diff --git a/README b/README
index bb42985..842e835 100644
--- a/README
+++ b/README
@@ -117,16 +117,18 @@ Running tests:
     - By default the tests suite will run xfs tests:
     - ./check '*/001' '*/002' '*/003'
     - ./check '*/06?'
-    - You can explicitly specify NFS/CIFS/UDF, otherwise the filesystem type will
-      be autodetected from $TEST_DEV:
-      ./check -nfs [test(s)]
     - Groups of tests maybe ran by: ./check -g [group(s)]
       See the 'group' file for details on groups
-    - for udf tests: ./check -udf [test(s)]
-      Running all the udf tests: ./check -udf -g udf
-    - for running nfs tests: ./check -nfs [test(s)]
-    - for running cifs/smb3 tests: ./check -cifs [test(s)]
     - To randomize test order: ./check -r [test(s)]
+    - You can explicitly specify NFS/CIFS/UDF/OVERLAY, otherwise
+      the filesystem type will be autodetected from $TEST_DEV:
+        - for running nfs tests: ./check -nfs [test(s)]
+        - for running cifs/smb3 tests: ./check -cifs [test(s)]
+        - for udf tests: ./check -udf [test(s)]
+          Running all the udf tests: ./check -udf -g udf
+        - for overlay tests: ./check -overlay [test(s)]
+          The TEST and SCRATCH partitions should be pre-formatted
+          with another base fs, where the overlay dirs will be created
 
     
     The check script tests the return value of each script, and
diff --git a/README.overlay b/README.overlay
new file mode 100644
index 0000000..647f9ea
--- /dev/null
+++ b/README.overlay
@@ -0,0 +1,18 @@
+
+To run xfstest on overlayfs, configure the variables of TEST and SCRATCH
+partitions to be used as the "base fs" and run './check -overlay'.
+
+For example, the following config file can be used to run tests on
+xfs test/scratch partitions:
+
+ TEST_DEV=/dev/sda5
+ TEST_DIR=/mnt/test
+ SCRATCH_DEV=/dev/sda6
+ SCRATCH_MNT=/mnt/scratch
+ FSTYP=xfs
+
+Using the same config file, but executing './check -overlay' will
+use the same partitions as base fs for overlayfs directories
+and set TEST_DIR/SCRATCH_MNT values to overlay mount points, i.e.:
+/mnt/test/ovl-mnt and /mnt/scratch/ovl-mnt, for the context of
+individual tests.
diff --git a/check b/check
index 68f070b..8cc2602 100755
--- a/check
+++ b/check
@@ -258,7 +258,7 @@ while [ $# -gt 0 ]; do
 
 	-nfs)		FSTYP=nfs ;;
 	-cifs)		FSTYP=cifs ;;
-	-overlay)	FSTYP=overlay ;;
+	-overlay)	FSTYP=overlay; export OVERLAY=true ;;
 	-tmpfs)		FSTYP=tmpfs ;;
 
 	-g)	group=$2 ; shift ;
diff --git a/common/config b/common/config
index a7ab2d9..320bded 100644
--- a/common/config
+++ b/common/config
@@ -82,6 +82,8 @@ export DEBUGFS_MNT=${DEBUGFS_MNT:="/sys/kernel/debug"}
 export OVL_UPPER="ovl-upper"
 export OVL_LOWER="ovl-lower"
 export OVL_WORK="ovl-work"
+# overlay mount point parent must be the base fs root
+export OVL_MNT="ovl-mnt"
 
 export PWD=`pwd`
 #export DEBUG=${DEBUG:=...} # arbitrary CFLAGS really.
@@ -442,16 +444,19 @@ _check_device()
 		if [ "$dev_needed" == "required" ]; then
 			_fatal "common/config: $name is required but not defined!"
 		fi
-		return
+		return 0
+	fi
+
+	if [ -b "$dev" ] || ( echo $dev | grep -qE ":|//" ); then
+		# block device or a network url
+		return 0
 	fi
 
-	echo $dev | grep -qE ":|//" > /dev/null 2>&1
-	network_dev=$?
 	if [ "$FSTYP" == "overlay" ]; then
 		if [ ! -d "$dev" ]; then
 			_fatal "common/config: $name ($dev) is not a directory for overlay"
 		fi
-	elif [ ! -b "$dev" -a "$network_dev" != "0" ]; then
+	else
 		_fatal "common/config: $name ($dev) is not a block device or a network filesystem"
 	fi
 }
@@ -462,12 +467,89 @@ _canonicalize_mountpoint()
 	local name=$1
 	local dir=$2
 
-	if [ ! -d "$dir" ]; then
+	if [ -d "$dir" ]; then
+		# this follows symlinks and removes all trailing "/"s
+		readlink -e "$dir"
+		return 0
+	fi
+
+	if [ "$FSTYP" != "overlay" ] || [[ "$name" == OVL_BASE_* ]]; then
 		_fatal "common/config: $name ($dir) is not a directory"
 	fi
 
-	# this follows symlinks and removes all trailing "/"s
-	readlink -e "$dir"
+	# base fs may not be mounted yet, so just check that parent dir
+	# exists (where base fs will be mounted) because we are going to
+	# mkdir the overlay mount point dir anyway
+	local base=`basename $dir`
+	local parent=`dirname $dir`
+	parent=`_canonicalize_mountpoint OVL_BASE_$name "$parent"`
+
+	# prepend the overlay mount point to canonical parent path
+	echo "$parent/$base"
+}
+
+# On check -overlay, for the non multi section config case, this
+# function is called on every test, before init_rc().
+# When SCRATCH/TEST_* vars are defined in config file, config file
+# is sourced on every test and this function overrides the vars
+# every time.
+# When SCRATCH/TEST_* vars are defined in evironment and not
+# in config file, this function is called after vars have already
+# been overriden in the previous test.
+# In that case, TEST_DEV is a directory and not a blockdev and
+# the function will return without overriding the SCRATCH/TEST_* vars.
+_overlay_config_override()
+{
+	# There are 2 options for configuring overlayfs tests:
+	#
+	# 1. (legacy) SCRATCH/TEST_DEV point to existing directories
+	#    on an already mounted fs.  In this case, the new
+	#    OVL_BASE_SCRATCH/TEST_* vars are set to use the legacy
+	#    vars values (even though they may not be mount points).
+	#
+	[ ! -d "$TEST_DEV" ] || export OVL_BASE_TEST_DIR="$TEST_DEV"
+	[ ! -d "$SCRATCH_DEV" ] || export OVL_BASE_SCRATCH_MNT="$SCRATCH_DEV"
+
+	# 2. SCRATCH/TEST_DEV point to the base fs partitions.  In this case,
+	#    the new OVL_BASE_SCRATCH/TEST_DEV/MNT vars are set to the values
+	#    of the configured base fs and SCRATCH/TEST_DEV vars are set to the
+	#    overlayfs base and mount dirs inside base fs mount.
+	[ -b "$TEST_DEV" ] || return 0
+
+	# Config file may specify base fs type, but we obay -overlay flag
+	export OVL_BASE_FSTYP="$FSTYP"
+	export FSTYP=overlay
+
+	# Store original base fs vars
+	export OVL_BASE_TEST_DEV="$TEST_DEV"
+	export OVL_BASE_TEST_DIR="$TEST_DIR"
+	export OVL_BASE_MOUNT_OPTIONS="$MOUNT_OPTIONS"
+
+	# Set TEST vars to overlay base and mount dirs inside base fs
+	export TEST_DEV="$OVL_BASE_TEST_DIR"
+	export TEST_DIR="$OVL_BASE_TEST_DIR/$OVL_MNT"
+	export MOUNT_OPTIONS="$OVERLAY_MOUNT_OPTIONS"
+
+	[ -b "$SCRATCH_DEV" ] || return 0
+
+	# Store original base fs vars
+	export OVL_BASE_SCRATCH_DEV="$SCRATCH_DEV"
+	export OVL_BASE_SCRATCH_MNT="$SCRATCH_MNT"
+
+	# Set SCRATCH vars to overlay base and mount dirs inside base fs
+	export SCRATCH_DEV="$OVL_BASE_SCRATCH_MNT"
+	export SCRATCH_MNT="$OVL_BASE_SCRATCH_MNT/$OVL_MNT"
+}
+
+_overlay_config_restore()
+{
+	export OVERLAY=true
+	[ -z "$OVL_BASE_FSTYP" ] || export FSTYP=$OVL_BASE_FSTYP
+	[ -z "$OVL_BASE_TEST_DEV" ] || export TEST_DEV=$OVL_BASE_TEST_DEV
+	[ -z "$OVL_BASE_TEST_DIR" ] || export TEST_DIR=$OVL_BASE_TEST_DIR
+	[ -z "$OVL_BASE_SCRATCH_DEV" ] || export SCRATCH_DEV=$OVL_BASE_SCRATCH_DEV
+	[ -z "$OVL_BASE_SCRATCH_MNT" ] || export SCRATCH_MNT=$OVL_BASE_SCRATCH_MNT
+	[ -z "$OVL_BASE_MOUNT_OPTIONS" ] || export MOUNT_OPTIONS=$OVL_BASE_MOUNT_OPTIONS
 }
 
 # Parse config section options. This function will parse all the configuration
@@ -498,6 +580,15 @@ get_next_config() {
 		return 0
 	fi
 
+	# We might have overriden FSTYP and TEST/SCRATCH vars with overlay values
+	# in the previous section, so restore them to original values stored in
+	# OVL_BASE_*.
+	# We need to do this *before* old FSTYP and MOUNT_OPTIONS are recorded
+	# and *before* SCRATCH_DEV and MOUNT_OPTIONS are unset
+	if [ "$FSTYP" == "overlay" ]; then
+		_overlay_config_restore
+	fi
+
 	local OLD_FSTYP=$FSTYP
 	local OLD_MOUNT_OPTIONS=$MOUNT_OPTIONS
 	local OLD_TEST_FS_MOUNT_OPTS=$TEST_FS_MOUNT_OPTS
@@ -581,6 +672,14 @@ get_next_config() {
 		_check_device SCRATCH_RTDEV optional $SCRATCH_RTDEV
 		_check_device SCRATCH_LOGDEV optional $SCRATCH_LOGDEV
 	fi
+
+	# Override FSTYP from config when running ./check -overlay
+	# and maybe override base fs TEST/SCRATCH_DEV with overlay base dirs.
+	# We need to do this *after* default mount options are set by base FSTYP
+	# and *after* SCRATCH_DEV is deduced from SCRATCH_DEV_POOL
+	if [ "$OVERLAY" == "true" -o "$FSTYP" == "overlay" ]; then
+		_overlay_config_override
+	fi
 }
 
 if [ -z "$CONFIG_INCLUDED" ]; then
@@ -601,10 +700,21 @@ if [ -z "$CONFIG_INCLUDED" ]; then
 	[ -z "$MKFS_OPTIONS" ] && _mkfs_opts
 	[ -z "$FSCK_OPTIONS" ] && _fsck_opts
 else
+	# We get here for the non multi section case, on every test that sources
+	# common/rc after re-sourcing the HOST_OPTIONS config file.
+	# Because of this re-sourcing, we need to re-canonicalize the configured
+	# mount points and re-override TEST/SCRATCH_DEV overlay vars.
+
 	# canonicalize the mount points
 	# this follows symlinks and removes all trailing "/"s
 	export TEST_DIR=`_canonicalize_mountpoint TEST_DIR $TEST_DIR`
 	export SCRATCH_MNT=`_canonicalize_mountpoint SCRATCH_MNT $SCRATCH_MNT`
+
+	# Override FSTYP from config when running ./check -overlay
+	# and maybe override base fs TEST/SCRATCH_DEV with overlay base dirs
+	if [ "$OVERLAY" == "true" -o "$FSTYP" == "overlay" ]; then
+		_overlay_config_override
+	fi
 fi
 
 # make sure this script returns success
diff --git a/common/rc b/common/rc
index 866735d..a545c69 100644
--- a/common/rc
+++ b/common/rc
@@ -257,7 +257,7 @@ _scratch_mount_options()
 	_scratch_options mount
 
 	if [ "$FSTYP" == "overlay" ]; then
-		echo `_overlay_mount_options $SCRATCH_DEV`
+		echo `_overlay_mount_options $OVL_BASE_SCRATCH_MNT`
 		return 0
 	fi
 	echo `_common_dev_mount_options $*` $SCRATCH_OPTIONS \
@@ -308,9 +308,10 @@ _overlay_mkdirs()
 	mkdir -p $dir/$OVL_UPPER
 	mkdir -p $dir/$OVL_LOWER
 	mkdir -p $dir/$OVL_WORK
+	mkdir -p $dir/$OVL_MNT
 }
 
-# Given a dir, set up 3 subdirectories and mount on the given mnt.
+# Given a base fs dir, set up overlay directories and mount on the given mnt.
 # The dir is used as the mount device so it can be seen from df or mount
 _overlay_mount()
 {
@@ -329,12 +330,12 @@ _overlay_mount()
 
 _overlay_test_mount()
 {
-	_overlay_mount $TEST_DEV $TEST_DIR $*
+	_overlay_mount $OVL_BASE_TEST_DIR $TEST_DIR $*
 }
 
 _overlay_scratch_mount()
 {
-	_overlay_mount $SCRATCH_DEV $SCRATCH_MNT $*
+	_overlay_mount $OVL_BASE_SCRATCH_MNT $SCRATCH_MNT $*
 }
 
 _overlay_test_unmount()
@@ -649,10 +650,12 @@ _scratch_cleanup_files()
 {
 	case $FSTYP in
 	overlay)
-		# $SCRATCH_DEV is a valid directory in overlay case
-		rm -rf $SCRATCH_DEV/*
+		# Avoid rm -rf /* if we messed up
+		[ -n "$OVL_BASE_SCRATCH_MNT" ] || return 1
+		rm -rf $OVL_BASE_SCRATCH_MNT/*
 		;;
 	*)
+		[ -n "$SCRATCH_MNT" ] || return 1
 		_scratch_mount
 		rm -rf $SCRATCH_MNT/*
 		_scratch_unmount
@@ -1390,10 +1393,13 @@ _require_scratch_nocheck()
 		fi
 		;;
 	overlay)
-		if [ -z "$SCRATCH_DEV" -o ! -d "$SCRATCH_DEV" ]; then
-			_notrun "this test requires a valid \$SCRATCH_DEV as ovl base dir"
+		if [ -z "$OVL_BASE_SCRATCH_MNT" -o ! -d "$OVL_BASE_SCRATCH_MNT" ]; then
+			_notrun "this test requires a valid \$OVL_BASE_SCRATCH_MNT as ovl base dir"
 		fi
-		if [ ! -d "$SCRATCH_MNT" ]; then
+		# if $SCRATCH_MNT is derived from $OVL_BASE_SCRATCH_MNT then
+		# don't check $SCRATCH_MNT dir here because base fs may not be mounted
+		# and we will create the mount point anyway on _overlay_mount
+		if [ "$SCRATCH_MNT" != "$OVL_BASE_SCRATCH_MNT/$OVL_MNT" -a ! -d "$SCRATCH_MNT" ]; then
 			_notrun "this test requires a valid \$SCRATCH_MNT"
 		fi
 		;;
@@ -1466,8 +1472,8 @@ _require_test()
 		fi
 		;;
 	overlay)
-		if [ -z "$TEST_DEV" -o ! -d "$TEST_DEV" ]; then
-			_notrun "this test requires a valid \$TEST_DEV as ovl base dir"
+		if [ -z "$OVL_BASE_TEST_DIR" -o ! -d "$OVL_BASE_TEST_DIR" ]; then
+			_notrun "this test requires a valid \$TEST_DIR as ovl base dir"
 		fi
 		if [ ! -d "$TEST_DIR" ]; then
 			_notrun "this test requires a valid \$TEST_DIR"
