Docker on Proxmox LXC: What Actually Works (and Why Unprivileged Doesn't)

The Setup I run a Proxmox 9 homelab (pve-manager/9.0.5, kernel 6.14.8-2-pve) and I needed to run Docker inside an LXC container — not a VM — to test a customer-style "bring-your-own-VPS" deployment path for a PaaS I'm building. The container had to act like a standard Ubuntu cloud VM: Docker, systemd, the works. LXC over a full VM gets me near-bare-metal performance, a fraction of the RAM overhead, and instant boots. The catch: the "Docker on LXC" recipes you'll find on most blog posts and Proxmox forum threads are out of date . They assume kernel 5.x and runc 1.1.x. On a modern Proxmox (kernel 6.14 + runc 1.2+ shipped with Docker 29) those recipes fail in two new and confusing ways before you even reach the workarounds we used to know about. This article walks through exactly what fails, why it fails, and the config that actually works in 2026 — plus an honest look at the security tradeoffs, because spoiler: the working config is privileged , and that matters. The Goal A Proxmox LXC container that can: Run docker run hello-world cleanly Pull and build complex images (multi-stage builds, overlay2 storage driver) Run nested containers with their own systemd Use systemd --user for per-service lingering processes Attempt 1: Unprivileged LXC (the path you "should" take) Conventional wisdom says: use unprivileged LXC. The container's root is mapped to an unprivileged UID on the host (typically 100000 ), so even a full container compromise can't escape to host root. Modern Proxmox makes this the default and recommended mode. I started with an unprivileged Ubuntu 25.04 container, added the now-standard features: pct set <vmid> -features nesting = 1,keyctl = 1,fuse = 1 Then inside the container, installed Docker from the official download.docker.com repo and ran: docker run --rm hello-world Here's what happened: docker: Error response from daemon: failed to create task for container: failed to create shim task: OCI runtime create failed: runc create failed: unable to start