diff --git a/release/Makefile b/release/Makefile
--- a/release/Makefile
+++ b/release/Makefile
@@ -23,7 +23,8 @@
 #            (by default, the directory above this one)
 #  NODISTSETS: if set, do not include dist sets or MANIFEST
 #  PKGBASE:  if set, include pkgbase packages rather than dist tarballs in
-#            disc1 and dvd1 installation media
+#            disc1 and dvd1 installation media and build VM/cloud images
+#            with packaged base systems.
 #  PORTSDIR: location of ports tree to distribute (default: /usr/ports)
 #  XTRADIR:  xtra-bits-dir argument for <arch>/mkisoimages.sh
 #  NOPKG:    if set, do not distribute third-party packages
diff --git a/release/Makefile.vm b/release/Makefile.vm
--- a/release/Makefile.vm
+++ b/release/Makefile.vm
@@ -131,7 +131,7 @@
 cw-${_CW:tl}-${_FS}-${_FMT}: cw-ec2-base-${_FS}-${_FMT}
 .endif
 
-cw-${_CW:tl}-${_FS}-${_FMT}: ${QEMUTGT}
+cw-${_CW:tl}-${_FS}-${_FMT}: ${QEMUTGT} ${PKGBASE_REPO_DIR}
 	mkdir -p ${.OBJDIR}/${.TARGET}
 	env TARGET=${TARGET} TARGET_ARCH=${TARGET_ARCH} SWAPSIZE=${SWAPSIZE} \
 		QEMUSTATIC=${QEMUSTATIC} \
@@ -139,6 +139,8 @@
 		${WITHOUT_QEMU:DWITHOUT_QEMU=true} \
 		${NO_ROOT:DNO_ROOT=true} \
 		PKG_INSTALL_EPOCH=${PKG_INSTALL_EPOCH:U${GITEPOCH}} \
+		PKGBASE=${PKGBASE} \
+		PKGBASE_REPO_DIR=${.OBJDIR}/pkgbase-repo-dir \
 		${.CURDIR}/scripts/mk-vmimage.sh \
 		-C ${.CURDIR}/tools/vmimage.subr -d ${.OBJDIR}/${.TARGET} \
 		-F ${"${_CW:MEC2-BUILDER}" != "":?ufs:${_FS}} \
@@ -182,7 +184,7 @@
 
 vm-base:	vm-image
 
-vm-image:	${QEMUTGT}
+vm-image:	${QEMUTGT} ${PKGBASE_REPO_DIR}
 .if defined(WITH_VMIMAGES) && !empty(WITH_VMIMAGES)
 . for FORMAT in ${VMFORMATS}
 .  for FS in ${VMFSLIST}
@@ -192,6 +194,8 @@
 		${WITHOUT_QEMU:DWITHOUT_QEMU=true} \
 		${NO_ROOT:DNO_ROOT=true} \
 		PKG_INSTALL_EPOCH=${PKG_INSTALL_EPOCH:U${GITEPOCH}} \
+		PKGBASE=${PKGBASE} \
+		PKGBASE_REPO_DIR=${.OBJDIR}/pkgbase-repo-dir \
 		${.CURDIR}/scripts/mk-vmimage.sh \
 		-C ${.CURDIR}/tools/vmimage.subr \
 		-d ${.OBJDIR}/${.TARGET}-${FORMAT}-${FS} -F ${FS} \
diff --git a/release/tools/ec2-builder.conf b/release/tools/ec2-builder.conf
--- a/release/tools/ec2-builder.conf
+++ b/release/tools/ec2-builder.conf
@@ -11,6 +11,17 @@
 export INSTALLOPTS="WITHOUT_DEBUG_FILES=YES WITHOUT_KERNEL_SYMBOLS=YES \
     WITHOUT_LIB32=YES WITHOUT_TESTS=YES WITHOUT_LLDB=YES"
 
+# Equivalent to INSTALLOPTS for pkgbase
+vm_filter_base_packages() {
+	grep < /dev/stdin -v \
+		-e '.*-dbg$' \
+		-e '.*-lib32$' \
+		-e '^FreeBSD-src.*' \
+		-e '^FreeBSD-tests.*' \
+		-e '^FreeBSD-lldb.*' \
+		-e '^FreeBSD-kernel.*'
+	echo "FreeBSD-kernel-generic"
+}
 # Packages to install into the image we're creating.  In addition to packages
 # present on all EC2 AMIs, we install:
 # * ec2-scripts, which provides a range of EC2ification startup scripts,
diff --git a/release/tools/ec2-small.conf b/release/tools/ec2-small.conf
--- a/release/tools/ec2-small.conf
+++ b/release/tools/ec2-small.conf
@@ -14,6 +14,18 @@
 export INSTALLOPTS="WITHOUT_DEBUG_FILES=YES WITHOUT_KERNEL_SYMBOLS=YES \
     WITHOUT_LIB32=YES WITHOUT_TESTS=YES WITHOUT_LLDB=YES"
 
+# Equivalent to INSTALLOPTS for pkgbase
+vm_filter_base_packages() {
+	grep < /dev/stdin -v \
+		-e '.*-dbg$' \
+		-e '.*-lib32$' \
+		-e '^FreeBSD-src.*' \
+		-e '^FreeBSD-tests.*' \
+		-e '^FreeBSD-lldb.*' \
+		-e '^FreeBSD-kernel.*'
+	echo "FreeBSD-kernel-generic"
+}
+
 # Packages to install into the image we're creating.  In addition to packages
 # present on all EC2 AMIs, we install:
 # * ec2-scripts, which provides a range of EC2ification startup scripts,
diff --git a/release/tools/vmimage.subr b/release/tools/vmimage.subr
--- a/release/tools/vmimage.subr
+++ b/release/tools/vmimage.subr
@@ -57,13 +57,35 @@
 	return 0
 }
 
+# Reads a list of all base system packages from stdin.
+# Writes a list of base system packages to install to stdout.
+# This can be overridden by configuration files to modify the
+# set of base packages installed to the image.
+vm_filter_base_packages() {
+	grep < /dev/stdin -v \
+		-e '^FreeBSD-src.*' \
+		-e '^FreeBSD-kernel.*'
+	echo "FreeBSD-kernel-generic"
+	echo "FreeBSD-kernel-generic-dbg"
+}
+
 vm_install_base() {
 	# Installs the FreeBSD userland/kernel to the virtual machine disk.
 
-	cd ${WORLDDIR} && \
-		make DESTDIR=${DESTDIR} ${INSTALLOPTS} \
-		installworld installkernel distribution || \
-		err "\n\nCannot install the base system to ${DESTDIR}."
+	if [ -n "${PKGBASE}" ]; then
+		local pkg_cmd
+		pkg_cmd="pkg --rootdir ${DESTDIR} --repo-conf-dir ${PKGBASE_REPO_DIR}
+			-o ASSUME_ALWAYS_YES=yes -o IGNORE_OSVERSION=yes
+			-o INSTALL_AS_USER=yes "
+		$pkg_cmd update
+		selected=$($pkg_cmd rquery -U -r FreeBSD-base %n | vm_filter_base_packages)
+		$pkg_cmd install -U -r FreeBSD-base $selected
+	else
+		cd ${WORLDDIR} && \
+			make DESTDIR=${DESTDIR} ${INSTALLOPTS} \
+			installworld installkernel distribution || \
+			err "\n\nCannot install the base system to ${DESTDIR}."
+	fi
 
 	# Bootstrap etcupdate(8) database.
 	mkdir -p ${DESTDIR}/var/db/etcupdate