diff --git a/src/libstore/local-overlay-store.cc b/src/libstore/local-overlay-store.cc
index 47d09dc75..38c40fbad 100644
--- a/src/libstore/local-overlay-store.cc
+++ b/src/libstore/local-overlay-store.cc
@@ -183,11 +183,27 @@ void LocalOverlayStore::deleteGCPath(const Path & path, uint64_t & bytesFreed)
         warn("local-overlay: unexpected gc path '%s' ", path);
         return;
     }
-    if (pathExists(toUpperPath({path.substr(mergedDir.length())}))) {
-        LocalStore::deleteGCPath(path, bytesFreed);
+
+    StorePath storePath = {path.substr(mergedDir.length())};
+    auto upperPath = toUpperPath(storePath);
+
+    if (pathExists(upperPath)) {
+        std::cerr << "    upper exists" << std::endl;
+        if (lowerStore->isValidPath(storePath)) {
+            std::cerr << "    lower exists" << std::endl;
+            // Path also exists in lower store.
+            // We must delete via upper layer to avoid creating a whiteout.
+            deletePath(upperPath, bytesFreed);
+            _remountRequired = true;
+        } else {
+            // Path does not exist in lower store.
+            // So we can delete via overlayfs and not need to remount.
+            LocalStore::deleteGCPath(path, bytesFreed);
+        }
     }
 }
 
+
 void LocalOverlayStore::optimiseStore()
 {
     Activity act(*logger, actOptimiseStore);
@@ -209,6 +225,7 @@ void LocalOverlayStore::optimiseStore()
     }
 }
 
+
 Path LocalOverlayStore::toRealPathForHardLink(const StorePath & path)
 {
     return lowerStore->isValidPath(path)
@@ -216,6 +233,7 @@ Path LocalOverlayStore::toRealPathForHardLink(const StorePath & path)
         : Store::toRealPath(path);
 }
 
+
 static RegisterStoreImplementation<LocalOverlayStore, LocalOverlayStoreConfig> regLocalOverlayStore;
 
 }
diff --git a/src/libstore/local-overlay-store.hh b/src/libstore/local-overlay-store.hh
index f489c6ed6..ffb310b7b 100644
--- a/src/libstore/local-overlay-store.hh
+++ b/src/libstore/local-overlay-store.hh
@@ -123,6 +123,8 @@ private:
     void optimiseStore() override;
 
     Path toRealPathForHardLink(const StorePath & storePath) override;
+
+    bool _remountRequired = false;
 };
 
 }
diff --git a/tests/overlay-local-store/delete-inner.sh b/tests/overlay-local-store/delete-inner.sh
index 20b39c7fa..051b59d5f 100644
--- a/tests/overlay-local-store/delete-inner.sh
+++ b/tests/overlay-local-store/delete-inner.sh
@@ -28,6 +28,7 @@ lowerInode=$(stat -c %i "$storeA/$lowerPath")
 
 # Now delete file via the overlay store
 nix-store --store "$storeB" --delete "$upperPath"
+remountOverlayfs
 
 # Check there is no longer a file in upper layer
 expect 1 stat "$storeBTop/${upperPath##/nix/store/}"