diff --git a/libpod/container_internal_common.go b/libpod/container_internal_common.go
index 07627abd1e..3ce372313e 100644
--- a/libpod/container_internal_common.go
+++ b/libpod/container_internal_common.go
@@ -2882,8 +2882,13 @@ func (c *Container) fixVolumePermissions(v *ContainerNamedVolume) error {
 			return err
 		}
 
-		// Make sure the new volume matches the permissions of the target directory.
+		// Make sure the new volume matches the permissions of the target directory unless 'U' is
+		// provided (since the volume was already chowned in this case).
 		// https://github.com/containers/podman/issues/10188
+		if slices.Contains(v.Options, "U") {
+			return nil
+		}
+
 		st, err := os.Lstat(filepath.Join(c.state.Mountpoint, v.Dest))
 		if err == nil {
 			if stat, ok := st.Sys().(*syscall.Stat_t); ok {
diff --git a/test/e2e/run_volume_test.go b/test/e2e/run_volume_test.go
index 4e777d62ef..8d17f4af63 100644
--- a/test/e2e/run_volume_test.go
+++ b/test/e2e/run_volume_test.go
@@ -740,15 +740,6 @@ VOLUME /test/`, ALPINE)
 			Skip("cannot find mappings for the current user")
 		}
 
-		if os.Getenv("container") != "" {
-			Skip("Overlay mounts not supported when running in a container")
-		}
-		if isRootless() {
-			if _, err := exec.LookPath("fuse_overlay"); err != nil {
-				Skip("Fuse-Overlayfs required for rootless overlay mount test")
-			}
-		}
-
 		mountPath := filepath.Join(podmanTest.TempDir, "secrets")
 		err = os.Mkdir(mountPath, 0755)
 		Expect(err).ToNot(HaveOccurred())
@@ -759,6 +750,12 @@ VOLUME /test/`, ALPINE)
 		Expect(session).Should(ExitCleanly())
 		Expect(session.OutputToString()).To(ContainSubstring("888:888"))
 
+		// test with an existing directory in the image
+		session = podmanTest.Podman([]string{"run", "--rm", "--user", "881:882", "-v", "NAMED-VOLUME:/mnt:U", ALPINE, "stat", "-c", "%u:%g", "/mnt"})
+		session.WaitWithDefaultTimeout()
+		Expect(session).Should(ExitCleanly())
+		Expect(session.OutputToString()).To(ContainSubstring("881:882"))
+
 		session = podmanTest.Podman([]string{"run", "--rm", "--user", "888:888", "--userns", "auto", "-v", vol, ALPINE, "stat", "-c", "%u:%g", dest})
 		session.WaitWithDefaultTimeout()
 		Expect(session).Should(ExitCleanly())