Simple step-by-step command line instructions on setting up SFTP server in Ubuntu 12.04, based on http://www.thegeekstuff.com/2012/03/chroot-sftp-setup/ article. 1. Add 'sftpusers' group: sudo groupadd sftpusers 2. Create a home directory for 'guestuser' user that will be added at the next step: sudo mkdir /var/guestuserhomedir As the result of the above command permissions for /var/guestuserhomedir should be 755 (owner: root, group: root). 3. Create 'guestuser' user, add it to the 'sftpusers' group and set a new password for this user: sudo useradd -g sftpusers -d /var/guestuserhomedir -s /usr/sbin/nologin guestuser sudo passwd guestuser 4. Create SFTP directories and set permissions (correct permissions are important): sudo mkdir /var/sftp_upload_dir sudo mkdir /var/sftp_upload_dir/guestuser sudo mkdir /var/sftp_upload_dir/guestuser/incoming sudo chown guestuser:sftpusers /var/sftp_upload_dir/guestuser/incoming sudo chmod 777 /var/sftp_u