diff --git a/pkg/controller/kubelet-config/helpers.go b/pkg/controller/kubelet-config/helpers.go
index 1e3aab5bb0..667a0298fa 100644
--- a/pkg/controller/kubelet-config/helpers.go
+++ b/pkg/controller/kubelet-config/helpers.go
@@ -28,6 +28,7 @@ func createNewKubeletDynamicSystemReservedIgnition(autoSystemReserved *bool, use
 	var autoNodeSizing string
 	var systemReservedMemory string
 	var systemReservedCPU string
+	var systemReservedEphemeralStorage string
 
 	if autoSystemReserved == nil {
 		autoNodeSizing = "false"
@@ -35,19 +36,26 @@ func createNewKubeletDynamicSystemReservedIgnition(autoSystemReserved *bool, use
 		autoNodeSizing = strconv.FormatBool(*autoSystemReserved)
 	}
 
-	if val, ok := userDefinedSystemReserved["memory"]; ok {
+	if val, ok := userDefinedSystemReserved["memory"]; ok && val != "" {
 		systemReservedMemory = val
 	} else {
 		systemReservedMemory = "1Gi"
 	}
 
-	if val, ok := userDefinedSystemReserved["cpu"]; ok {
+	if val, ok := userDefinedSystemReserved["cpu"]; ok && val != "" {
 		systemReservedCPU = val
 	} else {
 		systemReservedCPU = "500m"
 	}
 
-	config := fmt.Sprintf("NODE_SIZING_ENABLED=%s\nSYSTEM_RESERVED_MEMORY=%s\nSYSTEM_RESERVED_CPU=%s\n", autoNodeSizing, systemReservedMemory, systemReservedCPU)
+	if val, ok := userDefinedSystemReserved["ephemeral-storage"]; ok && val != "" {
+		systemReservedEphemeralStorage = val
+	} else {
+		systemReservedEphemeralStorage = "1Gi"
+	}
+
+	config := fmt.Sprintf("NODE_SIZING_ENABLED=%s\nSYSTEM_RESERVED_MEMORY=%s\nSYSTEM_RESERVED_CPU=%s\nSYSTEM_RESERVED_ES=%s\n",
+		autoNodeSizing, systemReservedMemory, systemReservedCPU, systemReservedEphemeralStorage)
 
 	mode := 0644
 	overwrite := true
diff --git a/pkg/controller/kubelet-config/kubelet_config_controller.go b/pkg/controller/kubelet-config/kubelet_config_controller.go
index e69a18cecc..d84b4abf27 100644
--- a/pkg/controller/kubelet-config/kubelet_config_controller.go
+++ b/pkg/controller/kubelet-config/kubelet_config_controller.go
@@ -438,6 +438,7 @@ func (ctrl *Controller) addAnnotation(cfg *mcfgv1.KubeletConfig, annotationKey,
 
 // syncKubeletConfig will sync the kubeletconfig with the given key.
 // This function is not meant to be invoked concurrently with the same key.
+//
 //nolint:gocyclo
 func (ctrl *Controller) syncKubeletConfig(key string) error {
 	startTime := time.Now()
@@ -578,6 +579,11 @@ func (ctrl *Controller) syncKubeletConfig(key string) error {
 				delete(specKubeletConfig.SystemReserved, "cpu")
 			}
 
+			if val, ok := specKubeletConfig.SystemReserved["ephemeral-storage"]; ok {
+				userDefinedSystemReserved["ephemeral-storage"] = val
+				delete(specKubeletConfig.SystemReserved, "ephemeral-storage")
+			}
+
 			// FeatureGates must be set from the FeatureGate.
 			// Remove them here to prevent the specKubeletConfig merge overwriting them.
 			specKubeletConfig.FeatureGates = nil
diff --git a/templates/common/_base/files/kubelet-auto-node-sizing-enabled.yaml b/templates/common/_base/files/kubelet-auto-node-sizing-enabled.yaml
index f5c28c1ca9..d1c72a540f 100644
--- a/templates/common/_base/files/kubelet-auto-node-sizing-enabled.yaml
+++ b/templates/common/_base/files/kubelet-auto-node-sizing-enabled.yaml
@@ -4,4 +4,5 @@ contents:
   inline: |
     NODE_SIZING_ENABLED=false
     SYSTEM_RESERVED_MEMORY=1Gi
-    SYSTEM_RESERVED_CPU=500m
\ No newline at end of file
+    SYSTEM_RESERVED_CPU=500m
+    SYSTEM_RESERVED_ES=1Gi
\ No newline at end of file
diff --git a/templates/common/_base/files/kubelet-auto-sizing.yaml b/templates/common/_base/files/kubelet-auto-sizing.yaml
index 747180383d..2b257187cc 100644
--- a/templates/common/_base/files/kubelet-auto-sizing.yaml
+++ b/templates/common/_base/files/kubelet-auto-sizing.yaml
@@ -77,23 +77,46 @@ contents:
     function dynamic_pid_sizing {
         echo "Not implemented yet"
     }
+    function set_memory {
+        SYSTEM_RESERVED_MEMORY=$1
+        if [ -z "${SYSTEM_RESERVED_MEMORY}" ]; then
+            SYSTEM_RESERVED_MEMORY="1Gi"
+        fi
+        echo "SYSTEM_RESERVED_MEMORY=${SYSTEM_RESERVED_MEMORY}" >> ${NODE_SIZES_ENV}
+    }
+    function set_cpu {
+        SYSTEM_RESERVED_CPU=$1
+        if [ -z "${SYSTEM_RESERVED_CPU}" ]; then
+            SYSTEM_RESERVED_CPU="500m"
+        fi
+        echo "SYSTEM_RESERVED_CPU=${SYSTEM_RESERVED_CPU}" >> ${NODE_SIZES_ENV}
+    }
+    function set_es {
+        SYSTEM_RESERVED_ES=$1
+        if [ -z "${SYSTEM_RESERVED_ES}" ]; then
+            SYSTEM_RESERVED_ES="1Gi"
+        fi
+        echo "SYSTEM_RESERVED_ES=${SYSTEM_RESERVED_ES}" >> ${NODE_SIZES_ENV}
+    }
     function dynamic_node_sizing {
         rm -f ${NODE_SIZES_ENV}
         dynamic_memory_sizing
         dynamic_cpu_sizing
+        set_es $1
         #dynamic_ephemeral_sizing
         #dynamic_pid_sizing
     }
     function static_node_sizing {
         rm -f ${NODE_SIZES_ENV}
-        echo "SYSTEM_RESERVED_MEMORY=$1" >> ${NODE_SIZES_ENV}
-        echo "SYSTEM_RESERVED_CPU=$2" >> ${NODE_SIZES_ENV}
+        set_memory $1
+        set_cpu $2
+        set_es $3
     }
 
     if [ $1 == "true" ]; then
-        dynamic_node_sizing
+        dynamic_node_sizing $4
     elif [ $1 == "false" ]; then
-        static_node_sizing $2 $3
+        static_node_sizing $2 $3 $4
     else
         echo "Unrecongnized command line option. Valid options are \"true\" or \"false\""
     fi
diff --git a/templates/common/_base/units/kubelet-auto-node-size.service.yaml b/templates/common/_base/units/kubelet-auto-node-size.service.yaml
index 52dce600df..96485f4390 100644
--- a/templates/common/_base/units/kubelet-auto-node-size.service.yaml
+++ b/templates/common/_base/units/kubelet-auto-node-size.service.yaml
@@ -11,6 +11,6 @@ contents: |
   Type=oneshot
   RemainAfterExit=yes
   EnvironmentFile=/etc/node-sizing-enabled.env
-  ExecStart=/bin/bash /usr/local/sbin/dynamic-system-reserved-calc.sh ${NODE_SIZING_ENABLED} ${SYSTEM_RESERVED_MEMORY} ${SYSTEM_RESERVED_CPU}
+  ExecStart=/bin/bash /usr/local/sbin/dynamic-system-reserved-calc.sh ${NODE_SIZING_ENABLED} ${SYSTEM_RESERVED_MEMORY} ${SYSTEM_RESERVED_CPU} ${SYSTEM_RESERVED_ES}
   [Install]
   RequiredBy=kubelet.service
diff --git a/templates/master/01-master-kubelet/_base/files/kubelet.yaml b/templates/master/01-master-kubelet/_base/files/kubelet.yaml
index 4181bbe2cf..6be322eb6d 100644
--- a/templates/master/01-master-kubelet/_base/files/kubelet.yaml
+++ b/templates/master/01-master-kubelet/_base/files/kubelet.yaml
@@ -22,8 +22,6 @@ contents:
     serializeImagePulls: false
     staticPodPath: /etc/kubernetes/manifests
     systemCgroups: /system.slice
-    systemReserved:
-      ephemeral-storage: 1Gi
     featureGates:
       APIPriorityAndFairness: true
       LegacyNodeRoleBehavior: false
diff --git a/templates/master/01-master-kubelet/_base/units/kubelet.service.yaml b/templates/master/01-master-kubelet/_base/units/kubelet.service.yaml
index 3d52dff415..4bb9f50d9b 100644
--- a/templates/master/01-master-kubelet/_base/units/kubelet.service.yaml
+++ b/templates/master/01-master-kubelet/_base/units/kubelet.service.yaml
@@ -42,7 +42,7 @@ contents: |
         --hostname-override=${KUBELET_NODE_NAME} \
         --register-with-taints=node-role.kubernetes.io/master=:NoSchedule \
         --pod-infra-container-image={{.Images.infraImageKey}} \
-        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY} \
+        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY},ephemeral-storage=${SYSTEM_RESERVED_ES} \
         --v=${KUBELET_LOG_LEVEL}
 
   Restart=always
diff --git a/templates/master/01-master-kubelet/on-prem/units/kubelet.service.yaml b/templates/master/01-master-kubelet/on-prem/units/kubelet.service.yaml
index 113a1c98f8..75d8227c00 100644
--- a/templates/master/01-master-kubelet/on-prem/units/kubelet.service.yaml
+++ b/templates/master/01-master-kubelet/on-prem/units/kubelet.service.yaml
@@ -40,7 +40,7 @@ contents: |
         --hostname-override=${KUBELET_NODE_NAME} \
         --register-with-taints=node-role.kubernetes.io/master=:NoSchedule \
         --pod-infra-container-image={{.Images.infraImageKey}} \
-        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY} \
+        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY},ephemeral-storage=${SYSTEM_RESERVED_ES} \
         --v=${KUBELET_LOG_LEVEL}
 
   Restart=always
diff --git a/templates/worker/01-worker-kubelet/_base/files/kubelet.yaml b/templates/worker/01-worker-kubelet/_base/files/kubelet.yaml
index 4181bbe2cf..6be322eb6d 100644
--- a/templates/worker/01-worker-kubelet/_base/files/kubelet.yaml
+++ b/templates/worker/01-worker-kubelet/_base/files/kubelet.yaml
@@ -22,8 +22,6 @@ contents:
     serializeImagePulls: false
     staticPodPath: /etc/kubernetes/manifests
     systemCgroups: /system.slice
-    systemReserved:
-      ephemeral-storage: 1Gi
     featureGates:
       APIPriorityAndFairness: true
       LegacyNodeRoleBehavior: false
diff --git a/templates/worker/01-worker-kubelet/_base/units/kubelet.service.yaml b/templates/worker/01-worker-kubelet/_base/units/kubelet.service.yaml
index 787337f1fc..eb214d2bed 100644
--- a/templates/worker/01-worker-kubelet/_base/units/kubelet.service.yaml
+++ b/templates/worker/01-worker-kubelet/_base/units/kubelet.service.yaml
@@ -41,7 +41,7 @@ contents: |
         {{cloudConfigFlag . }} \
         --hostname-override=${KUBELET_NODE_NAME} \
         --pod-infra-container-image={{.Images.infraImageKey}} \
-        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY} \
+        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY},ephemeral-storage=${SYSTEM_RESERVED_ES} \
         --v=${KUBELET_LOG_LEVEL}
 
   Restart=always
diff --git a/templates/worker/01-worker-kubelet/on-prem/units/kubelet.service.yaml b/templates/worker/01-worker-kubelet/on-prem/units/kubelet.service.yaml
index ddb91e0c4a..731fc00d7e 100644
--- a/templates/worker/01-worker-kubelet/on-prem/units/kubelet.service.yaml
+++ b/templates/worker/01-worker-kubelet/on-prem/units/kubelet.service.yaml
@@ -39,7 +39,7 @@ contents: |
         {{cloudConfigFlag . }} \
         --hostname-override=${KUBELET_NODE_NAME} \
         --pod-infra-container-image={{.Images.infraImageKey}} \
-        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY} \
+        --system-reserved=cpu=${SYSTEM_RESERVED_CPU},memory=${SYSTEM_RESERVED_MEMORY},ephemeral-storage=${SYSTEM_RESERVED_ES} \
         --v=${KUBELET_LOG_LEVEL}
 
   Restart=always