diff --git a/changelog/changes/2023-10-23-squashfs-zstd.md b/changelog/changes/2023-10-23-squashfs-zstd.md
new file mode 100644
index 0000000000..5cb4eb5ee7
--- /dev/null
+++ b/changelog/changes/2023-10-23-squashfs-zstd.md
@@ -0,0 +1 @@
+- linux kernel: added zstd support for squashfs kernel module ([scripts#](https://github.com/flatcar/scripts/pull/1295))
diff --git a/sdk_container/src/third_party/coreos-overlay/sys-kernel/coreos-modules/files/commonconfig-6.1 b/sdk_container/src/third_party/coreos-overlay/sys-kernel/coreos-modules/files/commonconfig-6.1
index 24c15dc8a4..9980f79cbc 100644
--- a/sdk_container/src/third_party/coreos-overlay/sys-kernel/coreos-modules/files/commonconfig-6.1
+++ b/sdk_container/src/third_party/coreos-overlay/sys-kernel/coreos-modules/files/commonconfig-6.1
@@ -854,6 +854,7 @@ CONFIG_SQUASHFS_LZ4=y
 CONFIG_SQUASHFS_LZO=y
 CONFIG_SQUASHFS_XATTR=y
 CONFIG_SQUASHFS_XZ=y
+CONFIG_SQUASHFS_ZSTD=y
 CONFIG_STACKPROTECTOR_STRONG=y
 CONFIG_STRICT_DEVMEM=y
 CONFIG_STRIP_ASM_SYMS=y