diff --git a/drivers/of/overlay.c b/drivers/of/overlay.c
index 32cfee68f2e3..94740f4ee34c 100644
--- a/drivers/of/overlay.c
+++ b/drivers/of/overlay.c
@@ -24,6 +24,26 @@
 #include "of_private.h"
 
 /**
+ * struct target - info about current target node as recursing through overlay
+ * @np:			node where current level of overlay will be applied
+ * @in_livetree:	@np is a node in the live devicetree
+ *
+ * Used in the algorithm to create the portion of a changeset that describes
+ * an overlay fragment, which is a devicetree subtree.  Initially @np is a node
+ * in the live devicetree where the overlay subtree is targeted to be grafted
+ * into.  When recursing to the next level of the overlay subtree, the target
+ * also recurses to the next level of the live devicetree, as long as overlay
+ * subtree node also exists in the live devicetree.  When a node in the overlay
+ * subtree does not exist at the same level in the live devicetree, target->np
+ * points to a newly allocated node, and all subsequent targets in the subtree
+ * will be newly allocated nodes.
+ */
+struct target {
+	struct device_node *np;
+	bool in_livetree;
+};
+
+/**
  * struct fragment - info about fragment nodes in overlay expanded device tree
  * @target:	target of the overlay operation
  * @overlay:	pointer to the __overlay__ node
@@ -72,8 +92,7 @@ static int devicetree_corrupt(void)
 }
 
 static int build_changeset_next_level(struct overlay_changeset *ovcs,
-		struct device_node *target_node,
-		const struct device_node *overlay_node);
+		struct target *target, const struct device_node *overlay_node);
 
 /*
  * of_resolve_phandles() finds the largest phandle in the live tree.
@@ -257,14 +276,17 @@ static struct property *dup_and_fixup_symbol_prop(
 /**
  * add_changeset_property() - add @overlay_prop to overlay changeset
  * @ovcs:		overlay changeset
- * @target_node:	where to place @overlay_prop in live tree
+ * @target:		where @overlay_prop will be placed
  * @overlay_prop:	property to add or update, from overlay tree
  * @is_symbols_prop:	1 if @overlay_prop is from node "/__symbols__"
  *
- * If @overlay_prop does not already exist in @target_node, add changeset entry
- * to add @overlay_prop in @target_node, else add changeset entry to update
+ * If @overlay_prop does not already exist in live devicetree, add changeset
+ * entry to add @overlay_prop in @target, else add changeset entry to update
  * value of @overlay_prop.
  *
+ * @target may be either in the live devicetree or in a new subtree that
+ * is contained in the changeset.
+ *
  * Some special properties are not updated (no error returned).
  *
  * Update of property in symbols node is not allowed.
@@ -273,20 +295,22 @@ static struct property *dup_and_fixup_symbol_prop(
  * invalid @overlay.
  */
 static int add_changeset_property(struct overlay_changeset *ovcs,
-		struct device_node *target_node,
-		struct property *overlay_prop,
+		struct target *target, struct property *overlay_prop,
 		bool is_symbols_prop)
 {
 	struct property *new_prop = NULL, *prop;
 	int ret = 0;
 
-	prop = of_find_property(target_node, overlay_prop->name, NULL);
-
 	if (!of_prop_cmp(overlay_prop->name, "name") ||
 	    !of_prop_cmp(overlay_prop->name, "phandle") ||
 	    !of_prop_cmp(overlay_prop->name, "linux,phandle"))
 		return 0;
 
+	if (target->in_livetree)
+		prop = of_find_property(target->np, overlay_prop->name, NULL);
+	else
+		prop = NULL;
+
 	if (is_symbols_prop) {
 		if (prop)
 			return -EINVAL;
@@ -299,10 +323,10 @@ static int add_changeset_property(struct overlay_changeset *ovcs,
 		return -ENOMEM;
 
 	if (!prop)
-		ret = of_changeset_add_property(&ovcs->cset, target_node,
+		ret = of_changeset_add_property(&ovcs->cset, target->np,
 						new_prop);
 	else
-		ret = of_changeset_update_property(&ovcs->cset, target_node,
+		ret = of_changeset_update_property(&ovcs->cset, target->np,
 						   new_prop);
 
 	if (ret) {
@@ -315,14 +339,14 @@ static int add_changeset_property(struct overlay_changeset *ovcs,
 
 /**
  * add_changeset_node() - add @node (and children) to overlay changeset
- * @ovcs:		overlay changeset
- * @target_node:	where to place @node in live tree
- * @node:		node from within overlay device tree fragment
+ * @ovcs:	overlay changeset
+ * @target:	where @node will be placed in live tree or changeset
+ * @node:	node from within overlay device tree fragment
  *
- * If @node does not already exist in @target_node, add changeset entry
- * to add @node in @target_node.
+ * If @node does not already exist in @target, add changeset entry
+ * to add @node in @target.
  *
- * If @node already exists in @target_node, and the existing node has
+ * If @node already exists in @target, and the existing node has
  * a phandle, the overlay node is not allowed to have a phandle.
  *
  * If @node has child nodes, add the children recursively via
@@ -355,15 +379,16 @@ static int add_changeset_property(struct overlay_changeset *ovcs,
  * invalid @overlay.
  */
 static int add_changeset_node(struct overlay_changeset *ovcs,
-		struct device_node *target_node, struct device_node *node)
+		struct target *target, struct device_node *node)
 {
 	const char *node_kbasename;
 	struct device_node *tchild;
+	struct target target_child;
 	int ret = 0;
 
 	node_kbasename = kbasename(node->full_name);
 
-	for_each_child_of_node(target_node, tchild)
+	for_each_child_of_node(target->np, tchild)
 		if (!of_node_cmp(node_kbasename, kbasename(tchild->full_name)))
 			break;
 
@@ -372,22 +397,28 @@ static int add_changeset_node(struct overlay_changeset *ovcs,
 		if (!tchild)
 			return -ENOMEM;
 
-		tchild->parent = target_node;
+		tchild->parent = target->np;
 		of_node_set_flag(tchild, OF_OVERLAY);
 
 		ret = of_changeset_attach_node(&ovcs->cset, tchild);
 		if (ret)
 			return ret;
 
-		ret = build_changeset_next_level(ovcs, tchild, node);
+		target_child.np = tchild;
+		target_child.in_livetree = false;
+
+		ret = build_changeset_next_level(ovcs, &target_child, node);
 		of_node_put(tchild);
 		return ret;
 	}
 
-	if (node->phandle && tchild->phandle)
+	if (node->phandle && tchild->phandle) {
 		ret = -EINVAL;
-	else
-		ret = build_changeset_next_level(ovcs, tchild, node);
+	} else {
+		target_child.np = tchild;
+		target_child.in_livetree = target->in_livetree;
+		ret = build_changeset_next_level(ovcs, &target_child, node);
+	}
 	of_node_put(tchild);
 
 	return ret;
@@ -396,7 +427,7 @@ static int add_changeset_node(struct overlay_changeset *ovcs,
 /**
  * build_changeset_next_level() - add level of overlay changeset
  * @ovcs:		overlay changeset
- * @target_node:	where to place @overlay_node in live tree
+ * @target:		where to place @overlay_node in live tree
  * @overlay_node:	node from within an overlay device tree fragment
  *
  * Add the properties (if any) and nodes (if any) from @overlay_node to the
@@ -409,27 +440,26 @@ static int add_changeset_node(struct overlay_changeset *ovcs,
  * invalid @overlay_node.
  */
 static int build_changeset_next_level(struct overlay_changeset *ovcs,
-		struct device_node *target_node,
-		const struct device_node *overlay_node)
+		struct target *target, const struct device_node *overlay_node)
 {
 	struct device_node *child;
 	struct property *prop;
 	int ret;
 
 	for_each_property_of_node(overlay_node, prop) {
-		ret = add_changeset_property(ovcs, target_node, prop, 0);
+		ret = add_changeset_property(ovcs, target, prop, 0);
 		if (ret) {
 			pr_debug("Failed to apply prop @%pOF/%s, err=%d\n",
-				 target_node, prop->name, ret);
+				 target->np, prop->name, ret);
 			return ret;
 		}
 	}
 
 	for_each_child_of_node(overlay_node, child) {
-		ret = add_changeset_node(ovcs, target_node, child);
+		ret = add_changeset_node(ovcs, target, child);
 		if (ret) {
 			pr_debug("Failed to apply node @%pOF/%s, err=%d\n",
-				 target_node, child->name, ret);
+				 target->np, child->name, ret);
 			of_node_put(child);
 			return ret;
 		}
@@ -442,17 +472,17 @@ static int build_changeset_next_level(struct overlay_changeset *ovcs,
  * Add the properties from __overlay__ node to the @ovcs->cset changeset.
  */
 static int build_changeset_symbols_node(struct overlay_changeset *ovcs,
-		struct device_node *target_node,
+		struct target *target,
 		const struct device_node *overlay_symbols_node)
 {
 	struct property *prop;
 	int ret;
 
 	for_each_property_of_node(overlay_symbols_node, prop) {
-		ret = add_changeset_property(ovcs, target_node, prop, 1);
+		ret = add_changeset_property(ovcs, target, prop, 1);
 		if (ret) {
 			pr_debug("Failed to apply prop @%pOF/%s, err=%d\n",
-				 target_node, prop->name, ret);
+				 target->np, prop->name, ret);
 			return ret;
 		}
 	}
@@ -475,6 +505,7 @@ static int build_changeset_symbols_node(struct overlay_changeset *ovcs,
 static int build_changeset(struct overlay_changeset *ovcs)
 {
 	struct fragment *fragment;
+	struct target target;
 	int fragments_count, i, ret;
 
 	/*
@@ -489,7 +520,9 @@ static int build_changeset(struct overlay_changeset *ovcs)
 	for (i = 0; i < fragments_count; i++) {
 		fragment = &ovcs->fragments[i];
 
-		ret = build_changeset_next_level(ovcs, fragment->target,
+		target.np = fragment->target;
+		target.in_livetree = true;
+		ret = build_changeset_next_level(ovcs, &target,
 						 fragment->overlay);
 		if (ret) {
 			pr_debug("apply failed '%pOF'\n", fragment->target);
@@ -499,7 +532,10 @@ static int build_changeset(struct overlay_changeset *ovcs)
 
 	if (ovcs->symbols_fragment) {
 		fragment = &ovcs->fragments[ovcs->count - 1];
-		ret = build_changeset_symbols_node(ovcs, fragment->target,
+
+		target.np = fragment->target;
+		target.in_livetree = true;
+		ret = build_changeset_symbols_node(ovcs, &target,
 						   fragment->overlay);
 		if (ret) {
 			pr_debug("apply failed '%pOF'\n", fragment->target);
@@ -517,7 +553,7 @@ static int build_changeset(struct overlay_changeset *ovcs)
  * 1) "target" property containing the phandle of the target
  * 2) "target-path" property containing the path of the target
  */
-static struct device_node *find_target_node(struct device_node *info_node)
+static struct device_node *find_target(struct device_node *info_node)
 {
 	struct device_node *node;
 	const char *path;
@@ -623,7 +659,7 @@ static int init_overlay_changeset(struct overlay_changeset *ovcs,
 
 		fragment = &fragments[cnt];
 		fragment->overlay = overlay_node;
-		fragment->target = find_target_node(node);
+		fragment->target = find_target(node);
 		if (!fragment->target) {
 			of_node_put(fragment->overlay);
 			ret = -EINVAL;
