diff --git a/sdk_container/src/third_party/coreos-overlay/coreos/config/env/sys-fs/zfs-kmod b/sdk_container/src/third_party/coreos-overlay/coreos/config/env/sys-fs/zfs-kmod
index d9059b9386..5f7fa2a9a8 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos/config/env/sys-fs/zfs-kmod
+++ b/sdk_container/src/third_party/coreos-overlay/coreos/config/env/sys-fs/zfs-kmod
@@ -1,6 +1,11 @@
 : ${MODULES_ROOT:=$(echo ${SYSROOT}/lib/modules/*)}
 KERNEL_DIR="${MODULES_ROOT}/build"
 
+# This addresses an issue with the kernel version compatibility check
+#  when installing zfs-kmod to /build/<arch> (e.g. via build_packages)
+#  from its binpkg (i.e. not recompiling it).
+SKIP_KERNEL_BINPKG_ENV_RESET=1
+
 # Necessary to prevent KV_FULL & KV_OUT_DIR from being unset
 # when building Kernel modules for sysext. See also eclass/linux-info.eclass.
 cros_pre_pkg_setup_kernel_version() {