I am on Ubuntu server 16, and my client is getting a dhcp address, but dns resolution is not working. When I attempt to visit a website, it fails to load. I've done everything here under Local DNS Cache: https://help.ubuntu.com/community/Dnsmasq. Some of the steps were different for me. I updated the listen address, then uncommented the lines in dhclient.conf. I then added a nameserver record for 8.8.8.8 under localhost. After restarting the service, it still fails to work. I look on the client, and the /etc/resolv.conf just has the local nameserver record. Shouldn't it mirror what's on the server, so also have 8.8.8.8? In dnsmasq.conf under /etc, I've added these lines to the end:

You have to configure dnsmasq to listen on the server's IP address as well as allow DHCP/DNS traffic if the firewall is running for it to accept requests from clients.

You do not mention what distribution/version the client is running but Ubuntu's latest versions install dnsmasq by default which is configured as a DNS proxy so the /etc/resolv.conf will be localhost. If dnsmasq was not running on the client /etc/resolv.conf should reflect the IP address of the server.

It seems that they are running a different version. Could that be the issue?
The client is Ubuntu, but that will change, as it's just for testing. I will probably have a switch, then devices attached to that.
As for listening on the IP, would that just be appending it to this line: listen-address=127.0.0.1 ?

Running a different version should not matter. Correct you should append your ethernet IP address.

listen-address=127.0.0.1,192.168.1.xxx

That did not help.

Here are some of my iptable rules that are applicable:

How is your network configured? Physical/virtual? Is the client directly connected to your server or is it connected to the LAN?
If all computers are on your LAN then make sure you turn off the DHCP server in your router.
Is your server's ethernet adapter configured with a static IP address?

By default Ubuntu uses ufw.

sudo ufw allow bootps (DHCP)
sudo ufw allow 53 (DNS)

It's physical. It is directly connected to the server.
Both NICs are set to static IPs.

I noticed /etc/resolv.conf on the server only has 127.0.0.1 nameserver record. Is this the issue?

I assume this is the server?

Are you trying to configure the server for NAT ie router?

You also need enable IP forwarding and add a masquerade rule.

That is the server using dnsmasq running as a DNS proxy. Should be ok.

That's as it should be for the server, since dnsmasq is doing the resolving and listening to localhost. You should be able to resolve by hostname on the server. For example
Focus on the client(s).

Yes.
I believe I put a iptable NAT rule in place. Would that interfere with this? And yes, this server does the routing. IP forwarding has been enabled, as well as masquerading.

Did you configure a gateway in the dnsmasq.conf file?

dhcp-option=3,192.168.1.x (i.e. the p1p1 IP address)

I had not. I updated that, restarted the service, but it's still not working.

update: the resolv.conf on the client now has a entry for: nameserver 192.168.1.1 (still not resolving google.com though)

Can you ping any ip addresses
google.com 74.125.198.139

I can ping the ip but not the hostname.