diff --git a/busybox/embedded-init/etc_inittab.txt b/overlay.d/busybox-init/etc_inittab.txt
similarity index 90%
rename from busybox/embedded-init/etc_inittab.txt
rename to overlay.d/busybox-init/etc_inittab.txt
index e295e57..7eb7b2d 100644
--- a/busybox/embedded-init/etc_inittab.txt
+++ b/overlay.d/busybox-init/etc_inittab.txt
@@ -1,7 +1,7 @@
 # --- SDE-COPYRIGHT-NOTE-BEGIN ---
 # This copyright note is auto-generated by ./scripts/Create-CopyPatch.
 #
-# Filename: target/mnemosyne/busybox/embedded-init/etc_inittab.txt
+# Filename: target/mnemosyne/overlay.d/busybox-init/etc_inittab.txt
 # Copyright (C) 2008 The OpenSDE Project
 #
 # More information can be found in the files COPYING and README.
diff --git a/overlay.in b/overlay.in
new file mode 100644
index 0000000..4974811
--- /dev/null
+++ b/overlay.in
@@ -0,0 +1,42 @@
+# --- SDE-COPYRIGHT-NOTE-BEGIN ---
+# This copyright note is auto-generated by ./scripts/Create-CopyPatch.
+#
+# Filename: target/mnemosyne/overlay.in
+# Copyright (C) 2008 The OpenSDE Project
+#
+# More information can be found in the files COPYING and README.
+#
+# This program is free software; you can redistribute it and/or modify
+# it under the terms of the GNU General Public License as published by
+# the Free Software Foundation; version 2 of the License. A copy of the
+# GNU General Public License can be found in the file COPYING.
+# --- SDE-COPYRIGHT-NOTE-END ---
+
+mnemosyne_overlay_dir="$base/target/$SDECFG_TRG_MNEMOSYNE/overlay.d"
+mnemosyne_overlay=
+
+mnemosyne_overlay_apply()
+{
+	local x=
+	for x; do
+		overlay_apply "$x"
+	done
+}
+
+hook_add postdoc 5 'eval mnemosyne_overlay_apply $mnemosyne_overlay'
+
+# $pkg specific overlays
+if [ -d "$mnemosyne_overlay_dir/pkgs/$pkg/" ]; then
+	var_append mnemosyne_overlay ' ' "$mnemosyne_overlay_dir/pkgs/$pkg/"
+fi
+
+# conditional $pkg specific overlays
+case "$pkg" in
+busybox)
+	if [ "$SDECFG_TRG_MNEMOSYNE_EMBEDDED_INIT" = 1 ]; then
+		var_append mnemosyne_overlay ' ' "$mnemosyne_overlay_dir/busybox-init"
+	fi
+	;;
+esac
+
+unset mnemosyne_overlay_dir
diff --git a/parse-config b/parse-config
index 0d026eb..c77b1ab 100644
--- a/parse-config
+++ b/parse-config
@@ -53,6 +53,9 @@ mnemosyne_postinstall() {
 	esac
 }
 
+# check overlays
+.  target/$SDECFG_TRG_MNEMOSYNE/overlay.in
+
 if [ "$SDECFG_TRG_MNEMOSYNE_DOC" == "minimal" ]; then
         echo_status "Just minimal documentation files will be flisted"
         mnemosyne_flist_just_minimal_docs() {