diff --git a/e2e/image/build_test.go b/e2e/image/build_test.go
index 7d89a6f3b5..6ded9ae8e9 100644
--- a/e2e/image/build_test.go
+++ b/e2e/image/build_test.go
@@ -2,11 +2,16 @@ package image
 
 import (
 	"fmt"
+	"io/ioutil"
+	"path/filepath"
+	"strings"
 	"testing"
 
 	"github.com/docker/cli/e2e/internal/fixtures"
 	"github.com/docker/cli/internal/test/environment"
 	"github.com/docker/cli/internal/test/output"
+	"gotest.tools/assert"
+	is "gotest.tools/assert/cmp"
 	"gotest.tools/fs"
 	"gotest.tools/icmd"
 	"gotest.tools/skip"
@@ -103,6 +108,33 @@ func TestTrustedBuildUntrustedImage(t *testing.T) {
 	})
 }
 
+func TestBuildIidFileSquash(t *testing.T) {
+	environment.SkipIfNotExperimentalDaemon(t)
+	dir := fs.NewDir(t, "test-iidfile-squash")
+	defer dir.Remove()
+	iidfile := filepath.Join(dir.Path(), "idsquash")
+	buildDir := fs.NewDir(t, "test-iidfile-squash-build",
+		fs.WithFile("Dockerfile", fmt.Sprintf(`
+	FROM %s
+	ENV FOO FOO
+	ENV BAR BAR
+	RUN touch /foop`, fixtures.AlpineImage)),
+	)
+	defer buildDir.Remove()
+
+	imageTag := "testbuildiidfilesquash"
+	result := icmd.RunCmd(
+		icmd.Command("docker", "build", "--iidfile", iidfile, "--squash", "-t", imageTag, "."),
+		withWorkingDir(buildDir),
+	)
+	result.Assert(t, icmd.Success)
+	id, err := ioutil.ReadFile(iidfile)
+	assert.NilError(t, err)
+	result = icmd.RunCommand("docker", "image", "inspect", "-f", "{{.Id}}", imageTag)
+	result.Assert(t, icmd.Success)
+	assert.Check(t, is.Equal(string(id), strings.TrimSpace(result.Combined())))
+}
+
 func withWorkingDir(dir *fs.Dir) func(*icmd.Cmd) {
 	return func(cmd *icmd.Cmd) {
 		cmd.Dir = dir.Path()
diff --git a/internal/test/environment/testenv.go b/internal/test/environment/testenv.go
index 3e4ef8495d..42043c1bdf 100644
--- a/internal/test/environment/testenv.go
+++ b/internal/test/environment/testenv.go
@@ -1,12 +1,17 @@
 package environment
 
 import (
+	"context"
 	"os"
 	"strings"
+	"testing"
 	"time"
 
+	"github.com/docker/docker/client"
 	"github.com/pkg/errors"
+	"gotest.tools/assert"
 	"gotest.tools/poll"
+	"gotest.tools/skip"
 )
 
 // Setup a new environment
@@ -74,5 +79,21 @@ func boolFromString(val string) bool {
 	}
 }
 
+func dockerClient(t *testing.T) client.APIClient {
+	t.Helper()
+	c, err := client.NewClientWithOpts(client.FromEnv, client.WithVersion("1.37"))
+	assert.NilError(t, err)
+	return c
+}
+
 // DefaultPollSettings used with gotestyourself/poll
 var DefaultPollSettings = poll.WithDelay(100 * time.Millisecond)
+
+// SkipIfNotExperimentalDaemon returns whether the test docker daemon is in experimental mode
+func SkipIfNotExperimentalDaemon(t *testing.T) {
+	t.Helper()
+	c := dockerClient(t)
+	info, err := c.Info(context.Background())
+	assert.NilError(t, err)
+	skip.If(t, !info.ExperimentalBuild, "running against a non-experimental daemon")
+}