diff --git a/daemon/graphdriver/driver.go b/daemon/graphdriver/driver.go
index 721f6609e9..ceb49b9818 100644
--- a/daemon/graphdriver/driver.go
+++ b/daemon/graphdriver/driver.go
@@ -277,6 +277,18 @@ func scanPriorDrivers(root string) map[string]bool {
 	return driversMap
 }
 
+// IsInitialized checks if the driver's home-directory exists and is non-empty.
+func IsInitialized(driverHome string) bool {
+	_, err := os.Stat(driverHome)
+	if os.IsNotExist(err) {
+		return false
+	}
+	if err != nil {
+		logrus.Warnf("graphdriver.IsInitialized: stat failed: %v", err)
+	}
+	return !isEmptyDir(driverHome)
+}
+
 // isEmptyDir checks if a directory is empty. It is used to check if prior
 // storage-driver directories exist. If an error occurs, it also assumes the
 // directory is not empty (which preserves the behavior _before_ this check
diff --git a/daemon/graphdriver/overlay/overlay.go b/daemon/graphdriver/overlay/overlay.go
index b148431863..fce775ea6b 100644
--- a/daemon/graphdriver/overlay/overlay.go
+++ b/daemon/graphdriver/overlay/overlay.go
@@ -148,7 +148,11 @@ func Init(home string, options []string, uidMaps, gidMaps []idtools.IDMap) (grap
 		return nil, err
 	}
 	if !supportsDType {
-		return nil, overlayutils.ErrDTypeNotSupported("overlay", backingFs)
+		if !graphdriver.IsInitialized(home) {
+			return nil, overlayutils.ErrDTypeNotSupported("overlay", backingFs)
+		}
+		// allow running without d_type only for existing setups (#27443)
+		logrus.Warn(overlayutils.ErrDTypeNotSupported("overlay", backingFs))
 	}
 
 	rootUID, rootGID, err := idtools.GetRootUIDGID(uidMaps, gidMaps)
diff --git a/daemon/graphdriver/overlay2/overlay.go b/daemon/graphdriver/overlay2/overlay.go
index ea707a0af6..f1731ea935 100644
--- a/daemon/graphdriver/overlay2/overlay.go
+++ b/daemon/graphdriver/overlay2/overlay.go
@@ -184,7 +184,11 @@ func Init(home string, options []string, uidMaps, gidMaps []idtools.IDMap) (grap
 		return nil, err
 	}
 	if !supportsDType {
-		return nil, overlayutils.ErrDTypeNotSupported("overlay2", backingFs)
+		if !graphdriver.IsInitialized(home) {
+			return nil, overlayutils.ErrDTypeNotSupported("overlay2", backingFs)
+		}
+		// allow running without d_type only for existing setups (#27443)
+		logrus.Warn(overlayutils.ErrDTypeNotSupported("overlay2", backingFs))
 	}
 
 	rootUID, rootGID, err := idtools.GetRootUIDGID(uidMaps, gidMaps)