diff --git a/cluster/common.sh b/cluster/common.sh
index d6eb22beac..c916e5a1cb 100755
--- a/cluster/common.sh
+++ b/cluster/common.sh
@@ -699,7 +699,7 @@ ENABLE_MANIFEST_URL: $(yaml-quote ${ENABLE_MANIFEST_URL:-false})
 MANIFEST_URL: $(yaml-quote ${MANIFEST_URL:-})
 MANIFEST_URL_HEADER: $(yaml-quote ${MANIFEST_URL_HEADER:-})
 NUM_NODES: $(yaml-quote ${NUM_NODES})
-STORAGE_BACKEND: $(yaml-quote ${STORAGE_BACKEND:-})
+STORAGE_BACKEND: $(yaml-quote ${STORAGE_BACKEND:-etcd2})
 ENABLE_GARBAGE_COLLECTOR: $(yaml-quote ${ENABLE_GARBAGE_COLLECTOR:-})
 EOF
     # ETCD_IMAGE (if set) allows to use a custom etcd image.
diff --git a/cluster/gce/gci/configure-helper.sh b/cluster/gce/gci/configure-helper.sh
index a22cfe9c8f..583c8767cf 100644
--- a/cluster/gce/gci/configure-helper.sh
+++ b/cluster/gce/gci/configure-helper.sh
@@ -625,6 +625,11 @@ function prepare-etcd-manifest {
   sed -i -e "s@{{ *hostname *}}@$host_name@g" "${temp_file}"
   sed -i -e "s@{{ *etcd_cluster *}}@$etcd_cluster@g" "${temp_file}"
   sed -i -e "s@{{ *storage_backend *}}@${STORAGE_BACKEND:-}@g" "${temp_file}"
+  if [[ "${STORAGE_BACKEND:-}" == "etcd3" ]]; then
+    sed -i -e "s@{{ *quota_bytes *}}@--quota-backend-bytes=4294967296@g" "${temp_file}"
+  else
+    sed -i -e "s@{{ *quota_bytes *}}@@g" "${temp_file}"
+  fi
   sed -i -e "s@{{ *cluster_state *}}@$cluster_state@g" "${temp_file}"
   if [[ -n "${ETCD_IMAGE:-}" ]]; then
     sed -i -e "s@{{ *pillar\.get('etcd_docker_tag', '\(.*\)') *}}@${ETCD_IMAGE}@g" "${temp_file}"
diff --git a/cluster/gce/trusty/configure-helper.sh b/cluster/gce/trusty/configure-helper.sh
index d8647f18fe..9e04aafa20 100644
--- a/cluster/gce/trusty/configure-helper.sh
+++ b/cluster/gce/trusty/configure-helper.sh
@@ -457,6 +457,11 @@ prepare_etcd_manifest() {
   sed -i -e "s@{{ *hostname *}}@$host_name@g" "${etcd_temp_file}"
   sed -i -e "s@{{ *etcd_cluster *}}@$etcd_cluster@g" "${etcd_temp_file}"
   sed -i -e "s@{{ *storage_backend *}}@${STORAGE_BACKEND:-}@g" "${temp_file}"
+  if [[ "${STORAGE_BACKEND:-}" == "etcd3" ]]; then
+    sed -i -e "s@{{ *quota_bytes *}}@--quota-backend-bytes=4294967296@g" "${temp_file}"
+  else
+    sed -i -e "s@{{ *quota_bytes *}}@@g" "${temp_file}"
+  fi
   sed -i -e "s@{{ *cluster_state *}}@$cluster_state@g" "${etcd_temp_file}"
   if [[ -n "${ETCD_IMAGE:-}" ]]; then
     sed -i -e "s@{{ *pillar\.get('etcd_docker_tag', '\(.*\)') *}}@${ETCD_IMAGE}@g" "${etcd_temp_file}"
diff --git a/cluster/saltbase/salt/etcd/etcd.manifest b/cluster/saltbase/salt/etcd/etcd.manifest
index a5de08ee20..5b6bf1d342 100644
--- a/cluster/saltbase/salt/etcd/etcd.manifest
+++ b/cluster/saltbase/salt/etcd/etcd.manifest
@@ -15,6 +15,10 @@
 {% set etcd_cluster = vars.etcd_cluster -%}
 {% set cluster_state = vars.cluster_state -%}
 {% set storage_backend = pillar.get('storage_backend', 'etcd2') -%}
+{% set quota_bytes = '' -%}
+{% if pillar.get('storage_backend', 'etcd2') == 'etcd3' -%}
+  {% set quota_bytes = '--quota-backend-bytes=4294967296' -%}
+{% endif -%}
 
 {
 "apiVersion": "v1",
@@ -37,7 +41,7 @@
     "command": [
               "/bin/sh",
               "-c",
-              "if [ -e /usr/local/bin/migrate-if-needed.sh ]; then /usr/local/bin/migrate-if-needed.sh 1>>/var/log/etcd{{ suffix }}.log 2>&1; fi; /usr/local/bin/etcd --name etcd-{{ hostname }} --listen-peer-urls http://{{ hostname }}:{{ server_port }} --initial-advertise-peer-urls http://{{ hostname }}:{{ server_port }} --advertise-client-urls http://127.0.0.1:{{ port }} --listen-client-urls http://127.0.0.1:{{ port }} --data-dir /var/etcd/data{{ suffix }} --initial-cluster-state {{ cluster_state }} --initial-cluster {{ etcd_cluster }} 1>>/var/log/etcd{{ suffix }}.log 2>&1"
+              "if [ -e /usr/local/bin/migrate-if-needed.sh ]; then /usr/local/bin/migrate-if-needed.sh 1>>/var/log/etcd{{ suffix }}.log 2>&1; fi; /usr/local/bin/etcd --name etcd-{{ hostname }} --listen-peer-urls http://{{ hostname }}:{{ server_port }} --initial-advertise-peer-urls http://{{ hostname }}:{{ server_port }} --advertise-client-urls http://127.0.0.1:{{ port }} --listen-client-urls http://127.0.0.1:{{ port }} {{ quota_bytes }} --data-dir /var/etcd/data{{ suffix }} --initial-cluster-state {{ cluster_state }} --initial-cluster {{ etcd_cluster }} 1>>/var/log/etcd{{ suffix }}.log 2>&1"
             ],
     "env": [
       { "name": "TARGET_STORAGE",
diff --git a/hack/verify-flags/exceptions.txt b/hack/verify-flags/exceptions.txt
index 5edc3cf747..a32567345a 100644
--- a/hack/verify-flags/exceptions.txt
+++ b/hack/verify-flags/exceptions.txt
@@ -40,6 +40,7 @@ cluster/rackspace/util.sh:    local node_ip=$(nova show --minimal ${NODE_NAMES[$
 cluster/saltbase/salt/cluster-autoscaler/cluster-autoscaler.manifest:{% set params = pillar['autoscaler_mig_config'] + " " + cloud_config -%}
 cluster/saltbase/salt/etcd/etcd.manifest:        "value": "{{ storage_backend }}"
 cluster/saltbase/salt/etcd/etcd.manifest:{% set storage_backend = pillar.get('storage_backend', 'etcd2') -%}
+cluster/saltbase/salt/etcd/etcd.manifest:{% if pillar.get('storage_backend', 'etcd2') == 'etcd3' -%}
 cluster/saltbase/salt/kube-admission-controls/init.sls:{% if 'LimitRanger' in pillar.get('admission_control', '') %}
 cluster/saltbase/salt/kube-apiserver/kube-apiserver.manifest:{% set params = address + " " + storage_backend + " " + etcd_servers + " " + etcd_servers_overrides + " " + cloud_provider + " " + cloud_config + " " + runtime_config + " " + feature_gates + " " + admission_control + " " + target_ram_mb + " " + service_cluster_ip_range + " " + client_ca_file + basic_auth_file + " " + min_request_timeout + " " + enable_garbage_collector -%}
 cluster/saltbase/salt/kube-controller-manager/kube-controller-manager.manifest:{% if pillar.get('enable_hostpath_provisioner', '').lower() == 'true' -%}