diff --git a/channeldb/kvdb/etcd/bucket.go b/channeldb/kvdb/etcd/bucket.go
index fd4a37015..3bc087dbf 100644
--- a/channeldb/kvdb/etcd/bucket.go
+++ b/channeldb/kvdb/etcd/bucket.go
@@ -16,12 +16,6 @@ var (
 	sequencePrefix = []byte("$")
 )
 
-// rootBucketId returns a zero filled 32 byte array
-func rootBucketID() []byte {
-	var rootID [bucketIDLength]byte
-	return rootID[:]
-}
-
 // makeBucketID returns a deterministic key for the passed byte slice.
 // Currently it returns the sha256 hash of the slice.
 func makeBucketID(key []byte) [bucketIDLength]byte {
diff --git a/channeldb/kvdb/etcd/bucket_test.go b/channeldb/kvdb/etcd/bucket_test.go
index c9df28471..e68821f1e 100644
--- a/channeldb/kvdb/etcd/bucket_test.go
+++ b/channeldb/kvdb/etcd/bucket_test.go
@@ -7,7 +7,8 @@ package etcd
 func bkey(buckets ...string) string {
 	var bucketKey []byte
 
-	parent := rootBucketID()
+	rootID := makeBucketID([]byte(""))
+	parent := rootID[:]
 
 	for _, bucketName := range buckets {
 		bucketKey = makeBucketKey(parent, []byte(bucketName))
@@ -28,7 +29,8 @@ func bval(buckets ...string) string {
 // vkey is a helper function used in tests to create a value key from the
 // passed key and bucket list.
 func vkey(key string, buckets ...string) string {
-	bucket := rootBucketID()
+	rootID := makeBucketID([]byte(""))
+	bucket := rootID[:]
 
 	for _, bucketName := range buckets {
 		bucketKey := makeBucketKey(bucket, []byte(bucketName))
diff --git a/channeldb/kvdb/etcd/db.go b/channeldb/kvdb/etcd/db.go
index 0079d2c9c..a082e6109 100644
--- a/channeldb/kvdb/etcd/db.go
+++ b/channeldb/kvdb/etcd/db.go
@@ -143,6 +143,11 @@ type BackendConfig struct {
 	// skip TLS verification.
 	InsecureSkipVerify bool
 
+	// Prefix the hash of the prefix will be used as the root
+	// bucket id. This enables key space separation similar to
+	// name spaces.
+	Prefix string
+
 	// CollectCommitStats indicates wheter to commit commit stats.
 	CollectCommitStats bool
 }
@@ -203,7 +208,7 @@ func (db *db) getSTMOptions() []STMOptionFunc {
 // occur).
 func (db *db) View(f func(tx walletdb.ReadTx) error) error {
 	apply := func(stm STM) error {
-		return f(newReadWriteTx(stm))
+		return f(newReadWriteTx(stm, db.config.Prefix))
 	}
 
 	return RunSTM(db.cli, apply, db.getSTMOptions()...)
@@ -217,7 +222,7 @@ func (db *db) View(f func(tx walletdb.ReadTx) error) error {
 // returned.
 func (db *db) Update(f func(tx walletdb.ReadWriteTx) error) error {
 	apply := func(stm STM) error {
-		return f(newReadWriteTx(stm))
+		return f(newReadWriteTx(stm, db.config.Prefix))
 	}
 
 	return RunSTM(db.cli, apply, db.getSTMOptions()...)
@@ -234,12 +239,18 @@ func (db *db) PrintStats() string {
 
 // BeginReadTx opens a database read transaction.
 func (db *db) BeginReadWriteTx() (walletdb.ReadWriteTx, error) {
-	return newReadWriteTx(NewSTM(db.cli, db.getSTMOptions()...)), nil
+	return newReadWriteTx(
+		NewSTM(db.cli, db.getSTMOptions()...),
+		db.config.Prefix,
+	), nil
 }
 
 // BeginReadWriteTx opens a database read+write transaction.
 func (db *db) BeginReadTx() (walletdb.ReadTx, error) {
-	return newReadWriteTx(NewSTM(db.cli, db.getSTMOptions()...)), nil
+	return newReadWriteTx(
+		NewSTM(db.cli, db.getSTMOptions()...),
+		db.config.Prefix,
+	), nil
 }
 
 // Copy writes a copy of the database to the provided writer.  This call will
diff --git a/channeldb/kvdb/etcd/readwrite_bucket.go b/channeldb/kvdb/etcd/readwrite_bucket.go
index 60a19cc18..e60d2cec3 100644
--- a/channeldb/kvdb/etcd/readwrite_bucket.go
+++ b/channeldb/kvdb/etcd/readwrite_bucket.go
@@ -24,7 +24,7 @@ type readWriteBucket struct {
 // newReadWriteBucket creates a new rw bucket with the passed transaction
 // and bucket id.
 func newReadWriteBucket(tx *readWriteTx, key, id []byte) *readWriteBucket {
-	if !bytes.Equal(id, rootBucketID()) {
+	if !bytes.Equal(id, tx.rootBucketID[:]) {
 		// Add the bucket key/value to the lock set.
 		tx.lock(string(key), string(id))
 	}
diff --git a/channeldb/kvdb/etcd/readwrite_tx.go b/channeldb/kvdb/etcd/readwrite_tx.go
index 37914e8c9..22d0ce421 100644
--- a/channeldb/kvdb/etcd/readwrite_tx.go
+++ b/channeldb/kvdb/etcd/readwrite_tx.go
@@ -11,6 +11,10 @@ type readWriteTx struct {
 	// stm is the reference to the parent STM.
 	stm STM
 
+	// rootBucketID holds the sha256 hash of the root bucket id, which is used
+	// for key space spearation.
+	rootBucketID [bucketIDLength]byte
+
 	// active is true if the transaction hasn't been committed yet.
 	active bool
 
@@ -24,18 +28,19 @@ type readWriteTx struct {
 }
 
 // newReadWriteTx creates an rw transaction with the passed STM.
-func newReadWriteTx(stm STM) *readWriteTx {
+func newReadWriteTx(stm STM, prefix string) *readWriteTx {
 	return &readWriteTx{
-		stm:    stm,
-		active: true,
-		lset:   make(map[string]string),
+		stm:          stm,
+		active:       true,
+		rootBucketID: makeBucketID([]byte(prefix)),
+		lset:         make(map[string]string),
 	}
 }
 
 // rooBucket is a helper function to return the always present
-// root bucket.
+// pseudo root bucket.
 func rootBucket(tx *readWriteTx) *readWriteBucket {
-	return newReadWriteBucket(tx, rootBucketID(), rootBucketID())
+	return newReadWriteBucket(tx, tx.rootBucketID[:], tx.rootBucketID[:])
 }
 
 // lock adds a key value to the lock set.
diff --git a/channeldb/kvdb/kvdb_etcd.go b/channeldb/kvdb/kvdb_etcd.go
index b2662e098..265e7daeb 100644
--- a/channeldb/kvdb/kvdb_etcd.go
+++ b/channeldb/kvdb/kvdb_etcd.go
@@ -12,7 +12,7 @@ const TestBackend = EtcdBackendName
 
 // GetEtcdBackend returns an etcd backend configured according to the
 // passed etcdConfig.
-func GetEtcdBackend(etcdConfig *EtcdConfig) (Backend, error) {
+func GetEtcdBackend(prefix string, etcdConfig *EtcdConfig) (Backend, error) {
 	// Config translation is needed here in order to keep the
 	// etcd package fully independent from the rest of the source tree.
 	backendConfig := etcd.BackendConfig{
@@ -22,6 +22,7 @@ func GetEtcdBackend(etcdConfig *EtcdConfig) (Backend, error) {
 		CertFile:           etcdConfig.CertFile,
 		KeyFile:            etcdConfig.KeyFile,
 		InsecureSkipVerify: etcdConfig.InsecureSkipVerify,
+		Prefix:             prefix,
 		CollectCommitStats: etcdConfig.CollectStats,
 	}
 
diff --git a/channeldb/kvdb/kvdb_no_etcd.go b/channeldb/kvdb/kvdb_no_etcd.go
index 1758551f8..ea5de4275 100644
--- a/channeldb/kvdb/kvdb_no_etcd.go
+++ b/channeldb/kvdb/kvdb_no_etcd.go
@@ -13,7 +13,7 @@ const TestBackend = BoltBackendName
 var errEtcdNotAvailable = fmt.Errorf("etcd backend not available")
 
 // GetEtcdBackend is a stub returning nil and errEtcdNotAvailable error.
-func GetEtcdBackend(etcdConfig *EtcdConfig) (Backend, error) {
+func GetEtcdBackend(prefix string, etcdConfig *EtcdConfig) (Backend, error) {
 	return nil, errEtcdNotAvailable
 }
 
diff --git a/lncfg/db.go b/lncfg/db.go
index c0f47fc7f..62de1f130 100644
--- a/lncfg/db.go
+++ b/lncfg/db.go
@@ -2,6 +2,7 @@ package lncfg
 
 import (
 	"fmt"
+	"path"
 
 	"github.com/lightningnetwork/lnd/channeldb/kvdb"
 )
@@ -50,12 +51,14 @@ func (db *DB) Validate() error {
 }
 
 // GetBackend returns a kvdb.Backend as set in the DB config.
-func (db *DB) GetBackend(path string) (kvdb.Backend, error) {
+func (db *DB) GetBackend(dbPath string) (kvdb.Backend, error) {
 	if db.Backend == etcdBackend {
-		return kvdb.GetEtcdBackend(db.Etcd)
+		// Prefix will separate key/values in the db.
+		prefix := path.Join(dbPath, dbName)
+		return kvdb.GetEtcdBackend(prefix, db.Etcd)
 	}
 
-	return kvdb.GetBoltBackend(path, dbName, db.Bolt.NoFreeListSync)
+	return kvdb.GetBoltBackend(dbPath, dbName, db.Bolt.NoFreeListSync)
 }
 
 // Compile-time constraint to ensure Workers implements the Validator interface.