diff --git a/src/libostree/ostree-repo-checkout.c b/src/libostree/ostree-repo-checkout.c
index f506545529..650604446d 100644
--- a/src/libostree/ostree-repo-checkout.c
+++ b/src/libostree/ostree-repo-checkout.c
@@ -1062,6 +1062,22 @@ checkout_tree_at_recurse (OstreeRepo *self, OstreeRepoCheckoutAtOptions *options
         if (!glnx_shutil_rm_rf_at (destination_parent_fd, destination_name, cancellable, error))
           return FALSE;
       }
+    else if (options->process_whiteouts
+             && options->overwrite_mode == OSTREE_REPO_CHECKOUT_OVERWRITE_UNION_FILES)
+      {
+        /* In this mode, we're flattening in a manner similar to overlayfs, so ensure
+         * any non-directory content there is gone. /
+         */
+        struct stat stbuf;
+        if (!glnx_fstatat_allow_noent (destination_parent_fd, destination_name, &stbuf,
+                                       AT_SYMLINK_NOFOLLOW, error))
+          return FALSE;
+        if (errno == 0 && !S_ISDIR (stbuf.st_mode))
+          {
+            if (!glnx_shutil_rm_rf_at (destination_parent_fd, destination_name, cancellable, error))
+              return FALSE;
+          }
+      }
 
     /* Create initially with mode 0700, then chown/chmod only when we're
      * done.  This avoids anyone else being able to operate on partially
diff --git a/tests/basic-test.sh b/tests/basic-test.sh
index 7905e6ee68..c8f853f8d6 100644
--- a/tests/basic-test.sh
+++ b/tests/basic-test.sh
@@ -1159,6 +1159,18 @@ if touch overlay/baz/.wh.cow && touch overlay/.wh.deeper && touch overlay/baz/an
     assert_has_file overlay-co/baz
     test -L overlay-co/anewdir
 
+    rm overlay-co overlay -rf
+    mkdir -p overlay/somelink overlay/yet/ovlnewdir
+    echo ovlnewf > overlay/yet/ovlnewdir/ovlnewf
+    $OSTREE --repo=repo commit ${COMMIT_ARGS} -b overlay-symlink-convert --tree=dir=overlay
+    for branch in test2 overlay-symlink-convert; do
+        $OSTREE --repo=repo checkout --union --whiteouts ${branch} overlay-co
+    done
+    test -d overlay-co/somelink || fatal "should replace symlink with dir"
+    assert_has_dir overlay-co/yet/another
+    assert_has_dir overlay-co/yet/ovlnewdir
+    assert_file_has_content overlay-co/yet/ovlnewdir/ovlnewf ovlnewf
+    rm overlay-co overlay -rf
     echo "ok whiteouts enabled"
 
     # Now double check whiteouts are not processed without --whiteouts