diff --git a/Makefile-tests.am b/Makefile-tests.am
index 2c0916f620..b93f084776 100644
--- a/Makefile-tests.am
+++ b/Makefile-tests.am
@@ -98,6 +98,7 @@ _installed_or_uninstalled_test_scripts = \
 	tests/test-admin-deploy-syslinux.sh \
 	tests/test-admin-deploy-2.sh \
 	tests/test-admin-deploy-karg.sh \
+	tests/test-admin-deploy-karg-default.sh \
 	tests/test-admin-deploy-switch.sh \
 	tests/test-admin-deploy-etcmerge-cornercases.sh \
 	tests/test-admin-deploy-uboot.sh \
diff --git a/src/libostree/ostree-sysroot-deploy.c b/src/libostree/ostree-sysroot-deploy.c
index 1096b0b071..67fa6aa949 100644
--- a/src/libostree/ostree-sysroot-deploy.c
+++ b/src/libostree/ostree-sysroot-deploy.c
@@ -2467,6 +2467,11 @@ _ostree_deployment_set_bootconfig_from_kargs (OstreeDeployment *deployment,
       _ostree_kernel_args_append_argv (kargs, override_kernel_argv);
       g_autofree char *new_options = _ostree_kernel_args_to_string (kargs);
       ostree_bootconfig_parser_set (bootconfig, "options", new_options);
+      /* Indicate explicitly that the kargs we just set were not generated from
+       * the config directories. */
+      ostree_bootconfig_parser_set (bootconfig,
+                                    "ostree-kargs-generated-from-config",
+                                    "false");
     }
 }
 
@@ -2564,9 +2569,158 @@ get_var_dfd (OstreeSysroot      *self,
   return glnx_opendirat (base_dfd, base_path, TRUE, ret_fd, error);
 }
 
+/* Get a GFile* referring to the commit object at ref for the file at path. */
+static GFile*
+get_file_from_repo (OstreeRepo    *repo,
+                    const char    *ref,
+                    const char    *path,
+                    GCancellable  *cancellable,
+                    GError       **error)
+{
+  g_autoptr(GFile) root = NULL;
+  if (!ostree_repo_read_commit (repo, ref, &root,
+                                NULL, cancellable, error))
+    return NULL;
+  return g_file_resolve_relative_path (root, path);
+}
+
+static gboolean
+collect_karg_from_tree (gpointer key,
+                        gpointer value,
+                        gpointer kargs_data)
+{
+  const char *karg_contents = value;
+  OstreeKernelArgs *kargs = kargs_data;
+
+  _ostree_kernel_args_parse_append (kargs, karg_contents);
+
+  return FALSE;
+}
+
+static gboolean
+sysroot_regenerate_kargs (OstreeSysroot  *self,
+                          const char     *revision,
+                          int             deployment_dfd,
+                          char          **out_kargs,
+                          GCancellable   *cancellable,
+                          GError        **error)
+{
+  g_autoptr(GTree) kargs_configs = g_tree_new_full ((GCompareDataFunc)g_ascii_strcasecmp,
+                                                    NULL, g_free, g_free);
+  g_auto(GLnxDirFdIterator) dfd_iter = { 0, };
+  gboolean host_dir_exists = FALSE;
+  if (!ot_dfd_iter_init_allow_noent (deployment_dfd,
+                                    _OSTREE_SYSROOT_KARGS_HOST, &dfd_iter,
+                                    &host_dir_exists, error))
+    return FALSE;
+
+  if (host_dir_exists)
+    {
+      while (TRUE)
+        {
+          struct dirent *dent = NULL;
+
+          if (!glnx_dirfd_iterator_next_dent_ensure_dtype (&dfd_iter, &dent,
+                                                          cancellable, error))
+            return FALSE;
+          if (dent == NULL)
+            break;
+
+          const char *host_karg_name = dent->d_name;
+
+          g_autofree char *host_karg_contents = NULL;
+          if (dent->d_type == DT_REG || dent->d_type == DT_LNK)
+            {
+              g_autofree char *host_karg_filepath =
+                g_build_filename (_OSTREE_SYSROOT_KARGS_HOST, host_karg_name, NULL);
+
+              host_karg_contents = glnx_file_get_contents_utf8_at (deployment_dfd,
+                                                                   host_karg_filepath,
+                                                                   NULL, cancellable,
+                                                                   error);
+              if (!host_karg_contents)
+                return FALSE;
+            }
+          else
+            {
+              continue;
+            }
+
+          g_strstrip (host_karg_contents);
+          g_tree_insert (kargs_configs, g_strdup (host_karg_name),
+                         g_steal_pointer (&host_karg_contents));
+        }
+    }
+
+  struct stat stbuf;
+  if (!glnx_fstatat_allow_noent (deployment_dfd, _OSTREE_SYSROOT_KARGS_BASE,
+                                 &stbuf, 0, error))
+    return FALSE;
+  const gboolean base_dir_exists = (errno == 0);
+
+  if (base_dir_exists)
+    {
+      /* Load base kargs configuration from the current commit, so that kargs will
+      * be written to the bootconfig as soon as the current deployment is
+      * finished (in install_deployment_kernel()). */
+      g_autoptr(GFile) base_karg_file = get_file_from_repo (ostree_sysroot_repo (self),
+                                                            revision,
+                                                            _OSTREE_SYSROOT_KARGS_BASE,
+                                                            cancellable, error);
+
+      g_autoptr(GFileEnumerator) dir_enum = NULL;
+      g_autoptr(GFile) child = NULL;
+      g_autoptr(GFileInfo) child_info = NULL;
+      g_autoptr(GError) temp_error = NULL;
+      dir_enum = g_file_enumerate_children (base_karg_file,
+                                            OSTREE_GIO_FAST_QUERYINFO,
+                                            G_FILE_QUERY_INFO_NOFOLLOW_SYMLINKS,
+                                            cancellable, error);
+      if (!dir_enum)
+        return FALSE;
+
+      while ((child_info = g_file_enumerator_next_file (dir_enum, NULL, &temp_error)) != NULL)
+        {
+          g_clear_object (&child);
+          const char *base_karg_name = g_file_info_get_name (child_info);
+          child = g_file_get_child (base_karg_file, base_karg_name);
+
+          g_autofree char *base_karg_contents = NULL;
+          if (!g_file_load_contents (child, cancellable,
+                                    &base_karg_contents, NULL, NULL, &temp_error))
+            {
+              g_propagate_error (error, g_steal_pointer (&temp_error));
+              return FALSE;
+            }
+          if (base_karg_contents && !g_tree_lookup (kargs_configs, base_karg_name))
+            {
+              g_strstrip (base_karg_contents);
+              g_tree_insert (kargs_configs, g_strdup (base_karg_name),
+                             g_strstrip (g_steal_pointer (&base_karg_contents)));
+            }
+          g_clear_object (&child_info);
+        }
+      if (temp_error)
+        {
+          g_propagate_error (error, g_steal_pointer (&temp_error));
+          return FALSE;
+        }
+    }
+
+  g_autoptr(OstreeKernelArgs) kargs = _ostree_kernel_args_new ();
+
+  g_tree_foreach (kargs_configs, (GTraverseFunc)collect_karg_from_tree, kargs);
+
+  g_autofree char *kargs_contents = _ostree_kernel_args_to_string (kargs);
+
+  ot_transfer_out_value (out_kargs, &kargs_contents);
+  return TRUE;
+}
+
 static gboolean
 sysroot_finalize_deployment (OstreeSysroot     *self,
                              OstreeDeployment  *deployment,
+                             const char        *revision,
                              char             **override_kernel_argv,
                              OstreeDeployment  *merge_deployment,
                              GCancellable      *cancellable,
@@ -2577,25 +2731,61 @@ sysroot_finalize_deployment (OstreeSysroot     *self,
   if (!glnx_opendirat (self->sysroot_fd, deployment_path, TRUE, &deployment_dfd, error))
     return FALSE;
 
-  /* Only use the merge if we didn't get an override */
+  if (merge_deployment)
+    {
+      /* Do the /etc merge. */
+      if (!merge_configuration_from (self, merge_deployment, deployment, deployment_dfd,
+                                     cancellable, error))
+        return FALSE;
+    }
+
+  /* If we didn't get an override in this deployment, and we got a merge
+   * deployment, check if we should copy the kargs from the merge
+   * deployment. */
+  gboolean kargs_generated_from_config = FALSE;
   if (!override_kernel_argv && merge_deployment)
     {
-      /* Override the bootloader arguments */
       OstreeBootconfigParser *merge_bootconfig = ostree_deployment_get_bootconfig (merge_deployment);
       if (merge_bootconfig)
         {
-          const char *opts = ostree_bootconfig_parser_get (merge_bootconfig, "options");
-          ostree_bootconfig_parser_set (ostree_deployment_get_bootconfig (deployment), "options", opts);
+          /* Flag that indicates that the kargs in the previous deployment were
+           * generated from the deployment config. If this is the case, then
+           * we continue to generate from the config rather than copy over. */
+          kargs_generated_from_config = g_strcmp0 (ostree_bootconfig_parser_get (merge_bootconfig,
+                                                                                 "ostree-kargs-generated-from-config"),
+                                                   "true") == 0;
+          if (!kargs_generated_from_config)
+            {
+              /* Copy kargs from the merge deployment. */
+              const char *opts = ostree_bootconfig_parser_get (merge_bootconfig, "options");
+              ostree_bootconfig_parser_set (ostree_deployment_get_bootconfig (deployment),
+                                            "options", opts);
+              ostree_bootconfig_parser_set (ostree_deployment_get_bootconfig (deployment),
+                                            "ostree-kargs-generated-from-config",
+                                            "false");
+            }
         }
-
     }
 
-  if (merge_deployment)
+  /* If we didn't get an override in this deployment, and we received
+   * indication to regenerate kargs from the deployment config, regenerate
+   * the kargs. Also if there is no merge deployment, then default to
+   * regenerating kargs from this deployment's config. */
+  if (!override_kernel_argv && (kargs_generated_from_config || !merge_deployment))
     {
-      /* And do the /etc merge */
-      if (!merge_configuration_from (self, merge_deployment, deployment, deployment_dfd,
-                                     cancellable, error))
+      /* Note this occurs after merge_configuration_from() so that
+       * /etc/ostree/kargs as a result of the /etc merge is used. */
+      g_autofree char *opts = NULL;
+      if (!sysroot_regenerate_kargs (self, revision, deployment_dfd, &opts,
+                                      cancellable, error))
         return FALSE;
+      OstreeBootconfigParser *bootconfig = ostree_deployment_get_bootconfig (deployment);
+      ostree_bootconfig_parser_set (bootconfig, "options", opts);
+      ostree_bootconfig_parser_set_option_line (bootconfig, "options",
+                                                "# ostree: options generated from /usr/lib/ostree-boot/kargs.d and /etc/ostree/kargs.d");
+      ostree_bootconfig_parser_set (bootconfig,
+                                    "ostree-kargs-generated-from-config",
+                                    "true");
     }
 
   const char *osdeploypath = glnx_strjoina ("ostree/deploy/", ostree_deployment_get_osname (deployment));
@@ -2676,7 +2866,8 @@ ostree_sysroot_deploy_tree (OstreeSysroot     *self,
                                       &deployment, cancellable, error))
     return FALSE;
 
-  if (!sysroot_finalize_deployment (self, deployment, override_kernel_argv,
+  if (!sysroot_finalize_deployment (self, deployment, revision,
+                                    override_kernel_argv,
                                     provided_merge_deployment,
                                     cancellable, error))
     return FALSE;
@@ -2949,8 +3140,8 @@ _ostree_sysroot_finalize_staged (OstreeSysroot *self,
   if (!glnx_unlinkat (AT_FDCWD, _OSTREE_SYSROOT_RUNSTATE_STAGED, 0, error))
     return FALSE;
 
-  if (!sysroot_finalize_deployment (self, self->staged_deployment, kargs, merge_deployment,
-                                    cancellable, error))
+  if (!sysroot_finalize_deployment (self, self->staged_deployment, self->staged_deployment->csum,
+                                    kargs, merge_deployment, cancellable, error))
     return FALSE;
 
   /* Now, take ownership of the staged state, as normally the API below strips
diff --git a/src/libostree/ostree-sysroot-private.h b/src/libostree/ostree-sysroot-private.h
index e4b2039e2f..f94902707d 100644
--- a/src/libostree/ostree-sysroot-private.h
+++ b/src/libostree/ostree-sysroot-private.h
@@ -79,6 +79,8 @@ struct OstreeSysroot {
 #define _OSTREE_SYSROOT_RUNSTATE_STAGED_LOCKED "/run/ostree/staged-deployment-locked"
 #define _OSTREE_SYSROOT_DEPLOYMENT_RUNSTATE_DIR "/run/ostree/deployment-state/"
 #define _OSTREE_SYSROOT_DEPLOYMENT_RUNSTATE_FLAG_DEVELOPMENT "unlocked-development"
+#define _OSTREE_SYSROOT_KARGS_HOST "etc/ostree/kargs.d"
+#define _OSTREE_SYSROOT_KARGS_BASE "usr/lib/ostree-boot/kargs.d"
 
 void
 _ostree_sysroot_emit_journal_msg (OstreeSysroot  *self,
diff --git a/tests/libtest.sh b/tests/libtest.sh
index e0022512e0..7980d46610 100755
--- a/tests/libtest.sh
+++ b/tests/libtest.sh
@@ -512,6 +512,55 @@ os_repository_new_commit ()
     cd ${test_tmpdir}
 }
 
+# TODO: deduplicate this with os_repository_new_commit()
+os_repository_commit ()
+{
+    repo=${1:-testos-repo}
+    boot_checksum_iteration=${2:-0}
+    content_iteration=${3:-0}
+    branch=${4:-testos/buildmaster/x86_64-runtime}
+    export version=${5:-$(date "+%Y%m%d.${content_iteration}")}
+    echo "BOOT ITERATION: $boot_checksum_iteration"
+    cd ${test_tmpdir}/osdata
+    kver=3.6.0
+    if test -f usr/lib/modules/${kver}/vmlinuz; then
+        bootdir=usr/lib/modules/${kver}
+    else
+        if test -d usr/lib/ostree-boot; then
+            bootdir=usr/lib/ostree-boot
+        else
+            bootdir=boot
+        fi
+    fi
+    rm ${bootdir}/*
+    kernel_path=${bootdir}/vmlinuz
+    initramfs_path=${bootdir}/initramfs.img
+    if [[ $bootdir != usr/lib/modules/* ]]; then
+        kernel_path=${kernel_path}-${kver}
+        initramfs_path=${bootdir}/initramfs-${kver}.img
+    fi
+    echo "new: a kernel ${boot_checksum_iteration}" > ${kernel_path}
+    echo "new: an initramfs ${boot_checksum_iteration}" > ${initramfs_path}
+    bootcsum=$(cat ${kernel_path} ${initramfs_path} | sha256sum | cut -f 1 -d ' ')
+    export bootcsum
+    if [[ $bootdir != usr/lib/modules/* ]]; then
+        mv ${kernel_path}{,-${bootcsum}}
+        mv ${initramfs_path}{,-${bootcsum}}
+    fi
+
+    ${CMD_PREFIX} ostree --repo=${test_tmpdir}/${repo} commit  --add-metadata-string "version=${version}" -b $branch -s "Build"
+    cd ${test_tmpdir}
+}
+
+os_tree_write_file ()
+{
+    path=${1}
+    contents="${2}"
+    cd ${test_tmpdir}/osdata
+    echo "${contents}" > ${path}
+    cd ${test_tmpdir}
+}
+
 _have_user_xattrs=''
 have_user_xattrs() {
     assert_has_setfattr
diff --git a/tests/test-admin-deploy-karg-default.sh b/tests/test-admin-deploy-karg-default.sh
new file mode 100755
index 0000000000..e0dacd8cbc
--- /dev/null
+++ b/tests/test-admin-deploy-karg-default.sh
@@ -0,0 +1,159 @@
+#!/bin/bash
+#
+# Copyright (C) 2019 Robert Fairley <rfairley@redhat.com>
+#
+# SPDX-License-Identifier: LGPL-2.0+
+#
+# This library is free software; you can redistribute it and/or
+# modify it under the terms of the GNU Lesser General Public
+# License as published by the Free Software Foundation; either
+# version 2 of the License, or (at your option) any later version.
+#
+# This library is distributed in the hope that it will be useful,
+# but WITHOUT ANY WARRANTY; without even the implied warranty of
+# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
+# Lesser General Public License for more details.
+#
+# You should have received a copy of the GNU Lesser General Public
+# License along with this library; if not, write to the
+# Free Software Foundation, Inc., 59 Temple Place - Suite 330,
+# Boston, MA 02111-1307, USA.
+
+set -euo pipefail
+
+. $(dirname $0)/libtest.sh
+
+# Exports OSTREE_SYSROOT so --sysroot not needed.
+setup_os_repository "archive" "syslinux"
+
+echo "1..7"
+
+${CMD_PREFIX} ostree --repo=sysroot/ostree/repo pull-local --remote=testos testos-repo testos/buildmaster/x86_64-runtime
+
+${CMD_PREFIX} ostree admin deploy --os=testos testos:testos/buildmaster/x86_64-runtime
+assert_has_dir sysroot/boot/ostree/testos-${bootcsum}
+# Check we generate kargs from the kargs.d configs from the first deployment.
+assert_file_has_content sysroot/boot/loader/entries/ostree-1-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-1-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+initial_rev=$(${CMD_PREFIX} ostree --repo=sysroot/ostree/repo rev-parse testos/buildmaster/x86_64-runtime)
+echo "initial_rev=${initial_rev}"
+
+# Configure kargs stored in the ostree commit.
+mkdir -p osdata/usr/lib/ostree-boot/kargs.d
+os_tree_write_file "usr/lib/ostree-boot/kargs.d/4000_FOO" "FOO=USR_1"
+os_tree_write_file "usr/lib/ostree-boot/kargs.d/4001_FOO2" "FOO2=USR_2"
+os_repository_commit "testos-repo"
+
+# Upgrade to tree with newly-committed kargs files.
+${CMD_PREFIX} ostree --repo=sysroot/ostree/repo remote add --set=gpg-verify=false testos file://$(pwd)/testos-repo testos/buildmaster/x86_64-runtime
+${CMD_PREFIX} ostree admin upgrade --os=testos
+# Sanity check a new boot directory was created after upgrading.
+assert_has_dir sysroot/boot/ostree/testos-${bootcsum}
+
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*FOO=USR_1.*FOO2=USR_2'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs base config"
+
+# Configure kargs stored in the default configuration (/usr/etc).
+mkdir -p osdata/usr/etc/ostree/kargs.d
+os_tree_write_file "usr/etc/ostree/kargs.d/8000_MOO" "MOO=ETC_USR_1"
+os_tree_write_file "usr/etc/ostree/kargs.d/8001_MOO2" "MOO2=ETC_USR_2"
+os_repository_commit "testos-repo"
+
+${CMD_PREFIX} ostree admin upgrade --os=testos
+assert_has_dir sysroot/boot/ostree/testos-${bootcsum}
+
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*FOO=USR_1.*FOO2=USR_2.*MOO=ETC_USR_1.*MOO2=ETC_USR_2'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs default config"
+
+# Configure kargs through the host config file.
+rev=$(${CMD_PREFIX} ostree --repo=sysroot/ostree/repo rev-parse testos/buildmaster/x86_64-runtime)
+echo "rev=${rev}"
+etc=sysroot/ostree/deploy/testos/deploy/${rev}.0/etc
+assert_has_dir ${etc}
+mkdir -p ${etc}/ostree/kargs.d
+# Configure a new karg (append).
+echo "HELLO=ETC_1" > ${etc}/ostree/kargs.d/2000_HELLO
+# Overwrite existing karg from /usr/etc/ostree/kargs.d (replace).
+echo "MOO=ETC_2" > ${etc}/ostree/kargs.d/8000_MOO
+# Overwrite existing karg from /usr/lib/ostree-boot/kargs.d (replace).
+echo "FOO=ETC_3" > ${etc}/ostree/kargs.d/4000_FOO
+
+# Re-deploy with host-configured kernel args.
+${CMD_PREFIX} ostree admin deploy --os=testos testos:testos/buildmaster/x86_64-runtime
+
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*HELLO=ETC_1.*FOO=ETC_3.*FOO2=USR_2.*MOO=ETC_2.*MOO2=ETC_USR_2'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'MOO=ETC_USR_1'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'FOO=USR_1'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs host config"
+
+rev=$(${CMD_PREFIX} ostree --repo=sysroot/ostree/repo rev-parse testos/buildmaster/x86_64-runtime)
+echo "rev=${rev}"
+etc=sysroot/ostree/deploy/testos/deploy/${rev}.1/etc
+mkdir -p ${etc}/ostree/kargs.d
+# Clear base kargs by writing an empty file which overrides them (delete).
+echo "" > ${etc}/ostree/kargs.d/8000_MOO
+echo "" > ${etc}/ostree/kargs.d/4000_FOO
+
+${CMD_PREFIX} ostree admin deploy --os=testos testos:testos/buildmaster/x86_64-runtime
+
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*HELLO=ETC_1.*FOO2=USR_2.*MOO2=ETC_USR_2'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'MOO\>'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'FOO\>'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs delete empty file"
+
+rev=$(${CMD_PREFIX} ostree --repo=sysroot/ostree/repo rev-parse testos/buildmaster/x86_64-runtime)
+echo "rev=${rev}"
+etc=sysroot/ostree/deploy/testos/deploy/${rev}.2/etc
+mkdir -p ${etc}/ostree/kargs.d
+rm ${etc}/ostree/kargs.d/8000_MOO
+rm ${etc}/ostree/kargs.d/4000_FOO
+# Clear base kargs by symlinking to /dev/null.
+ln -s /dev/null ${etc}/ostree/kargs.d/8000_MOO
+ln -s /dev/null ${etc}/ostree/kargs.d/4000_FOO
+
+${CMD_PREFIX} ostree admin deploy --os=testos testos:testos/buildmaster/x86_64-runtime
+
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*HELLO=ETC_1.*FOO2=USR_2.*MOO2=ETC_USR_2'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'MOO\>'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'FOO\>'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs delete /dev/null"
+
+${CMD_PREFIX} ostree admin upgrade --os=testos --allow-downgrade --override-commit=${initial_rev}
+
+# Only the config in /etc/ostree/kargs.d remains.
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*HELLO=ETC_1'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'MOO=ETC_USR_1'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'MOO2=ETC_USR_2'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'FOO=USR_1'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'FOO2=USR_2'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs downgrade"
+
+${CMD_PREFIX} ostree admin deploy --os=testos --karg-append=TESTARG=TESTVALUE testos:testos/buildmaster/x86_64-runtime
+
+# Check we carry over previous deployment kargs, after passing in a kargs
+# override.
+assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*HELLO=ETC_1.*TESTARG=TESTVALUE'
+# Check we won't regenerate from the config again.
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree.*options.*generated from.*kargs\.d'
+
+echo "ok default kargs overridden"
diff --git a/tests/test-admin-deploy-karg.sh b/tests/test-admin-deploy-karg.sh
index aade011ce9..2cc8b7d966 100755
--- a/tests/test-admin-deploy-karg.sh
+++ b/tests/test-admin-deploy-karg.sh
@@ -26,13 +26,15 @@ set -euo pipefail
 # Exports OSTREE_SYSROOT so --sysroot not needed.
 setup_os_repository "archive" "syslinux"
 
-echo "1..3"
+echo "1..5"
 
 ${CMD_PREFIX} ostree --repo=sysroot/ostree/repo pull-local --remote=testos testos-repo testos/buildmaster/x86_64-runtime
 rev=$(${CMD_PREFIX} ostree --repo=sysroot/ostree/repo rev-parse testos/buildmaster/x86_64-runtime)
 export rev
 # This initial deployment gets kicked off with some kernel arguments 
 ${CMD_PREFIX} ostree admin deploy --karg=root=LABEL=MOO --karg=quiet --os=testos testos:testos/buildmaster/x86_64-runtime
+# Check the kargs are not being updated from the kargs.d configs.
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-1-testos.conf 'ostree-kargs-generated-from-config.*true'
 ${CMD_PREFIX} ostree admin deploy --karg=FOO=BAR --os=testos testos:testos/buildmaster/x86_64-runtime
 ${CMD_PREFIX} ostree admin deploy --karg=TESTARG=TESTVALUE --os=testos testos:testos/buildmaster/x86_64-runtime
 assert_file_has_content sysroot/boot/loader/entries/ostree-1-testos.conf 'options.*FOO=BAR'
@@ -61,9 +63,26 @@ echo "ok deploy --karg-proc-cmdline"
 ${CMD_PREFIX} ostree admin status
 ${CMD_PREFIX} ostree admin undeploy 0
 
-${CMD_PREFIX} ostree admin deploy  --os=testos --karg-append=APPENDARG=VALAPPEND --karg-append=APPENDARG=2NDAPPEND testos:testos/buildmaster/x86_64-runtime
+${CMD_PREFIX} ostree admin deploy --os=testos --karg-append=APPENDARG=VALAPPEND --karg-append=APPENDARG=2NDAPPEND testos:testos/buildmaster/x86_64-runtime
 assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*FOO=BAR'
 assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*TESTARG=TESTVALUE'
 assert_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'options.*APPENDARG=VALAPPEND .*APPENDARG=2NDAPPEND'
+# Check the kargs are still not being updated from the kargs.d configs.
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
 
 echo "ok deploy --karg-append"
+
+${CMD_PREFIX} ostree admin status
+${CMD_PREFIX} ostree admin undeploy 0
+
+${CMD_PREFIX} ostree admin deploy --os=testos testos:testos/buildmaster/x86_64-runtime
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+
+echo "ok no true kargs generated from config flag"
+
+${CMD_PREFIX} ostree admin status
+
+${CMD_PREFIX} ostree admin deploy --os=testos testos:testos/buildmaster/x86_64-runtime
+assert_not_file_has_content sysroot/boot/loader/entries/ostree-2-testos.conf 'ostree-kargs-generated-from-config.*true'
+
+echo "ok no true kargs generated from config flag persists"