diff --git a/cmd/zfs/zfs_main.c b/cmd/zfs/zfs_main.c
index 83f02666d..84073435e 100644
--- a/cmd/zfs/zfs_main.c
+++ b/cmd/zfs/zfs_main.c
@@ -5641,7 +5641,6 @@ share_mount_one(zfs_handle_t *zhp, int op, int flags, char *protocol,
 	char mountpoint[ZFS_MAXPROPLEN];
 	char shareopts[ZFS_MAXPROPLEN];
 	char smbshareopts[ZFS_MAXPROPLEN];
-	char overlay[ZFS_MAXPROPLEN];
 	const char *cmdname = op == OP_SHARE ? "share" : "mount";
 	struct mnttab mnt;
 	uint64_t zoned, canmount;
@@ -5748,19 +5747,6 @@ share_mount_one(zfs_handle_t *zhp, int op, int flags, char *protocol,
 		return (0);
 	}
 
-	/*
-	 * Overlay mounts are disabled by default but may be enabled
-	 * via the 'overlay' property or the 'zfs mount -O' option.
-	 */
-	if (!(flags & MS_OVERLAY)) {
-		if (zfs_prop_get(zhp, ZFS_PROP_OVERLAY, overlay,
-			    sizeof (overlay), NULL, NULL, 0, B_FALSE) == 0) {
-			if (strcmp(overlay, "on") == 0) {
-				flags |= MS_OVERLAY;
-			}
-		}
-	}
-
 	/*
 	 * At this point, we have verified that the mountpoint and/or
 	 * shareopts are appropriate for auto management. If the
diff --git a/lib/libzfs/libzfs_mount.c b/lib/libzfs/libzfs_mount.c
index ac3b68226..0e3332e0e 100644
--- a/lib/libzfs/libzfs_mount.c
+++ b/lib/libzfs/libzfs_mount.c
@@ -388,6 +388,7 @@ zfs_mount(zfs_handle_t *zhp, const char *options, int flags)
 	struct stat buf;
 	char mountpoint[ZFS_MAXPROPLEN];
 	char mntopts[MNT_LINE_MAX];
+	char overlay[ZFS_MAXPROPLEN];
 	libzfs_handle_t *hdl = zhp->zfs_hdl;
 	int remount = 0, rc;
 
@@ -441,6 +442,19 @@ zfs_mount(zfs_handle_t *zhp, const char *options, int flags)
 		}
 	}
 
+	/*
+	 * Overlay mounts are disabled by default but may be enabled
+	 * via the 'overlay' property or the 'zfs mount -O' option.
+	 */
+	if (!(flags & MS_OVERLAY)) {
+		if (zfs_prop_get(zhp, ZFS_PROP_OVERLAY, overlay,
+			    sizeof (overlay), NULL, NULL, 0, B_FALSE) == 0) {
+			if (strcmp(overlay, "on") == 0) {
+				flags |= MS_OVERLAY;
+			}
+		}
+	}
+
 	/*
 	 * Determine if the mountpoint is empty.  If so, refuse to perform the
 	 * mount.  We don't perform this check if 'remount' is