diff --git a/libpod/runtime.go b/libpod/runtime.go
index 7da8b181f40f..1118264f0ebd 100644
--- a/libpod/runtime.go
+++ b/libpod/runtime.go
@@ -17,6 +17,7 @@ import (
 	"github.com/containers/podman/v2/libpod/events"
 	"github.com/containers/podman/v2/libpod/image"
 	"github.com/containers/podman/v2/libpod/lock"
+	"github.com/containers/podman/v2/libpod/shutdown"
 	"github.com/containers/podman/v2/pkg/cgroups"
 	"github.com/containers/podman/v2/pkg/registries"
 	"github.com/containers/podman/v2/pkg/rootless"
@@ -174,9 +175,21 @@ func newRuntimeFromConfig(ctx context.Context, conf *config.Config, options ...R
 		}
 	}
 
+	if err := shutdown.Start(); err != nil {
+		return nil, errors.Wrapf(err, "error starting shutdown signal handler")
+	}
+
 	if err := makeRuntime(ctx, runtime); err != nil {
 		return nil, err
 	}
+
+	if err := shutdown.Register("libpod", func() error {
+		os.Exit(1)
+		return nil
+	}); err != nil {
+		logrus.Errorf("Error registering shutdown handler for libpod: %v", err)
+	}
+
 	return runtime, nil
 }
 
diff --git a/libpod/runtime_ctr.go b/libpod/runtime_ctr.go
index 51b4c5f0397a..de73a9ff358e 100644
--- a/libpod/runtime_ctr.go
+++ b/libpod/runtime_ctr.go
@@ -12,6 +12,7 @@ import (
 	"github.com/containers/common/pkg/config"
 	"github.com/containers/podman/v2/libpod/define"
 	"github.com/containers/podman/v2/libpod/events"
+	"github.com/containers/podman/v2/libpod/shutdown"
 	"github.com/containers/podman/v2/pkg/cgroups"
 	"github.com/containers/podman/v2/pkg/rootless"
 	"github.com/containers/storage"
@@ -149,6 +150,10 @@ func (r *Runtime) setupContainer(ctx context.Context, ctr *Container) (_ *Contai
 		return nil, err
 	}
 
+	// Inhibit shutdown until creation succeeds
+	shutdown.Inhibit()
+	defer shutdown.Uninhibit()
+
 	// Allocate a lock for the container
 	lock, err := r.lockManager.AllocateLock()
 	if err != nil {
diff --git a/pkg/api/server/server.go b/pkg/api/server/server.go
index cc5b45a65144..6547fb395f65 100644
--- a/pkg/api/server/server.go
+++ b/pkg/api/server/server.go
@@ -190,6 +190,9 @@ func (s *APIServer) Serve() error {
 	}); err != nil {
 		return err
 	}
+	// Unregister the libpod handler, which just calls exit(1).
+	// Ignore errors if it doesn't exist.
+	_ = shutdown.Unregister("libpod")
 
 	errChan := make(chan error, 1)
 
diff --git a/pkg/domain/infra/abi/terminal/sigproxy_linux.go b/pkg/domain/infra/abi/terminal/sigproxy_linux.go
index f484e926c035..0c586cf5c055 100644
--- a/pkg/domain/infra/abi/terminal/sigproxy_linux.go
+++ b/pkg/domain/infra/abi/terminal/sigproxy_linux.go
@@ -5,12 +5,17 @@ import (
 	"syscall"
 
 	"github.com/containers/podman/v2/libpod"
+	"github.com/containers/podman/v2/libpod/shutdown"
 	"github.com/containers/podman/v2/pkg/signal"
 	"github.com/sirupsen/logrus"
 )
 
 // ProxySignals ...
 func ProxySignals(ctr *libpod.Container) {
+	// Stop catching the shutdown signals (SIGINT, SIGTERM) - they're going
+	// to the container now.
+	shutdown.Stop()
+
 	sigBuffer := make(chan os.Signal, 128)
 	signal.CatchAll(sigBuffer)