diff --git a/test/includes/microcloud.sh b/test/includes/microcloud.sh
index a1bfbb55b..de473bbbe 100644
--- a/test/includes/microcloud.sh
+++ b/test/includes/microcloud.sh
@@ -5,7 +5,7 @@ unset_interactive_vars() {
   unset SKIP_LOOKUP LOOKUP_IFACE LIMIT_SUBNET SKIP_SERVICE EXPECT_PEERS REUSE_EXISTING REUSE_EXISTING_COUNT \
     SETUP_ZFS ZFS_FILTER ZFS_WIPE \
     SETUP_CEPH CEPH_MISSING_DISKS CEPH_FILTER CEPH_WIPE CEPH_ENCRYPT SETUP_CEPHFS CEPH_CLUSTER_NETWORK \
-    PROCEED_WITH_NO_OVERLAY_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_UNDERLAY_NETWORK OVN_UNDERLAY_FILTEROVN_WARNING OVN_FILTER IPV4_SUBNET IPV4_START IPV4_END DNS_ADDRESSES IPV6_SUBNET \
     REPLACE_PROFILE CEPH_RETRY_HA MULTI_NODE
 }
 
@@ -41,6 +41,8 @@ microcloud_interactive() {
   IPV4_START=${IPV4_START:-}                      # OVN ipv4 range start.
   IPV4_END=${IPV4_END:-}                          # OVN ipv4 range end.
   DNS_ADDRESSES=${DNS_ADDRESSES:-}                # OVN custom DNS addresses.
+  OVN_UNDERLAY_NETWORK=${OVN_UNDERLAY_NETWORK:-}  # (yes/no) set up a custom OVN underlay network.
+  OVN_UNDERLAY_FILTER=${OVN_UNDERLAY_FILTER:-}    # filter string for OVN underlay interfaces.
   IPV6_SUBNET=${IPV6_SUBNET:-}                    # OVN ipv6 range.
   REPLACE_PROFILE="${REPLACE_PROFILE:-}"          # Replace default profile config and devices.
 
@@ -129,6 +131,17 @@ ${IPV6_SUBNET}
 ${DNS_ADDRESSES}
 $(true)                                                 # workaround for set -e
 "
+
+  if [ -n "${OVN_UNDERLAY_NETWORK}" ]; then
+    setup="${setup}
+${OVN_UNDERLAY_NETWORK}
+$([ "${OVN_UNDERLAY_NETWORK}" = "yes" ] && printf "wait 300ms")
+${OVN_UNDERLAY_FILTER}
+$([ "${OVN_UNDERLAY_NETWORK}" = "yes" ] && printf "select-all")
+$([ "${OVN_UNDERLAY_NETWORK}" = "yes" ] && printf -- "---")
+$(true)                                                 # workaround for set -e
+"
+  fi
 fi
 
 if [ -n "${REPLACE_PROFILE}" ] ; then
@@ -287,13 +300,29 @@ validate_ceph_encrypt() {
 # validate_system_microovn: Ensures the node with the given name has correctly set up MicroOVN with the given resources.
 validate_system_microovn() {
     name=${1}
+    shift 1
 
     echo "==> ${name} Validating MicroOVN"
 
     lxc remote switch local
     lxc exec "${name}" -- microovn cluster list | grep -q "${name}"
-}
 
+    ovn_underlay_subnet_prefix=""
+    if [ $# -gt 0 ] && echo "${1}" | grep -Pq '^([0-9]{1,3}\.){2}[0-9]{1,3}$'; then
+      ovn_underlay_subnet_prefix="${1}"
+      shift 1
+    fi
+
+    # Instances are named micro01, micro02, etc.
+    # We need to extract the instance number to check the OVN Geneve tunnel IP.
+    instance_idx=$(echo "${name}" | grep -oE '[0-9]+$')
+    underlay_ip_idx=$((instance_idx + 1))
+    if [ -n "${ovn_underlay_subnet_prefix}" ]; then
+      lxc exec "${name}" -- sh -ceu "
+        microovn.ovn-sbctl --columns=ip,type find Encap type=geneve | grep -q ${ovn_underlay_subnet_prefix}.${underlay_ip_idx}
+      " > /dev/null
+    fi
+}
 # validate_system_lxd_zfs: Ensures the node with the given name has the given disk set up for ZFS storage.
 validate_system_lxd_zfs() {
   name=${1}
diff --git a/test/suites/add.sh b/test/suites/add.sh
index 9e57cecd6..aeb1dc069 100644
--- a/test/suites/add.sh
+++ b/test/suites/add.sh
@@ -138,6 +138,7 @@ test_add_interactive() {
   export IPV4_END="10.1.123.254"
   export IPV6_SUBNET="fd42:1:1234:1234::1/64"
   export DNS_ADDRESSES="10.1.123.1,fd42:1:1234:1234::1"
+  export OVN_UNDERLAY_NETWORK="no"
   microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init > out"
   lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
 
@@ -159,6 +160,7 @@ test_add_interactive() {
   export CEPH_ENCRYPT="no"
   export SETUP_OVN="yes"
   export OVN_FILTER="enp6s0"
+  export OVN_UNDERLAY_NETWORK="no"
   microcloud_interactive | lxc exec micro01 -- sh -c "microcloud add > out"
   lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
 
@@ -191,6 +193,7 @@ test_add_interactive() {
   export SETUP_ZFS="yes"
   export ZFS_FILTER="lxd_disk1"
   export ZFS_WIPE="yes"
+  export OVN_UNDERLAY_NETWORK="no"
   microcloud_interactive | lxc exec micro01 -- sh -c "microcloud add > out"
   lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
 
@@ -208,6 +211,7 @@ test_add_interactive() {
   export SETUP_ZFS="no"
   export SETUP_CEPH="no"
   export SETUP_OVN="no"
+  export OVN_UNDERLAY_NETWORK="no"
 
   lxc exec micro04 -- snap disable microcloud
   microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init > out"
@@ -237,6 +241,7 @@ test_add_interactive() {
   export IPV6_SUBNET="fd42:1:1234:1234::1/64"
   export DNS_ADDRESSES="10.1.123.1,fd42:1:1234:1234::1"
   export REPLACE_PROFILE="yes"
+  export OVN_UNDERLAY_NETWORK="no"
 
   lxc exec micro04 -- snap enable microcloud
   lxc exec micro04 -- snap start microcloud
diff --git a/test/suites/basic.sh b/test/suites/basic.sh
index fcd9be270..5fc36cf50 100644
--- a/test/suites/basic.sh
+++ b/test/suites/basic.sh
@@ -137,6 +137,7 @@ test_interactive() {
   export IPV6_SUBNET="fd42:1:1234:1234::1/64"
   export DNS_ADDRESSES="10.1.123.1,8.8.8.8"
   export CEPH_CLUSTER_NETWORK="${microcloud_internal_net_addr}"
+  export OVN_UNDERLAY_NETWORK="no"
   microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init > out"
 
   lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
@@ -207,6 +208,7 @@ test_interactive() {
   export IPV4_SUBNET="10.1.123.1/24"
   export IPV4_START="10.1.123.100"
   export IPV4_END="10.1.123.254"
+  export OVN_UNDERLAY_NETWORK="no"
   microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init > out"
 
   lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
@@ -215,6 +217,37 @@ test_interactive() {
     validate_system_microceph "${m}" 1 "${CEPH_CLUSTER_NETWORK}" disk2
     validate_system_microovn "${m}"
   done
+
+  reset_systems 3 3 3
+
+  ceph_cluster_subnet_prefix="10.2.123"
+  ceph_cluster_subnet_iface="enp7s0"
+
+  for n in $(seq 2 4); do
+    cluster_ip="${ceph_cluster_subnet_prefix}.${n}/24"
+    lxc exec "micro0$((n-1))" -- ip addr add "${cluster_ip}" dev "${ceph_cluster_subnet_iface}"
+  done
+
+  ovn_underlay_subnet_prefix="10.3.123"
+  ovn_underlay_subnet_iface="enp8s0"
+
+  for n in $(seq 2 4); do
+    ovn_underlay_ip="${ovn_underlay_subnet_prefix}.${n}/24"
+    lxc exec "micro0$((n-1))" -- sh -c "ip addr add ${ovn_underlay_ip} dev ${ovn_underlay_subnet_iface} && ip link set ${ovn_underlay_subnet_iface} up"
+  done
+
+  echo "Creating a MicroCloud with ZFS, Ceph storage with a fully disaggregated Ceph networking setup, OVN management network and OVN underlay network"
+  export CEPH_CLUSTER_NETWORK="${ceph_cluster_subnet_prefix}.0/24"
+  export OVN_UNDERLAY_NETWORK="yes"
+  export OVN_UNDERLAY_FILTER="${ovn_underlay_subnet_prefix}"
+  microcloud_interactive | lxc exec micro01 -- sh -c "microcloud init > out"
+
+  lxc exec micro01 -- tail -1 out | grep "MicroCloud is ready" -q
+  for m in micro01 micro02 micro03 ; do
+    validate_system_lxd "${m}" 3 disk1 3 1 "${OVN_FILTER}" "${IPV4_SUBNET}" "${IPV4_START}"-"${IPV4_END}" "${IPV6_SUBNET}"
+    validate_system_microceph "${m}" 1 "${CEPH_CLUSTER_NETWORK}" disk2
+    validate_system_microovn "${m}" "${ovn_underlay_subnet_prefix}"
+  done
 }
 
 test_instances_config() {
@@ -663,6 +696,7 @@ _test_case() {
     export LOOKUP_IFACE="enp5s0" # filter string for the lookup interface table.
     export LIMIT_SUBNET="yes" # (yes/no) input for limiting lookup of systems to the above subnet.
     export CEPH_CLUSTER_NETWORK="${microcloud_internal_net_addr}"
+    export OVN_UNDERLAY_NETWORK="no"
 
     export EXPECT_PEERS="$((num_systems - 1))"
 
@@ -1079,6 +1113,7 @@ test_reuse_cluster() {
   export IPV4_END="10.1.123.254"
   export DNS_ADDRESSES="10.1.123.1,8.8.8.8"
   export IPV6_SUBNET="fd42:1:1234:1234::1/64"
+  export OVN_UNDERLAY_NETWORK="no"
 
   reset_systems 3 3 3
   echo "Create a MicroCloud that re-uses an existing service"
@@ -1207,6 +1242,7 @@ test_remove_cluster_member() {
   export IPV4_END="10.1.123.254"
   export DNS_ADDRESSES="10.1.123.1,8.8.8.8"
   export IPV6_SUBNET="fd42:1:1234:1234::1/64"
+  export OVN_UNDERLAY_NETWORK="no"
 
   reset_systems 3 3 3
   echo "Fail to remove member from MicroCeph and LXD until OSDs are removed"
@@ -1355,6 +1391,7 @@ test_add_services() {
   export DNS_ADDRESSES="10.1.123.1,8.8.8.8"
   export IPV6_SUBNET="fd42:1:1234:1234::1/64"
   export CEPH_CLUSTER_NETWORK="${ceph_cluster_subnet_prefix}.0/24"
+  export OVN_UNDERLAY_NETWORK="no"
 
   reset_systems 3 3 3
   set_cluster_subnet 3  "${ceph_cluster_subnet_iface}" "${ceph_cluster_subnet_prefix}"
@@ -1492,6 +1529,7 @@ test_non_ha() {
   export CEPH_ENCRYPT="no"
   export CEPH_RETRY_HA="no"
   export SETUP_OVN="yes"
+  export OVN_UNDERLAY_NETWORK="no"
   export OVN_FILTER="enp6s0"
   export IPV4_SUBNET="10.1.123.1/24"
   export IPV4_START="10.1.123.100"