diff --git a/src/import/importd.c b/src/import/importd.c
index a6447e1fdd3..8a6a8c8ed1b 100644
--- a/src/import/importd.c
+++ b/src/import/importd.c
@@ -689,7 +689,7 @@ static int method_pull_tar_or_raw(sd_bus *bus, sd_bus_message *msg, void *userda
         if (v < 0)
                 return sd_bus_error_setf(error, SD_BUS_ERROR_INVALID_ARGS, "Unknown verification mode %s", verify);
 
-        r = setup_machine_directory(error);
+        r = setup_machine_directory((uint64_t) -1, error);
         if (r < 0)
                 return r;
 
@@ -784,7 +784,7 @@ static int method_pull_dkr(sd_bus *bus, sd_bus_message *msg, void *userdata, sd_
         if (v != IMPORT_VERIFY_NO)
                 return sd_bus_error_setf(error, SD_BUS_ERROR_NOT_SUPPORTED, "DKR does not support verification.");
 
-        r = setup_machine_directory(error);
+        r = setup_machine_directory((uint64_t) -1, error);
         if (r < 0)
                 return r;
 
diff --git a/src/machine/machined-dbus.c b/src/machine/machined-dbus.c
index 0b57a62fd4e..5ab40b04104 100644
--- a/src/machine/machined-dbus.c
+++ b/src/machine/machined-dbus.c
@@ -31,6 +31,7 @@
 #include "cgroup-util.h"
 #include "btrfs-util.h"
 #include "machine-image.h"
+#include "machine-pool.h"
 #include "image-dbus.h"
 #include "machined.h"
 #include "machine-dbus.h"
@@ -799,6 +800,11 @@ static int method_set_pool_limit(sd_bus *bus, sd_bus_message *message, void *use
         if (r == 0)
                 return 1; /* Will call us back */
 
+        /* Set up the machine directory if necessary */
+        r = setup_machine_directory(limit, error);
+        if (r < 0)
+                return r;
+
         r = btrfs_resize_loopback("/var/lib/machines", limit);
         if (r < 0 && r != -ENODEV)
                 return sd_bus_error_set_errnof(error, r, "Failed to adjust loopback limit: %m");
diff --git a/src/shared/machine-pool.c b/src/shared/machine-pool.c
index 7b17395d212..b74252dbc8e 100644
--- a/src/shared/machine-pool.c
+++ b/src/shared/machine-pool.c
@@ -47,7 +47,7 @@ static int check_btrfs(void) {
         return F_TYPE_EQUAL(sfs.f_type, BTRFS_SUPER_MAGIC);
 }
 
-static int setup_machine_raw(sd_bus_error *error) {
+static int setup_machine_raw(uint64_t size, sd_bus_error *error) {
         _cleanup_free_ char *tmp = NULL;
         _cleanup_close_ int fd = -1;
         struct statvfs ss;
@@ -91,7 +91,7 @@ static int setup_machine_raw(sd_bus_error *error) {
                 goto fail;
         }
 
-        if (ftruncate(fd, VAR_LIB_MACHINES_SIZE_START) < 0) {
+        if (ftruncate(fd, size) < 0) {
                 r = sd_bus_error_set_errnof(error, errno, "Failed to enlarge /var/lib/machines.raw: %m");
                 goto fail;
         }
@@ -160,7 +160,7 @@ fail:
         return r;
 }
 
-int setup_machine_directory(sd_bus_error *error) {
+int setup_machine_directory(uint64_t size, sd_bus_error *error) {
         _cleanup_release_lock_file_ LockFile lock_file = LOCK_FILE_INIT;
         struct loop_info64 info = {
                 .lo_flags = LO_FLAGS_AUTOCLEAR,
@@ -171,6 +171,12 @@ int setup_machine_directory(sd_bus_error *error) {
         bool tmpdir_made = false, mntdir_made = false, mntdir_mounted = false;
         int r, nr = -1;
 
+        /* btrfs cannot handle file systems < 16M, hence use this as minimum */
+        if (size == (uint64_t) -1)
+                size = VAR_LIB_MACHINES_SIZE_START;
+        else if (size < 16*1024*1024)
+                size = 16*1024*1024;
+
         /* Make sure we only set the directory up once at a time */
         r = make_lock_file("/run/systemd/machines.lock", LOCK_EX, &lock_file);
         if (r < 0)
@@ -193,7 +199,7 @@ int setup_machine_directory(sd_bus_error *error) {
             dir_is_empty("/var/lib/machines") == 0)
                 return sd_bus_error_setf(error, SD_BUS_ERROR_INVALID_ARGS, "/var/lib/machines is not a btrfs file system. Operation is not supported on legacy file systems.");
 
-        fd = setup_machine_raw(error);
+        fd = setup_machine_raw(size, error);
         if (fd < 0)
                 return fd;
 
diff --git a/src/shared/machine-pool.h b/src/shared/machine-pool.h
index 5f7bc281ebc..9c9849f6183 100644
--- a/src/shared/machine-pool.h
+++ b/src/shared/machine-pool.h
@@ -23,4 +23,4 @@
 
 #include "sd-bus.h"
 
-int setup_machine_directory(sd_bus_error *error);
+int setup_machine_directory(uint64_t size, sd_bus_error *error);