diff --git a/recipes-core/images/aos-image-initramfs.bb b/recipes-core/images/aos-image-initramfs.bb
index a4528981..fb3ab177 100644
--- a/recipes-core/images/aos-image-initramfs.bb
+++ b/recipes-core/images/aos-image-initramfs.bb
@@ -10,11 +10,6 @@ AOS_INITRAMFS_SCRIPTS ?= " \
     initramfs-module-vardir \
 "
 
-RRECOMMENDS:${PN} = " \
-    kernel-module-overlay \
-    kernel-module-squashfs \
-"
-
 # Don't allow the initramfs to contain a kernel
 PACKAGE_EXCLUDE = "kernel-image-*"
 
diff --git a/recipes-core/initrdscripts/initramfs-framework/aosoverlay b/recipes-core/initrdscripts/initramfs-framework/aosoverlay
new file mode 100644
index 00000000..95380a9f
--- /dev/null
+++ b/recipes-core/initrdscripts/initramfs-framework/aosoverlay
@@ -0,0 +1,71 @@
+#!/bin/sh
+
+# This module overlays multiple sources over the rootfs:
+#     aosoverlay.path     - specifies a directory containing squashfs image files and
+#                           subdirectories. Each squashfs file is loop-mounted first, then
+#                           all mounted images and subdirectories are stacked over ROOTFS_DIR
+#                           using overlayfs (files take priority over directories).
+#     aosoverlay.upperdir - (optional) upperdir for the overlay mount, making ROOTFS_DIR writable.
+#     aosoverlay.workdir  - (optional) workdir for the overlay mount; required when upperdir is set.
+
+OVERLAY_MOUNT="/mnt/overlay"
+
+aosoverlay_enabled() {
+    if [ -z "${bootparam_aosoverlay_path}" ]; then
+        msg "Aos overlay disabled: boot parameter aosoverlay.path is not set."
+        return 1
+    fi
+
+    if [ ! -d "${bootparam_aosoverlay_path}" ]; then
+        msg "Aos overlay disabled: ${bootparam_aosoverlay_path} does not exist."
+        return 1
+    fi
+
+    return 0
+}
+
+aosoverlay_run() {
+    msg "Aos overlay: applying ${bootparam_aosoverlay_path} over rootfs"
+
+    if [ -n "${bootparam_aosoverlay_upperdir}" ] && [ -z "${bootparam_aosoverlay_workdir}" ]; then
+        fatal "Aos overlay: aosoverlay.workdir is required when aosoverlay.upperdir is set"
+    fi
+
+    lower_dirs=""
+
+    # Mount squashfs files first
+    for img in "$bootparam_aosoverlay_path"/*; do
+        [ -f "$img" ] || continue
+        name=$(basename "$img")
+        mnt="${OVERLAY_MOUNT}/${name}"
+
+        msg "Aos overlay: mounting ${img} to ${mnt}"
+
+        mkdir -p "$mnt"
+        mount -t squashfs -o loop "$img" "$mnt"
+
+        lower_dirs="${lower_dirs}${lower_dirs:+:}${mnt}"
+    done
+
+    # Add subdirectories
+    for dir in "$bootparam_aosoverlay_path"/*; do
+        [ -d "$dir" ] || continue
+        lower_dirs="${lower_dirs}${lower_dirs:+:}${dir}"
+    done
+
+    if [ -z "$lower_dirs" ]; then
+        msg "Aos overlay: no squashfs files or directories found in ${bootparam_aosoverlay_path}, skipping"
+        return
+    fi
+
+    msg "Aos overlay: mounting ${lower_dirs} over ${ROOTFS_DIR}"
+
+    if [ -n "${bootparam_aosoverlay_upperdir}" ] && [ -n "${bootparam_aosoverlay_workdir}" ]; then
+        mkdir -p "${bootparam_aosoverlay_upperdir}" "${bootparam_aosoverlay_workdir}"
+        mount -t overlay overlay \
+            -o lowerdir="${lower_dirs}:${ROOTFS_DIR}",upperdir="${bootparam_aosoverlay_upperdir}",workdir="${bootparam_aosoverlay_workdir}" \
+            "$ROOTFS_DIR"
+    else
+        mount -t overlay overlay -o lowerdir="${lower_dirs}:${ROOTFS_DIR}" "$ROOTFS_DIR"
+    fi
+}
diff --git a/recipes-core/initrdscripts/initramfs-framework/aosupdate b/recipes-core/initrdscripts/initramfs-framework/aosupdate
index 52f12884..2f5c045b 100644
--- a/recipes-core/initrdscripts/initramfs-framework/aosupdate
+++ b/recipes-core/initrdscripts/initramfs-framework/aosupdate
@@ -2,7 +2,7 @@
 
 # This module requires the following boot parameters:
 #     aosupdate.device         - specifies device where update artifacts are stored;
-#     aosupdate.path           - specifies path whre update artifacts are stored;
+#     aosupdate.path           - specifies path where update artifacts are stored;
 #     aosupdate.selinux_module - specifies SELinux module.
 
 # consts
diff --git a/recipes-core/initrdscripts/initramfs-framework_%.bbappend b/recipes-core/initrdscripts/initramfs-framework_%.bbappend
index dca36484..53d57ea2 100644
--- a/recipes-core/initrdscripts/initramfs-framework_%.bbappend
+++ b/recipes-core/initrdscripts/initramfs-framework_%.bbappend
@@ -5,11 +5,13 @@ SRC_URI += " \
     file://kmsglog \
     file://machineid \
     file://opendisk \
+    file://aosoverlay \
     file://rundir \
     file://vardir \
 "
 
 PACKAGES += " \
+    initramfs-module-aosoverlay \
     initramfs-module-aosupdate \
     initramfs-module-kmsglog \
     initramfs-module-machineid \
@@ -32,6 +34,16 @@ RRECOMMENDS:initramfs-module-aosupdate = " \
     ', '', d)} \
 "
 
+
+SUMMARY:initramfs-module-aosoverlay = "initramfs support for overlaying a source over rootfs"
+RDEPENDS:initramfs-module-aosoverlay = "${PN}-base"
+FILES:initramfs-module-aosoverlay = "/init.d/97-aosoverlay"
+RRECOMMENDS:initramfs-module-aosoverlay = " \
+    kernel-module-loop \
+    kernel-module-overlay \
+    kernel-module-squashfs \
+"
+
 SUMMARY:initramfs-module-kmsglog = "redirect log messages to kmsg"
 RDEPENDS:initramfs-module-kmsglog = "${PN}-base"
 FILES:initramfs-module-kmsglog = "/init.d/00-kmsglog"
@@ -53,6 +65,9 @@ RDEPENDS:initramfs-module-vardir = "${PN}-base"
 FILES:initramfs-module-vardir = "/init.d/02-vardir"
 
 do_install:append() {
+    # aosoverlay
+    install -m 0755 ${WORKDIR}/aosoverlay ${D}/init.d/97-aosoverlay
+
     # aosupdate
     install -m 0755 ${WORKDIR}/aosupdate ${D}/init.d/95-aosupdate