diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-1.1.2-r1.ebuild b/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-1.2.0.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-1.1.2-r1.ebuild
rename to sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-1.2.0.ebuild
diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-9999.ebuild b/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-9999.ebuild
index 97cab15380..c7d7a44bcc 100644
--- a/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-9999.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/docker-9999.ebuild
@@ -17,8 +17,8 @@ if [[ ${PV} == *9999 ]]; then
 	DOCKER_GITCOMMIT="deadbee"
 	KEYWORDS="~amd64"
 else
-	CROS_WORKON_COMMIT="d84a070e476ce923dd03e28232564a87704613ab" # v1.1.2
-	DOCKER_GITCOMMIT="d84a070"
+	CROS_WORKON_COMMIT="fa7b24f2c3948d1eb52453c609417a6bc7eba5dd" # v1.2.0
+	DOCKER_GITCOMMIT="fa7b24f"
 	KEYWORDS="amd64"
 fi
 
diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/files/docker.service b/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/files/docker.service
index 115f1ad6b6..0a8cea43aa 100644
--- a/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/files/docker.service
+++ b/sdk_container/src/third_party/coreos-overlay/app-emulation/docker/files/docker.service
@@ -10,7 +10,7 @@ LimitNOFILE=1048576
 LimitNPROC=1048576
 # Run docker but don't have docker automatically restart
 # containers. This is a job for systemd and unit files.
-ExecStart=/usr/bin/docker -d -s=btrfs -r=false -H fd://
+ExecStart=/usr/bin/docker --daemon --storage-driver=btrfs --host=fd://
 
 [Install]
 WantedBy=multi-user.target