diff --git a/pkg/ignition/builder.go b/pkg/ignition/builder.go
index 14087f54..20da5c4b 100644
--- a/pkg/ignition/builder.go
+++ b/pkg/ignition/builder.go
@@ -97,7 +97,10 @@ func (b *ignitionBuilder) GenerateConfig() (config ignition_config_types_32.Conf
 	config.Ignition.Version = "3.2.0"
 	config.Storage.Files = []ignition_config_types_32.File{b.IronicAgentConf()}
 	config.Storage.Files = append(config.Storage.Files, netFiles...)
-	config.Systemd.Units = []ignition_config_types_32.Unit{b.IronicAgentService(len(netFiles) > 0)}
+	config.Systemd.Units = []ignition_config_types_32.Unit{
+		b.IronicAgentService(len(netFiles) > 0),
+		b.hostNameFixService(),
+	}
 
 	if b.ironicAgentPullSecret != "" {
 		config.Storage.Files = append(config.Storage.Files, b.authFile())
diff --git a/pkg/ignition/builder_test.go b/pkg/ignition/builder_test.go
index 2ead4eaf..85fa2294 100644
--- a/pkg/ignition/builder_test.go
+++ b/pkg/ignition/builder_test.go
@@ -18,7 +18,7 @@ func TestGenerateStructure(t *testing.T) {
 	assert.NoError(t, err)
 
 	assert.Equal(t, "3.2.0", ignition.Ignition.Version)
-	assert.Len(t, ignition.Systemd.Units, 1)
+	assert.Len(t, ignition.Systemd.Units, 2)
 	assert.Len(t, ignition.Storage.Files, 2)
 	assert.Len(t, ignition.Passwd.Users, 0)
 
@@ -41,7 +41,7 @@ func TestGenerateWithMoreFields(t *testing.T) {
 	assert.NoError(t, err)
 
 	assert.Equal(t, "3.2.0", ignition.Ignition.Version)
-	assert.Len(t, ignition.Systemd.Units, 1)
+	assert.Len(t, ignition.Systemd.Units, 2)
 	assert.Len(t, ignition.Storage.Files, 5)
 	assert.Len(t, ignition.Passwd.Users, 1)
 
diff --git a/pkg/ignition/service_config.go b/pkg/ignition/service_config.go
index 9b108645..0083eb37 100644
--- a/pkg/ignition/service_config.go
+++ b/pkg/ignition/service_config.go
@@ -39,7 +39,7 @@ Restart=on-failure
 RestartSec=5
 StartLimitIntervalSec=0
 ExecStartPre=/bin/podman pull %s %s
-ExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --env "IPA_COREOS_IP_OPTIONS=%s" --env IPA_COREOS_COPY_NETWORK=%v --name ironic-agent %s
+ExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --uts=host --env "IPA_COREOS_IP_OPTIONS=%s" --env IPA_COREOS_COPY_NETWORK=%v --name ironic-agent %s
 [Install]
 WantedBy=multi-user.target
 `
@@ -59,3 +59,33 @@ func (b *ignitionBuilder) authFile() ignition_config_types_32.File {
 		FileEmbedded1: ignition_config_types_32.FileEmbedded1{Contents: ignition_config_types_32.Resource{Source: &source}},
 	}
 }
+
+func (b *ignitionBuilder) hostNameFixService() ignition_config_types_32.Unit {
+	script := fmt.Sprintf(`
+if [[ "$(hostnamectl hostname)" =~ ^localhost(\.localdomain)?$ ]]; then
+    echo Localhost detected, setting hostname to %[1]s;
+    hostnamectl set-hostname --static --transient "%[1]s";
+    echo "%[1]s" > /etc/hostname;
+fi`, b.hostname)
+
+	script = strings.Replace(script, "\n", " ", -1)
+
+	unitTemplate := `[Unit]
+Description=Fix hostname if it is localhost
+After=network-online.target
+Before=ironic-agent.service
+Wants=network-online.target
+[Service]
+Type=oneshot
+ExecStart=/bin/bash -c '%s'
+[Install]
+WantedBy=multi-user.target
+`
+	contents := fmt.Sprintf(unitTemplate, script)
+
+	return ignition_config_types_32.Unit{
+		Name:     "hostname-fix.service",
+		Enabled:  pointer.BoolPtr(true),
+		Contents: &contents,
+	}
+}
diff --git a/pkg/ignition/service_config_test.go b/pkg/ignition/service_config_test.go
index a22ab9eb..f635ace9 100644
--- a/pkg/ignition/service_config_test.go
+++ b/pkg/ignition/service_config_test.go
@@ -60,7 +60,7 @@ func TestIronicAgentService(t *testing.T) {
 			want: ignition_config_types_32.Unit{
 				Name:     "ironic-agent.service",
 				Enabled:  pointer.BoolPtr(true),
-				Contents: pointer.StringPtr("[Unit]\nDescription=Ironic Agent\nAfter=network-online.target\nWants=network-online.target\n[Service]\nEnvironment=\"HTTP_PROXY=\"\nEnvironment=\"HTTPS_PROXY=\"\nEnvironment=\"NO_PROXY=\"\nTimeoutStartSec=0\nRestart=on-failure\nRestartSec=5\nStartLimitIntervalSec=0\nExecStartPre=/bin/podman pull http://example.com/foo:latest --tls-verify=false --authfile=/etc/authfile.json\nExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --env \"IPA_COREOS_IP_OPTIONS=ip=dhcp6\" --env IPA_COREOS_COPY_NETWORK=false --name ironic-agent http://example.com/foo:latest\n[Install]\nWantedBy=multi-user.target\n"),
+				Contents: pointer.StringPtr("[Unit]\nDescription=Ironic Agent\nAfter=network-online.target\nWants=network-online.target\n[Service]\nEnvironment=\"HTTP_PROXY=\"\nEnvironment=\"HTTPS_PROXY=\"\nEnvironment=\"NO_PROXY=\"\nTimeoutStartSec=0\nRestart=on-failure\nRestartSec=5\nStartLimitIntervalSec=0\nExecStartPre=/bin/podman pull http://example.com/foo:latest --tls-verify=false --authfile=/etc/authfile.json\nExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --uts=host --env \"IPA_COREOS_IP_OPTIONS=ip=dhcp6\" --env IPA_COREOS_COPY_NETWORK=false --name ironic-agent http://example.com/foo:latest\n[Install]\nWantedBy=multi-user.target\n"),
 			},
 		},
 		{
@@ -69,7 +69,7 @@ func TestIronicAgentService(t *testing.T) {
 			want: ignition_config_types_32.Unit{
 				Name:     "ironic-agent.service",
 				Enabled:  pointer.BoolPtr(true),
-				Contents: pointer.StringPtr("[Unit]\nDescription=Ironic Agent\nAfter=network-online.target\nWants=network-online.target\n[Service]\nEnvironment=\"HTTP_PROXY=\"\nEnvironment=\"HTTPS_PROXY=\"\nEnvironment=\"NO_PROXY=\"\nTimeoutStartSec=0\nRestart=on-failure\nRestartSec=5\nStartLimitIntervalSec=0\nExecStartPre=/bin/podman pull http://example.com/foo:latest --tls-verify=false\nExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --env \"IPA_COREOS_IP_OPTIONS=ip=dhcp6\" --env IPA_COREOS_COPY_NETWORK=false --name ironic-agent http://example.com/foo:latest\n[Install]\nWantedBy=multi-user.target\n"),
+				Contents: pointer.StringPtr("[Unit]\nDescription=Ironic Agent\nAfter=network-online.target\nWants=network-online.target\n[Service]\nEnvironment=\"HTTP_PROXY=\"\nEnvironment=\"HTTPS_PROXY=\"\nEnvironment=\"NO_PROXY=\"\nTimeoutStartSec=0\nRestart=on-failure\nRestartSec=5\nStartLimitIntervalSec=0\nExecStartPre=/bin/podman pull http://example.com/foo:latest --tls-verify=false\nExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --uts=host --env \"IPA_COREOS_IP_OPTIONS=ip=dhcp6\" --env IPA_COREOS_COPY_NETWORK=false --name ironic-agent http://example.com/foo:latest\n[Install]\nWantedBy=multi-user.target\n"),
 			},
 		},
 		{
@@ -80,7 +80,7 @@ func TestIronicAgentService(t *testing.T) {
 			want: ignition_config_types_32.Unit{
 				Name:     "ironic-agent.service",
 				Enabled:  pointer.BoolPtr(true),
-				Contents: pointer.StringPtr("[Unit]\nDescription=Ironic Agent\nAfter=network-online.target\nWants=network-online.target\n[Service]\nEnvironment=\"HTTP_PROXY=\"\nEnvironment=\"HTTPS_PROXY=\"\nEnvironment=\"NO_PROXY=\"\nTimeoutStartSec=0\nRestart=on-failure\nRestartSec=5\nStartLimitIntervalSec=0\nExecStartPre=/bin/podman pull http://example.com/foo:latest --tls-verify=false --authfile=/etc/authfile.json\nExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --env \"IPA_COREOS_IP_OPTIONS=ip=dhcp6\" --env IPA_COREOS_COPY_NETWORK=true --name ironic-agent http://example.com/foo:latest\n[Install]\nWantedBy=multi-user.target\n"),
+				Contents: pointer.StringPtr("[Unit]\nDescription=Ironic Agent\nAfter=network-online.target\nWants=network-online.target\n[Service]\nEnvironment=\"HTTP_PROXY=\"\nEnvironment=\"HTTPS_PROXY=\"\nEnvironment=\"NO_PROXY=\"\nTimeoutStartSec=0\nRestart=on-failure\nRestartSec=5\nStartLimitIntervalSec=0\nExecStartPre=/bin/podman pull http://example.com/foo:latest --tls-verify=false --authfile=/etc/authfile.json\nExecStart=/bin/podman run --rm --privileged --network host --mount type=bind,src=/etc/ironic-python-agent.conf,dst=/etc/ironic-python-agent/ignition.conf --mount type=bind,src=/dev,dst=/dev --mount type=bind,src=/sys,dst=/sys --mount type=bind,src=/run/dbus/system_bus_socket,dst=/run/dbus/system_bus_socket --mount type=bind,src=/,dst=/mnt/coreos --mount type=bind,src=/run/udev,dst=/run/udev --ipc=host --uts=host --env \"IPA_COREOS_IP_OPTIONS=ip=dhcp6\" --env IPA_COREOS_COPY_NETWORK=true --name ironic-agent http://example.com/foo:latest\n[Install]\nWantedBy=multi-user.target\n"),
 			},
 		},
 	}