diff --git a/homeassistant/components/sighthound/image_processing.py b/homeassistant/components/sighthound/image_processing.py
index 175b1edc4c68e..be02cd63283eb 100644
--- a/homeassistant/components/sighthound/image_processing.py
+++ b/homeassistant/components/sighthound/image_processing.py
@@ -1,6 +1,9 @@
 """Person detection using Sighthound cloud service."""
+import io
 import logging
+import os
 
+from PIL import Image, ImageDraw
 import simplehound.core as hound
 import voluptuous as vol
 
@@ -14,6 +17,7 @@
 from homeassistant.const import ATTR_ENTITY_ID, CONF_API_KEY
 from homeassistant.core import split_entity_id
 import homeassistant.helpers.config_validation as cv
+from homeassistant.util.pil import draw_box
 
 _LOGGER = logging.getLogger(__name__)
 
@@ -22,6 +26,7 @@
 ATTR_BOUNDING_BOX = "bounding_box"
 ATTR_PEOPLE = "people"
 CONF_ACCOUNT_TYPE = "account_type"
+CONF_SAVE_FILE_FOLDER = "save_file_folder"
 DEV = "dev"
 PROD = "prod"
 
@@ -29,6 +34,7 @@
     {
         vol.Required(CONF_API_KEY): cv.string,
         vol.Optional(CONF_ACCOUNT_TYPE, default=DEV): vol.In([DEV, PROD]),
+        vol.Optional(CONF_SAVE_FILE_FOLDER): cv.isdir,
     }
 )
 
@@ -45,10 +51,14 @@ def setup_platform(hass, config, add_entities, discovery_info=None):
         _LOGGER.error("Sighthound error %s setup aborted", exc)
         return
 
+    save_file_folder = config.get(CONF_SAVE_FILE_FOLDER)
+    if save_file_folder:
+        save_file_folder = os.path.join(save_file_folder, "")  # If no trailing / add it
+
     entities = []
     for camera in config[CONF_SOURCE]:
         sighthound = SighthoundEntity(
-            api, camera[CONF_ENTITY_ID], camera.get(CONF_NAME)
+            api, camera[CONF_ENTITY_ID], camera.get(CONF_NAME), save_file_folder
         )
         entities.append(sighthound)
     add_entities(entities)
@@ -57,7 +67,7 @@ def setup_platform(hass, config, add_entities, discovery_info=None):
 class SighthoundEntity(ImageProcessingEntity):
     """Create a sighthound entity."""
 
-    def __init__(self, api, camera_entity, name):
+    def __init__(self, api, camera_entity, name, save_file_folder):
         """Init."""
         self._api = api
         self._camera = camera_entity
@@ -69,6 +79,8 @@ def __init__(self, api, camera_entity, name):
         self._state = None
         self._image_width = None
         self._image_height = None
+        if save_file_folder:
+            self._save_file_folder = save_file_folder
 
     def process_image(self, image):
         """Process an image."""
@@ -81,6 +93,8 @@ def process_image(self, image):
         self._image_height = metadata["image_height"]
         for person in people:
             self.fire_person_detected_event(person)
+        if hasattr(self, "_save_file_folder") and self._state > 0:
+            self.save_image(image, people, self._save_file_folder)
 
     def fire_person_detected_event(self, person):
         """Send event with detected total_persons."""
@@ -94,6 +108,21 @@ def fire_person_detected_event(self, person):
             },
         )
 
+    def save_image(self, image, people, directory):
+        """Save a timestamped image with bounding boxes around targets."""
+
+        img = Image.open(io.BytesIO(bytearray(image))).convert("RGB")
+        draw = ImageDraw.Draw(img)
+
+        for person in people:
+            box = hound.bbox_to_tf_style(
+                person["boundingBox"], self._image_width, self._image_height
+            )
+            draw_box(draw, box, self._image_width, self._image_height)
+
+        latest_save_path = directory + "{}_latest.jpg".format(self._name)
+        img.save(latest_save_path)
+
     @property
     def camera_entity(self):
         """Return camera entity id from process pictures."""
diff --git a/tests/components/sighthound/test_image_processing.py b/tests/components/sighthound/test_image_processing.py
index 4548a3a6a3583..fb82cfd82a4a6 100644
--- a/tests/components/sighthound/test_image_processing.py
+++ b/tests/components/sighthound/test_image_processing.py
@@ -1,4 +1,5 @@
 """Tests for the Sighthound integration."""
+import os
 from unittest.mock import patch
 
 import pytest
@@ -10,6 +11,8 @@
 from homeassistant.core import callback
 from homeassistant.setup import async_setup_component
 
+TEST_DIR = os.path.join(os.path.dirname(__file__))
+
 VALID_CONFIG = {
     ip.DOMAIN: {
         "platform": "sighthound",
@@ -91,3 +94,18 @@ def capture_person_event(event):
     state = hass.states.get(VALID_ENTITY_ID)
     assert state.state == "2"
     assert len(person_events) == 2
+
+
+async def test_save_image(hass, mock_image, mock_detections):
+    """Save a processed image."""
+    VALID_CONFIG.update({sh.CONF_SAVE_FILE_FOLDER: TEST_DIR})
+    await async_setup_component(hass, ip.DOMAIN, VALID_CONFIG)
+    assert hass.states.get(VALID_ENTITY_ID)
+
+    data = {ATTR_ENTITY_ID: VALID_ENTITY_ID}
+    with patch("PIL.Image.Image.save") as mock_save:
+        await hass.services.async_call(ip.DOMAIN, ip.SERVICE_SCAN, service_data=data)
+        await hass.async_block_till_done()
+        state = hass.states.get(VALID_ENTITY_ID)
+        assert state.state == "2"
+        mock_save.assert_called_with("test.jpg")