Multi- and many-core processors are becoming increasingly popular in embedded systems. Many of these processors now feature hardware virtualization capabilities, as found on the ARM Cortex A15 and x86 architectures with Intel VT-x or AMD-V support. Hardware virtualization provides a way to partition physical resources, including processor cores, memory, and I/O devices, among guest virtual machines (VMs). Each VM is then able to host tasks of a specific criticality level, as part of a mixed-criticality system with different timing and safety requirements. However, traditional virtual machine systems are inappropriate for mixed-criticality computing. They use hypervisors to schedule separate VMs on physical processor cores. The costs of trapping into hypervisors to multiplex and manage machine physical resources on behalf of separate guests are too expensive for many time-critical tasks. Additionally, traditional hypervisors have memory footprints that are often too large for many embedded computing systems. In this article, we discuss the design of the Quest-V separation kernel, which partitions services of different criticality levels across separate VMs, or sandboxes . Each sandbox encapsulates a subset of machine physical resources that it manages without requiring intervention from a hypervisor. In Quest-V, a hypervisor is only needed to bootstrap the system, recover from certain faults, and establish communication channels between sandboxes. This not only reduces the memory footprint of the most privileged protection domain but also removes it from the control path during normal system operation, thereby heightening security.