diff --git a/src/config.c b/src/config.c
index f7f8d1949..4bcbaf7fa 100644
--- a/src/config.c
+++ b/src/config.c
@@ -1196,7 +1196,6 @@ load_hard_disks(void)
         ini_section_delete_var(cat, temp);
 
         memset(hdd[c].fn, 0x00, sizeof(hdd[c].fn));
-        memset(hdd[c].prev_fn, 0x00, sizeof(hdd[c].prev_fn));
         sprintf(temp, "hdd_%02i_fn", c + 1);
         p = ini_section_get_string(cat, temp, "");
 
@@ -1229,6 +1228,13 @@ load_hard_disks(void)
         }
         path_normalize(hdd[c].fn);
 
+        sprintf(temp, "hdd_%02i_vhd_blocksize", c + 1);
+        hdd[c].vhd_blocksize = ini_section_get_int(cat, temp, 0);
+
+        sprintf(temp, "hdd_%02i_vhd_parent", c + 1);
+        p = ini_section_get_string(cat, temp, "");
+        strncpy(hdd[c].vhd_parent, p, sizeof(hdd[c].vhd_parent) - 1);
+
         /* If disk is empty or invalid, mark it for deletion. */
         if (!hdd_is_valid(c)) {
             sprintf(temp, "hdd_%02i_parameters", c + 1);
@@ -2806,6 +2812,19 @@ save_hard_disks(void)
         } else
             ini_section_delete_var(cat, temp);
 
+        sprintf(temp, "hdd_%02i_vhd_blocksize", c + 1);
+        if (hdd_is_valid(c) && (hdd[c].vhd_blocksize > 0))
+            ini_section_set_int(cat, temp, hdd[c].vhd_blocksize);
+        else
+            ini_section_delete_var(cat, temp);
+
+        sprintf(temp, "hdd_%02i_vhd_parent", c + 1);
+        if (hdd_is_valid(c) && hdd[c].vhd_parent[0]) {
+            path_normalize(hdd[c].vhd_parent);
+            ini_section_set_string(cat, temp, hdd[c].vhd_parent);
+        } else
+            ini_section_delete_var(cat, temp);
+
         sprintf(temp, "hdd_%02i_speed", c + 1);
         if (!hdd_is_valid(c) || (hdd[c].bus != HDD_BUS_IDE && hdd[c].bus != HDD_BUS_ESDI))
             ini_section_delete_var(cat, temp);
diff --git a/src/disk/hdd_image.c b/src/disk/hdd_image.c
index 2f3389403..856fc382c 100644
--- a/src/disk/hdd_image.c
+++ b/src/disk/hdd_image.c
@@ -334,11 +334,35 @@ hdd_image_load(int id)
                     full_size                  = ((uint64_t) hdd[id].spt) * ((uint64_t) hdd[id].hpc) * ((uint64_t) hdd[id].tracks) << 9LL;
                     hdd_images[id].last_sector = (full_size >> 9LL) - 1;
 
-                    hdd_images[id].vhd = mvhd_create_fixed(fn, geometry, &vhd_error, NULL);
-                    if (hdd_images[id].vhd == NULL)
-                        fatal("hdd_image_load(): VHD: Could not create VHD : %s\n", mvhd_strerr(vhd_error));
+                    if (hdd[id].vhd_blocksize || hdd[id].vhd_parent[0]) {
+                        MVHDCreationOptions options;
+retry_vhd:
+                        options.block_size_in_sectors = hdd[id].vhd_blocksize;
+                        options.path                  = fn;
+                        options.size_in_bytes         = 0;
+                        options.geometry              = geometry;
+                        if (hdd[id].vhd_parent[0]) {
+                            options.type        = MVHD_TYPE_DIFF;
+                            options.parent_path = hdd[id].vhd_parent;
+                        } else {
+                            options.type        = MVHD_TYPE_DYNAMIC;
+                            options.parent_path = NULL;
+                        }
 
+                        hdd_images[id].vhd = mvhd_create_ex(options, &vhd_error);
+                    } else {
+                        hdd_images[id].vhd = mvhd_create_fixed(fn, geometry, &vhd_error, NULL);
+                    }
+                    if (hdd_images[id].vhd == NULL) {
+                        /* Don't lock out if the parent of a differential VHD doesn't exist. */
+                        if (hdd[id].vhd_parent[0]) {
+                            hdd[id].vhd_parent[0] = '\0';
+                            goto retry_vhd;
+                        }
+                        fatal("hdd_image_load(): VHD: Could not create VHD : %s\n", mvhd_strerr(vhd_error));
+                    }
                     hdd_images[id].type = HDD_IMAGE_VHD;
+
                     return 1;
                 } else {
                     hdd_images[id].type = HDD_IMAGE_RAW;
@@ -429,9 +453,12 @@ hdd_image_load(int id)
                 fatal("hdd_image_load(): VHD: Parent/child timestamp mismatch for VHD file '%s'\n", fn);
             }
 
-            hdd[id].tracks      = hdd_images[id].vhd->footer.geom.cyl;
-            hdd[id].hpc         = hdd_images[id].vhd->footer.geom.heads;
-            hdd[id].spt         = hdd_images[id].vhd->footer.geom.spt;
+            hdd[id].tracks        = hdd_images[id].vhd->footer.geom.cyl;
+            hdd[id].hpc           = hdd_images[id].vhd->footer.geom.heads;
+            hdd[id].spt           = hdd_images[id].vhd->footer.geom.spt;
+            hdd[id].vhd_blocksize = (hdd_images[id].vhd->footer.disk_type == MVHD_TYPE_FIXED) ? 0 : (hdd_images[id].vhd->sparse.block_sz / MVHD_SECTOR_SIZE);
+            if (hdd_images[id].vhd->parent && hdd_images[id].vhd->parent->filename[0])
+                strncpy(hdd[id].vhd_parent, hdd_images[id].vhd->parent->filename, sizeof(hdd[id].vhd_parent) - 1);
             full_size           = ((uint64_t) hdd[id].spt) * ((uint64_t) hdd[id].hpc) * ((uint64_t) hdd[id].tracks) << 9LL;
             hdd_images[id].type = HDD_IMAGE_VHD;
             /* If we're here, this means there is a valid VHD footer in the
@@ -628,9 +655,6 @@ hdd_image_unload(uint8_t id, int fn_preserve)
 
     hdd_images[id].last_sector = -1;
 
-    memset(hdd[id].prev_fn, 0, sizeof(hdd[id].prev_fn));
-    if (fn_preserve)
-        strcpy(hdd[id].prev_fn, hdd[id].fn);
     memset(hdd[id].fn, 0, sizeof(hdd[id].fn));
 }
 
diff --git a/src/include/86box/hdd.h b/src/include/86box/hdd.h
index 58fff9ffd..1508939ba 100644
--- a/src/include/86box/hdd.h
+++ b/src/include/86box/hdd.h
@@ -154,8 +154,8 @@ typedef struct {
 
     void *priv;
 
-    char fn[1024],     /* Name of current image file */
-        prev_fn[1024]; /* Name of previous image file */
+    char fn[1024];         /* Name of current image file */
+    char vhd_parent[1041]; /* Differential VHD parent file */
 
     uint32_t res0, pad1,
         base,
@@ -176,6 +176,7 @@ typedef struct {
     uint32_t cur_addr;
 
     uint32_t speed_preset;
+    uint32_t vhd_blocksize;
 
     double avg_rotation_lat_usec;
     double full_stroke_usec;