diff --git a/cluster/gce/coreos/configure-node.sh b/cluster/gce/coreos/configure-node.sh
index fc6bf5986c5..45f42953cc3 100644
--- a/cluster/gce/coreos/configure-node.sh
+++ b/cluster/gce/coreos/configure-node.sh
@@ -79,6 +79,11 @@ function configure-etcd-events() {
   evaluate-manifest ${MANIFESTS_DIR}/etcd-events.yaml /etc/kubernetes/manifests/etcd-events.yaml
 }
 
+function configure-addon-manager() {
+  echo "Configuring addon-manager"
+  evaluate-manifest ${MANIFESTS_DIR}/kube-addon-manager.yaml /etc/kubernetes/manifests/kube-addon-manager.yaml
+}
+
 function configure-kube-apiserver() {
   echo "Configuring kube-apiserver"
   
@@ -164,6 +169,7 @@ function configure-master-components() {
   configure-kube-apiserver
   configure-kube-scheduler
   configure-kube-controller-manager
+  configure-addon-manager
   configure-master-addons
 }
 
diff --git a/cluster/gce/coreos/kube-manifests/kube-addon-manager.yaml b/cluster/gce/coreos/kube-manifests/kube-addon-manager.yaml
new file mode 100644
index 00000000000..d46b9888117
--- /dev/null
+++ b/cluster/gce/coreos/kube-manifests/kube-addon-manager.yaml
@@ -0,0 +1,23 @@
+apiVersion: v1
+kind: Pod
+metadata:
+  name: kube-addon-manager
+  namespace: kube-system
+  version: v1
+spec:
+  hostNetwork: true
+  containers:
+  - name: kube-addon-manager
+    image: gcr.io/google-containers/kube-addon-manager:v1
+    resources:
+      requests:
+        cpu: 5m
+        memory: 50Mi
+    volumeMounts:
+    - mountPath: /etc/kubernetes/
+      name: addons
+      readOnly: true
+  volumes:
+  - hostPath:
+      path: /etc/kubernetes/
+    name: addons
diff --git a/cluster/gce/coreos/master.yaml b/cluster/gce/coreos/master.yaml
index 14faf452127..4bce287252c 100644
--- a/cluster/gce/coreos/master.yaml
+++ b/cluster/gce/coreos/master.yaml
@@ -38,11 +38,9 @@ coreos:
         Type=oneshot
         RemainAfterExit=yes
         EnvironmentFile=/etc/kube-env
-        ExecStartPre=/usr/bin/mkdir -p /etc/rkt
-        ExecStartPre=/usr/bin/mkdir -p /opt/downloads
-        ExecStartPre=/usr/bin/curl --fail --silent --show-error --location --create-dirs --output \
-        /opt/downloads/rkt.tar.gz https://github.com/coreos/rkt/releases/download/v${RKT_VERSION}/rkt-v${RKT_VERSION}.tar.gz
-        ExecStart=/usr/bin/tar xf /opt/downloads/rkt.tar.gz -C /opt --overwrite
+        ExecStartPre=/usr/bin/mkdir -p /etc/rkt /opt/downloads /opt/rkt/
+        ExecStartPre=/usr/bin/curl --fail --silent --location --create-dirs --output /opt/downloads/rkt.tar.gz https://github.com/coreos/rkt/releases/download/v${RKT_VERSION}/rkt-v${RKT_VERSION}.tar.gz
+        ExecStart=/usr/bin/tar --strip-components=1 -xf /opt/downloads/rkt.tar.gz -C /opt/rkt/ --overwrite
 
     - name: kubernetes-download-salt.service
       command: start
@@ -132,7 +130,8 @@ coreos:
         --cluster-domain=${DNS_DOMAIN} \
         --logtostderr=true \
         --container-runtime=${KUBERNETES_CONTAINER_RUNTIME} \
-        --rkt-path=/opt/rkt-v${RKT_VERSON}/rkt \
+        --rkt-path=/opt/rkt/rkt \
+        --rkt-stage1-image=/opt/rkt/stage1-coreos.aci \
         --configure-cbr0=${KUBERNETES_CONFIGURE_CBR0} \
         --pod-cidr=${MASTER_IP_RANGE} \
         --register-schedulable=false \
@@ -181,18 +180,3 @@ coreos:
         http://metadata.google.internal/computeMetadata/v1/instance/attributes/configure-node
         ExecStartPre=/usr/bin/chmod 0755 /run/configure-node.sh
         ExecStart=/run/configure-node.sh
-
-    - name: kubernetes-addons.service
-      command: start
-      content: |
-        [Unit]
-        Description=Start Kubernetes addons and watch for updates.
-        Requires=kubernetes-configure-node.service
-        After=kubernetes-configure-node.service
-        [Service]
-        Environment=KUBECTL_BIN=/opt/kubernetes/server/bin/kubectl
-        Environment=kubelet_kubeconfig_file=/var/lib/kubelet/kubeconfig
-        ExecStartPre=/usr/bin/chmod 0755 /opt/kubernetes/saltbase/salt/kube-addons/kube-addons.sh
-        ExecStart=/opt/kubernetes/saltbase/salt/kube-addons/kube-addons.sh
-        Restart=always
-        RestartSec=10
diff --git a/cluster/gce/coreos/node.yaml b/cluster/gce/coreos/node.yaml
index 25b0b7c889a..84ba4495ff6 100644
--- a/cluster/gce/coreos/node.yaml
+++ b/cluster/gce/coreos/node.yaml
@@ -38,11 +38,9 @@ coreos:
         Type=oneshot
         RemainAfterExit=yes
         EnvironmentFile=/etc/kube-env
-        ExecStartPre=/usr/bin/mkdir -p /etc/rkt
-        ExecStartPre=/usr/bin/mkdir -p /opt/downloads
-        ExecStartPre=/usr/bin/curl --fail --silent --show-error --location --create-dirs --output \
-        /opt/downloads/rkt.tar.gz https://github.com/coreos/rkt/releases/download/v${RKT_VERSION}/rkt-v${RKT_VERSION}.tar.gz
-        ExecStart=/usr/bin/tar xf /opt/downloads/rkt.tar.gz -C /opt --overwrite
+        ExecStartPre=/usr/bin/mkdir -p /etc/rkt /opt/downloads /opt/rkt/
+        ExecStartPre=/usr/bin/curl --fail --silent --location --create-dirs --output /opt/downloads/rkt.tar.gz https://github.com/coreos/rkt/releases/download/v${RKT_VERSION}/rkt-v${RKT_VERSION}.tar.gz
+        ExecStart=/usr/bin/tar --strip-components=1 -xf /opt/downloads/rkt.tar.gz -C /opt/rkt/ --overwrite
 
     - name: kubernetes-download-manifests.service
       command: start
@@ -82,6 +80,18 @@ coreos:
         /opt/kubernetes/pkg/kubernetes-server-linux-amd64.tar.gz ${SERVER_BINARY_TAR_URL}
         ExecStart=/usr/bin/tar xf /opt/kubernetes/pkg/kubernetes-server-linux-amd64.tar.gz -C /opt --overwrite
 
+    - name: rkt-api-service.service
+      command: start
+      content: |
+        [Unit]
+        Description=Start rkt API service as Daemon
+        Requires=kubernetes-install-rkt.service
+        After=kubernetes-install-rkt.service
+        [Service]
+        ExecStart=/opt/rkt/rkt api-service
+        Restart=always
+        RestartSec=10
+
     - name: kubelet.service
       command: start
       content: |
@@ -112,7 +122,8 @@ coreos:
         --cluster-domain=${DNS_DOMAIN} \
         --logtostderr=true \
         --container-runtime=${KUBERNETES_CONTAINER_RUNTIME} \
-        --rkt-path=/opt/rkt-v${RKT_VERSON}/rkt \
+        --rkt-path=/opt/rkt/rkt \
+        --rkt-stage1-image=/opt/rkt/stage1-coreos.aci \
         --configure-cbr0=${KUBERNETES_CONFIGURE_CBR0}
         Restart=always
         RestartSec=10