diff --git a/docs/reference/filesystem.rst b/docs/reference/filesystem.rst
index cd86009287..9e7e6212dc 100644
--- a/docs/reference/filesystem.rst
+++ b/docs/reference/filesystem.rst
@@ -178,7 +178,8 @@ Board                 FAT    littlefs v1  littlefs v2
 ====================  =====  ===========  ===========
 pyboard 1.0, 1.1, D   Yes    No           Yes
 Other STM32           Yes    No           No
-ESP8266               Yes    No           No
+ESP8266 (1M)          No     No           Yes
+ESP8266 (2M+)         Yes    No           Yes
 ESP32                 Yes    No           Yes
 ====================  =====  ===========  ===========
 
diff --git a/ports/esp8266/Makefile b/ports/esp8266/Makefile
index 989e8a62f3..60eb7c0803 100644
--- a/ports/esp8266/Makefile
+++ b/ports/esp8266/Makefile
@@ -22,7 +22,6 @@ QSTR_GLOBAL_DEPENDENCIES = $(BOARD_DIR)/mpconfigboard.h
 MICROPY_PY_USSL = 1
 MICROPY_SSL_AXTLS = 1
 AXTLS_DEFS_EXTRA = -Dabort=abort_ -DRT_MAX_PLAIN_LENGTH=1024 -DRT_EXTRA=4096
-MICROPY_PY_BTREE ?= 1
 BTREE_DEFS_EXTRA = -DDEFPSIZE=1024 -DMINCACHE=3
 
 FROZEN_MANIFEST ?= boards/manifest.py
@@ -60,7 +59,7 @@ CFLAGS_XTENSA = -fsingle-precision-constant -Wdouble-promotion \
 CFLAGS = $(INC) -Wall -Wpointer-arith -Werror -std=gnu99 -nostdlib -DUART_OS=$(UART_OS) \
 	$(CFLAGS_XTENSA) $(CFLAGS_MOD) $(COPT) $(CFLAGS_EXTRA) -I$(BOARD_DIR)
 
-LD_FILES ?= boards/esp8266.ld
+LD_FILES ?= boards/esp8266_2m.ld
 LDFLAGS = -nostdlib -T $(LD_FILES) -Map=$(@:.elf=.map) --cref
 LIBS = -L$(ESP_SDK)/lib -lmain -ljson -llwip_open -lpp -lnet80211 -lwpa -lphy -lnet80211 $(LDFLAGS_MOD)
 
diff --git a/ports/esp8266/boards/GENERIC/mpconfigboard.mk b/ports/esp8266/boards/GENERIC/mpconfigboard.mk
index 820f073d98..2ecfb6d343 100644
--- a/ports/esp8266/boards/GENERIC/mpconfigboard.mk
+++ b/ports/esp8266/boards/GENERIC/mpconfigboard.mk
@@ -1,3 +1,7 @@
+LD_FILES = boards/esp8266_2m.ld
+
+MICROPY_PY_BTREE = 1
 MICROPY_VFS_FAT = 1
+MICROPY_VFS_LFS2 = 1
 
 FROZEN_MANIFEST ?= $(BOARD_DIR)/manifest.py
diff --git a/ports/esp8266/boards/GENERIC_1M/mpconfigboard.h b/ports/esp8266/boards/GENERIC_1M/mpconfigboard.h
new file mode 100644
index 0000000000..ed50729936
--- /dev/null
+++ b/ports/esp8266/boards/GENERIC_1M/mpconfigboard.h
@@ -0,0 +1,20 @@
+#define MICROPY_HW_BOARD_NAME "ESP module (1M)"
+#define MICROPY_HW_MCU_NAME "ESP8266"
+
+#define MICROPY_PERSISTENT_CODE_LOAD    (1)
+#define MICROPY_EMIT_XTENSA             (1)
+#define MICROPY_EMIT_INLINE_XTENSA      (1)
+
+#define MICROPY_DEBUG_PRINTERS          (1)
+#define MICROPY_ERROR_REPORTING         (MICROPY_ERROR_REPORTING_NORMAL)
+
+#define MICROPY_READER_VFS              (MICROPY_VFS)
+#define MICROPY_VFS                     (1)
+
+#define MICROPY_PY_BUILTINS_SLICE_ATTRS (1)
+#define MICROPY_PY_ALL_SPECIAL_METHODS  (1)
+#define MICROPY_PY_IO_FILEIO            (1)
+#define MICROPY_PY_SYS_STDIO_BUFFER     (1)
+#define MICROPY_PY_URE_SUB              (1)
+#define MICROPY_PY_UCRYPTOLIB           (1)
+#define MICROPY_PY_FRAMEBUF             (1)
diff --git a/ports/esp8266/boards/GENERIC_1M/mpconfigboard.mk b/ports/esp8266/boards/GENERIC_1M/mpconfigboard.mk
new file mode 100644
index 0000000000..7399790e71
--- /dev/null
+++ b/ports/esp8266/boards/GENERIC_1M/mpconfigboard.mk
@@ -0,0 +1,4 @@
+LD_FILES = boards/esp8266_1m.ld
+
+MICROPY_PY_BTREE = 1
+MICROPY_VFS_LFS2 = 1
diff --git a/ports/esp8266/boards/GENERIC_512K/mpconfigboard.mk b/ports/esp8266/boards/GENERIC_512K/mpconfigboard.mk
index 32fd4e0077..a7566f9f19 100644
--- a/ports/esp8266/boards/GENERIC_512K/mpconfigboard.mk
+++ b/ports/esp8266/boards/GENERIC_512K/mpconfigboard.mk
@@ -1,3 +1 @@
-MICROPY_PY_BTREE = 0
-MICROPY_VFS_FAT = 0
 LD_FILES = boards/esp8266_512k.ld
diff --git a/ports/esp8266/boards/esp8266.ld b/ports/esp8266/boards/esp8266.ld
deleted file mode 100644
index 745edaadbb..0000000000
--- a/ports/esp8266/boards/esp8266.ld
+++ /dev/null
@@ -1,12 +0,0 @@
-/* GNU linker script for ESP8266 */
-
-MEMORY
-{
-    dport0_0_seg : org = 0x3ff00000, len = 0x10
-    dram0_0_seg :  org = 0x3ffe8000, len = 0x14000
-    iram1_0_seg :  org = 0x40100000, len = 0x8000
-    irom0_0_seg :  org = 0x40209000, len = 0x8f000
-}
-
-/* define common sections and symbols */
-INCLUDE boards/esp8266_common.ld
diff --git a/ports/esp8266/boards/esp8266_1m.ld b/ports/esp8266/boards/esp8266_1m.ld
new file mode 100644
index 0000000000..94bc6a229a
--- /dev/null
+++ b/ports/esp8266/boards/esp8266_1m.ld
@@ -0,0 +1,19 @@
+/* GNU linker script for ESP8266 with 1M flash
+
+   Flash layout:
+    0x40200000 36k  header + iram/dram init
+    0x40209000 572k firmware (irom0)
+    0x40298000 396k filesystem
+    0x402fb000 20k  SDK parameters
+*/
+
+MEMORY
+{
+    dport0_0_seg : org = 0x3ff00000, len = 16
+    dram0_0_seg :  org = 0x3ffe8000, len = 80K
+    iram1_0_seg :  org = 0x40100000, len = 32K
+    irom0_0_seg :  org = 0x40209000, len = 572K
+}
+
+/* define common sections and symbols */
+INCLUDE boards/esp8266_common.ld
diff --git a/ports/esp8266/boards/esp8266_2m.ld b/ports/esp8266/boards/esp8266_2m.ld
new file mode 100644
index 0000000000..b5813ce0fb
--- /dev/null
+++ b/ports/esp8266/boards/esp8266_2m.ld
@@ -0,0 +1,18 @@
+/* GNU linker script for ESP8266 with 2M or more flash
+
+   Flash layout:
+    0x40200000 36k  header + iram/dram init
+    0x40209000 988k firmware (irom0)
+    0x40300000 1M+  filesystem (not memory mapped)
+*/
+
+MEMORY
+{
+    dport0_0_seg : org = 0x3ff00000, len = 16
+    dram0_0_seg :  org = 0x3ffe8000, len = 80K
+    iram1_0_seg :  org = 0x40100000, len = 32K
+    irom0_0_seg :  org = 0x40209000, len = 1M - 36K
+}
+
+/* define common sections and symbols */
+INCLUDE boards/esp8266_common.ld
diff --git a/ports/esp8266/boards/esp8266_512k.ld b/ports/esp8266/boards/esp8266_512k.ld
index 8690447813..c4cc798499 100644
--- a/ports/esp8266/boards/esp8266_512k.ld
+++ b/ports/esp8266/boards/esp8266_512k.ld
@@ -1,11 +1,17 @@
-/* GNU linker script for ESP8266 */
+/* GNU linker script for ESP8266 with 512K flash
+
+   Flash layout:
+    0x40200000 36k  header + iram/dram init
+    0x40209000 456k firmware (irom0)
+    0x4027b000 20k  SDK parameters
+*/
 
 MEMORY
 {
-    dport0_0_seg : org = 0x3ff00000, len = 0x10
-    dram0_0_seg :  org = 0x3ffe8000, len = 0x14000
-    iram1_0_seg :  org = 0x40100000, len = 0x8000
-    irom0_0_seg :  org = 0x40209000, len = 0x72000
+    dport0_0_seg : org = 0x3ff00000, len = 16
+    dram0_0_seg :  org = 0x3ffe8000, len = 80K
+    iram1_0_seg :  org = 0x40100000, len = 32K
+    irom0_0_seg :  org = 0x40209000, len = 512K - 36K - 20K
 }
 
 /* define common sections and symbols */
diff --git a/ports/esp8266/modules/flashbdev.py b/ports/esp8266/modules/flashbdev.py
index 404cf36665..652fe9a4ba 100644
--- a/ports/esp8266/modules/flashbdev.py
+++ b/ports/esp8266/modules/flashbdev.py
@@ -2,26 +2,23 @@ import esp
 
 
 class FlashBdev:
-
     SEC_SIZE = 4096
-    RESERVED_SECS = 1
-    START_SEC = esp.flash_user_start() // SEC_SIZE + RESERVED_SECS
-    NUM_BLK = 0x6B - RESERVED_SECS
 
-    def __init__(self, blocks=NUM_BLK):
+    def __init__(self, start_sec, blocks):
+        self.start_sec = start_sec
         self.blocks = blocks
 
     def readblocks(self, n, buf, off=0):
         # print("readblocks(%s, %x(%d), %d)" % (n, id(buf), len(buf), off))
-        esp.flash_read((n + self.START_SEC) * self.SEC_SIZE + off, buf)
+        esp.flash_read((n + self.start_sec) * self.SEC_SIZE + off, buf)
 
     def writeblocks(self, n, buf, off=None):
         # print("writeblocks(%s, %x(%d), %d)" % (n, id(buf), len(buf), off))
         # assert len(buf) <= self.SEC_SIZE, len(buf)
         if off is None:
-            esp.flash_erase(n + self.START_SEC)
+            esp.flash_erase(n + self.start_sec)
             off = 0
-        esp.flash_write((n + self.START_SEC) * self.SEC_SIZE + off, buf)
+        esp.flash_write((n + self.start_sec) * self.SEC_SIZE + off, buf)
 
     def ioctl(self, op, arg):
         # print("ioctl(%d, %r)" % (op, arg))
@@ -30,7 +27,7 @@ class FlashBdev:
         if op == 5:  # MP_BLOCKDEV_IOCTL_BLOCK_SIZE
             return self.SEC_SIZE
         if op == 6:  # MP_BLOCKDEV_IOCTL_BLOCK_ERASE
-            esp.flash_erase(arg + self.START_SEC)
+            esp.flash_erase(arg + self.start_sec)
             return 0
 
 
@@ -38,5 +35,8 @@ size = esp.flash_size()
 if size < 1024 * 1024:
     bdev = None
 else:
+    start_sec = esp.flash_user_start() // FlashBdev.SEC_SIZE
+    if start_sec < 256:
+        start_sec += 1  # Reserve space for native code
     # 20K at the flash end is reserved for SDK params storage
-    bdev = FlashBdev((size - 20480) // FlashBdev.SEC_SIZE - FlashBdev.START_SEC)
+    bdev = FlashBdev(start_sec, (size - 20480) // FlashBdev.SEC_SIZE - start_sec)
diff --git a/ports/esp8266/modules/inisetup.py b/ports/esp8266/modules/inisetup.py
index 1bbc3d0dbb..79576e9d62 100644
--- a/ports/esp8266/modules/inisetup.py
+++ b/ports/esp8266/modules/inisetup.py
@@ -45,8 +45,8 @@ def setup():
     check_bootsec()
     print("Performing initial setup")
     wifi()
-    uos.VfsFat.mkfs(bdev)
-    vfs = uos.VfsFat(bdev)
+    uos.VfsLfs2.mkfs(bdev)
+    vfs = uos.VfsLfs2(bdev)
     uos.mount(vfs, "/")
     with open("boot.py", "w") as f:
         f.write(