diff --git a/debian/changelog b/debian/changelog
index 121bd892..e9695751 100644
--- a/debian/changelog
+++ b/debian/changelog
@@ -1,3 +1,10 @@
+livecd-rootfs (2.540) cosmic; urgency=medium
+
+  * Ensure /lib/modules exists in root tarballs and sqashfs.
+    (LP: #1792905)
+
+ -- Tobias Koch <tobias.koch@canonical.com>  Thu, 20 Sep 2018 09:38:34 +0200
+
 livecd-rootfs (2.539) cosmic; urgency=medium
 
   * Stop building buildd chroots with --xattrs until we move to python3.
diff --git a/live-build/ubuntu-cpc/hooks/031-0-create-root-dir.binary b/live-build/ubuntu-cpc/hooks/031-0-create-root-dir.binary
index 9a916658..a4d77bd7 100755
--- a/live-build/ubuntu-cpc/hooks/031-0-create-root-dir.binary
+++ b/live-build/ubuntu-cpc/hooks/031-0-create-root-dir.binary
@@ -21,6 +21,9 @@ env DEBIAN_FRONTEND=noninteractive chroot $rootfs_dir apt-get --purge remove --a
 env DEBIAN_FRONTEND=noninteractive chroot $rootfs_dir apt-get autoremove --purge --assume-yes
 rm -rf $rootfs_dir/boot/grub
 
+# Keep this as some derivatives mount a tempfs here
+mkdir -p $rootfs_dir/lib/modules
+
 teardown_mountpoint $rootfs_dir
 
 dpkg-query --admindir=$rootfs_dir/var/lib/dpkg -W > $rootfs_dir.manifest