diff --git a/nix/ci.nix b/nix/ci.nix
index 4726fd9..f44c5e2 100644
--- a/nix/ci.nix
+++ b/nix/ci.nix
@@ -13,18 +13,23 @@ dimension "Nixpkgs version" {
       nixpkgsSource = "nixos-19.03";
       enableDoc = false;
       nixosTestIsPerl = true;
+      dockerSupportsSystemd = true;
+      nixosHasPodmanDockerSocket = false;
     };
     "nixos-20_09" = {
       nixpkgsSource = "nixos-20.09";
       isReferenceNixpkgs = true;
       enableDoc = true;
+      dockerSupportsSystemd = true;
+      nixosHasPodmanDockerSocket = false;
     };
     "nixos-unstable" = {
       nixpkgsSource = "nixos-unstable";
       enableDoc = true;
     };
   } (
-    _name: { nixpkgsSource, isReferenceNixpkgs ? false, enableDoc ? true, nixosTestIsPerl ? false }:
+    _name: { nixpkgsSource, isReferenceNixpkgs ? false, enableDoc ? true,
+              nixosTestIsPerl ? false, dockerSupportsSystemd ? false, nixosHasPodmanDockerSocket ? true }:
 
 
       dimension "System" {
@@ -34,7 +39,7 @@ dimension "Nixpkgs version" {
         system: { isReferenceTarget ? false, enableNixOSTests ? true }:
           let
             pkgs = import ./. {
-              inherit system nixosTestIsPerl;
+              inherit system nixosTestIsPerl dockerSupportsSystemd nixosHasPodmanDockerSocket;
               nixpkgsSrc = sources.${nixpkgsSource};
             };
           in
diff --git a/nix/default.nix b/nix/default.nix
index a824a53..a880f2c 100644
--- a/nix/default.nix
+++ b/nix/default.nix
@@ -3,6 +3,8 @@
 , nixpkgsSrc ? sources.${nixpkgsName}
 , system ? builtins.currentSystem
 , nixosTestIsPerl ? false
+, dockerSupportsSystemd ? false
+, nixosHasPodmanDockerSocket ? true
 , ...
 }:
 
@@ -11,8 +13,12 @@ import nixpkgsSrc ({
   config = {
   };
   overlays = [
-    # all the packages are defined there:
-    (_: _: { inherit nixosTestIsPerl; })
+    (_: _: {
+      inherit nixosTestIsPerl;
+      arionTestingFlags = {
+        inherit nixosTestIsPerl dockerSupportsSystemd nixosHasPodmanDockerSocket;
+      };
+    })
     (import ./overlay.nix)
   ];
   inherit system;
diff --git a/nix/sources.json b/nix/sources.json
index 47e0e6c..d68b5da 100644
--- a/nix/sources.json
+++ b/nix/sources.json
@@ -36,15 +36,15 @@
         "url_template": "https://github.com/<owner>/<repo>/archive/<rev>.tar.gz"
     },
     "nixos-unstable": {
-        "branch": "nixos-unstable",
+        "branch": "wip-arion-prs",
         "description": "A read-only mirror of NixOS/nixpkgs tracking the released channels. Send issues and PRs to",
         "homepage": "https://github.com/NixOS/nixpkgs",
-        "owner": "NixOS",
+        "owner": "hercules-ci",
         "repo": "nixpkgs",
-        "rev": "296793637b22bdb4d23b479879eba0a71c132a66",
-        "sha256": "0j09yih9693w5vjx64ikfxyja1ha7pisygrwrpg3wfz3sssglg69",
+        "rev": "4f5e5257f4385bb178f2b14393c06bada5fdb65e",
+        "sha256": "0m60fvajhx90hamn6arl3ifvbzfwrl2c80v5j44lwcl6n2bjgcmb",
         "type": "tarball",
-        "url": "https://github.com/NixOS/nixpkgs/archive/296793637b22bdb4d23b479879eba0a71c132a66.tar.gz",
+        "url": "https://github.com/hercules-ci/nixpkgs/archive/4f5e5257f4385bb178f2b14393c06bada5fdb65e.tar.gz",
         "url_template": "https://github.com/<owner>/<repo>/archive/<rev>.tar.gz",
         "version": ""
     },
diff --git a/src/haskell/testdata/Arion/NixSpec/arion-compose.json b/src/haskell/testdata/Arion/NixSpec/arion-compose.json
index 479fe96..83d62fc 100644
--- a/src/haskell/testdata/Arion/NixSpec/arion-compose.json
+++ b/src/haskell/testdata/Arion/NixSpec/arion-compose.json
@@ -2,14 +2,14 @@
     "services": {
         "webserver": {
             "command": [
-                "/nix/store/b9w61w4g8sqgrm3rid6ca22krslqghb3-nixos-system-unnamed-19.03.173100.e726e8291b2/init"
+                "/usr/sbin/init"
             ],
             "environment": {
                 "NIX_REMOTE": "",
                 "PATH": "/usr/bin:/run/current-system/sw/bin/",
                 "container": "docker"
             },
-            "image": "arion-base:<HASH>",
+            "image": "webserver:<HASH>",
             "ports": [
                 "8000:80"
             ],
@@ -23,8 +23,7 @@
             "tty": true,
             "volumes": [
                 "/sys/fs/cgroup:/sys/fs/cgroup:ro",
-                "/nix/store:/nix/store:ro",
-                "/nix/store/pssdmhzjnhflawv7rwk1yw39350iv40g-container-system-env:/run/system:ro"
+                "/nix/store:/nix/store:ro"
             ]
         }
     },
@@ -32,8 +31,8 @@
     "x-arion": {
         "images": [
             {
-                "image": "<STOREPATH>",
-                "imageName": "arion-base",
+                "imageExe": "<STOREPATH>",
+                "imageName": "webserver",
                 "imageTag": "<HASH>"
             }
         ],
diff --git a/src/nix/modules/service/nixos-init.nix b/src/nix/modules/service/nixos-init.nix
index d152f0c..38a23a7 100644
--- a/src/nix/modules/service/nixos-init.nix
+++ b/src/nix/modules/service/nixos-init.nix
@@ -24,7 +24,13 @@ in
       ../nixos/default-shell.nix
       (pkgs.path + "/nixos/modules/profiles/minimal.nix")
     ];
-    image.command = [ "${config.nixos.build.toplevel}/init" ];
+    image.command = [ "/usr/sbin/init" ];
+    image.contents = [
+      (pkgs.runCommand "root-init" {} ''
+        mkdir -p $out/usr/sbin
+        ln -s ${config.nixos.build.toplevel}/init $out/usr/sbin/init
+      '')
+    ];
     service.environment.container = "docker";
     service.environment.PATH = "/usr/bin:/run/current-system/sw/bin/";
     service.volumes = [
diff --git a/tests/arion-test/default.nix b/tests/arion-test/default.nix
index dcbd376..e34ff93 100644
--- a/tests/arion-test/default.nix
+++ b/tests/arion-test/default.nix
@@ -1,4 +1,4 @@
-{ pkgs, ... }:
+{ usePodman ? false, pkgs, lib, ... }:
 
 let
   # To make some prebuilt derivations available in the vm
@@ -6,14 +6,26 @@ let
     inherit modules;
     inherit pkgs;
   };
+
+  inherit (lib)
+    optionalAttrs
+    optionalString
+    ;
+
+  haveSystemd = usePodman || pkgs.arionTestingFlags.dockerSupportsSystemd;
+
 in
 {
   name = "arion-test";
   machine = { pkgs, lib, ... }: {
     environment.systemPackages = [
       pkgs.arion
-    ];
-    virtualisation.docker.enable = true;
+    ] ++ lib.optional usePodman pkgs.docker;
+    virtualisation.docker.enable = !usePodman;
+    virtualisation.podman = optionalAttrs usePodman {
+      enable = true;
+      dockerSocket.enable = true;
+    };
     
     # no caches, because no internet
     nix.binaryCaches = lib.mkForce [];
@@ -38,6 +50,7 @@ in
     ];
 
     virtualisation.memorySize = 1024;
+    virtualisation.diskSize = 8000;
   };
   testScript = ''
     machine.fail("curl --fail localhost:8000")
@@ -71,6 +84,7 @@ in
     #     machine.succeed("cd work && NIX_PATH= arion down")
     #     machine.wait_until_fails("curl --fail localhost:8000")
 
+    ${optionalString haveSystemd ''
     # Tests
     #  - arion exec
     #  - examples/full-nixos
@@ -95,6 +109,7 @@ in
             "cd work && NIX_PATH=nixpkgs='${pkgs.path}' arion down"
         )
         machine.wait_until_fails("curl --fail localhost:8000")
+    ''}
 
     # Tests
     #  - examples/nixos-unit
diff --git a/tests/default.nix b/tests/default.nix
index cc9ad49..e134b37 100644
--- a/tests/default.nix
+++ b/tests/default.nix
@@ -1,4 +1,4 @@
-{ pkgs ? import ../pkgs.nix, nixosTestIsPerl ? false }:
+{ pkgs ? import ../pkgs.nix, nixosTestIsPerl ? false, arionTestingFlags ? {} }:
 let
   inherit (pkgs) nixosTest recurseIntoAttrs arion;
 in
@@ -6,6 +6,10 @@ in
 recurseIntoAttrs {
 
   test = if nixosTestIsPerl then nixosTest ./arion-test-perl else nixosTest ./arion-test;
+  testWithPodman =
+    if arionTestingFlags.nixosHasPodmanDockerSocket
+    then nixosTest (pkgs.callPackage ./arion-test { usePodman = true; })
+    else {};
 
   testBuild = arion.build {