diff --git a/roles/container-engine/kata-containers/defaults/main.yml b/roles/container-engine/kata-containers/defaults/main.yml
index fc909caf82d6739cc1ed445fc78a073dca5a5f2d..40bbc33d5796d321fdd7186477e18afcc7dc10f1 100644
--- a/roles/container-engine/kata-containers/defaults/main.yml
+++ b/roles/container-engine/kata-containers/defaults/main.yml
@@ -7,3 +7,4 @@ kata_containers_qemu_default_memory: "{{ ansible_memtotal_mb }}"
 kata_containers_qemu_debug: 'false'
 kata_containers_qemu_sandbox_cgroup_only: 'true'
 kata_containers_qemu_enable_mem_prealloc: 'false'
+kata_containers_virtio_fs_cache: 'always'
diff --git a/roles/container-engine/kata-containers/templates/configuration-qemu.toml.j2 b/roles/container-engine/kata-containers/templates/configuration-qemu.toml.j2
index 9e89deedabe8956de3d2dfa6cc35caf76b8cf009..15511442c6d03eecc0a9be4f68a71bf2647bb152 100644
--- a/roles/container-engine/kata-containers/templates/configuration-qemu.toml.j2
+++ b/roles/container-engine/kata-containers/templates/configuration-qemu.toml.j2
@@ -1,11 +1,12 @@
 # Copyright (c) 2017-2019 Intel Corporation
+# Copyright (c) 2021 Adobe Inc.
 #
 # SPDX-License-Identifier: Apache-2.0
 #
 
 # XXX: WARNING: this file is auto-generated.
 # XXX:
-# XXX: Source file: "cli/config/configuration-qemu.toml.in"
+# XXX: Source file: "config/configuration-qemu.toml.in"
 # XXX: Project:
 # XXX:   Name: Kata Containers
 # XXX:   Type: kata
@@ -18,20 +19,46 @@ kernel = "/opt/kata/share/kata-containers/vmlinux.container"
 kernel = "/opt/kata/share/kata-containers/vmlinuz.container"
 {% endif %}
 image = "/opt/kata/share/kata-containers/kata-containers.img"
+# initrd = "/opt/kata/share/kata-containers/kata-containers-initrd.img"
 machine_type = "q35"
 
+# rootfs filesystem type:
+#   - ext4 (default)
+#   - xfs
+#   - erofs
+rootfs_type="ext4"
+
 # Enable confidential guest support.
 # Toggling that setting may trigger different hardware features, ranging
 # from memory encryption to both memory and CPU-state encryption and integrity.
 # The Kata Containers runtime dynamically detects the available feature set and
-# aims at enabling the largest possible one.
+# aims at enabling the largest possible one, returning an error if none is
+# available, or none is supported by the hypervisor.
+#
+# Known limitations:
+# * Does not work by design:
+#   - CPU Hotplug
+#   - Memory Hotplug
+#   - NVDIMM devices
+#
 # Default false
 # confidential_guest = true
 
+# Choose AMD SEV-SNP confidential guests
+# In case of using confidential guests on AMD hardware that supports both SEV
+# and SEV-SNP, the following enables SEV-SNP guests. SEV guests are default.
+# Default false
+# sev_snp_guest = true
+
+# Enable running QEMU VMM as a non-root user.
+# By default QEMU VMM run as root. When this is set to true, QEMU VMM process runs as
+# a non-root random user. See documentation for the limitations of this mode.
+# rootless = true
+
 # List of valid annotation names for the hypervisor
 # Each member of the list is a regular expression, which is the base name
 # of the annotation, e.g. "path" for io.katacontainers.config.hypervisor.path"
-enable_annotations = []
+enable_annotations = ["enable_iommu"]
 
 # List of valid annotations values for the hypervisor
 # Each member of the list is a path pattern as described by glob(3).
@@ -55,11 +82,25 @@ kernel_params = ""
 # If you want that qemu uses the default firmware leave this option empty
 firmware = ""
 
+# Path to the firmware volume.
+# firmware TDVF or OVMF can be split into FIRMWARE_VARS.fd (UEFI variables
+# as configuration) and FIRMWARE_CODE.fd (UEFI program image). UEFI variables
+# can be customized per each user while UEFI code is kept same.
+firmware_volume = ""
+
 # Machine accelerators
 # comma-separated list of machine accelerators to pass to the hypervisor.
 # For example, `machine_accelerators = "nosmm,nosmbus,nosata,nopit,static-prt,nofw"`
 machine_accelerators=""
 
+# Qemu seccomp sandbox feature
+# comma-separated list of seccomp sandbox features to control the syscall access.
+# For example, `seccompsandbox= "on,obsolete=deny,spawn=deny,resourcecontrol=deny"`
+# Note: "elevateprivileges=deny" doesn't work with daemonize option, so it's removed from the seccomp sandbox
+# Another note: enabling this feature may reduce performance, you may enable
+# /proc/sys/net/core/bpf_jit_enable to reduce the impact. see https://man7.org/linux/man-pages/man8/bpfc.8.html
+#seccompsandbox="on,obsolete=deny,spawn=deny,resourcecontrol=deny"
+
 # CPU features
 # comma-separated list of cpu features to pass to the cpu
 # For example, `cpu_features = "pmu=off,vmx=off"
@@ -110,6 +151,12 @@ default_memory = {{ kata_containers_qemu_default_memory }}
 # This is will determine the times that memory will be hotadded to sandbox/VM.
 #memory_slots = 10
 
+# Default maximum memory in MiB per SB / VM
+# unspecified or == 0           --> will be set to the actual amount of physical RAM
+# > 0 <= amount of physical RAM --> will be set to the specified number
+# > amount of physical RAM      --> will be set to the actual amount of physical RAM
+default_maxmemory = 0
+
 # The size in MiB will be plused to max memory of hypervisor.
 # It is the memory address space for the NVDIMM devie.
 # If set block storage driver (block_device_driver) to "nvdimm",
@@ -128,12 +175,13 @@ default_memory = {{ kata_containers_qemu_default_memory }}
 # root file system is backed by a block device, the block device is passed
 # directly to the hypervisor for performance reasons.
 # This flag prevents the block device from being passed to the hypervisor,
-# 9pfs is used instead to pass the rootfs.
+# virtio-fs is used instead to pass the rootfs.
 disable_block_device_use = false
 
 # Shared file system type:
 #   - virtio-fs (default)
 #   - virtio-9p
+#   - virtio-fs-nydus
 {% if kata_containers_version is version('2.2.0', '>=') %}
 shared_fs = "virtio-fs"
 {% else %}
@@ -141,27 +189,39 @@ shared_fs = "virtio-9p"
 {% endif %}
 
 # Path to vhost-user-fs daemon.
+{% if kata_containers_version is version('2.5.0', '>=') %}
+virtio_fs_daemon = "/opt/kata/libexec/virtiofsd"
+{% else %}
 virtio_fs_daemon = "/opt/kata/libexec/kata-qemu/virtiofsd"
+{% endif %}
 
 # List of valid annotations values for the virtiofs daemon
 # The default if not set is empty (all annotations rejected.)
-# Your distribution recommends: ["/opt/kata/libexec/kata-qemu/virtiofsd"]
-valid_virtio_fs_daemon_paths = ["/opt/kata/libexec/kata-qemu/virtiofsd"]
+# Your distribution recommends: ["/opt/kata/libexec/virtiofsd"]
+valid_virtio_fs_daemon_paths = [
+    "/opt/kata/libexec/virtiofsd",
+    "/opt/kata/libexec/kata-qemu/virtiofsd",
+]
 
 # Default size of DAX cache in MiB
 virtio_fs_cache_size = 0
 
+# Default size of virtqueues
+virtio_fs_queue_size = 1024
+
 # Extra args for virtiofsd daemon
 #
 # Format example:
-#   ["-o", "arg1=xxx,arg2", "-o", "hello world", "--arg3=yyy"]
+#   ["--arg1=xxx", "--arg2=yyy"]
+# Examples:
+#   Set virtiofsd log level to debug : ["--log-level=debug"]
 #
 # see `virtiofsd -h` for possible options.
-virtio_fs_extra_args = ["--thread-pool-size=1"]
+virtio_fs_extra_args = ["--thread-pool-size=1", "--announce-submounts"]
 
 # Cache mode:
 #
-#  - none
+#  - never
 #    Metadata, data, and pathname lookup are not cached in guest. They are
 #    always fetched from host and any changes are immediately pushed to host.
 #
@@ -172,13 +232,27 @@ virtio_fs_extra_args = ["--thread-pool-size=1"]
 #
 #  - always
 #    Metadata, data, and pathname lookup are cached in guest and never expire.
-virtio_fs_cache = "always"
+virtio_fs_cache = "{{ kata_containers_virtio_fs_cache }}"
 
 # Block storage driver to be used for the hypervisor in case the container
 # rootfs is backed by a block device. This is virtio-scsi, virtio-blk
 # or nvdimm.
 block_device_driver = "virtio-scsi"
 
+# aio is the I/O mechanism used by qemu
+# Options:
+#
+#   - threads
+#     Pthread based disk I/O.
+#
+#   - native
+#     Native Linux I/O.
+#
+#   - io_uring
+#     Linux io_uring API. This provides the fastest I/O operations on Linux, requires kernel>5.1 and
+#     qemu >=5.0.
+block_device_aio = "io_uring"
+
 # Specifies cache-related options will be set to block devices or not.
 # Default false
 #block_device_cache_set = true
@@ -242,6 +316,11 @@ vhost_user_store_path = "/var/run/kata-containers/vhost-user"
 # Your distribution recommends: ["/var/run/kata-containers/vhost-user"]
 valid_vhost_user_store_paths = ["/var/run/kata-containers/vhost-user"]
 
+# The timeout for reconnecting on non-server spdk sockets when the remote end goes away.
+# qemu will delay this many seconds and then attempt to reconnect.
+# Zero disables reconnecting, and the default is zero.
+vhost_user_reconnect_timeout_sec = 0
+
 # Enable file based guest memory support. The default is an empty string which
 # will disable this feature. In the case of virtio-fs, this is enabled
 # automatically and '/dev/shm' is used as the backing folder.
@@ -253,17 +332,12 @@ valid_vhost_user_store_paths = ["/var/run/kata-containers/vhost-user"]
 # Your distribution recommends: [""]
 valid_file_mem_backends = [""]
 
-# Enable swap of vm memory. Default false.
-# The behaviour is undefined if mem_prealloc is also set to true
-#enable_swap = true
-
 # -pflash can add image file to VM. The arguments of it should be in format
 # of ["/path/to/flash0.img", "/path/to/flash1.img"]
 pflashes = []
 
 # This option changes the default hypervisor and kernel parameters
-# to enable debug output where available. This extra output is added
-# to the proxy logs, but only when proxy debug is also enabled.
+# to enable debug output where available. And Debug also enables the hmp socket.
 #
 # Default false
 enable_debug = {{ kata_containers_qemu_debug }}
@@ -278,21 +352,18 @@ enable_debug = {{ kata_containers_qemu_debug }}
 # used for 9p packet payload.
 #msize_9p = 8192
 
-# If true and vsocks are supported, use vsocks to communicate directly
-# with the agent and no proxy is started, otherwise use unix
-# sockets and start a proxy to communicate with the agent.
-# Default false
-#use_vsock = true
-
 # If false and nvdimm is supported, use nvdimm device to plug guest image.
 # Otherwise virtio-block device is used.
+#
+# nvdimm is not supported when `confidential_guest = true`.
+#
 # Default is false
 #disable_image_nvdimm = true
 
 # VFIO devices are hotplugged on a bridge by default.
 # Enable hotplugging on root bus. This may be required for devices with
 # a large PCI bar, as this is a current limitation with hotplugging on
-# a bridge. This value is valid for "pc" machine type.
+# a bridge.
 # Default false
 #hotplug_vfio_on_root_bus = true
 
@@ -329,15 +400,15 @@ valid_entropy_sources = ["/dev/urandom","/dev/random",""]
 # the OCI spec passed to the runtime.
 #
 # You can create a rootfs with hooks by customizing the osbuilder scripts:
-# https://github.com/kata-containers/osbuilder
+# https://github.com/kata-containers/kata-containers/tree/main/tools/osbuilder
 #
 # Hooks must be stored in a subdirectory of guest_hook_path according to their
-# hook type, i.e. "guest_hook_path/{prestart,postart,poststop}".
+# hook type, i.e. "guest_hook_path/{prestart,poststart,poststop}".
 # The agent will scan these directories for executable files and add them, in
 # lexicographical order, to the lifecycle of the guest container.
 # Hooks are executed in the runtime namespace of the guest. See the official documentation:
 # https://github.com/opencontainers/runtime-spec/blob/v1.0.1/config.md#posix-platform-hooks
-# Warnings will be logged if any error is encountered will scanning for hooks,
+# Warnings will be logged if any error is encountered while scanning for hooks,
 # but it will not abort container execution.
 #guest_hook_path = "/usr/share/oci/hooks"
 #
@@ -382,6 +453,19 @@ valid_entropy_sources = ["/dev/urandom","/dev/random",""]
 # be default_memory.
 #enable_guest_swap = true
 
+# use legacy serial for guest console if available and implemented for architecture. Default false
+#use_legacy_serial = true
+
+# disable applying SELinux on the VMM process (default false)
+disable_selinux=false
+
+# disable applying SELinux on the container process
+# If set to false, the type `container_t` is applied to the container process by default.
+# Note: To enable guest SELinux, the guest rootfs must be CentOS that is created and built
+# with `SELINUX=yes`.
+# (default: true)
+disable_guest_selinux=true
+
 [factory]
 # VM templating support. Once enabled, new VMs are created from template
 # using vm cloning. They will share the same initial kernel, initramfs and
@@ -425,31 +509,6 @@ valid_entropy_sources = ["/dev/urandom","/dev/random",""]
 # Default /var/run/kata-containers/cache.sock
 #vm_cache_endpoint = "/var/run/kata-containers/cache.sock"
 
-[proxy.kata]
-path = "/opt/kata/libexec/kata-containers/kata-proxy"
-
-# If enabled, proxy messages will be sent to the system log
-# (default: disabled)
-enable_debug = {{ kata_containers_qemu_debug }}
-
-[shim.kata]
-path = "/opt/kata/libexec/kata-containers/kata-shim"
-
-# If enabled, shim messages will be sent to the system log
-# (default: disabled)
-enable_debug = {{ kata_containers_qemu_debug }}
-
-# If enabled, the shim will create opentracing.io traces and spans.
-# (See https://www.jaegertracing.io/docs/getting-started).
-#
-# Note: By default, the shim runs in a separate network namespace. Therefore,
-# to allow it to send trace details to the Jaeger agent running on the host,
-# it is necessary to set 'disable_new_netns=true' so that it runs in the host
-# network namespace.
-#
-# (default: disabled)
-#enable_tracing = true
-
 [agent.kata]
 # If enabled, make the agent display debug-level messages.
 # (default: disabled)
@@ -457,24 +516,17 @@ enable_debug = {{ kata_containers_qemu_debug }}
 
 # Enable agent tracing.
 #
-# If enabled, the default trace mode is "dynamic" and the
-# default trace type is "isolated". The trace mode and type are set
-# explicitly with the `trace_type=` and `trace_mode=` options.
+# If enabled, the agent will generate OpenTelemetry trace spans.
 #
 # Notes:
 #
-# - Tracing is ONLY enabled when `enable_tracing` is set: explicitly
-#   setting `trace_mode=` and/or `trace_type=` without setting `enable_tracing`
-#   will NOT activate agent tracing.
-#
-# - See https://github.com/kata-containers/agent/blob/master/TRACING.md for
-#   full details.
+# - If the runtime also has tracing enabled, the agent spans will be
+#   associated with the appropriate runtime parent span.
+# - If enabled, the runtime will wait for the container to shutdown,
+#   increasing the container shutdown time slightly.
 #
 # (default: disabled)
 #enable_tracing = true
-#
-#trace_mode = "dynamic"
-#trace_type = "isolated"
 
 # Comma separated list of kernel modules and their parameters.
 # These modules will be loaded in the guest kernel using modprobe(8).
@@ -500,21 +552,6 @@ kernel_modules=[]
 # (default: 30)
 #dial_timeout = 30
 
-[netmon]
-# If enabled, the network monitoring process gets started when the
-# sandbox is created. This allows for the detection of some additional
-# network being added to the existing network namespace, after the
-# sandbox has been created.
-# (default: disabled)
-#enable_netmon = true
-
-# Specify the path to the netmon binary.
-path = "/opt/kata/libexec/kata-containers/kata-netmon"
-
-# If enabled, netmon messages will be sent to the system log
-# (default: disabled)
-enable_debug = {{ kata_containers_qemu_debug }}
-
 [runtime]
 # If enabled, the runtime will log additional debug messages to the
 # system log
@@ -546,6 +583,19 @@ internetworking_model="tcfilter"
 # (default: true)
 disable_guest_seccomp=true
 
+# vCPUs pinning settings
+# if enabled, each vCPU thread will be scheduled to a fixed CPU
+# qualified condition: num(vCPU threads) == num(CPUs in sandbox's CPUSet)
+# enable_vcpus_pinning = false
+
+# Apply a custom SELinux security policy to the container process inside the VM.
+# This is used when you want to apply a type other than the default `container_t`,
+# so general users should not uncomment and apply it.
+# (format: "user:role:type")
+# Note: You cannot specify MCS policy with the label because the sensitivity levels and
+# categories are determined automatically by high-level container runtimes such as containerd.
+#guest_selinux_label="system_u:system_r:container_t"
+
 # If enabled, the runtime will create opentracing.io traces and spans.
 # (See https://www.jaegertracing.io/docs/getting-started).
 # (default: disabled)
@@ -563,11 +613,9 @@ disable_guest_seccomp=true
 
 # If enabled, the runtime will not create a network namespace for shim and hypervisor processes.
 # This option may have some potential impacts to your host. It should only be used when you know what you're doing.
-# `disable_new_netns` conflicts with `enable_netmon`
 # `disable_new_netns` conflicts with `internetworking_model=tcfilter` and `internetworking_model=macvtap`. It works only
 # with `internetworking_model=none`. The tap device will be in the host network namespace and can connect to a bridge
 # (like OVS) directly.
-# If you are using docker, `disable_new_netns` only works with `docker run --net=none`
 # (default: false)
 #disable_new_netns = true
 
@@ -576,15 +624,49 @@ disable_guest_seccomp=true
 # The runtime caller is free to restrict or collect cgroup stats of the overall Kata sandbox.
 # The sandbox cgroup path is the parent cgroup of a container with the PodSandbox annotation.
 # The sandbox cgroup is constrained if there is no container type annotation.
-# See: https://godoc.org/github.com/kata-containers/runtime/virtcontainers#ContainerType
+# See: https://pkg.go.dev/github.com/kata-containers/kata-containers/src/runtime/virtcontainers#ContainerType
 sandbox_cgroup_only={{ kata_containers_qemu_sandbox_cgroup_only }}
 
+# If enabled, the runtime will attempt to determine appropriate sandbox size (memory, CPU) before booting the virtual machine. In
+# this case, the runtime will not dynamically update the amount of memory and CPU in the virtual machine. This is generally helpful
+# when a hardware architecture or hypervisor solutions is utilized which does not support CPU and/or memory hotplug.
+# Compatibility for determining appropriate sandbox (VM) size:
+# - When running with pods, sandbox sizing information will only be available if using Kubernetes >= 1.23 and containerd >= 1.6. CRI-O
+#   does not yet support sandbox sizing annotations.
+# - When running single containers using a tool like ctr, container sizing information will be available.
+static_sandbox_resource_mgmt=false
+
 # If specified, sandbox_bind_mounts identifieds host paths to be mounted (ro) into the sandboxes shared path.
 # This is only valid if filesystem sharing is utilized. The provided path(s) will be bindmounted into the shared fs directory.
 # If defaults are utilized, these mounts should be available in the guest at `/run/kata-containers/shared/containers/sandbox-mounts`
 # These will not be exposed to the container workloads, and are only provided for potential guest services.
 sandbox_bind_mounts=[]
 
+# VFIO Mode
+# Determines how VFIO devices should be be presented to the container.
+# Options:
+#
+#  - vfio
+#    Matches behaviour of OCI runtimes (e.g. runc) as much as
+#    possible.  VFIO devices will appear in the container as VFIO
+#    character devices under /dev/vfio.  The exact names may differ
+#    from the host (they need to match the VM's IOMMU group numbers
+#    rather than the host's)
+#
+#  - guest-kernel
+#    This is a Kata-specific behaviour that's useful in certain cases.
+#    The VFIO device is managed by whatever driver in the VM kernel
+#    claims it.  This means it will appear as one or more device nodes
+#    or network interfaces depending on the nature of the device.
+#    Using this mode requires specially built workloads that know how
+#    to locate the relevant device interfaces within the VM.
+#
+vfio_mode="guest-kernel"
+
+# If enabled, the runtime will not create Kubernetes emptyDir mounts on the guest filesystem. Instead, emptyDir mounts will
+# be created on the host and shared via virtio-fs. This is potentially slower, but allows sharing of files from host to guest.
+disable_guest_empty_dir=false
+
 # Enabled experimental feature list, format: ["a", "b"].
 # Experimental features are features not stable enough for production,
 # they may break compatibility, and are prepared for a big version bump.