diff --git a/lopper/assists/xlnx_overlay_pl_dt.py b/lopper/assists/xlnx_overlay_pl_dt.py
index a190d34a..3c674c53 100644
--- a/lopper/assists/xlnx_overlay_pl_dt.py
+++ b/lopper/assists/xlnx_overlay_pl_dt.py
@@ -166,6 +166,8 @@ def usage():
     print('  --exclude-nodes=<node>[,<node>,...] - Comma-separated list of node paths/labels to exclude')
     print('                      These nodes will be removed from the generated overlay output.')
     print('                      Example: --exclude-nodes=/amba_pl/some_node')
+    print('  --exclude-overlays=<file>[,<file>,...] - Exclude specific *.dtso files from auto-discovery')
+    print('                      Supports glob patterns (e.g., --exclude-overlays=*.dtso to skip all)')
     print('\nExamples:')
     print(' With machine argument:')
     print(' lopper -O <output_dir>/ -f --enhanced <path_to_system_top>/system-top.dts <path_to_lopper_gen_dt>/lopper-gen.dts -- xlnx_overlay_pl_dt <machine> <config> <path_to_pl_dtsi>/pl.dtsi')
@@ -272,6 +274,7 @@ def validate_and_parse_options(options, sdt):
     node_specs = None
     exclude_props = None
     exclude_nodes = None
+    exclude_overlays = None
     for arg in optional_args:
         if arg.startswith("--firmware-name="):
             firmware_override = arg.split("=", 1)[1]
@@ -281,6 +284,11 @@ def validate_and_parse_options(options, sdt):
             exclude_props = [p.strip() for p in arg.split("=", 1)[1].split(",") if p.strip()]
         elif arg.startswith("--exclude-nodes="):
             exclude_nodes = [n.strip() for n in arg.split("=", 1)[1].split(",") if n.strip()]
+        elif arg.startswith("--exclude-overlays="):
+            exclude_overlays = [f.strip() for f in arg.split("=", 1)[1].split(",") if f.strip()]
+        elif arg == "--exclude-overlays":
+            _error("--exclude-overlays requires a value (e.g., --exclude-overlays=a.dtso,b.dtso)")
+            sys.exit(1)
 
     # Parse arguments based on count
     try:
@@ -350,7 +358,7 @@ def validate_and_parse_options(options, sdt):
         usage()
         sys.exit(1)
 
-    return platform, config, zynq_platforms, versal_platforms, firmware_override, node_specs, exclude_props, exclude_nodes
+    return platform, config, zynq_platforms, versal_platforms, firmware_override, node_specs, exclude_props, exclude_nodes, exclude_overlays
 
 def validate_amba_pl_node(amba_node):
     """
@@ -769,10 +777,55 @@ def write_output_files(overlay_tree, sdt, pl_file, dtso_file):
     - pl.dtso: Copy of pl.dtsi with .dtso extension
     Note: Modified system device tree (with /amba_pl node removed) is written by lopper itself
 """
+
+def discover_overlay_files(sdt, exclude_overlays=None):
+    """Auto-discover *.dtso overlay files co-located with system-top.dts.
+
+    Scans the directory containing the input SDT file for files matching
+    the *.dtso extension and registers them via the same compilation path
+    used by the -i flag, so fragment_add_for_refs() emits them as overlay
+    fragments in pl.dtsi automatically.
+
+    Args:
+        sdt: LopperSDT object with .dts pointing to the input file
+        exclude_overlays: list of filename patterns to exclude (supports glob)
+    """
+    if not sdt.dts:
+        return
+
+    sdt_dir = Path(sdt.dts).resolve().parent
+    overlay_files = sorted(sdt_dir.glob('*.dtso'))
+
+    if not overlay_files:
+        return
+
+    if exclude_overlays:
+        overlay_files = [f for f in overlay_files
+                         if not any(f.match(pat) for pat in exclude_overlays)]
+
+    if not overlay_files:
+        return
+
+    existing = set(sdt.tree._metadata.get('overlay_subtrees', {}).keys())
+    new_files = []
+    for f in overlay_files:
+        if f.stem not in existing:
+            new_files.append(str(f))
+        else:
+            _info(f"Overlay '{f.stem}' already registered (via -i?), skipping")
+
+    if not new_files:
+        return
+
+    for f in new_files:
+        print(f"Auto-discovered overlay: {Path(f).name}")
+
+    sdt._compile_overlay_subtrees(new_files, str(sdt_dir))
+
 def xlnx_generate_overlay_dt(tgt_node, sdt, options):
     _level(utils.log_setup(options), __name__)
     # Parse and validate options
-    platform, config, zynq_platforms, versal_platforms, firmware_override, node_specs, exclude_props, exclude_nodes = validate_and_parse_options(options, sdt)
+    platform, config, zynq_platforms, versal_platforms, firmware_override, node_specs, exclude_props, exclude_nodes, exclude_overlays = validate_and_parse_options(options, sdt)
 
     # Remove SDT-specific properties from overlay automatically
     if exclude_props is None:
@@ -780,6 +833,8 @@ def xlnx_generate_overlay_dt(tgt_node, sdt, options):
     elif 'address-map' not in exclude_props:
         exclude_props.append('address-map')
 
+    discover_overlay_files(sdt, exclude_overlays)
+
     overlay_tree = LopperTree()
 
     print("Starting overlay generation...")