diff --git a/dracut b/dracut
index 27e8a2f..14612b1 160000
--- a/dracut
+++ b/dracut
@@ -1 +1 @@
-Subproject commit 27e8a2f6a961b8478f6a33169df0261e92d78ed5
+Subproject commit 14612b15abcb5c91c1b327eb1fde1f169182750f
diff --git a/gen-installer.sh b/gen-installer.sh
index 0f49380..336a644 100755
--- a/gen-installer.sh
+++ b/gen-installer.sh
@@ -12,6 +12,8 @@ source lib.bash
 ARCH=${ARCH:-$(dpkg --print-architecture)}
 # Topic parameter to pass to aoscbootstrap
 TOPIC_OPT=
+# Filesystem type.
+FSTYPE="${FSTYPE:-erofs}"
 # Path to aoscbootstrap scripts and recipes
 AOSCBOOTSTRAP=${AOSCBOOTSTRAP:-/usr/share/aoscbootstrap}
 # Package repository to download packages from.
@@ -20,6 +22,8 @@ REPO=${REPO:-https://repo.aosc.io/debs}
 WORKDIR=${WORKDIR:-$PWD/work}
 # Output directory.
 OUTDIR=${OUTDIR:-$PWD/iso}
+# Prefix directory for layers, templates and configuration.
+OUT_PREFIX="$OUTDIR"/livekit
 # Layers.
 LAYERS=("desktop-common" "livekit" "desktop" "desktop-nvidia")
 LAYERS_NONVIDIA=("desktop-common" "livekit" "desktop")
@@ -301,15 +305,13 @@ squash_layer() {
 		return
 	fi
 	info "Squashing layer $tgt ..."
-	pushd "$WORKDIR/$tgt"
 	if [ "x$1" = "xbase" ] ; then
-		outfile="${OUTDIR}/squashfs/$tgt.squashfs"
+		outfile="${OUT_PREFIX}/$tgt.$FSTYPE"
 	else
-		outfile="${OUTDIR}/squashfs/layers/$tgt.squashfs"
+		outfile="${OUT_PREFIX}/layers/$tgt.$FSTYPE"
 	fi
-	mksquashfs . ${outfile} \
-		-noappend -comp xz -processors $(nproc)
-	popd
+	packfs "$FSTYPE" "$outfile" "$WORKDIR"/"$tgt" || \
+		die "Failed to pack layer into an filesystem image."
 }
 
 pack_templates() {
@@ -347,11 +349,9 @@ pack_templates() {
 	info "Umounting template layer ..."
 	umount ${WORKDIR}/$tgt-template-merged
 	info "Squashing template layer ..."
-	outfile=${OUTDIR}/squashfs/templates/$tgt.squashfs
-	pushd ${WORKDIR}/$tgt-template
-	mksquashfs . ${outfile} \
-		-noappend -comp xz -processors $(nproc)
-	popd
+	outfile=${OUT_PREFIX}/templates/"$tgt"."$FSTYPE"
+	packfs "$FSTYPE" "$outfile" "${WORKDIR}"/"$tgt"-template || \
+		die "Failed to pack the template into a filesystem image."
 }
 
 get_info() {
@@ -401,12 +401,12 @@ prepare() {
 	done
 	mkdir -pv ${WORKDIR}/merged
 	mkdir -pv ${OUTDIR}/manifest
-	mkdir -pv ${OUTDIR}/squashfs/layers
-	mkdir -pv ${OUTDIR}/squashfs/templates
+	mkdir -pv ${OUT_PREFIX}/layers
+	mkdir -pv ${OUT_PREFIX}/templates
 	# File for gen-recipe.py to read. Contains recipe information.
 	touch ${OUTDIR}/sysroots.ini
 	# File for the dracut loader to read. Contains layers and their dependencies.
-	touch ${OUTDIR}/squashfs/layers.conf
+	touch ${OUT_PREFIX}/livekit.conf
 	if [ "x$TOPICS" != "x" ] ; then
 		for t in $TOPICS ; do
 			info "Will opt in topic '$t'."
@@ -458,7 +458,9 @@ cat > ${OUTDIR}/sysroots.ini << EOF
 sysroots=${AVAIL_SYSROOTS1[@]}
 
 EOF
-cat > ${OUTDIR}/squashfs/layers.conf << EOF
+cat > ${OUT_PREFIX}/livekit.conf << EOF
+# Filesystem type.
+FSTYPE="$FSTYPE"
 # All available layers.
 LAYERS=$(dump_array AVAIL_LAYERS)
 # All possible sysroots these layers combine to.
@@ -474,9 +476,9 @@ SYSROOT_DEP_desktop_nvidia=("base" "desktop-common" "desktop" "desktop-nvidia")
 SYSROOT_DEP_desktop_latx=("base" "desktop-common" "desktop" "desktop-latx")
 SYSROOT_DEP_livekit_nvidia=("base" "desktop-common" "desktop-nvidia" "livekit")
 
-TEMPLATE_desktop_nvidia="desktop.squashfs"
-TEMPLATE_desktop_latx="desktop.squashfs"
-TEMPLATE_livekit_nvidia="livekit.squashfs"
+TEMPLATE_desktop_nvidia="desktop.$FSTYPE"
+TEMPLATE_desktop_latx="desktop.$FSTYPE"
+TEMPLATE_livekit_nvidia="livekit.$FSTYPE"
 EOF
 bootstrap_base
 get_info base
@@ -503,8 +505,8 @@ info "Downloading translated recipe ..."
 curl -Lo "$OUTDIR"/manifest/recipe-i18n.json https://releases.aosc.io/manifest/recipe-i18n.json
 
 info "Copying hooks ..."
-cp -av ${PWD}/hooks ${OUTDIR}/squashfs/
+cp -av ${PWD}/hooks ${OUT_PREFIX}/
 
 info "Build successful!"
 tree -h ${OUTDIR}
-info "Total image size: $(du -sh ${OUTDIR}/squashfs | awk '{ print $1 }')"
+info "Total image size: $(du -sh ${OUT_PREFIX} | awk '{ print $1 }')"
diff --git a/gen-livekit.sh b/gen-livekit.sh
index 76d7c0c..8a9655e 100755
--- a/gen-livekit.sh
+++ b/gen-livekit.sh
@@ -1,14 +1,8 @@
 #!/bin/bash
 # New LiveKit generator.
 # This "new" LiveKit will use our dracut loader to load the LiveKit.
-
+set -e
 source lib.bash
-# Config file for the dracut loader.
-CONF="# AOSC OS LiveKit config for LiveKit loader.
-# The LiveKit itself is the base layer.
-# No more configuration required!
-SYSROOT_DEP_base=('base')
-"
 
 # Set of '--topics TOPIC' options to be passed to aoscbootstrap.
 TOPICS_OPT=
@@ -17,13 +11,14 @@ WORKDIR=${PWD}/work
 ISODIR=${PWD}/iso
 AOSCBOOTSTRAP=${AOSCBOOTSTRAP:-/usr/share/aoscbootstrap}
 FSTYPE=${FSTYPE:-squashfs}
+OUT_PREFIX="$ISODIR"/livekit
 
 info "Generating LiveKit distribution ..."
 
 info "Preparing ..."
 rm -rf iso work
 mkdir -p $WORKDIR/livekit
-mkdir -p $ISODIR/$FSTYPE
+mkdir -p $ISODIR/livekit
 # We have to pack up the dracut module and copy into the target sysroot
 # where it will be untarred and installed into initrd.
 tar cf $WORKDIR/livekit/dracut.tar dracut
@@ -107,16 +102,23 @@ if [[ "${RETRO}" != "1" ]]; then
 	fi
 fi
 
+# Config file for the dracut loader.
+CONF="# AOSC OS LiveKit config for LiveKit loader.
+# The LiveKit itself is the base layer.
+# No more configuration required!
+FSTYPE="$FSTYPE"
+SYSROOT_DEP_base=('base')
+"
 info "Squashing rootfs ..."
-packfs "$FSTYPE" "$ISODIR"/"$FSTYPE"/base.squashfs "$WORKDIR"/livekit
+packfs "$FSTYPE" "$OUT_PREFIX"/base."$FSTYPE" "$WORKDIR"/livekit
 
 info "Installing GRUB config files ..."
 make -C "$PWD"/boot/grub install TARGET=livekit
 
 info "Writing config file ..."
-echo "$CONF" > $ISODIR/$FSTYPE/layers.conf
+echo "$CONF" > "$OUT_PREFIX"/livekit.conf
 
 info "Copying hooks ..."
-cp -a "$PWD"/hooks $ISODIR/$FSTYPE/
+cp -a "$PWD"/hooks "$OUT_PREFIX"/
 
 info "Done generating the LiveKit image!"
diff --git a/lib.bash b/lib.bash
index f030e40..9dbe213 100644
--- a/lib.bash
+++ b/lib.bash
@@ -8,6 +8,11 @@ export LANG=C.UTF-8
 export LANGUAGE=C.UTF-8
 export LC_ALL=C.UTF-8
 
+if [ "$LOCAL_TESTING" = "1" ] ; then
+	SQUASHFS_COMP=none
+	EROFS_COMP=none
+fi
+
 info() {
 	echo -e "\033[1;37m[\033[36mINFO\033[37m]: $@\033[0m"
 }
@@ -21,6 +26,84 @@ die() {
 	exit 1
 }
 
+pack_squashfs() {
+	local _comp outfile="$1" rootpath="$2"
+	pushd "$WORKDIR/$tgt"
+	case "${SQUASHFS_COMP:-xz}" in
+		none)
+			_comp="-no-compression"
+			;;
+		xz)
+			_comp="-comp xz"
+			;;
+		zstd)
+			# Default level is 15.
+			_comp="-comp zstd"
+			;;
+		lz4hc)
+			_comp="-comp lz4 -Xhc"
+			;;
+		*)
+			die "Unsupported compression method '$SQUASHFS_COMP'."
+			;;
+	esac
+	pushd "$rootpath"
+	mksquashfs . ${outfile} \
+		-noappend $_comp -processors $(nproc)
+	popd
+}
+
+pack_erofs() {
+	local _pagesize _comp outfile="$1" srcdir="$2"
+	info "Creating an EROFS image \"$outfile\" from \"$srcdir\" ..."
+	# Kernels with larger page size can mount images with smaller block
+	# sizes. It does not work vice versa.
+	case "$ARCH" in
+		loongarch64|loongson3)
+			# The installer uses 16K kernel
+			_pagesize=16384
+			;;
+		ppc64el)
+			_pagesize=65536
+			;;
+		*)
+			# This is where the problem ocurrs:
+			# We may use a machine running a 16K kernel to
+			# generate EROFS images, which can not be mounted
+			# using a 4KB kernel.
+			_pagesize=4096
+			;;
+	esac
+	case "${EROFS_COMP:-lzma}" in
+		lzma)
+			_comp="-zlzma,level=6"
+			;;
+		lz4hc)
+			_comp="-zlz4hc,level=9"
+			;;
+		zstd)
+			# zstd uses level 1 to 19.
+			_comp="-zzstd,level=9"
+			;;
+		none)
+			_comp=""
+			;;
+		*)
+			die "Unsupported EROFS compression method."
+			;;
+	esac
+	# Use a larger cluster size for better compression.
+	# -E ztailpacking: Embed fragmented file contents into metadata
+	#                  blocks.
+	# # -E fragments: Pack small enough files into a special inode.
+	# The two options above makes it behave like how NTFS stores smaller
+	# files.
+	mkfs.erofs "$outfile" "$srcdir" \
+		-b "$_pagesize" \
+		-C 1048576 $_comp --worker $(nproc) -E fragments,ztailpacking
+}
+
+
 # $1: fstype
 # $2: Output file
 # $3: Path used as root (can not be a file)
@@ -45,26 +128,11 @@ packfs() {
 		squashfs)
 			pack_squashfs "$outfile" "$rootpath"
 			;;
+		erofs)
+			pack_erofs "$outfile" "$rootpath"
+			;;
 		*)
 			die "Unknown filesystem type '$fstype'."
 			;;
 	esac
 }
-
-# $1: Output file
-# $2: Path used as root (can not be a file)
-pack_squashfs() {
-	local rootpath outfile comp
-	outfile="$1"
-	rootpath="$2"
-	if [ "$LOCAL_TESTING" = "1" ] ; then
-		comp="-no-compression"
-	else
-		comp="-comp xz"
-	fi
-	info "Packing squashfs from '$rootpath' to '$outfile' ..."
-	pushd "$rootpath"
-	mksquashfs . ${outfile} \
-		-noappend $comp -processors $(nproc)
-	popd
-}