diff --git a/pkg/distro/rhel9/images.go b/pkg/distro/rhel9/images.go
index e04bc95d5e..6604490e1e 100644
--- a/pkg/distro/rhel9/images.go
+++ b/pkg/distro/rhel9/images.go
@@ -480,6 +480,11 @@ func edgeRawImage(workload workload.Workload,
 	}
 	img.PartitionTable = pt
 
+	customServiceFile := createFilesystemMounpointService(customizations)
+	if customServiceFile != nil {
+		img.Files = append(img.Files, customServiceFile)
+	}
+
 	img.Filename = t.Filename()
 	img.Compression = t.compression
 
@@ -537,6 +542,11 @@ func edgeSimplifiedInstallerImage(workload workload.Workload,
 	}
 	rawImg.PartitionTable = pt
 
+	customServiceFile := createFilesystemMounpointService(customizations)
+	if customServiceFile != nil {
+		rawImg.Files = append(rawImg.Files, customServiceFile)
+	}
+
 	rawImg.Filename = t.Filename()
 
 	// 92+ only
@@ -702,3 +712,25 @@ func initialSetupKickstart() *fsnode.File {
 	}
 	return file
 }
+
+// fixes: https://github.com/osbuild/images/issues/352
+// Creates a unit file that create mountpoints if it doesnot exits.
+// This ensures that the filesystem created using image builder continues to work after upgrade.
+func createFilesystemMounpointService(customizations *blueprint.Customizations) *fsnode.File {
+	mntpnts := customizations.GetFilesystems()
+	if mntpnts != nil {
+		customServiceUnit := "[Unit]\nDescription=Create mountpoints if does not exists\nDefaultDependencies=no\n"
+		customService := "[Service]\nType=oneshot\nRemainAfterExit=yes\nExecStartPre=chattr -i /\nExecStopPost=chattr +i /\nExecStart=mkdir -p"
+		for _, mountpoint := range mntpnts {
+			customServiceUnit = customServiceUnit + "ConditionPathExists=|!" + mountpoint.Mountpoint + "\n"
+			customService = customService + " " + mountpoint.Mountpoint
+		}
+		finalCustomService := customServiceUnit + customService + "\n" + "[Install]\nWantedBy=local-fs.target\n"
+		file, err := fsnode.NewFile("/etc/systemd/system/osbuild-ostree-mountpoints.service", nil, nil, nil, []byte(finalCustomService))
+		if err != nil {
+			panic(err)
+		}
+		return file
+	}
+	return nil
+}
diff --git a/pkg/distro/rhel9/imagetype.go b/pkg/distro/rhel9/imagetype.go
index 3589b69809..a9bb74ce56 100644
--- a/pkg/distro/rhel9/imagetype.go
+++ b/pkg/distro/rhel9/imagetype.go
@@ -239,6 +239,12 @@ func (t *imageType) Manifest(bp *blueprint.Blueprint,
 			cw.Services = services.Enabled
 			cw.DisabledServices = services.Disabled
 		}
+		// enable custom-service that creates mountpoints , refer func: createFilesystemMounpointService
+		if t.name == "edge-simplified-installer" || t.name == "edge-raw-image" || t.name == "edge-ami" || t.name == "edge-vsphere" {
+			if filesystemCustomization := bp.Customizations.GetFilesystems(); filesystemCustomization != nil {
+				cw.Services = append(cw.Services, "osbuild-ostree-mountpoints.service")
+			}
+		}
 		w = cw
 	}