A system and method can provide subnet management packet (SMP) firewall restrictions in a middleware machine environment. A secure firmware implementation can be provided on a host channel adaptor (HCA), wherein the HCA is associated with a host in the middleware machine environment. The secure firmware implementation operates to receive at least one SMP from the host or destined to the host, and prevent the host from sending or receiving the at least one SMP. Furthermore, the secure firmware implementation can include a proxy function that can communicate with external management components on behalf of the host.