diff --git a/pkg/kustomize/kustomize.go b/pkg/kustomize/kustomize.go
index 8780a33fe..e154ecbd0 100644
--- a/pkg/kustomize/kustomize.go
+++ b/pkg/kustomize/kustomize.go
@@ -70,12 +70,15 @@ func componentImageFor(component v1.ComponentKind) types.Image {
 	}
 	image := os.Getenv(envVarFor[component])
 	if image != "" {
-		if len(strings.Split(image, "@")) != 2 {
-			panic(envVarFor[component] + " must use manifest digest reference")
+		if len(strings.Split(image, "@")) == 2 {
+			imageOverride.NewName = strings.Split(image, "@")[0]
+			imageOverride.Digest = strings.Split(image, "@")[1]
+		} else if len(strings.Split(image, ":")) == 2 {
+			imageOverride.NewName = strings.Split(image, ":")[0]
+			imageOverride.NewTag = strings.Split(image, ":")[1]
+		} else {
+			panic("image override must be reference by tag or manifest digest: " + image)
 		}
-
-		imageOverride.NewName = strings.Split(image, "@")[0]
-		imageOverride.Digest = strings.Split(image, "@")[1]
 	}
 
 	return imageOverride
@@ -315,9 +318,8 @@ func KustomizationFor(ctx *quaycontext.QuayRegistryContext, quay *v1.QuayRegistr
 	images := []types.Image{}
 	for _, component := range append(quay.Spec.Components, v1.Component{Kind: "base", Managed: true}) {
 		if component.Managed {
-			imageOverride := componentImageFor(component.Kind)
-			if imageOverride.Digest != "" {
-				images = append(images, imageOverride)
+			if image := componentImageFor(component.Kind); image.NewName != "" || image.Digest != "" {
+				images = append(images, componentImageFor(component.Kind))
 			}
 		}
 	}
diff --git a/pkg/kustomize/kustomize_test.go b/pkg/kustomize/kustomize_test.go
index e2acc3ca3..87e31368a 100644
--- a/pkg/kustomize/kustomize_test.go
+++ b/pkg/kustomize/kustomize_test.go
@@ -99,6 +99,39 @@ var kustomizationForTests = []struct {
 		},
 		"",
 	},
+	{
+		"ComponentImageOverridesWithTag",
+		&v1.QuayRegistry{
+			Spec: v1.QuayRegistrySpec{
+				Components: []v1.Component{
+					{Kind: "postgres", Managed: true},
+					{Kind: "clair", Managed: true},
+					{Kind: "redis", Managed: true},
+				},
+			},
+		},
+		quaycontext.QuayRegistryContext{},
+		&types.Kustomization{
+			TypeMeta: types.TypeMeta{
+				APIVersion: types.KustomizationVersion,
+				Kind:       types.KustomizationKind,
+			},
+			Resources: []string{},
+			Components: []string{
+				"../components/postgres",
+				"../components/clair",
+				"../components/redis",
+			},
+			Images: []types.Image{
+				{Name: "quay.io/projectquay/quay", NewName: "quay", NewTag: "latest"},
+				{Name: "quay.io/projectquay/clair", NewName: "clair", NewTag: "alpine"},
+				{Name: "centos/redis-32-centos7", NewName: "redis", NewTag: "buster"},
+				{Name: "centos/postgresql-10-centos7", NewName: "postgres", NewTag: "latest"},
+			},
+			SecretGenerator: []types.SecretArgs{},
+		},
+		"",
+	},
 }
 
 func TestKustomizationFor(t *testing.T) {
@@ -107,7 +140,11 @@ func TestKustomizationFor(t *testing.T) {
 	for _, test := range kustomizationForTests {
 		if test.expected != nil {
 			for _, img := range test.expected.Images {
-				os.Setenv("RELATED_IMAGE_COMPONENT_"+strings.ToUpper(img.NewName), img.NewName+"@"+img.Digest)
+				if len(img.Digest) != 0 {
+					os.Setenv("RELATED_IMAGE_COMPONENT_"+strings.ToUpper(img.NewName), img.NewName+"@"+img.Digest)
+				} else {
+					os.Setenv("RELATED_IMAGE_COMPONENT_"+strings.ToUpper(img.NewName), img.NewName+":"+img.NewTag)
+				}
 			}
 		}