diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7dd0b9ec..aef6cf95 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -6,6 +6,7 @@ In Development
 
 Mail:
 
+* "SMTPUTF8" is now disabled in Postfix. Because Dovecot still does not support SMTPUTF8, incoming mail to internationalized addresses was bouncing. This fixes incoming mail to internationalized domains (which was probably working prior to v0.40), but it will prevent sending outbound mail to addresses with internationalized local-parts.
 * Upgraded to Roundcube 1.5 Release Candidate.
 
 Firewall:
diff --git a/README.md b/README.md
index 92fab007..473dc1a9 100644
--- a/README.md
+++ b/README.md
@@ -42,6 +42,8 @@ It also includes system management tools:
 * A control panel for adding/removing mail users, aliases, custom DNS records, configuring backups, etc.
 * An API for all of the actions on the control panel
 
+Internationalized domain names are supported and configured easily (but SMTPUTF8 is not supported, unfortunately).
+
 It also supports static website hosting since the box is serving HTTPS anyway. (To serve a website for your domains elsewhere, just add a custom DNS "A" record in you Mail-in-a-Box's control panel to point domains to another server.)
 
 For more information on how Mail-in-a-Box handles your privacy, see the [security details page](security.md).
diff --git a/management/mailconfig.py b/management/mailconfig.py
index 0c58747e..2fcb9703 100755
--- a/management/mailconfig.py
+++ b/management/mailconfig.py
@@ -16,8 +16,8 @@ import idna
 
 def validate_email(email, mode=None):
 	# Checks that an email address is syntactically valid. Returns True/False.
-	# Until Postfix supports SMTPUTF8, an email address may contain ASCII
-	# characters only; IDNs must be IDNA-encoded.
+	# An email address may contain ASCII characters only because Dovecot's
+	# authentication mechanism gets confused with other character encodings.
 	#
 	# When mode=="user", we're checking that this can be a user account name.
 	# Dovecot has tighter restrictions - letters, numbers, underscore, and
diff --git a/setup/mail-users.sh b/setup/mail-users.sh
index c0320e7c..b570f037 100755
--- a/setup/mail-users.sh
+++ b/setup/mail-users.sh
@@ -101,8 +101,12 @@ EOF
 # ### Destination Validation
 
 # Use a Sqlite3 database to check whether a destination email address exists,
-# and to perform any email alias rewrites in Postfix.
+# and to perform any email alias rewrites in Postfix. Additionally, we disable
+# SMTPUTF8 because Dovecot's LMTP server that delivers mail to inboxes does
+# not support it, and if a message is received with the SMTPUTF8 flag it will
+# bounce.
 tools/editconf.py /etc/postfix/main.cf \
+	smtputf8_enable=no \
 	virtual_mailbox_domains=sqlite:/etc/postfix/virtual-mailbox-domains.cf \
 	virtual_mailbox_maps=sqlite:/etc/postfix/virtual-mailbox-maps.cf \
 	virtual_alias_maps=sqlite:/etc/postfix/virtual-alias-maps.cf \