diff --git a/auth.php b/auth.php
index ae009f3..04502ef 100644
--- a/auth.php
+++ b/auth.php
@@ -57,6 +57,7 @@ class auth_plugin_userkey extends auth_plugin_base {
         'mappingfield' => self::DEFAULT_MAPPING_FIELD,
         'keylifetime' => 60,
         'iprestriction' => 0,
+        'ipwhitelist' => '',
         'redirecturl' => '',
         'ssourl' => '',
         'createuser' => false,
diff --git a/classes/core_userkey_manager.php b/classes/core_userkey_manager.php
index 8d897b8..c302cb9 100644
--- a/classes/core_userkey_manager.php
+++ b/classes/core_userkey_manager.php
@@ -124,8 +124,28 @@ class core_userkey_manager implements userkey_manager_interface {
 
         if ($key->iprestriction) {
             $remoteaddr = getremoteaddr(null);
-            if (empty($remoteaddr) or !address_in_subnet($remoteaddr, $key->iprestriction)) {
-                print_error('ipmismatch');
+
+            if (isset($this->config->ipwhitelist)) {
+                $whitelist = $this->config->ipwhitelist;
+            } else {
+                $whitelist = false;
+            }
+
+            if (empty($remoteaddr) ) {
+                print_error('noip', 'auth_userkey');
+            } else if (!empty($whitelist)) {
+                $ips = explode(';', $whitelist);
+                $whitelisted = false;
+                foreach ($ips as $ip) {
+                    if (address_in_subnet($remoteaddr, $ip)) {
+                        $whitelisted = true;
+                    }
+                }
+                if (!$whitelisted) {
+                    print_error('ipmismatch', 'error', '', null, "Remote address: $remoteaddr\nKey IP: $key->iprestriction");
+                }
+            } else if (!address_in_subnet($remoteaddr, $key->iprestriction)) {
+                print_error('ipmismatch', 'error', '', null, "Remote address: $remoteaddr\nKey IP: $key->iprestriction");
             }
         }
 
diff --git a/lang/en/auth_userkey.php b/lang/en/auth_userkey.php
index cf3e55b..ab5db6f 100644
--- a/lang/en/auth_userkey.php
+++ b/lang/en/auth_userkey.php
@@ -29,6 +29,10 @@ $string['mappingfield_desc'] = 'This user field will be used to find relevant us
 $string['iprestriction'] = 'IP restriction';
 $string['iprestriction_desc'] = 'If enabled, a web call has to contain "ip" parameter when requesting login URL.
 A user has to have provided IP to be able to use a key to login to LMS.';
+$string['ipwhitelist'] = 'Whitelist IP ranges';
+$string['ipwhitelist_desc'] = "Ignore IP restrictions if the IP address the token was issued for or the login attempt comes from falls within any of these ranges.
+\nThis can happen when some users reach Moodle or the system issuing login tokens via a private network or DMZ.
+\nIf the route to either the system issuing tokens or this Moodle is via a private address range then set this value to 10.0.0.0/8;172.16.0.0/12;192.168.0.0/16";
 $string['keylifetime'] = 'User key life time';
 $string['keylifetime_desc'] = 'Life time in seconds of the each user login key.';
 $string['incorrectkeylifetime'] = 'User key life time should be a number';
diff --git a/settings.html b/settings.html
index 8e95618..d82c526 100644
--- a/settings.html
+++ b/settings.html
@@ -49,6 +49,13 @@ $fields = get_auth_plugin('userkey')->get_allowed_mapping_fields();
             <?php if (isset($err[$field])) { echo $OUTPUT->notification($err[$field], 'notifyfailure'); } ?>
             <?php print_string($field.'_desc', 'auth_userkey')?></td>
     </tr>
+    <tr valign="top">
+        <?php $field = 'ipwhitelist' ?>
+        <td align="right"><label for="<?php echo $field ?>"><?php print_string($field, 'auth_userkey') ?></label></td>
+        <td><input type="text" size="60" name="<?php echo $field ?>" value="<?php print $config->$field ?>" placeholder=""><br>
+            <?php if (isset($err[$field])) { echo $OUTPUT->notification($err[$field], 'notifyfailure'); } ?>
+            <?php print_string($field.'_desc', 'auth_userkey') ?></td>
+    </tr>
     <tr valign="top">
         <?php $field = 'redirecturl' ?>
         <td align="right"><label for="<?php echo $field ?>"><?php print_string($field, 'auth_userkey') ?></label></td>
diff --git a/tests/auth_plugin_test.php b/tests/auth_plugin_test.php
index bde01e7..dfe7985 100644
--- a/tests/auth_plugin_test.php
+++ b/tests/auth_plugin_test.php
@@ -756,6 +756,7 @@ class auth_plugin_userkey_testcase extends advanced_testcase {
         $formconfig->mappingfield = 'email';
         $formconfig->keylifetime = 100;
         $formconfig->iprestriction = 0;
+        $formconfig->ipwhitelist = '';
         $formconfig->redirecturl = 'http://google.com/';
         $formconfig->ssourl = 'http://google.com/';
         $formconfig->createuser = false;
@@ -842,6 +843,32 @@ class auth_plugin_userkey_testcase extends advanced_testcase {
         $this->auth->user_login_userkey();
     }
 
+    /**
+     * Test that IP address mismatch exception gets thrown if incorrect IP and outside whitelist.
+     *
+     * @expectedException moodle_exception
+     * @expectedExceptionMessage Client IP address mismatch
+     */
+    public function test_ipmismatch_exception_thrown_if_ip_is_outside_whitelist() {
+        global $DB;
+
+        set_config('ipwhitelist', '10.0.0.0/8;172.16.0.0/12;192.168.0.0/16', 'auth_userkey');
+
+        $key = new stdClass();
+        $key->value = 'IpmismatchKey';
+        $key->script = 'auth/userkey';
+        $key->userid = $this->user->id;
+        $key->instance = $this->user->id;
+        $key->iprestriction = '192.161.1.1';
+        $key->validuntil    = time() + 300;
+        $key->timecreated   = time();
+        $DB->insert_record('user_private_key', $key);
+
+        $_POST['key'] = 'IpmismatchKey';
+        $_SERVER['HTTP_CLIENT_IP'] = '192.161.1.2';
+        $this->auth->user_login_userkey();
+    }
+
     /**
      * Test that IP address mismatch exception gets thrown if user id is incorrect.
      *
diff --git a/tests/core_userkey_manager_test.php b/tests/core_userkey_manager_test.php
index 97e3f93..14fb4bc 100644
--- a/tests/core_userkey_manager_test.php
+++ b/tests/core_userkey_manager_test.php
@@ -149,6 +149,45 @@ class core_userkey_manager_testcase extends advanced_testcase {
         $this->assertEquals(time() + 60, $actualkey->validuntil);
     }
 
+    /**
+     * Test that IP address mismatch exception gets thrown if incorrect IP and outside whitelist.
+     *
+     * @expectedException moodle_exception
+     * @expectedExceptionMessage Client IP address mismatch
+     */
+    public function test_exception_if_ip_is_outside_whitelist() {
+        global $DB;
+
+        $this->config->iprestriction = true;
+        $this->config->ipwhitelist = '10.0.0.0/8;172.16.0.0/12;192.168.0.0/16';
+
+        $manager = new core_userkey_manager($this->config);
+        $value = $manager->create_key($this->user->id, '193.168.1.1');
+
+        $_SERVER['HTTP_CLIENT_IP'] = '193.168.1.2';
+
+        $manager->validate_key($value);
+    }
+
+    /**
+     * Test that key is accepted if incorrect IP and within whitelist.
+     */
+    public function test_create_correct_key_if_ip_is_whitelisted() {
+        global $DB;
+
+        $this->config->iprestriction = true;
+
+        $this->config->ipwhitelist = '10.0.0.0/8;172.16.0.0/12;192.168.0.0/16';
+
+        $manager = new core_userkey_manager($this->config);
+        $value = $manager->create_key($this->user->id, '192.168.1.1');
+
+        $_SERVER['HTTP_CLIENT_IP'] = '192.168.1.2';
+
+        $key = $manager->validate_key($value);
+        $this->assertEquals($this->user->id, $key->userid);
+    }
+
     /**
      * Test that key gets created correctly if config option iprestriction is set to false and we set allowedips.
      */