diff --git a/doc/man1/common/job-shell-options.rst b/doc/man1/common/job-shell-options.rst
index 905698b83705..cf06436052e3 100644
--- a/doc/man1/common/job-shell-options.rst
+++ b/doc/man1/common/job-shell-options.rst
@@ -39,3 +39,8 @@
 
    * - :option:`hwloc.xmlfile`
      - Write hwloc XML gathered by job to a file and set ``HWLOC_XMLFILE``
+
+   * - :option:`output.limit`
+     - Set KVS output limit to SIZE bytes, where SIZE may be a floating point
+       value including optional SI units: k, K, M, G. This value is ignored
+       if output is directed to a file with :option:`--output`.
diff --git a/doc/man1/flux-shell.rst b/doc/man1/flux-shell.rst
index b7f5c9eea3e8..c5f545e7dee5 100644
--- a/doc/man1/flux-shell.rst
+++ b/doc/man1/flux-shell.rst
@@ -318,6 +318,14 @@ plugins include:
   this option directly, as it will be set automatically by options
   of higher level commands such as :man1:`flux-submit`.
 
+.. option:: output.limit=SIZE
+
+   Truncate KVS output after SIZE bytes have been written. SIZE may
+   be a floating point value with optional SI units k, K, M, G. A value of
+   0 is considered unlimited. The default KVS output limit is 10M for jobs
+   in a multi-user instance or unlimited for single-user instance jobs.
+   This value is ignored if output is directed to a file.
+
 .. option:: output.{stdout,stderr}.path=PATH
 
   Set job stderr/out file output to PATH.
diff --git a/doc/man3/flux_shell_get_info.rst b/doc/man3/flux_shell_get_info.rst
index 2fe6efd3d112..cd1146d9b4df 100644
--- a/doc/man3/flux_shell_get_info.rst
+++ b/doc/man3/flux_shell_get_info.rst
@@ -39,6 +39,7 @@ with the following layout:
 ::
 
    "jobid":I,
+   "instance_owner":i,
    "rank":i,
    "size":i,
    "ntasks";i,
diff --git a/src/shell/internal.h b/src/shell/internal.h
index 0d91d81c049e..01be0140c16b 100644
--- a/src/shell/internal.h
+++ b/src/shell/internal.h
@@ -26,6 +26,7 @@
 struct flux_shell {
     flux_jobid_t jobid;
     int broker_rank;
+    uid_t broker_owner;
     char hostname [MAXHOSTNAMELEN + 1];
     int protocol_fd[2];
 
diff --git a/src/shell/output.c b/src/shell/output.c
index dc3b4260326b..c44ca16c0024 100644
--- a/src/shell/output.c
+++ b/src/shell/output.c
@@ -53,6 +53,7 @@
 #include "src/common/libeventlog/eventlog.h"
 #include "src/common/libeventlog/eventlogger.h"
 #include "src/common/libioencode/ioencode.h"
+#include "src/common/libutil/parse_size.h"
 #include "ccan/str/str.h"
 
 #include "task.h"
@@ -61,8 +62,7 @@
 #include "builtins.h"
 #include "log.h"
 
-#define OUTPUT_LIMIT_BYTES 1024*1024*10
-#define OUTPUT_LIMIT_STRING "10MB"
+#define MULTIUSER_OUTPUT_LIMIT "10M"
 
 enum {
     FLUX_OUTPUT_TYPE_TERM = 1,
@@ -82,6 +82,8 @@ struct shell_output_type_file {
 
 struct shell_output {
     flux_shell_t *shell;
+    const char *kvs_limit_string;
+    size_t kvs_limit_bytes;
     struct eventlogger *ev;
     double batch_timeout;
     int refcount;
@@ -341,6 +343,9 @@ static bool check_kvs_output_limit (struct shell_output *out,
     size_t *bytesp;
     size_t prev;
 
+    if (out->kvs_limit_bytes == 0)
+        return false;
+
     if (is_stdout) {
         stream = "stdout";
         bytesp = &out->stdout_bytes;
@@ -353,13 +358,13 @@ static bool check_kvs_output_limit (struct shell_output *out,
     prev = *bytesp;
     *bytesp += len;
 
-    if (*bytesp > OUTPUT_LIMIT_BYTES) {
+    if (*bytesp > out->kvs_limit_bytes) {
         /*  Only log an error when the threshold is reached.
         */
-        if (prev <= OUTPUT_LIMIT_BYTES)
+        if (prev <= out->kvs_limit_bytes)
             shell_warn ("%s will be truncated, %s limit exceeded",
                         stream,
-                        OUTPUT_LIMIT_STRING);
+                        out->kvs_limit_string);
         return true;
     }
     return false;
@@ -385,7 +390,7 @@ static int shell_output_kvs (struct shell_output *out)
                                out->stdout_bytes : out->stderr_bytes;
                 shell_warn ("%s: %zu of %zu bytes truncated",
                             is_stdout ? "stdout" : "stderr",
-                            total - OUTPUT_LIMIT_BYTES,
+                            total - out->kvs_limit_bytes,
                             total);
             }
         }
@@ -1135,6 +1140,53 @@ static int shell_lost (flux_plugin_t *p,
     return 0;
 }
 
+static int get_output_limit (struct shell_output *out)
+{
+    json_t *val = NULL;
+    uint64_t size;
+
+    /*  Set default to unlimited (0) for single-user instances,
+     *  O/w use the default multiuser output limit:
+     */
+    if (out->shell->broker_owner == getuid())
+        out->kvs_limit_string = "0";
+    else
+        out->kvs_limit_string = MULTIUSER_OUTPUT_LIMIT;
+
+    if (flux_shell_getopt_unpack (out->shell,
+                                  "output",
+                                  "{s?o}",
+                                  "limit", &val) < 0) {
+        shell_log_error ("Unable to unpack shell output.limit");
+        return -1;
+    }
+    if (val != NULL) {
+        if (json_is_integer (val)) {
+            out->kvs_limit_bytes = (size_t) json_integer_value (val);
+            if (out->kvs_limit_bytes > 0) {
+                /*  Need a string representation of limit for errors
+                */
+                char *s = strdup (encode_size (out->kvs_limit_bytes));
+                if (s && flux_shell_aux_set (out->shell, NULL, s, free) < 0)
+                    free (s);
+                else
+                    out->kvs_limit_string = s;
+            }
+            return 0;
+        }
+        if (!(out->kvs_limit_string = json_string_value (val))) {
+            shell_log_error ("Unable to convert output.limit to string");
+            return -1;
+        }
+    }
+    if (parse_size (out->kvs_limit_string, &size) < 0) {
+        shell_log_errno ("Invalid KVS output.limit=%s", out->kvs_limit_string);
+        return -1;
+    }
+    out->kvs_limit_bytes = (size_t) size;
+    return 0;
+}
+
 struct shell_output *shell_output_create (flux_shell_t *shell)
 {
     struct shell_output *out;
@@ -1147,6 +1199,8 @@ struct shell_output *shell_output_create (flux_shell_t *shell)
     out->stdout_buffer_type = "line";
     out->stderr_buffer_type = "none";
 
+    if (get_output_limit (out) < 0)
+        goto error;
     if (shell_output_check_alternate_output (out) < 0)
         goto error;
     if (shell_output_check_alternate_buffer_type (out) < 0)
diff --git a/src/shell/shell.c b/src/shell/shell.c
index ce95988f218a..e7eeb34e19e7 100644
--- a/src/shell/shell.c
+++ b/src/shell/shell.c
@@ -253,6 +253,25 @@ static int reconnect (flux_t *h, void *arg)
     return 0;
 }
 
+static uid_t get_instance_owner (flux_t *h)
+{
+    const char *s;
+    char *endptr;
+    int id;
+
+    if (!(s = flux_attr_get (h, "security.owner"))) {
+        shell_log_errno ("error fetching security.owner attribute");
+        return (uid_t) 0;
+    }
+    errno = 0;
+    id = strtoul (s, &endptr, 10);
+    if (errno != 0 || *endptr != '\0') {
+        shell_log_error ("error parsing security.owner=%s", s);
+        return (uid_t) 0;
+    }
+    return (uid_t) id;
+}
+
 static void shell_connect_flux (flux_shell_t *shell)
 {
     uint32_t rank;
@@ -274,6 +293,8 @@ static void shell_connect_flux (flux_shell_t *shell)
         shell_log_errno ("error fetching broker rank");
     shell->broker_rank = rank;
 
+    shell->broker_owner = get_instance_owner (shell->h);
+
     if (plugstack_call (shell->plugstack, "shell.connect", NULL) < 0)
         shell_log_errno ("shell.connect");
 }
@@ -427,9 +448,10 @@ static json_t *flux_shell_get_info_object (flux_shell_t *shell)
         return o;
 
     if (!(o = json_pack_ex (&err, 0,
-                            "{ s:I s:i s:i s:i s:s s:O s:O s:{ s:i }}",
+                            "{ s:I s:i s:i s:i s:i s:s s:O s:O s:{ s:i }}",
                             "jobid", shell->info->jobid,
                             "rank",  shell->info->shell_rank,
+                            "instance_owner", (int) shell->broker_owner,
                             "size",  shell->info->shell_size,
                             "ntasks", shell->info->total_ntasks,
                             "service", shell_svc_name (shell->svc),
diff --git a/src/shell/shell.h b/src/shell/shell.h
index b84591927401..2ce166466e91 100644
--- a/src/shell/shell.h
+++ b/src/shell/shell.h
@@ -105,6 +105,7 @@ const struct taskmap *flux_shell_get_taskmap (flux_shell_t *shell);
 /*  Return shell info as a JSON string.
  *  {
  *   "jobid":I,
+ *   "instance_owner":i,
  *   "rank":i,
  *   "size":i,
  *   "ntasks";i,
diff --git a/t/system/0001-basic.t b/t/system/0001-basic.t
index 6b3de9ff2e98..e484225e8f99 100755
--- a/t/system/0001-basic.t
+++ b/t/system/0001-basic.t
@@ -15,3 +15,10 @@ test_expect_success 'flux jobs lists job with correct userid' '
 test_expect_success 'flux proxy can submit jobs to system instance' '
 	flux proxy $(flux getattr local-uri) flux submit true
 '
+test_expect_success 'flux-shell limits kvs output to 10M for guest jobs' '
+	dd if=/dev/urandom bs=10240 count=800 | base64 --wrap 79 >large.in &&
+	flux run -vvv cat large.in >large.out 2>trunc.err &&
+	ls -lh large* &&
+	test_debug "cat trunc.err" &&
+	grep "stdout.*truncated" trunc.err
+'
diff --git a/t/t2606-job-shell-output-redirection.t b/t/t2606-job-shell-output-redirection.t
index a10717c77bd8..43c648d2a3d7 100755
--- a/t/t2606-job-shell-output-redirection.t
+++ b/t/t2606-job-shell-output-redirection.t
@@ -348,15 +348,22 @@ test_expect_success 'job-shell: shell errors are captured in error file' '
 	test_expect_code 127  flux run --error=test.err nosuchcommand &&
 	grep "nosuchcommand: No such file or directory" test.err
 '
-test_expect_success LONGTEST 'job-shell: output to kvs is truncated at 10MB' '
-	dd if=/dev/urandom bs=10240 count=800 | base64 --wrap 79 >expected &&
-	flux run cat expected >output 2>truncate.error &&
-	test_debug "cat truncate.error" &&
-	grep "stdout.*truncated" truncate.error
-'
-test_expect_success LONGTEST 'job-shell: stderr to kvs is truncated at 10MB' '
-	dd if=/dev/urandom bs=10240 count=800 | base64 --wrap 79 >expected &&
-	flux run sh -c "cat expected >&2"  >truncate2.error 2>&1 &&
-	grep "stderr.*truncated" truncate2.error
+test_expect_success 'job-shell: kvs output truncatation works' '
+	flux run -o output.limit=5 echo 0123456789 2>trunc.err &&
+	test_debug "cat trunc.err" &&
+	grep "stdout.*truncated" trunc.err
+'
+test_expect_success 'job-shell: stderr truncation works' '
+	flux run -o output.limit=5 \
+		sh -c "echo 0123456789 >&2" >trunc2.error 2>&1 &&
+	grep "stderr.*truncated" trunc2.error
+'
+test_expect_success LONGTEST 'job-shell: no truncation at 10MB for single-user job' '
+	dd if=/dev/urandom bs=10240 count=800 | base64 --wrap 79 >10M+ &&
+	flux run cat 10M+ >10M+.output &&
+	test_cmp 10M+ 10M+.output
+'
+test_expect_success 'job-shell: invalid output.limit string is rejected' '
+	test_must_fail flux run -o output.limit=foo hostname
 '
 test_done
diff --git a/t/t9000-system.t b/t/t9000-system.t
index 53fcb4ac68ce..e982b8d3b218 100755
--- a/t/t9000-system.t
+++ b/t/t9000-system.t
@@ -65,7 +65,7 @@ alias test_expect_success='expect_success_wrap'
 #
 for testscript in ${FLUX_SOURCE_DIR}/t/system/${T9000_SYSTEM_GLOB}; do
 	TEST_LABEL="$(basename $testscript)"
-	source $testscript
+	. $testscript
 done
 
 test_done