Multi- and many-core processors are becoming increasingly popular in embedded systems. Many of these processors now feature hardware virtualization capabilities, such as the ARM Cortex A15, and x86 processors with Intel VT-x or AMD-V support. Hardware virtualization offers opportunities to partition physical resources, including processor cores, memory and I/O devices amongst guest virtual machines. Mixed criticality systems and services can then co-exist on the same platform in separate virtual machines. However, traditional virtual machine systems are too expensive because of the costs of trapping into hypervisors to multiplex and manage machine physical resources on behalf of separate guests. For example, hypervisors are needed to schedule separate VMs on physical processor cores. Additionally, traditional hypervisors have memory footprints that are often too large for many embedded computing systems. This dissertation presents the design of the Quest-V separation kernel, which partitions services of different criticality levels across separate virtual machines, or sandboxes. Each sandbox encapsulates a subset of machine physical resources that it manages without requiring intervention of a hypervisor. In Quest-V, a hypervisor is not needed for normal operation, except to bootstrap the system and establish communication channels between sandboxes. This approach not only reduces the memory footprint of the most privileged protection domain, it removes it from the control path during normal system operation, thereby heightening security.