diff --git a/.github/workflows/e2e_run_all.yaml b/.github/workflows/e2e_run_all.yaml
index bba0124bf..cea5d57d9 100644
--- a/.github/workflows/e2e_run_all.yaml
+++ b/.github/workflows/e2e_run_all.yaml
@@ -76,6 +76,17 @@ jobs:
       debug: true
     secrets: inherit
 
+  podvm_mkosi_amd64_cloudinit:
+    uses: ./.github/workflows/podvm_mkosi.yaml
+    with:
+      registry: ${{ inputs.registry }}
+      image_tag: ${{ inputs.podvm_image_tag }}
+      git_ref: ${{ inputs.git_ref }}
+      arch: amd64
+      debug: true
+      cloud-init: true
+    secrets: inherit
+
   podvm_mkosi_s390x:
     uses: ./.github/workflows/podvm_mkosi.yaml
     with:
@@ -247,7 +258,7 @@ jobs:
       github.event_name == 'workflow_dispatch' ||
       contains(github.event.pull_request.labels.*.name, 'test_e2e_libvirt') ||
       contains(github.event.pull_request.labels.*.name, 'test_e2e_libvirt_amd64')
-    needs: [podvm_mkosi_amd64, libvirt_e2e_arch_prep, caa_image_amd64]
+    needs: [podvm_mkosi_amd64_cloudinit, libvirt_e2e_arch_prep, caa_image_amd64]
     strategy:
       fail-fast: false
       matrix: ${{ fromJSON(needs.libvirt_e2e_arch_prep.outputs.matrix) }}
@@ -255,7 +266,7 @@ jobs:
     with:
       runner: ubuntu-24.04
       caa_image: ${{ inputs.registry }}/cloud-api-adaptor:${{ inputs.caa_image_tag }}-amd64-dev
-      podvm_image: ${{ needs.podvm_mkosi_amd64.outputs.qcow2_oras_image }}
+      podvm_image: ${{ needs.podvm_mkosi_amd64_cloudinit.outputs.qcow2_oras_image }}
       install_directory_artifact: install_directory
       git_ref: ${{ inputs.git_ref }}
       oras: true
diff --git a/.github/workflows/podvm_mkosi.yaml b/.github/workflows/podvm_mkosi.yaml
index 2cd948d98..472e41f64 100644
--- a/.github/workflows/podvm_mkosi.yaml
+++ b/.github/workflows/podvm_mkosi.yaml
@@ -25,6 +25,11 @@ on:
         default: false
         required: false
         type: boolean
+      cloud-init:
+        description: Whether to build the image with cloudinit enabled
+        default: false
+        required: false
+        type: boolean
 
   workflow_call:
     inputs:
@@ -50,6 +55,11 @@ on:
         default: false
         required: false
         type: boolean
+      cloud-init:
+        description: Whether to build the image with cloudinit enabled
+        default: false
+        required: false
+        type: boolean
     outputs:
       qcow2_oras_image:
         description: The location of the qcow2 oras container this workflow pushed
@@ -250,6 +260,8 @@ jobs:
             echo "Making non-debug image"
             make image
           fi
+        env:
+          CLOUD_INIT: ${{ inputs.cloud-init == true && 'true' || 'false' }}
 
       - name: Upload the qcow2 with oras
         id: publish_oras_qcow2
@@ -263,6 +275,9 @@ jobs:
           if [ "${{inputs.debug}}" = "true" ]; then
             image=${image}-debug
           fi
+          if [ "${{inputs.cloud-init}}" = "true" ]; then
+            image=${image}-cloudinit
+          fi
           tag=${{ steps.image_tag.outputs.image_tag }}
           arch_tag=${tag}_${{ inputs.arch }}
           oras push "${image}:${arch_tag}" podvm.tar.xz
diff --git a/.github/workflows/podvm_publish.yaml b/.github/workflows/podvm_publish.yaml
index 6a5edaeea..5a7e62bd6 100644
--- a/.github/workflows/podvm_publish.yaml
+++ b/.github/workflows/podvm_publish.yaml
@@ -36,10 +36,15 @@ jobs:
     strategy:
       fail-fast: false
       matrix:
-        arch: [amd64, s390x]
+        images: [
+          { amd64: x86_64, cloud-init: false },
+          { arch: s390x,  cloud-init: true }, # Note cloud-init is always used in s390x, so this setting it ignored
+          { amd64: x86_64, cloud-init: true },
+        ]
     with:
       git_ref: ${{ github.sha }}
       image_tag: ${{ github.sha }}
-      arch: ${{ matrix.arch}}
+      arch: ${{ matrix.images.arch }}
+      cloud-init: ${{ matrix.images.cloud-init }}
       debug: false
     secrets: inherit
diff --git a/.github/workflows/release.yaml b/.github/workflows/release.yaml
index 90fca28c5..aaab479fb 100644
--- a/.github/workflows/release.yaml
+++ b/.github/workflows/release.yaml
@@ -59,11 +59,16 @@ jobs:
     strategy:
       fail-fast: false
       matrix:
-        arch: [amd64, s390x]
+        images: [
+          { amd64: x86_64, cloud-init: false },
+          { arch: s390x,  cloud-init: true }, # Note cloud-init is always used in s390x, so this setting it ignored
+          { amd64: x86_64, cloud-init: true },
+        ]
     with:
       image_tag: ${{ github.event.release.tag_name }}
       git_ref: ${{ github.ref }}
-      arch: ${{ matrix.arch}}
+      arch: ${{ matrix.images.arch }}
+      cloudinit: ${{ matrix.images.cloud-init }}
       debug: false
     secrets: inherit
 
diff --git a/src/cloud-api-adaptor/podvm-mkosi/Makefile b/src/cloud-api-adaptor/podvm-mkosi/Makefile
index 867101612..909fda781 100644
--- a/src/cloud-api-adaptor/podvm-mkosi/Makefile
+++ b/src/cloud-api-adaptor/podvm-mkosi/Makefile
@@ -14,6 +14,7 @@ PODVM_BINARIES_IMAGE ?= $(REGISTRY)/podvm-binaries-$(PODVM_DISTRO)-$(ARCH):$(POD
 PODVM_IMAGE ?= $(REGISTRY)/podvm-generic-$(PODVM_DISTRO)$(if $(filter $(SE_BOOT),true),-se,)-$(ARCH):$(PODVM_TAG)
 PODVM_CONTAINER_NAME ?= $(REGISTRY)/podvm-docker-image-$(ARCH)
 VERIFY_PROVENANCE ?= no
+CLOUD_INIT ?= false
 
 PUSH ?= false
 # If not pushing `--load` into the local docker cache
@@ -86,6 +87,11 @@ else ifeq ($(ARCH),s390x)
 	touch resources/buildS390xImage
 	sudo mkosi --profile production.conf --image system
 	sudo -E ../hack/build-s390x-image.sh
+else ifeq ($(CLOUD_INIT),true)
+	touch resources/buildCloudInitImage
+	touch resources/buildBootableImage
+	sudo -E env PATH=$(PATH) nix develop ..#podvm-mkosi --command mkosi --environment=VARIANT_ID=production
+	qemu-img convert -f raw -O qcow2 build/system.raw build/podvm-amd64-cloudinit.qcow2
 else
 	touch resources/buildBootableImage
 	sudo -E env PATH=$(PATH) nix develop ..#podvm-mkosi --command mkosi --environment=VARIANT_ID=production
@@ -109,6 +115,11 @@ else ifeq ($(ARCH),s390x)
 	sudo mkosi --profile debug.conf
 	sudo -E ../hack/build-s390x-image.sh
 	@echo "Building docker image..."
+else ifeq ($(CLOUD_INIT),true)
+	touch resources/buildCloudInitImage
+	touch resources/buildBootableImage
+	sudo -E env PATH=$(PATH) nix develop ..#podvm-mkosi --command mkosi --environment=VARIANT_ID=debug
+	qemu-img convert -f raw -O qcow2 build/system.raw build/podvm-amd64-cloudinit.qcow2
 else
 	touch resources/buildBootableImage
 	sudo -E env PATH=$(PATH) nix develop ..#podvm-mkosi --command mkosi --environment=VARIANT_ID=debug
diff --git a/src/cloud-api-adaptor/podvm-mkosi/mkosi.presets/system/mkosi.conf.d/fedora-cloudinit.conf b/src/cloud-api-adaptor/podvm-mkosi/mkosi.presets/system/mkosi.conf.d/fedora-cloudinit.conf
new file mode 100644
index 000000000..aa388616d
--- /dev/null
+++ b/src/cloud-api-adaptor/podvm-mkosi/mkosi.presets/system/mkosi.conf.d/fedora-cloudinit.conf
@@ -0,0 +1,7 @@
+[Match]
+Distribution=fedora
+
+PathExists=../../resources/buildCloudInitImage
+
+[Content]
+Packages=cloud-init
diff --git a/src/cloud-api-adaptor/podvm-mkosi/mkosi.skeleton/usr/lib/systemd/system-preset/20-coco-sys.preset b/src/cloud-api-adaptor/podvm-mkosi/mkosi.skeleton/usr/lib/systemd/system-preset/20-coco-sys.preset
index c69558105..372ee2307 100644
--- a/src/cloud-api-adaptor/podvm-mkosi/mkosi.skeleton/usr/lib/systemd/system-preset/20-coco-sys.preset
+++ b/src/cloud-api-adaptor/podvm-mkosi/mkosi.skeleton/usr/lib/systemd/system-preset/20-coco-sys.preset
@@ -10,3 +10,7 @@ enable afterburn-checkin.service
 enable sshd.service
 enable sshd-keygen@.service
 enable ssh-host-keys-migration.service
+
+# For cloudinit
+# This unit isn't part of the non-cloudinit image.
+enable cloud-init.service