diff --git a/tools/releasetools/ota_from_target_files.py b/tools/releasetools/ota_from_target_files.py
index 915a29e..b29ba69 100755
--- a/tools/releasetools/ota_from_target_files.py
+++ b/tools/releasetools/ota_from_target_files.py
@@ -873,15 +873,17 @@
         int(i) for i in
         OPTIONS.info_dict.get("blockimgdiff_versions", "1").split(","))
 
-  # Check first block of system partition for remount R/W only if
-  # disk type is ext4
-  system_partition = OPTIONS.source_info_dict["fstab"]["/system"]
-  check_first_block = system_partition.fs_type == "ext4"
+  # Check the first block of the source system partition for remount R/W only
+  # if the filesystem is ext4.
+  system_src_partition = OPTIONS.source_info_dict["fstab"]["/system"]
+  check_first_block = system_src_partition.fs_type == "ext4"
   # Disable using imgdiff for squashfs. 'imgdiff -z' expects input files to be
   # in zip formats. However with squashfs, a) all files are compressed in LZ4;
   # b) the blocks listed in block map may not contain all the bytes for a given
   # file (because they're rounded to be 4K-aligned).
-  disable_imgdiff = system_partition.fs_type == "squashfs"
+  system_tgt_partition = OPTIONS.target_info_dict["fstab"]["/system"]
+  disable_imgdiff = (system_src_partition.fs_type == "squashfs" or
+                     system_tgt_partition.fs_type == "squashfs")
   system_diff = common.BlockDifference("system", system_tgt, system_src,
                                        check_first_block,
                                        version=blockimgdiff_version,