diff --git a/__tests__/docker/install.test.itg.ts b/__tests__/docker/install.test.itg.ts
index c061afb..822da61 100644
--- a/__tests__/docker/install.test.itg.ts
+++ b/__tests__/docker/install.test.itg.ts
@@ -41,8 +41,9 @@ aarch64:https://cloud.debian.org/images/cloud/bookworm/20231013-1532/debian-12-g
   });
   // prettier-ignore
   test.each([
-    {type: 'archive', version: 'v26.1.4', channel: 'stable'} as InstallSourceArchive,
     {type: 'image', tag: '27.3.1'} as InstallSourceImage,
+    {type: 'image', tag: 'master'} as InstallSourceImage,
+    {type: 'archive', version: 'v26.1.4', channel: 'stable'} as InstallSourceArchive,
   ])(
     'install docker %s', async (source) => {
       if (process.env.ImageOS && process.env.ImageOS.startsWith('ubuntu')) {
@@ -56,18 +57,19 @@ aarch64:https://cloud.debian.org/images/cloud/bookworm/20231013-1532/debian-12-g
           }
         });
       }
+      const install = new Install({
+        source: source,
+        runDir: tmpDir,
+        contextName: 'foo',
+        daemonConfig: `{"debug":true,"features":{"containerd-snapshotter":true}}`
+      });
       await expect((async () => {
-        const install = new Install({
-          source: source,
-          runDir: tmpDir,
-          contextName: 'foo',
-          daemonConfig: `{"debug":true,"features":{"containerd-snapshotter":true}}`
-        });
         await install.download();
         await install.install();
         await Docker.printVersion();
         await Docker.printInfo();
+      })().finally(async () => {
         await install.tearDown();
-      })()).resolves.not.toThrow();
-    }, 1200000);
+      })).resolves.not.toThrow();
+    }, 30 * 60 * 1000);
 });
diff --git a/src/docker/assets.ts b/src/docker/assets.ts
index 15e39c2..00f7332 100644
--- a/src/docker/assets.ts
+++ b/src/docker/assets.ts
@@ -221,16 +221,49 @@ provision:
     EOF
     fi
     export DEBIAN_FRONTEND=noninteractive
-    curl -fsSL https://get.docker.com | sh -s -- --channel {{dockerBinChannel}} --version {{dockerBinVersion}}
+    if [ "{{srcType}}" == "archive" ]; then
+      curl -fsSL https://get.docker.com | sh -s -- --channel {{srcArchiveChannel}} --version {{srcArchiveVersion}}
+    elif [ "{{srcType}}" == "image" ]; then
+      arch=$(uname -m)
+      case $arch in
+        x86_64) arch=amd64;;
+        aarch64) arch=arm64;;
+      esac
+      url="https://github.com/crazy-max/undock/releases/download/v0.8.0/undock_0.8.0_linux_$arch.tar.gz"
+
+      wget "$url" -O /tmp/undock.tar.gz
+      tar -C /usr/local/bin -xvf /tmp/undock.tar.gz
+      undock --version
+
+      HOME=/tmp undock moby/moby-bin:{{srcImageTag}} /usr/local/bin
+
+      wget https://raw.githubusercontent.com/moby/moby/{{srcImageTag}}/contrib/init/systemd/docker.service \
+        https://raw.githubusercontent.com/moby/moby/v{{srcImageTag}}/contrib/init/systemd/docker.service \
+        -O /etc/systemd/system/docker.service || true
+      wget https://raw.githubusercontent.com/moby/moby/{{srcImageTag}}/contrib/init/systemd/docker.socket \
+        https://raw.githubusercontent.com/moby/moby/v{{srcImageTag}}/contrib/init/systemd/docker.socket \
+        -O /etc/systemd/system/docker.socket || true
+
+      sed -i 's|^ExecStart=.*|ExecStart=/usr/local/bin/dockerd -H fd://|' /etc/systemd/system/docker.service
+      sed -i 's|containerd.service||' /etc/systemd/system/docker.service
+      if ! getent group docker; then
+        groupadd --system docker
+      fi
+      systemctl daemon-reload
+      fail=0
+      if ! systemctl enable --now docker; then
+        fail=1
+      fi
+      systemctl status docker.socket || true
+      systemctl status docker.service || true
+      exit $fail
+    fi
 
 probes:
 - script: |
     #!/bin/bash
     set -eux -o pipefail
-    if ! timeout 30s bash -c "until command -v docker >/dev/null 2>&1; do sleep 3; done"; then
-      echo >&2 "docker is not installed yet"
-      exit 1
-    fi
+    # Don't check for docker CLI as it's not installed in the VM (only on the host)
     if ! timeout 30s bash -c "until pgrep dockerd; do sleep 3; done"; then
       echo >&2 "dockerd is not running"
       exit 1
diff --git a/src/docker/install.ts b/src/docker/install.ts
index e6f219f..d2c89a3 100644
--- a/src/docker/install.ts
+++ b/src/docker/install.ts
@@ -127,13 +127,14 @@ export class Install {
         const cli = await HubRepository.build('dockereng/cli-bin');
         extractFolder = await cli.extractImage(tag);
 
-        // Daemon is only available for Windows and Linux
         if (['win32', 'linux'].includes(platform)) {
           core.info(`Downloading dockerd from moby/moby-bin:${tag}`);
           const moby = await HubRepository.build('moby/moby-bin');
           await moby.extractImage(tag, extractFolder);
+        } else if (platform == 'darwin') {
+          // On macOS, the docker daemon binary will be downloaded inside the lima VM
         } else {
-          core.info(`dockerd not supported on ${platform}`);
+          core.warning(`dockerd not supported on ${platform}, only the Docker cli will be available`);
         }
         break;
       }
@@ -192,10 +193,7 @@ export class Install {
   }
 
   private async installDarwin(): Promise<string> {
-    if (this.source.type !== 'archive') {
-      throw new Error('Only archive source is supported on macOS');
-    }
-    const src = this.source as InstallSourceArchive;
+    const src = this.source;
     const limaDir = path.join(os.homedir(), '.lima', this.limaInstanceName);
     await io.mkdirP(limaDir);
     const dockerHost = `unix://${limaDir}/docker.sock`;
@@ -226,12 +224,15 @@ export class Install {
       handlebars.registerHelper('stringify', function (obj) {
         return new handlebars.SafeString(JSON.stringify(obj));
       });
+      const srcArchive = src as InstallSourceArchive;
       const limaCfg = handlebars.compile(limaYamlData)({
         customImages: Install.limaCustomImages(),
         daemonConfig: limaDaemonConfig,
         dockerSock: `${limaDir}/docker.sock`,
-        dockerBinVersion: src.version.replace(/^v/, ''),
-        dockerBinChannel: src.channel
+        srcType: src.type,
+        srcArchiveVersion: srcArchive.version?.replace(/^v/, ''),
+        srcArchiveChannel: srcArchive.channel,
+        srcImageTag: (src as InstallSourceImage).tag
       });
       core.info(`Writing lima config to ${path.join(limaDir, 'lima.yaml')}`);
       fs.writeFileSync(path.join(limaDir, 'lima.yaml'), limaCfg);