diff --git a/contrib/xml2/expected/xml2.out b/contrib/xml2/expected/xml2.out
index 7dd05fad9ac..8bc741e364f 100644
--- a/contrib/xml2/expected/xml2.out
+++ b/contrib/xml2/expected/xml2.out
@@ -145,3 +145,18 @@ values
 Value</attribute></attributes>');
 create index idx_xpath on t1 ( xpath_string
 ('/attributes/attribute[@name="attr_1"]/text()', xml_data::text));
+-- possible security exploit
+SELECT xslt_process('<xml><foo>Hello from XML</foo></xml>',
+$$<xsl:stylesheet version="1.0"
+      xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
+      xmlns:sax="http://icl.com/saxon"
+      extension-element-prefixes="sax">
+
+  <xsl:template match="//foo">
+    <sax:output href="0wn3d.txt" method="text">
+      <xsl:value-of select="'0wn3d via xml2 extension and libxslt'"/>
+      <xsl:apply-templates/>
+    </sax:output>
+  </xsl:template>
+</xsl:stylesheet>$$);
+ERROR:  failed to apply stylesheet
diff --git a/contrib/xml2/expected/xml2_1.out b/contrib/xml2/expected/xml2_1.out
index 80cefb54df3..5f267b4cd62 100644
--- a/contrib/xml2/expected/xml2_1.out
+++ b/contrib/xml2/expected/xml2_1.out
@@ -107,3 +107,18 @@ values
 Value</attribute></attributes>');
 create index idx_xpath on t1 ( xpath_string
 ('/attributes/attribute[@name="attr_1"]/text()', xml_data::text));
+-- possible security exploit
+SELECT xslt_process('<xml><foo>Hello from XML</foo></xml>',
+$$<xsl:stylesheet version="1.0"
+      xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
+      xmlns:sax="http://icl.com/saxon"
+      extension-element-prefixes="sax">
+
+  <xsl:template match="//foo">
+    <sax:output href="0wn3d.txt" method="text">
+      <xsl:value-of select="'0wn3d via xml2 extension and libxslt'"/>
+      <xsl:apply-templates/>
+    </sax:output>
+  </xsl:template>
+</xsl:stylesheet>$$);
+ERROR:  xslt_process() is not available without libxslt
diff --git a/contrib/xml2/sql/xml2.sql b/contrib/xml2/sql/xml2.sql
index 73723b6be10..71d3535d14f 100644
--- a/contrib/xml2/sql/xml2.sql
+++ b/contrib/xml2/sql/xml2.sql
@@ -80,3 +80,18 @@ Value</attribute></attributes>');
 
 create index idx_xpath on t1 ( xpath_string
 ('/attributes/attribute[@name="attr_1"]/text()', xml_data::text));
+
+-- possible security exploit
+SELECT xslt_process('<xml><foo>Hello from XML</foo></xml>',
+$$<xsl:stylesheet version="1.0"
+      xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
+      xmlns:sax="http://icl.com/saxon"
+      extension-element-prefixes="sax">
+
+  <xsl:template match="//foo">
+    <sax:output href="0wn3d.txt" method="text">
+      <xsl:value-of select="'0wn3d via xml2 extension and libxslt'"/>
+      <xsl:apply-templates/>
+    </sax:output>
+  </xsl:template>
+</xsl:stylesheet>$$);
diff --git a/contrib/xml2/xslt_proc.c b/contrib/xml2/xslt_proc.c
index 5e4b7a61b4e..a56b297c90b 100644
--- a/contrib/xml2/xslt_proc.c
+++ b/contrib/xml2/xslt_proc.c
@@ -26,6 +26,7 @@
 
 #include <libxslt/xslt.h>
 #include <libxslt/xsltInternals.h>
+#include <libxslt/security.h>
 #include <libxslt/transform.h>
 #include <libxslt/xsltutils.h>
 
@@ -64,7 +65,10 @@ xslt_process(PG_FUNCTION_ARGS)
 	xsltStylesheetPtr stylesheet = NULL;
 	xmlDocPtr	doctree;
 	xmlDocPtr	restree;
-	xmlDocPtr	ssdoc = NULL;
+	xmlDocPtr	ssdoc;
+	xsltSecurityPrefsPtr xslt_sec_prefs;
+	bool		xslt_sec_prefs_error;
+	xsltTransformContextPtr xslt_ctxt;
 	xmlChar    *resstr;
 	int			resstat;
 	int			reslen;
@@ -81,34 +85,27 @@ xslt_process(PG_FUNCTION_ARGS)
 	/* Setup parser */
 	pgxml_parser_init();
 
-	/* Check to see if document is a file or a literal */
-
-	if (VARDATA(doct)[0] == '<')
-		doctree = xmlParseMemory((char *) VARDATA(doct), VARSIZE(doct) - VARHDRSZ);
-	else
-		doctree = xmlParseFile(text_to_cstring(doct));
+	/* Parse document */
+	doctree = xmlParseMemory((char *) VARDATA(doct),
+							 VARSIZE(doct) - VARHDRSZ);
 
 	if (doctree == NULL)
 		xml_ereport(ERROR, ERRCODE_EXTERNAL_ROUTINE_EXCEPTION,
 					"error parsing XML document");
 
 	/* Same for stylesheet */
-	if (VARDATA(ssheet)[0] == '<')
+	ssdoc = xmlParseMemory((char *) VARDATA(ssheet),
+						   VARSIZE(ssheet) - VARHDRSZ);
+
+	if (ssdoc == NULL)
 	{
-		ssdoc = xmlParseMemory((char *) VARDATA(ssheet),
-							   VARSIZE(ssheet) - VARHDRSZ);
-		if (ssdoc == NULL)
-		{
-			xmlFreeDoc(doctree);
-			xml_ereport(ERROR, ERRCODE_EXTERNAL_ROUTINE_EXCEPTION,
-						"error parsing stylesheet as XML document");
-		}
-
-		stylesheet = xsltParseStylesheetDoc(ssdoc);
+		xmlFreeDoc(doctree);
+		xml_ereport(ERROR, ERRCODE_EXTERNAL_ROUTINE_EXCEPTION,
+					"error parsing stylesheet as XML document");
 	}
-	else
-		stylesheet = xsltParseStylesheetFile((xmlChar *) text_to_cstring(ssheet));
 
+	/* After this call we need not free ssdoc separately */
+	stylesheet = xsltParseStylesheetDoc(ssdoc);
 
 	if (stylesheet == NULL)
 	{
@@ -118,12 +115,50 @@ xslt_process(PG_FUNCTION_ARGS)
 					"failed to parse stylesheet");
 	}
 
-	restree = xsltApplyStylesheet(stylesheet, doctree, params);
+	xslt_ctxt = xsltNewTransformContext(stylesheet, doctree);
+
+	xslt_sec_prefs_error = false;
+	if ((xslt_sec_prefs = xsltNewSecurityPrefs()) == NULL)
+		xslt_sec_prefs_error = true;
+
+	if (xsltSetSecurityPrefs(xslt_sec_prefs, XSLT_SECPREF_READ_FILE,
+							 xsltSecurityForbid) != 0)
+		xslt_sec_prefs_error = true;
+	if (xsltSetSecurityPrefs(xslt_sec_prefs, XSLT_SECPREF_WRITE_FILE,
+							 xsltSecurityForbid) != 0)
+		xslt_sec_prefs_error = true;
+	if (xsltSetSecurityPrefs(xslt_sec_prefs, XSLT_SECPREF_CREATE_DIRECTORY,
+							 xsltSecurityForbid) != 0)
+		xslt_sec_prefs_error = true;
+	if (xsltSetSecurityPrefs(xslt_sec_prefs, XSLT_SECPREF_READ_NETWORK,
+							 xsltSecurityForbid) != 0)
+		xslt_sec_prefs_error = true;
+	if (xsltSetSecurityPrefs(xslt_sec_prefs, XSLT_SECPREF_WRITE_NETWORK,
+							 xsltSecurityForbid) != 0)
+		xslt_sec_prefs_error = true;
+	if (xsltSetCtxtSecurityPrefs(xslt_sec_prefs, xslt_ctxt) != 0)
+		xslt_sec_prefs_error = true;
+
+	if (xslt_sec_prefs_error)
+	{
+		xsltFreeStylesheet(stylesheet);
+		xmlFreeDoc(doctree);
+		xsltFreeSecurityPrefs(xslt_sec_prefs);
+		xsltFreeTransformContext(xslt_ctxt);
+		xsltCleanupGlobals();
+		xml_ereport(ERROR, ERRCODE_EXTERNAL_ROUTINE_EXCEPTION,
+					"could not set libxslt security preferences");
+	}
+
+	restree = xsltApplyStylesheetUser(stylesheet, doctree, params,
+									  NULL, NULL, xslt_ctxt);
 
 	if (restree == NULL)
 	{
 		xsltFreeStylesheet(stylesheet);
 		xmlFreeDoc(doctree);
+		xsltFreeSecurityPrefs(xslt_sec_prefs);
+		xsltFreeTransformContext(xslt_ctxt);
 		xsltCleanupGlobals();
 		xml_ereport(ERROR, ERRCODE_EXTERNAL_ROUTINE_EXCEPTION,
 					"failed to apply stylesheet");
@@ -134,6 +169,8 @@ xslt_process(PG_FUNCTION_ARGS)
 	xsltFreeStylesheet(stylesheet);
 	xmlFreeDoc(restree);
 	xmlFreeDoc(doctree);
+	xsltFreeSecurityPrefs(xslt_sec_prefs);
+	xsltFreeTransformContext(xslt_ctxt);
 
 	xsltCleanupGlobals();
 
diff --git a/doc/src/sgml/xml2.sgml b/doc/src/sgml/xml2.sgml
index 51faaccd208..80a3a45bed2 100644
--- a/doc/src/sgml/xml2.sgml
+++ b/doc/src/sgml/xml2.sgml
@@ -394,14 +394,6 @@ WHERE t.author_id = p.person_id;
     contain commas!
    </para>
 
-   <para>
-    Also note that if either the document or stylesheet values do not
-    begin with a &lt; then they will be treated as URLs and libxslt will
-    fetch them. It follows that you can use <function>xslt_process</> as a
-    means to fetch the contents of URLs &mdash; you should be aware of the
-    security implications of this.
-   </para>
-
    <para>
     There is also a two-parameter version of <function>xslt_process</> which
     does not pass any parameters to the transformation.