diff --git a/lib/ansible/runner/connection_plugins/ssh.py b/lib/ansible/runner/connection_plugins/ssh.py
index 127661285b4..a27b8de51c3 100644
--- a/lib/ansible/runner/connection_plugins/ssh.py
+++ b/lib/ansible/runner/connection_plugins/ssh.py
@@ -23,7 +23,9 @@ import pipes
 import random
 import select
 import fcntl
+import hmac
 import pwd
+from hashlib import sha1
 import ansible.constants as C
 from ansible.callbacks import vvv
 from ansible import errors
@@ -39,6 +41,7 @@ class Connection(object):
         self.user = user
         self.password = password
         self.private_key_file = private_key_file
+        self.HASHED_KEY_MAGIC = "|1|"
 
     def connect(self):
         ''' connect to the remote host '''
@@ -105,8 +108,21 @@ class Connection(object):
             if line is None or line.find(" ") == -1:
                 continue
             tokens = line.split()
-            if host in tokens[0]:
-                return False
+            if tokens[0].find(self.HASHED_KEY_MAGIC) == 0:
+                # this is a hashed known host entry
+                try:
+                    (kn_salt,kn_host) = tokens[0][len(self.HASHED_KEY_MAGIC):].split("|",2)
+                    hash = hmac.new(kn_salt.decode('base64'), digestmod=sha1)
+                    hash.update(host)
+                    if hash.digest() == kn_host.decode('base64'):
+                        return False
+                except:
+                    # invalid hashed host key, skip it
+                    continue
+            else:
+                # standard host file entry
+                if host in tokens[0]:
+                    return False
         return True
 
     def exec_command(self, cmd, tmp_path, sudo_user,sudoable=False, executable='/bin/sh'):