diff --git a/package/base-files/files/etc/rc.button/reset b/package/base-files/files/etc/rc.button/reset
index c6dc7cfbc0..4265767437 100755
--- a/package/base-files/files/etc/rc.button/reset
+++ b/package/base-files/files/etc/rc.button/reset
@@ -2,8 +2,12 @@
 
 . /lib/functions.sh
 
+OVERLAY="$( grep ' /overlay ' /proc/mounts )"
+
 case "$ACTION" in
 pressed)
+	[ -z "$OVERLAY" ] && return 0
+
 	return 5
 ;;
 timeout)
@@ -16,7 +20,7 @@ released)
 		echo "REBOOT" > /dev/console
 		sync
 		reboot
-	elif [ "$SEEN" -gt 5 ]
+	elif [ "$SEEN" -gt 5 -a -n "$OVERLAY" ]
 	then
 		echo "FACTORY RESET" > /dev/console
 		jffs2reset -y && reboot &