--- a/browser/base/content/nsContextMenu.js
+++ b/browser/base/content/nsContextMenu.js
@@ -446,17 +446,18 @@ nsContextMenu.prototype = {
     this.showItem("context-inspect", showInspect);
 
     this.showItem("context-sep-viewsource", shouldShow);
 
     // Set as Desktop background depends on whether an image was clicked on,
     // and only works if we have a shell service.
     var haveSetDesktopBackground = false;
 
-    if (AppConstants.HAVE_SHELL_SERVICE) {
+    if (AppConstants.HAVE_SHELL_SERVICE &&
+        Services.policies.isAllowed("set_desktop_background")) {
       // Only enable Set as Desktop Background if we can get the shell service.
       var shell = getShellService();
       if (shell)
         haveSetDesktopBackground = shell.canSetDesktopBackground;
     }
 
     this.showItem("context-setDesktopBackground",
                   haveSetDesktopBackground && this.onLoadedImage);
@@ -1012,18 +1013,20 @@ nsContextMenu.prototype = {
 
     mm.sendAsyncMessage("ContextMenu:SetAsDesktopBackground", null,
                         { target: this.target });
 
     let onMessage = (message) => {
       mm.removeMessageListener("ContextMenu:SetAsDesktopBackground:Result",
                                onMessage);
 
-      if (message.data.disable)
+      if (message.data.disable ||
+          !Services.policies.isAllowed("set_desktop_background")) {
         return;
+      }
 
       let image = document.createElementNS("http://www.w3.org/1999/xhtml", "img");
       image.src = message.data.dataUrl;
       let imageName = message.data.imageName;
 
       // Confirm since it's annoying if you hit this accidentally.
       const kDesktopBackgroundURL =
                     "chrome://browser/content/setDesktopBackground.xul";

--- a/browser/components/enterprisepolicies/Policies.jsm
+++ b/browser/components/enterprisepolicies/Policies.jsm
@@ -71,16 +71,24 @@ this.Policies = {
           Services.prefs.setBoolPref(PREF_BOOKMARKS_ALREADY_DISPLAYED, true);
         } else {
           log.debug("Not showing the bookmarks toolbar because it has already been shown.");
         }
       }
     }
   },
 
+  "block_set_desktop_background": {
+    onBeforeUIStartup(manager, param) {
+      if (param == true) {
+        manager.disallowFeature("set_desktop_background", true);
+      }
+    }
+  },
+
   "dont_check_default_browser": {
     onBeforeUIStartup(manager, param) {
       setAndLockPref("browser.shell.checkDefaultBrowser", false);
     }
   },
 
   "flash_plugin": {
     onBeforeUIStartup(manager, param) {

--- a/browser/components/enterprisepolicies/schemas/policies-schema.json
+++ b/browser/components/enterprisepolicies/schemas/policies-schema.json
@@ -21,16 +21,24 @@
     "display_bookmarks_toolbar": {
       "description": "Causes the bookmarks toolbar to be displayed by default.",
       "first_available": "60.0",
 
       "type": "boolean",
       "enum": [true]
     },
 
+    "block_set_desktop_background": {
+      "description": "Prevents usage of the \"Set Image as Desktop Background\" feature.",
+      "first_available": "60.0",
+
+      "type": "boolean",
+      "enum": [true]
+    },
+
     "dont_check_default_browser": {
       "description": "Don't check for the default browser on startup.",
       "first_available": "60.0",
 
       "type": "boolean",
       "enum": [true]
     },
 

--- a/browser/components/enterprisepolicies/tests/browser/browser.ini
+++ b/browser/components/enterprisepolicies/tests/browser/browser.ini
@@ -5,17 +5,19 @@ support-files =
   head.js
   config_dont_check_default_browser.json
   config_popups_cookies_addons_flash.json
   config_setAndLockPref.json
   config_simple_policies.json
   config_broken_json.json
   config_display_menu.json
   config_display_bookmarks.json
+  config_block_set_desktop_background.json
 
 [browser_policies_broken_json.js]
 [browser_policies_popups_cookies_addons_flash.js]
 [browser_policies_setAndLockPref_API.js]
 [browser_policies_simple_policies.js]
 [browser_policies_validate_and_parse_API.js]
 [browser_policy_default_browser_check.js]
 [browser_policy_display_menu.js]
 [browser_policy_display_bookmarks.js]
+[browser_policy_block_set_desktop_background.js]

new file mode 100644
--- /dev/null
+++ b/browser/components/enterprisepolicies/tests/browser/browser_policy_block_set_desktop_background.js
@@ -0,0 +1,34 @@
+/* Any copyright is dedicated to the Public Domain.
+ * http://creativecommons.org/publicdomain/zero/1.0/ */
+"use strict";
+
+add_task(async function setup() {
+  await setupPolicyEngineWithJson("config_block_set_desktop_background.json");
+});
+
+add_task(async function test_check_set_desktop_background() {
+  const imageUrl = "data:image/png;base64,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";
+  let tab = await BrowserTestUtils.openNewForegroundTab(gBrowser, imageUrl, true);
+
+  // Right click on the image and wait for the context menu to open
+  let contextMenu = document.getElementById("contentAreaContextMenu");
+  let promiseContextMenuOpen = BrowserTestUtils.waitForEvent(contextMenu, "popupshown");
+  await BrowserTestUtils.synthesizeMouse("img", 0, 0,
+                                         {
+                                           type: "contextmenu",
+                                           button: 2,
+                                           centered: true
+                                         },
+                                         gBrowser.selectedBrowser);
+  await promiseContextMenuOpen;
+  info("Context Menu Shown");
+
+  let buttonElement = document.getElementById("context-setDesktopBackground");
+  is(buttonElement.hidden, true,
+     "The \"Set Desktop Background\" context menu element should be hidden");
+
+  let promiseContextMenuHidden = BrowserTestUtils.waitForEvent(contextMenu, "popuphidden");
+  contextMenu.hidePopup();
+  await promiseContextMenuHidden;
+  await BrowserTestUtils.removeTab(tab);
+});

new file mode 100644
--- /dev/null
+++ b/browser/components/enterprisepolicies/tests/browser/config_block_set_desktop_background.json
@@ -0,0 +1,5 @@
+{
+  "policies": {
+    "block_set_desktop_background": true
+  }
+}