Overlay File System

Overlay file system is a feature of Linux. It's simply another file system type similar to EXT4. This means, when a directory is mounted with type as overlay, then the VFS calls the read and write function provided by the OverlayFS.

overlay-fs

how it's used in docker

Each layer in a docker image is mounted as a lower layer. This is why more the layer, bigger the size of the image.

Docker simply creates a new mount namespace and creates this OverlayFS inside that namespace.