diff --git a/test/includes/microcloud.sh b/test/includes/microcloud.sh
index 93f53ef7b..332541578 100644
--- a/test/includes/microcloud.sh
+++ b/test/includes/microcloud.sh
@@ -5,7 +5,7 @@ unset_interactive_vars() {
   unset LOOKUP_IFACE LIMIT_SUBNET SKIP_SERVICE EXPECT_PEERS REUSE_EXISTING REUSE_EXISTING_COUNT \
     SETUP_ZFS ZFS_FILTER ZFS_WIPE \
     SETUP_CEPH CEPH_WARNING CEPH_FILTER CEPH_WIPE SETUP_CEPHFS CEPH_CLUSTER_NETWORK IGNORE_CEPH_NETWORKING \
-    SETUP_OVN OVN_WARNING OVN_FILTER IPV4_SUBNET IPV4_START IPV4_END DNS_ADDRESSES IPV6_SUBNET
+    PROCEED_WITH_NO_OVERLAY_NETWORKING SETUP_OVN OVN_WARNING OVN_FILTER IPV4_SUBNET IPV4_START IPV4_END DNS_ADDRESSES IPV6_SUBNET
 }
 
 # microcloud_interactive: outputs text that can be passed to `TEST_CONSOLE=1 microcloud init`
@@ -19,24 +19,25 @@ microcloud_interactive() {
   EXPECT_PEERS=${EXPECT_PEERS:-}                 # wait for this number of systems to be available to join the cluster.
   REUSE_EXISTING=${REUSE_EXISTING:-}              # (yes/no) incorporate an existing clustered service.
   REUSE_EXISTING_COUNT=${REUSE_EXISTING_COUNT:-0} # (number) number of existing clusters to incorporate.
-  SETUP_ZFS=${SETUP_ZFS:-}                       # (yes/no) input for initiating ZFS storage pool setup.
-  ZFS_FILTER=${ZFS_FILTER:-}                     # filter string for ZFS disks.
-  ZFS_WIPE=${ZFS_WIPE:-}                         # (yes/no) to wipe all disks.
-  SETUP_CEPH=${SETUP_CEPH:-}                     # (yes/no) input for initiating CEPH storage pool setup.
-  SETUP_CEPHFS=${SETUP_CEPHFS:-}                 # (yes/no) input for initialising CephFS storage pool setup.
-  CEPH_WARNING=${CEPH_WARNING:-}                 # (yes/no) input for warning about eligible disk detection.
-  CEPH_FILTER=${CEPH_FILTER:-}                   # filter string for CEPH disks.
-  CEPH_WIPE=${CEPH_WIPE:-}                       # (yes/no) to wipe all disks.
+  SETUP_ZFS=${SETUP_ZFS:-}                        # (yes/no) input for initiating ZFS storage pool setup.
+  ZFS_FILTER=${ZFS_FILTER:-}                      # filter string for ZFS disks.
+  ZFS_WIPE=${ZFS_WIPE:-}                          # (yes/no) to wipe all disks.
+  SETUP_CEPH=${SETUP_CEPH:-}                      # (yes/no) input for initiating CEPH storage pool setup.
+  SETUP_CEPHFS=${SETUP_CEPHFS:-}                  # (yes/no) input for initialising CephFS storage pool setup.
+  CEPH_WARNING=${CEPH_WARNING:-}                  # (yes/no) input for warning about eligible disk detection.
+  CEPH_FILTER=${CEPH_FILTER:-}                    # filter string for CEPH disks.
+  CEPH_WIPE=${CEPH_WIPE:-}                        # (yes/no) to wipe all disks.
   CEPH_CLUSTER_NETWORK=${CEPH_CLUSTER_NETWORK:-} # (default: MicroCloud internal subnet or Ceph public network if specified previously) input for setting up a cluster network.
   IGNORE_CEPH_NETWORKING=${IGNORE_CEPH_NETWORKING:-} # (yes/no) input for ignoring Ceph network setup. Set it to `yes` during `microcloud add` .
-  SETUP_OVN=${SETUP_OVN:-}                       # (yes/no) input for initiating OVN network setup.
-  OVN_WARNING=${OVN_WARNING:-}                   # (yes/no) input for warning about eligible interface detection.
-  OVN_FILTER=${OVN_FILTER:-}                     # filter string for OVN interfaces.
-  IPV4_SUBNET=${IPV4_SUBNET:-}                   # OVN ipv4 gateway subnet.
-  IPV4_START=${IPV4_START:-}                     # OVN ipv4 range start.
-  IPV4_END=${IPV4_END:-}                         # OVN ipv4 range end.
-  DNS_ADDRESSES=${DNS_ADDRESSES:-}               # OVN custom DNS addresses.
-  IPV6_SUBNET=${IPV6_SUBNET:-}                   # OVN ipv6 range.
+  PROCEED_WITH_NO_OVERLAY_NETWORKING=${PROCEED_WITH_NO_OVERLAY_NETWORKING:-} # (yes/no) input for proceeding without overlay networking.
+  SETUP_OVN=${SETUP_OVN:-}                        # (yes/no) input for initiating OVN network setup.
+  OVN_WARNING=${OVN_WARNING:-}                    # (yes/no) input for warning about eligible interface detection.
+  OVN_FILTER=${OVN_FILTER:-}                      # filter string for OVN interfaces.
+  IPV4_SUBNET=${IPV4_SUBNET:-}                    # OVN ipv4 gateway subnet.
+  IPV4_START=${IPV4_START:-}                      # OVN ipv4 range start.
+  IPV4_END=${IPV4_END:-}                          # OVN ipv4 range end.
+  DNS_ADDRESSES=${DNS_ADDRESSES:-}                # OVN custom DNS addresses.
+  IPV6_SUBNET=${IPV6_SUBNET:-}                    # OVN ipv6 range.
 
   setup="
 ${LOOKUP_IFACE}                                         # filter the lookup interface
@@ -88,6 +89,13 @@ $(true)                                                 # workaround for set -e
 "
 fi
 
+if [ -n "${PROCEED_WITH_NO_OVERLAY_NETWORKING}" ]; then
+  setup="${setup}
+${PROCEED_WITH_NO_OVERLAY_NETWORKING}                   # agree to proceed without overlay networking (neither FAN nor OVN networking) (yes/no)
+$(true)                                                 # workaround for set -e
+"
+fi
+
 if [ -z "${IGNORE_CEPH_NETWORKING}" ]; then
   if [ -n "${CEPH_CLUSTER_NETWORK}" ]; then
     setup="${setup}
diff --git a/test/suites/basic.sh b/test/suites/basic.sh
index 5d636f0c1..edd42aad3 100644
--- a/test/suites/basic.sh
+++ b/test/suites/basic.sh
@@ -47,6 +47,46 @@ test_interactive() {
     validate_system_lxd "${m}" 3 disk1
   done
 
+  # Reset the systems with just LXD and no IPv6 support.
+  reset_systems 3 3 1
+
+  for m in micro01 micro02 micro03 ; do
+    lxc exec "${m}" -- echo 1 > /proc/sys/net/ipv6/conf/all/disable_ipv6
+    lxc exec "${m}" -- snap disable microceph || true
+    lxc exec "${m}" -- snap disable microovn || true
+    lxc exec "${m}" -- snap restart microcloud
+  done
+
+  echo "Creating a MicroCloud with ZFS storage and no IPv6 support"
+  microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init > out"
+
+  lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
+  for m in micro01 micro02 micro03 ; do
+    validate_system_lxd "${m}" 3 disk1
+  done
+
+  # Reset the systems with just LXD and no IPv4 support.
+  gw_net_addr=$(lxc network get lxdbr0 ipv4.address)
+  lxc network set lxdbr0 ipv4.address none
+  reset_systems 3 3 1
+
+  for m in micro01 micro02 micro03 ; do
+    lxc exec "${m}" -- snap disable microceph || true
+    lxc exec "${m}" -- snap disable microovn || true
+    lxc exec "${m}" -- snap restart microcloud
+  done
+
+  export PROCEED_WITH_NO_OVERLAY_NETWORKING="no" # This will avoid to setup the cluster if no overlay networking is available.
+  echo "Creating a MicroCloud with ZFS storage and no IPv4 support"
+  ! microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init 2> err" || false
+
+  # Ensure we error out due to a lack of usable overlay networking.
+  lxc exec micro01 -- cat err | grep "cluster bootstrapping aborted due to lack of usable networking" -q
+
+  # Set the IPv4 address back to the original value.
+  lxc network set lxdbr0 ipv4.address "${gw_net_addr}"
+  unset PROCEED_WITH_NO_OVERLAY_NETWORKING
+
   # Reset the systems and install microceph.
   reset_systems 3 3 1