diff --git a/libpod/runtime_volume_common.go b/libpod/runtime_volume_common.go
index f215667c16..c5cee9b997 100644
--- a/libpod/runtime_volume_common.go
+++ b/libpod/runtime_volume_common.go
@@ -168,16 +168,11 @@ func (r *Runtime) newVolume(ctx context.Context, noCreatePluginVolume bool, opti
 		if err := idtools.SafeChown(volPathRoot, volume.config.UID, volume.config.GID); err != nil {
 			return nil, fmt.Errorf("chowning volume directory %q to %d:%d: %w", volPathRoot, volume.config.UID, volume.config.GID, err)
 		}
-		fullVolPath := filepath.Join(volPathRoot, "_data")
-		if err := os.MkdirAll(fullVolPath, 0755); err != nil {
-			return nil, fmt.Errorf("creating volume directory %q: %w", fullVolPath, err)
-		}
-		if err := idtools.SafeChown(fullVolPath, volume.config.UID, volume.config.GID); err != nil {
-			return nil, fmt.Errorf("chowning volume directory %q to %d:%d: %w", fullVolPath, volume.config.UID, volume.config.GID, err)
-		}
-		if err := LabelVolumePath(fullVolPath, volume.config.MountLabel); err != nil {
-			return nil, err
-		}
+
+		// Setting quotas must happen *before* the _data inner directory
+		// is created, as the volume must be empty for the quota to be
+		// properly applied - if any subdirectories exist before the
+		// quota is applied, the quota will not be applied to them.
 		switch {
 		case volume.config.DisableQuota:
 			if volume.config.Size > 0 || volume.config.Inodes > 0 {
@@ -206,10 +201,20 @@ func (r *Runtime) newVolume(ctx context.Context, noCreatePluginVolume bool, opti
 			// subdirectory - so the quota ID assignment logic works
 			// properly.
 			if err := q.SetQuota(volPathRoot, quota); err != nil {
-				return nil, fmt.Errorf("failed to set size quota size=%d inodes=%d for volume directory %q: %w", volume.config.Size, volume.config.Inodes, fullVolPath, err)
+				return nil, fmt.Errorf("failed to set size quota size=%d inodes=%d for volume directory %q: %w", volume.config.Size, volume.config.Inodes, volPathRoot, err)
 			}
 		}
 
+		fullVolPath := filepath.Join(volPathRoot, "_data")
+		if err := os.MkdirAll(fullVolPath, 0755); err != nil {
+			return nil, fmt.Errorf("creating volume directory %q: %w", fullVolPath, err)
+		}
+		if err := idtools.SafeChown(fullVolPath, volume.config.UID, volume.config.GID); err != nil {
+			return nil, fmt.Errorf("chowning volume directory %q to %d:%d: %w", fullVolPath, volume.config.UID, volume.config.GID, err)
+		}
+		if err := LabelVolumePath(fullVolPath, volume.config.MountLabel); err != nil {
+			return nil, err
+		}
 		volume.config.MountPoint = fullVolPath
 	}
 
diff --git a/rpm/podman.spec b/rpm/podman.spec
index 185a8e804c..02df5efe59 100644
--- a/rpm/podman.spec
+++ b/rpm/podman.spec
@@ -151,6 +151,7 @@ Requires: openssl
 Requires: socat
 Requires: buildah
 Requires: gnupg
+Requires: xfsprogs
 
 %description tests
 %{summary}
diff --git a/test/system/161-volume-quotas.bats b/test/system/161-volume-quotas.bats
new file mode 100644
index 0000000000..8019499509
--- /dev/null
+++ b/test/system/161-volume-quotas.bats
@@ -0,0 +1,78 @@
+#!/usr/bin/env bats   -*- bats -*-
+#
+# podman volume XFS quota tests
+#
+# bats file_tags=distro-integration
+#
+
+load helpers
+
+function setup() {
+    basic_setup
+
+    run_podman '?' volume rm -a
+}
+
+function teardown() {
+    run_podman '?' rm -af -t 0
+    run_podman '?' volume rm -a
+
+    loop=$PODMAN_TMPDIR/disk.img
+    vol_path=$PODMAN_TMPDIR/volpath
+    if [ -f ${loop} ]; then
+        if [ -d ${vol_path} ]; then
+           if mountpoint ${vol_path}; then
+              umount "$vol_path"
+           fi
+           rm -rf "$vol_path"
+        fi
+
+        while read path dev; do
+            if [[ "$path" == "$loop" ]]; then
+                losetup -d $dev
+            fi
+        done < <(losetup -l --noheadings --output BACK-FILE,NAME)
+        rm -f $loop
+    fi
+
+    basic_teardown
+}
+
+@test "podman volumes with XFS quotas" {
+    skip_if_rootless "Quotas are only possible with root"
+    skip_if_remote "Requires --root flag, not possible w/ remote"
+
+    # Minimum XFS filesystem size is 300mb
+    loop=$PODMAN_TMPDIR/disk.img
+    fallocate -l 300m  ${loop}
+    run -0 losetup -f --show $loop
+    loop_dev="$output"
+    mkfs.xfs $loop_dev
+
+    safe_opts=$(podman_isolation_opts ${PODMAN_TMPDIR})
+    vol_path=$PODMAN_TMPDIR/volpath
+    mkdir -p $vol_path
+    safe_opts="$safe_opts --volumepath=$vol_path"
+    mount -t xfs -o defaults,pquota $loop_dev $vol_path
+
+    vol_one="testvol1"
+    run_podman $safe_opts volume create --opt o=size=2m $vol_one
+
+    vol_two="testvol2"
+    run_podman $safe_opts volume create --opt o=size=4m $vol_two
+
+    ctrname="testctr"
+    run_podman $safe_opts run -d --name=$ctrname -i -v $vol_one:/one -v $vol_two:/two $IMAGE top
+
+    run_podman $safe_opts exec $ctrname dd if=/dev/zero of=/one/oneMB bs=1M count=1
+    run_podman 1 $safe_opts exec $ctrname dd if=/dev/zero of=/one/twoMB bs=1M count=1
+    assert "$output" =~ "No space left on device"
+    run_podman $safe_opts exec $ctrname dd if=/dev/zero of=/two/threeMB bs=1M count=3
+    run_podman 1 $safe_opts exec $ctrname dd if=/dev/zero of=/two/oneMB bs=1M count=1
+    assert "$output" =~ "No space left on device"
+
+    run_podman $safe_opts rm -f -t 0 $ctrname
+    run_podman $safe_opts volume rm -af
+}
+
+# vim: filetype=sh
diff --git a/test/system/README.md b/test/system/README.md
index 1800a1fd17..fdd873a655 100644
--- a/test/system/README.md
+++ b/test/system/README.md
@@ -92,6 +92,7 @@ Requirements
 - socat
 - buildah
 - gnupg
+- xfsprogs
 
 
 Further Details