machine.succeed("getent shadow new-normalo"), "new-normalo user password is not correct"
+  '';
+}