diff --git a/src/Components/CreateImageWizard/CreateImageWizard.tsx b/src/Components/CreateImageWizard/CreateImageWizard.tsx
index f26989158d..6647acaf6b 100644
--- a/src/Components/CreateImageWizard/CreateImageWizard.tsx
+++ b/src/Components/CreateImageWizard/CreateImageWizard.tsx
@@ -45,6 +45,7 @@ import {
   parseStateFromRequest,
   selectDistribution,
   selectImageSource,
+  selectImageSourceType,
   selectImageTypes,
   selectIsImageMode,
   selectTimezone,
@@ -121,6 +122,7 @@ const CreateImageWizard = () => {
   const isOnPremise = useAppSelector(selectIsOnPremise);
   const isImageMode = useAppSelector(selectIsImageMode);
   const imageSource = useAppSelector(selectImageSource);
+  const imageSourceType = useAppSelector(selectImageSourceType);
   const [searchParams, setSearchParams] = useSearchParams();
   const resolvePath = useAppSelector(selectPathResolver);
   const hasInitialized = useRef(false);
@@ -170,6 +172,11 @@ const CreateImageWizard = () => {
   const usersHaveErrors =
     usersValidation.disabledNext || userGroupsValidation.disabledNext;
 
+  // The "Local images" source is a fake door: it only shows a coming-soon
+  // note, so the wizard must not proceed past base settings.
+  const localImageSourceSelected =
+    isOnPremise && isImageMode && imageSourceType === 'local';
+
   const baseSettingsHasErrors =
     targetEnvironments.length === 0 ||
     (isImageMode && !imageSource) ||
@@ -417,10 +424,11 @@ const CreateImageWizard = () => {
       (s) => s.id === 'base-settings-step',
     )?.isVisited;
     const canNavigate =
-      mode === 'edit' ||
-      step.isVisited ||
-      isBaseSettingsStep ||
-      (hasVisitedBaseSettings && !baseSettingsHasErrors);
+      (isBaseSettingsStep || !localImageSourceSelected) &&
+      (mode === 'edit' ||
+        step.isVisited ||
+        isBaseSettingsStep ||
+        (hasVisitedBaseSettings && !baseSettingsHasErrors));
 
     return (
       <WizardNavItem
@@ -487,6 +495,7 @@ const CreateImageWizard = () => {
           footer={
             <CustomWizardFooter
               disableBack={true}
+              disableNext={localImageSourceSelected}
               hasErrors={baseSettingsHasErrors}
               isOnPremise={isOnPremise}
             />
diff --git a/src/Components/CreateImageWizard/components/CustomWizardFooter.tsx b/src/Components/CreateImageWizard/components/CustomWizardFooter.tsx
index 9c25ac749d..28e82931c8 100644
--- a/src/Components/CreateImageWizard/components/CustomWizardFooter.tsx
+++ b/src/Components/CreateImageWizard/components/CustomWizardFooter.tsx
@@ -20,6 +20,7 @@ import { scrollToFirstError } from '../utilities/scrollToFirstError';
 
 type CustomWizardFooterPropType = {
   disableBack?: boolean;
+  disableNext?: boolean;
   hasErrors: boolean;
   beforeNext?: () => boolean;
   isOnPremise: boolean;
@@ -27,6 +28,7 @@ type CustomWizardFooterPropType = {
 
 export const CustomWizardFooter = ({
   disableBack,
+  disableNext = false,
   hasErrors,
   beforeNext,
   isOnPremise,
@@ -89,10 +91,18 @@ export const CustomWizardFooter = ({
         >
           Back
         </Button>
-        <Button variant='secondary' onClick={handleNext}>
+        <Button
+          variant='secondary'
+          onClick={handleNext}
+          isDisabled={disableNext}
+        >
           Next
         </Button>
-        <Button variant='primary' onClick={handleReview}>
+        <Button
+          variant='primary'
+          onClick={handleReview}
+          isDisabled={disableNext}
+        >
           Review image
         </Button>
         <Button
diff --git a/src/Components/CreateImageWizard/components/tests/CustomWizardFooter.test.tsx b/src/Components/CreateImageWizard/components/tests/CustomWizardFooter.test.tsx
new file mode 100644
index 0000000000..987399e063
--- /dev/null
+++ b/src/Components/CreateImageWizard/components/tests/CustomWizardFooter.test.tsx
@@ -0,0 +1,42 @@
+import React from 'react';
+
+import { Wizard, WizardStep } from '@patternfly/react-core';
+import { screen } from '@testing-library/react';
+
+import { renderWithRedux } from '@/test/testUtils';
+
+import CustomWizardFooter from '../CustomWizardFooter';
+
+const renderFooter = (
+  props: Partial<React.ComponentProps<typeof CustomWizardFooter>> = {},
+) => {
+  return renderWithRedux(
+    <Wizard>
+      <WizardStep
+        name='Test step'
+        id='test-step'
+        footer={
+          <CustomWizardFooter hasErrors={false} isOnPremise={true} {...props} />
+        }
+      >
+        Step content
+      </WizardStep>
+    </Wizard>,
+  );
+};
+
+describe('CustomWizardFooter', () => {
+  test('Next and Review image are enabled by default', async () => {
+    renderFooter();
+
+    expect(await screen.findByRole('button', { name: 'Next' })).toBeEnabled();
+    expect(screen.getByRole('button', { name: 'Review image' })).toBeEnabled();
+  });
+
+  test('Next and Review image are disabled when disableNext is set', async () => {
+    renderFooter({ disableNext: true });
+
+    expect(await screen.findByRole('button', { name: 'Next' })).toBeDisabled();
+    expect(screen.getByRole('button', { name: 'Review image' })).toBeDisabled();
+  });
+});
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/Hosted.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/Hosted.tsx
index 3f640ffe68..e5bfd9f32c 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/Hosted.tsx
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/Hosted.tsx
@@ -125,7 +125,7 @@ const HostedImageSourceSelect = () => {
 
   return (
     <FormGroup label='Image source' isRequired>
-      {isError && <ImageSourceError isOnPremise={false} />}
+      {isError && <ImageSourceError />}
       <Select
         isOpen={isOpen}
         selected={imageSource}
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/ImageSourceError.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/ImageSourceError.tsx
index 158c5c1491..16bd2cc5f4 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/ImageSourceError.tsx
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/ImageSourceError.tsx
@@ -2,19 +2,13 @@ import React from 'react';
 
 import { Alert } from '@patternfly/react-core';
 
-type ImageSourceErrorProps = {
-  isOnPremise: boolean;
-};
-
-const ImageSourceError = ({ isOnPremise }: ImageSourceErrorProps) => (
+const ImageSourceError = () => (
   <Alert
     title='Error loading bootc images'
     variant='danger'
     className='pf-v6-u-mb-md'
   >
-    {isOnPremise
-      ? 'Unable to load available bootc images. Ensure podman is installed and accessible.'
-      : 'Unable to load available bootc images. Please try again later.'}
+    Unable to load available bootc images. Please try again later.
   </Alert>
 );
 
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/CustomImageSource.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/CustomImageSource.tsx
deleted file mode 100644
index dacb0e4059..0000000000
--- a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/CustomImageSource.tsx
+++ /dev/null
@@ -1,101 +0,0 @@
-import React, { useMemo } from 'react';
-
-import { Button, Flex, FlexItem } from '@patternfly/react-core';
-import { SyncAltIcon } from '@patternfly/react-icons';
-
-import {
-  type BootcDistributionItem,
-  useGetDistributionsQuery,
-  useGetRegistryAuthStatusQuery,
-} from '@/store/api/backend';
-import { Distributions } from '@/store/api/backend/hosted';
-import { isKnownImageRef } from '@/store/api/backend/onprem/constants';
-import { useAppDispatch, useAppSelector } from '@/store/hooks';
-import {
-  changeDistribution,
-  changeImageSource,
-  changeImageTypes,
-  selectArchitecture,
-  selectImageSource,
-  selectImageSourceType,
-  type SupportedImageTypes,
-} from '@/store/slices/wizard';
-
-import ImageSelect from './ImageSelect';
-
-import ImageSourceError from '../ImageSourceError';
-
-const CustomImageSource = () => {
-  const dispatch = useAppDispatch();
-  const arch = useAppSelector(selectArchitecture);
-  const selectedRef = useAppSelector(selectImageSource);
-  const imageSourceType = useAppSelector(selectImageSourceType);
-
-  const { data: authStatus } = useGetRegistryAuthStatusQuery();
-  const isAuthenticated = authStatus?.status === 'authenticated';
-
-  const {
-    data: distributions,
-    isLoading,
-    isError,
-    refetch,
-  } = useGetDistributionsQuery({
-    kind: 'bootc',
-    arch,
-  });
-
-  const images = useMemo(() => {
-    const imgs = (distributions ?? []) as BootcDistributionItem[];
-    if (!isAuthenticated) {
-      return imgs;
-    }
-
-    return imgs.filter((img) => !isKnownImageRef(img.reference));
-  }, [isAuthenticated, distributions]);
-
-  if (imageSourceType !== 'custom') {
-    return null;
-  }
-
-  return (
-    <>
-      {isError && <ImageSourceError isOnPremise />}
-      <Flex>
-        <FlexItem>
-          <ImageSelect
-            items={images}
-            selectedRef={selectedRef}
-            onSelect={(_event, selection) => {
-              const selected = images.find(
-                (img) => img.reference === selection,
-              );
-              if (selected) {
-                dispatch(changeImageSource(selected.reference));
-                dispatch(changeDistribution(selected.distro as Distributions));
-                dispatch(
-                  changeImageTypes([selected.type as SupportedImageTypes]),
-                );
-              }
-            }}
-            getLabel={(item) => item.reference}
-            placeholder='Select a custom image'
-            isLoading={isLoading}
-            isSearchable
-          />
-        </FlexItem>
-        <FlexItem>
-          <Button
-            variant='plain'
-            icon={<SyncAltIcon />}
-            onClick={refetch}
-            isDisabled={isLoading}
-            isInline
-            aria-label='Refresh image sources'
-          />
-        </FlexItem>
-      </Flex>
-    </>
-  );
-};
-
-export default CustomImageSource;
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/ImageSelect.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/ImageSelect.tsx
index de16481030..41d3eab5ed 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/ImageSelect.tsx
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/ImageSelect.tsx
@@ -7,9 +7,6 @@ import {
   Select,
   SelectList,
   SelectOption,
-  Spinner,
-  TextInputGroup,
-  TextInputGroupMain,
 } from '@patternfly/react-core';
 
 import { simpleTargetNames } from '@/constants';
@@ -24,9 +21,7 @@ type ImageSelectProps = {
   onSelect: (event?: React.MouseEvent, selection?: string | number) => void;
   getLabel: (item: BootcDistributionItem) => string;
   placeholder?: string;
-  isLoading?: boolean;
   isDisabled?: boolean;
-  isSearchable?: boolean;
   ariaDescribedBy?: string | undefined;
 };
 
@@ -41,103 +36,33 @@ const ImageSelect = ({
   onSelect,
   getLabel,
   placeholder = 'Select an image',
-  isLoading = false,
   isDisabled = false,
-  isSearchable = false,
   ariaDescribedBy,
 }: ImageSelectProps) => {
   const [isOpen, setIsOpen] = useState(false);
-  // null = not filtering (show selected label), string = user is typing
-  const [filterValue, setFilterValue] = useState<string | null>(null);
 
   const selectedItem = items.find((item) => item.reference === selectedRef);
 
-  const filteredItems =
-    isSearchable && filterValue
-      ? items.filter((item) =>
-          getLabel(item).toLowerCase().includes(filterValue.toLowerCase()),
-        )
-      : items;
-
   const handleSelect = (
     event?: React.MouseEvent,
     selection?: string | number,
   ) => {
     onSelect(event, selection);
-    setFilterValue(null);
     setIsOpen(false);
   };
 
-  const handleOpenChange = (open: boolean) => {
-    setIsOpen(open);
-    if (!open) {
-      setFilterValue(null);
-    }
-  };
-
-  const toggle = (toggleRef: React.Ref<MenuToggleElement>) => {
-    if (isLoading) {
-      return (
-        <MenuToggle
-          ref={toggleRef}
-          isDisabled
-          style={toggleStyle}
-          aria-describedby={ariaDescribedBy}
-        >
-          <Spinner size='sm' aria-hidden='true' /> Loading images...
-        </MenuToggle>
-      );
-    }
-
-    if (isSearchable) {
-      const inputValue =
-        filterValue !== null
-          ? filterValue
-          : selectedItem
-            ? getLabel(selectedItem)
-            : '';
-
-      return (
-        <MenuToggle
-          ref={toggleRef}
-          variant='typeahead'
-          onClick={() => setIsOpen((prev) => !prev)}
-          isExpanded={isOpen}
-          isDisabled={isDisabled}
-          style={toggleStyle}
-          aria-describedby={ariaDescribedBy}
-        >
-          <TextInputGroup isPlain>
-            <TextInputGroupMain
-              value={inputValue}
-              onClick={() => setIsOpen((prev) => !prev)}
-              onChange={(_event, value) => {
-                setFilterValue(value);
-                if (!isOpen) {
-                  setIsOpen(true);
-                }
-              }}
-              autoComplete='off'
-              placeholder={placeholder}
-            />
-          </TextInputGroup>
-        </MenuToggle>
-      );
-    }
-
-    return (
-      <MenuToggle
-        ref={toggleRef}
-        onClick={() => setIsOpen((prev) => !prev)}
-        isExpanded={isOpen}
-        isDisabled={isDisabled}
-        style={toggleStyle}
-        aria-describedby={ariaDescribedBy}
-      >
-        {selectedItem ? getLabel(selectedItem) : placeholder}
-      </MenuToggle>
-    );
-  };
+  const toggle = (toggleRef: React.Ref<MenuToggleElement>) => (
+    <MenuToggle
+      ref={toggleRef}
+      onClick={() => setIsOpen((prev) => !prev)}
+      isExpanded={isOpen}
+      isDisabled={isDisabled}
+      style={toggleStyle}
+      aria-describedby={ariaDescribedBy}
+    >
+      {selectedItem ? getLabel(selectedItem) : placeholder}
+    </MenuToggle>
+  );
 
   return (
     <div className='pf-v6-u-mt-md'>
@@ -145,17 +70,15 @@ const ImageSelect = ({
         isOpen={isOpen}
         selected={selectedRef}
         onSelect={handleSelect}
-        onOpenChange={handleOpenChange}
+        onOpenChange={(open) => setIsOpen(open)}
         toggle={toggle}
         shouldFocusToggleOnSelect
       >
         <SelectList>
-          {filteredItems.length === 0 && (
-            <SelectOption isDisabled>
-              {filterValue ? 'No results found' : 'No images available'}
-            </SelectOption>
+          {items.length === 0 && (
+            <SelectOption isDisabled>No images available</SelectOption>
           )}
-          {filteredItems.map((item) => (
+          {items.map((item) => (
             <SelectOption
               key={item.reference}
               value={item.reference}
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/LocalImageSource.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/LocalImageSource.tsx
new file mode 100644
index 0000000000..9fb4850c75
--- /dev/null
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/LocalImageSource.tsx
@@ -0,0 +1,38 @@
+import React from 'react';
+
+import {
+  ClipboardCopy,
+  EmptyState,
+  EmptyStateBody,
+} from '@patternfly/react-core';
+import { RocketIcon } from '@patternfly/react-icons';
+
+const LocalImageSource = () => {
+  return (
+    <EmptyState
+      variant='sm'
+      icon={RocketIcon}
+      titleText='Local image support is coming soon'
+      headingLevel='h4'
+      className='pf-v6-u-mt-md'
+    >
+      <EmptyStateBody>
+        Until support arrives in Cockpit Image Builder 10.4, build local
+        container images with the image-builder command-line tool:
+        <ClipboardCopy
+          isReadOnly
+          isCode
+          hoverTip='Copy'
+          clickTip='Copied'
+          className='pf-v6-u-mt-md'
+        >
+          {
+            'image-builder build qcow2 --bootc-ref localhost/my-derived-image:latest'
+          }
+        </ClipboardCopy>
+      </EmptyStateBody>
+    </EmptyState>
+  );
+};
+
+export default LocalImageSource;
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/index.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/index.tsx
index 409986530a..81c51da2c7 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/index.tsx
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/components/ImageSourceSelect/OnPrem/index.tsx
@@ -17,7 +17,7 @@ import {
   selectImageSourceType,
 } from '@/store/slices/wizard';
 
-import CustomImageSource from './CustomImageSource';
+import LocalImageSource from './LocalImageSource';
 import OfficialImageSource from './OfficialImageSource';
 
 const OnPremImageSourceSelect = () => {
@@ -53,33 +53,31 @@ const OnPremImageSourceSelect = () => {
           <CardBody>Remote images from {IMAGE_REGISTRY_HOST}</CardBody>
         </Card>
         <Card
-          id='custom-card'
+          id='local-card'
           isSelectable
-          isSelected={imageSourceType === 'custom'}
+          isSelected={imageSourceType === 'local'}
         >
           <CardHeader
             selectableActions={{
-              selectableActionId: 'custom-image-source-input',
-              selectableActionAriaLabelledby: 'custom-card-title',
+              selectableActionId: 'local-image-source-input',
+              selectableActionAriaLabelledby: 'local-card-title',
               name: 'image-source-type',
               variant: 'single',
               onChange: (_, checked) => {
                 if (checked) {
-                  dispatch(changeImageSourceType('custom'));
+                  dispatch(changeImageSourceType('local'));
                 }
               },
               hasNoOffset: true,
             }}
           >
-            <CardTitle id='custom-card-title'>
-              Custom images <Label isCompact>No login</Label>
-            </CardTitle>
+            <CardTitle id='local-card-title'>Local images</CardTitle>
           </CardHeader>
           <CardBody>Local container images</CardBody>
         </Card>
       </Gallery>
       {imageSourceType === 'official' && <OfficialImageSource />}
-      {imageSourceType === 'custom' && <CustomImageSource />}
+      {imageSourceType === 'local' && <LocalImageSource />}
     </FormGroup>
   );
 };
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/tests/ImageSourceSelect.test.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/tests/ImageSourceSelect.test.tsx
index 960ad8017f..0faa147c22 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/tests/ImageSourceSelect.test.tsx
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/tests/ImageSourceSelect.test.tsx
@@ -3,21 +3,12 @@ import React from 'react';
 import { screen, waitFor } from '@testing-library/react';
 import { vi } from 'vitest';
 
-import {
-  initialState,
-  selectDistribution,
-  selectImageSource as selectImageSourceState,
-} from '@/store/slices/wizard';
+import { initialState, selectImageSource } from '@/store/slices/wizard';
 import { clickWithWait, createUser, renderWithRedux } from '@/test/testUtils';
 
-import {
-  clickRefreshImageSources,
-  openImageSourceSelect,
-  renderImageSourceSelect,
-} from './helpers';
+import { renderImageSourceSelect } from './helpers';
 import {
   mockBootcDistributions,
-  mockBootcDistributionsMixed,
   mockBootcDistributionsMultipleTypes,
   mockBootcDistributionsNoRhel10,
   mockBootcDistributionsWithMinorVersions,
@@ -27,7 +18,10 @@ import ImageSourceSelect from '../components/ImageSourceSelect';
 
 const mockRefetch = vi.fn();
 const mockUseGetDistributionsQuery = vi.fn();
-const mockRegistryLogin = vi.fn().mockReturnValue({ unwrap: vi.fn() });
+const mockUseGetImageExistsQuery = vi.fn();
+const mockUseGetRegistryAuthStatusQuery = vi.fn();
+const mockUsePullImageMutation = vi.fn();
+const mockPullImage = vi.fn();
 
 vi.mock('@/store/api/backend', async (importOriginal) => {
   const actual = await importOriginal<typeof import('@/store/api/backend')>();
@@ -35,16 +29,12 @@ vi.mock('@/store/api/backend', async (importOriginal) => {
     ...actual,
     useGetDistributionsQuery: (...args: unknown[]) =>
       mockUseGetDistributionsQuery(...args),
-    useGetRegistryAuthStatusQuery: () => ({
-      data: { status: 'authenticated', username: 'testuser' },
-      isLoading: false,
-      isError: false,
-      error: undefined,
-    }),
-    useRegistryLoginMutation: () => [
-      mockRegistryLogin,
-      { isLoading: false, error: undefined },
-    ],
+    useGetRegistryAuthStatusQuery: (...args: unknown[]) =>
+      mockUseGetRegistryAuthStatusQuery(...args),
+    useGetImageExistsQuery: (...args: unknown[]) =>
+      mockUseGetImageExistsQuery(...args),
+    usePullImageMutation: (...args: unknown[]) =>
+      mockUsePullImageMutation(...args),
   };
 });
 
@@ -66,6 +56,21 @@ describe('ImageSourceSelect', () => {
       isError: false,
       refetch: mockRefetch,
     });
+    mockUseGetImageExistsQuery.mockReturnValue({
+      data: true,
+      isLoading: false,
+      isError: false,
+    });
+    mockUseGetRegistryAuthStatusQuery.mockReturnValue({
+      data: { status: 'authenticated', username: 'testuser' },
+      isLoading: false,
+      isError: false,
+      error: undefined,
+    });
+    mockUsePullImageMutation.mockReturnValue([
+      mockPullImage,
+      { isLoading: false, isError: false },
+    ]);
   });
 
   describe('Rendering', () => {
@@ -78,196 +83,107 @@ describe('ImageSourceSelect', () => {
       expect(requiredMarkers.length).toBeGreaterThanOrEqual(1);
     });
 
-    test('does not auto-select an image in custom on-prem mode', async () => {
-      const { store } = renderImageSourceSelect();
-
-      // Wait for component to settle
-      await screen.findByText('Image source');
-
-      expect(selectImageSourceState(store.getState())).toBeUndefined();
-    });
-  });
-
-  describe('Loading State', () => {
-    beforeEach(() => {
-      mockUseGetDistributionsQuery.mockReturnValue({
-        data: undefined,
-        isLoading: true,
-        isError: false,
-        refetch: mockRefetch,
-      });
-    });
-
-    test('displays loading text in toggle', async () => {
+    test('displays official and local image source cards', async () => {
       renderImageSourceSelect();
 
-      expect(await screen.findByText(/loading images/i)).toBeInTheDocument();
+      expect(
+        await screen.findByText('Official Red Hat images'),
+      ).toBeInTheDocument();
+      expect(screen.getByText('Local images')).toBeInTheDocument();
+      expect(screen.queryByText('Custom images')).not.toBeInTheDocument();
+      expect(screen.queryByText('No login')).not.toBeInTheDocument();
     });
 
-    test('disables refresh button when loading', async () => {
-      renderImageSourceSelect();
+    test('does not auto-select an image on-prem', async () => {
+      const { store } = renderImageSourceSelect();
 
-      const refreshButton = await screen.findByRole('button', {
-        name: /refresh image sources/i,
-      });
-      expect(refreshButton).toBeDisabled();
+      await screen.findByText('Image source');
+
+      expect(selectImageSource(store.getState())).toBeUndefined();
     });
   });
 
-  describe('Error State', () => {
-    beforeEach(() => {
-      mockUseGetDistributionsQuery.mockReturnValue({
-        data: undefined,
-        isLoading: false,
-        isError: true,
-        refetch: mockRefetch,
+  describe('Local images', () => {
+    const renderLocalImageSource = () => {
+      return renderImageSourceSelect({
+        output: {
+          ...initialState.output,
+          imageSourceType: 'local',
+        },
       });
-    });
+    };
 
-    test('displays error alert when query fails', async () => {
-      renderImageSourceSelect();
+    test('displays coming soon note instead of an image dropdown', async () => {
+      renderLocalImageSource();
 
       expect(
-        await screen.findByRole('heading', {
-          name: /error loading bootc images/i,
-        }),
+        await screen.findByText(/local image support is coming soon/i),
       ).toBeInTheDocument();
       expect(
-        screen.getByText(/unable to load available bootc images/i),
+        screen.getByText(/cockpit image builder 10\.4/i),
       ).toBeInTheDocument();
     });
 
-    test('displays on-prem error message mentioning podman', async () => {
-      renderImageSourceSelect();
+    test('displays the image-builder CLI example', async () => {
+      renderLocalImageSource();
 
       expect(
-        await screen.findByText(/ensure podman is installed/i),
+        await screen.findByDisplayValue(
+          'image-builder build qcow2 --bootc-ref localhost/my-derived-image:latest',
+        ),
       ).toBeInTheDocument();
     });
 
-    test('displays hosted error message without podman reference', async () => {
-      renderHostedImageSourceSelect();
-
-      expect(
-        await screen.findByText(/please try again later/i),
-      ).toBeInTheDocument();
-    });
-  });
-
-  describe('Empty State', () => {
-    beforeEach(() => {
-      mockUseGetDistributionsQuery.mockReturnValue({
-        data: [],
-        isLoading: false,
-        isError: false,
-        refetch: mockRefetch,
-      });
-    });
-
-    test('displays "No images available" in dropdown', async () => {
+    test('selecting the local card shows the coming soon note', async () => {
       renderImageSourceSelect();
       const user = createUser();
 
-      await openImageSourceSelect(user);
+      const localCard = await screen.findByRole('radio', {
+        name: /local images/i,
+      });
+      await clickWithWait(user, localCard);
 
       expect(
-        await screen.findByRole('option', {
-          name: /no images available/i,
-        }),
+        await screen.findByText(/local image support is coming soon/i),
       ).toBeInTheDocument();
     });
   });
 
-  describe('Image Selection', () => {
-    test('displays available images in dropdown', async () => {
-      renderImageSourceSelect();
-      const user = createUser();
+  describe('Hosted (non on-premise)', () => {
+    test('does not display source type cards', async () => {
+      renderHostedImageSourceSelect();
 
-      await openImageSourceSelect(user);
+      await screen.findByText('Image source');
 
+      expect(screen.queryByText('Local images')).not.toBeInTheDocument();
       expect(
-        await screen.findByRole('option', {
-          name: /registry.redhat.io\/rhel10\/rhel-bootc:rhel-10/i,
-        }),
-      ).toBeInTheDocument();
-      expect(
-        screen.getByRole('option', {
-          name: /registry.redhat.io\/rhel9\/rhel-bootc:rhel-9/i,
-        }),
-      ).toBeInTheDocument();
-    });
-
-    test('updates redux state when selecting an image', async () => {
-      const { store } = renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-      const option = await screen.findByRole('option', {
-        name: /registry.redhat.io\/rhel9\/rhel-bootc:rhel-9/i,
-      });
-      await clickWithWait(user, option);
-
-      await waitFor(() => {
-        expect(selectImageSourceState(store.getState())).toBe(
-          'registry.redhat.io/rhel9/rhel-bootc:rhel-9',
-        );
-        expect(selectDistribution(store.getState())).toBe('rhel-9');
-      });
+        screen.queryByText('Official Red Hat images'),
+      ).not.toBeInTheDocument();
     });
 
-    test('closes dropdown after selection', async () => {
-      renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-      expect(screen.getByRole('listbox')).toBeInTheDocument();
-
-      const option = await screen.findByRole('option', {
-        name: /registry.redhat.io\/rhel9\/rhel-bootc:rhel-9/i,
+    test('displays hosted error message when query fails', async () => {
+      mockUseGetDistributionsQuery.mockReturnValue({
+        data: undefined,
+        isLoading: false,
+        isError: true,
+        refetch: mockRefetch,
       });
-      await clickWithWait(user, option);
 
-      await waitFor(() => {
-        expect(screen.queryByRole('listbox')).not.toBeInTheDocument();
-      });
-    });
-  });
-
-  describe('On-premise refresh', () => {
-    test('displays refresh button', async () => {
-      renderImageSourceSelect();
-
-      expect(
-        await screen.findByRole('button', { name: /refresh image sources/i }),
-      ).toBeInTheDocument();
-    });
-
-    test('calls refetch when refresh button clicked', async () => {
-      renderImageSourceSelect();
-      const user = createUser();
-
-      await clickRefreshImageSources(user);
-
-      expect(mockRefetch).toHaveBeenCalledTimes(1);
-    });
-  });
-
-  describe('Hosted (non on-premise)', () => {
-    test('does not display refresh button', async () => {
       renderHostedImageSourceSelect();
 
-      await screen.findByText('Image source');
-
       expect(
-        screen.queryByRole('button', { name: /refresh image sources/i }),
-      ).not.toBeInTheDocument();
+        await screen.findByRole('heading', {
+          name: /error loading bootc images/i,
+        }),
+      ).toBeInTheDocument();
+      expect(screen.getByText(/please try again later/i)).toBeInTheDocument();
     });
 
     test('auto-selects the first rhel-10 distribution', async () => {
       const { store } = renderHostedImageSourceSelect();
 
       await waitFor(() => {
-        expect(selectImageSourceState(store.getState())).toBe(
+        expect(selectImageSource(store.getState())).toBe(
           'registry.redhat.io/rhel10/rhel-bootc:rhel-10',
         );
       });
@@ -284,133 +200,14 @@ describe('ImageSourceSelect', () => {
       const { store } = renderHostedImageSourceSelect();
 
       await waitFor(() => {
-        expect(selectImageSourceState(store.getState())).toBe(
+        expect(selectImageSource(store.getState())).toBe(
           'registry.redhat.io/rhel9/rhel-bootc:rhel-9',
         );
       });
     });
   });
 
-  describe('Non-RHEL distributions', () => {
-    beforeEach(() => {
-      mockUseGetDistributionsQuery.mockReturnValue({
-        data: mockBootcDistributionsMixed,
-        isLoading: false,
-        isError: false,
-        refetch: mockRefetch,
-      });
-    });
-
-    test('displays all image references including non-RHEL in dropdown', async () => {
-      renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-
-      expect(
-        screen.getByRole('option', {
-          name: /registry.redhat.io\/rhel10\/rhel-bootc:rhel-10/i,
-        }),
-      ).toBeInTheDocument();
-      expect(
-        screen.getByRole('option', {
-          name: /quay.io\/fedora\/fedora-bootc:44/i,
-        }),
-      ).toBeInTheDocument();
-      expect(
-        screen.getByRole('option', {
-          name: /quay.io\/centos-bootc\/centos-bootc:stream10/i,
-        }),
-      ).toBeInTheDocument();
-      expect(
-        screen.getByRole('option', {
-          name: /localhost\/my-custom-image:latest/i,
-        }),
-      ).toBeInTheDocument();
-    });
-
-    test('selecting Fedora dispatches correct distribution and image source', async () => {
-      const { store } = renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-      const fedoraOption = await screen.findByRole('option', {
-        name: /quay.io\/fedora\/fedora-bootc:44/i,
-      });
-      await clickWithWait(user, fedoraOption);
-
-      await waitFor(() => {
-        expect(selectImageSourceState(store.getState())).toBe(
-          'quay.io/fedora/fedora-bootc:44',
-        );
-        expect(selectDistribution(store.getState())).toBe('fedora-44');
-      });
-    });
-
-    test('selecting CentOS dispatches correct distribution and image source', async () => {
-      const { store } = renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-      const centosOption = await screen.findByRole('option', {
-        name: /quay.io\/centos-bootc\/centos-bootc:stream10/i,
-      });
-      await clickWithWait(user, centosOption);
-
-      await waitFor(() => {
-        expect(selectImageSourceState(store.getState())).toBe(
-          'quay.io/centos-bootc/centos-bootc:stream10',
-        );
-        expect(selectDistribution(store.getState())).toBe('centos-10');
-      });
-    });
-
-    test('selecting unknown image dispatches correct distribution and image source', async () => {
-      const { store } = renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-      const customOption = await screen.findByRole('option', {
-        name: /localhost\/my-custom-image:latest/i,
-      });
-      await clickWithWait(user, customOption);
-
-      await waitFor(() => {
-        expect(selectImageSourceState(store.getState())).toBe(
-          'localhost/my-custom-image:latest',
-        );
-        expect(selectDistribution(store.getState())).toBe('unknown-custom');
-      });
-    });
-  });
-
   describe('Distribution filtering and deduplication', () => {
-    test('on-prem shows all images including minor versions', async () => {
-      mockUseGetDistributionsQuery.mockReturnValue({
-        data: mockBootcDistributionsWithMinorVersions,
-        isLoading: false,
-        isError: false,
-        refetch: mockRefetch,
-      });
-
-      renderImageSourceSelect();
-      const user = createUser();
-
-      await openImageSourceSelect(user);
-
-      const options = screen.getAllByRole('option');
-      expect(options).toHaveLength(3);
-      expect(options[0]).toHaveTextContent(
-        'registry.redhat.io/rhel10/rhel-bootc:rhel-10',
-      );
-      expect(options[1]).toHaveTextContent(
-        'registry.redhat.io/rhel10/rhel-bootc:rhel-10.1',
-      );
-      expect(options[2]).toHaveTextContent(
-        'registry.redhat.io/rhel9/rhel-bootc:rhel-9',
-      );
-    });
-
     test('hosted filters out minor versions', async () => {
       mockUseGetDistributionsQuery.mockReturnValue({
         data: mockBootcDistributionsWithMinorVersions,
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/tests/helpers.tsx b/src/Components/CreateImageWizard/steps/ImageOutput/tests/helpers.tsx
index f93401a2ea..bdc84d48ea 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/tests/helpers.tsx
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/tests/helpers.tsx
@@ -146,7 +146,7 @@ export const renderImageSourceSelect = (
       },
       output: {
         ...initialState.output,
-        imageSourceType: 'custom',
+        imageSourceType: 'official',
       },
       ...wizardStateOverrides,
     },
@@ -157,37 +157,3 @@ export const renderImageSourceSelect = (
     },
   );
 };
-
-// ImageSourceSelect interaction helpers
-export const openImageSourceSelect = async (user: UserEventInstance) => {
-  // Custom on-prem uses a typeahead input; hosted uses a button toggle
-  const input = screen.queryByRole('textbox', {
-    name: /type to filter/i,
-  });
-  if (input) {
-    await clickWithWait(user, input);
-    return;
-  }
-  const toggle = await screen.findByRole('button', {
-    name: /select a bootc image/i,
-  });
-  await clickWithWait(user, toggle);
-};
-
-export const selectImageSource = async (
-  user: UserEventInstance,
-  imageTag: RegExp | string,
-) => {
-  await openImageSourceSelect(user);
-  const option = await screen.findByRole('option', {
-    name: imageTag,
-  });
-  await clickWithWait(user, option);
-};
-
-export const clickRefreshImageSources = async (user: UserEventInstance) => {
-  const button = await screen.findByRole('button', {
-    name: /refresh image sources/i,
-  });
-  await clickWithWait(user, button);
-};
diff --git a/src/Components/CreateImageWizard/steps/ImageOutput/tests/mocks/fixtures.ts b/src/Components/CreateImageWizard/steps/ImageOutput/tests/mocks/fixtures.ts
index 26754bd948..dad9a88534 100644
--- a/src/Components/CreateImageWizard/steps/ImageOutput/tests/mocks/fixtures.ts
+++ b/src/Components/CreateImageWizard/steps/ImageOutput/tests/mocks/fixtures.ts
@@ -141,34 +141,3 @@ export const mockBootcDistributionsMultipleTypes: BootcDistributionItem[] = [
     reference: 'registry.redhat.io/rhel10/rhel-bootc-aws:10.3',
   },
 ];
-
-export const mockBootcDistributionsMixed: BootcDistributionItem[] = [
-  {
-    distro: 'rhel-10',
-    name: 'Red Hat Enterprise Linux (RHEL) 10',
-    type: 'guest-image',
-    arch: 'x86_64',
-    reference: 'registry.redhat.io/rhel10/rhel-bootc:rhel-10',
-  },
-  {
-    distro: 'fedora-44',
-    name: 'Fedora 44',
-    type: 'guest-image',
-    arch: 'x86_64',
-    reference: 'quay.io/fedora/fedora-bootc:44',
-  },
-  {
-    distro: 'centos-10',
-    name: 'CentOS Stream 10',
-    type: 'guest-image',
-    arch: 'x86_64',
-    reference: 'quay.io/centos-bootc/centos-bootc:stream10',
-  },
-  {
-    distro: 'unknown-custom',
-    name: 'localhost/my-custom-image:latest',
-    type: 'guest-image',
-    arch: 'x86_64',
-    reference: 'localhost/my-custom-image:latest',
-  },
-];
diff --git a/src/store/slices/wizard/output/parsers.ts b/src/store/slices/wizard/output/parsers.ts
index d0e7ea0be5..bf165997cd 100644
--- a/src/store/slices/wizard/output/parsers.ts
+++ b/src/store/slices/wizard/output/parsers.ts
@@ -63,7 +63,7 @@ const parseImageSourceType = ({ bootc }: RequestLike): ImageSourceType => {
   }
 
   if (!isKnownImageRef(bootc.reference)) {
-    return 'custom';
+    return 'local';
   }
 
   return 'official';
diff --git a/src/store/slices/wizard/output/types.ts b/src/store/slices/wizard/output/types.ts
index 7a457b7b92..ae27b00d55 100644
--- a/src/store/slices/wizard/output/types.ts
+++ b/src/store/slices/wizard/output/types.ts
@@ -24,7 +24,7 @@ export type MiscFormatType = Exclude<
 >;
 
 export type ImageSource = string;
-export type ImageSourceType = 'official' | 'custom';
+export type ImageSourceType = 'official' | 'local';
 
 export type RhelDistribution = (typeof RHEL_DISTRIBUTIONS)[number];