diff --git a/hw/s390x/s390-virtio-ccw.c b/hw/s390x/s390-virtio-ccw.c
index 2e6d292c23..577590e623 100644
--- a/hw/s390x/s390-virtio-ccw.c
+++ b/hw/s390x/s390-virtio-ccw.c
@@ -160,6 +160,35 @@ static void virtio_ccw_register_hcalls(void)
                                    virtio_ccw_hcall_early_printk);
 }
 
+static void s390_device_memory_init(MachineState *machine)
+{
+    MemoryRegion *sysmem = get_system_memory();
+
+    machine->device_memory = g_malloc0(sizeof(*machine->device_memory));
+
+    /* initialize device memory address space */
+    if (machine->ram_size < machine->maxram_size) {
+        ram_addr_t device_mem_size = machine->maxram_size - machine->ram_size;
+
+        if (QEMU_ALIGN_UP(machine->maxram_size, MiB) != machine->maxram_size) {
+            error_report("maximum memory size must by aligned to 1 MB");
+            exit(EXIT_FAILURE);
+        }
+
+        machine->device_memory->base = machine->ram_size;
+        if (machine->device_memory->base + device_mem_size < device_mem_size) {
+            error_report("unsupported amount of maximum memory: " RAM_ADDR_FMT,
+                         machine->maxram_size);
+            exit(EXIT_FAILURE);
+        }
+
+        memory_region_init(&machine->device_memory->mr, OBJECT(machine),
+                           "device-memory", device_mem_size);
+        memory_region_add_subregion(sysmem, machine->device_memory->base,
+                                    &machine->device_memory->mr);
+    }
+}
+
 static void s390_memory_init(MachineState *machine)
 {
     MemoryRegion *sysmem = get_system_memory();
@@ -194,6 +223,11 @@ static void s390_memory_init(MachineState *machine)
     s390_skeys_init();
     /* Initialize storage attributes device */
     s390_stattrib_init();
+
+    /* Support for memory devices is glued to compat machines. */
+    if (memory_devices_allowed()) {
+        s390_device_memory_init(machine);
+    }
 }
 
 static void s390_init_ipl_dev(const char *kernel_filename,
@@ -617,6 +651,7 @@ static void ccw_machine_class_init(ObjectClass *oc, void *data)
     s390mc->cpu_model_allowed = true;
     s390mc->css_migration_enabled = true;
     s390mc->hpage_1m_allowed = true;
+    s390mc->memory_devices_allowed = true;
     mc->init = ccw_init;
     mc->reset = s390_machine_reset;
     mc->hot_add_cpu = s390_hot_add_cpu;
@@ -713,6 +748,11 @@ bool hpage_1m_allowed(void)
     return get_machine_class()->hpage_1m_allowed;
 }
 
+bool memory_devices_allowed(void)
+{
+    return get_machine_class()->memory_devices_allowed;
+}
+
 static char *machine_get_loadparm(Object *obj, Error **errp)
 {
     S390CcwMachineState *ms = S390_CCW_MACHINE(obj);
@@ -831,8 +871,11 @@ static void ccw_machine_5_0_instance_options(MachineState *machine)
 
 static void ccw_machine_5_0_class_options(MachineClass *mc)
 {
+    S390CcwMachineClass *s390mc = S390_MACHINE_CLASS(mc);
+
     ccw_machine_5_1_class_options(mc);
     compat_props_add(mc->compat_props, hw_compat_5_0, hw_compat_5_0_len);
+    s390mc->memory_devices_allowed = false;
 }
 DEFINE_CCW_MACHINE(5_0, "5.0", false);
 
diff --git a/hw/s390x/sclp.c b/hw/s390x/sclp.c
index f59195e15a..85d3505597 100644
--- a/hw/s390x/sclp.c
+++ b/hw/s390x/sclp.c
@@ -22,6 +22,7 @@
 #include "hw/s390x/event-facility.h"
 #include "hw/s390x/s390-pci-bus.h"
 #include "hw/s390x/ipl.h"
+#include "hw/s390x/s390-virtio-ccw.h"
 
 static inline SCLPDevice *get_sclp_device(void)
 {
@@ -110,8 +111,15 @@ static void read_SCP_info(SCLPDevice *sclp, SCCB *sccb)
         read_info->rnsize2 = cpu_to_be32(rnsize);
     }
 
-    /* we don't support standby memory, maxram_size is never exposed */
-    rnmax = machine->ram_size >> sclp->increment_size;
+    /*
+     * Support for maxram was added with support for memory devices. The
+     * size of the initial memory is exposed via diag260.
+     */
+    if (memory_devices_allowed()) {
+        rnmax = machine->maxram_size >> sclp->increment_size;
+    } else {
+        rnmax = machine->ram_size >> sclp->increment_size;
+    }
     if (rnmax < 0x10000) {
         read_info->rnmax = cpu_to_be16(rnmax);
     } else {
diff --git a/include/hw/s390x/s390-virtio-ccw.h b/include/hw/s390x/s390-virtio-ccw.h
index cd1dccc6e3..3a1e7e2a6d 100644
--- a/include/hw/s390x/s390-virtio-ccw.h
+++ b/include/hw/s390x/s390-virtio-ccw.h
@@ -41,6 +41,7 @@ typedef struct S390CcwMachineClass {
     bool cpu_model_allowed;
     bool css_migration_enabled;
     bool hpage_1m_allowed;
+    bool memory_devices_allowed;
 } S390CcwMachineClass;
 
 /* runtime-instrumentation allowed by the machine */
@@ -49,6 +50,8 @@ bool ri_allowed(void);
 bool cpu_model_allowed(void);
 /* 1M huge page mappings allowed by the machine */
 bool hpage_1m_allowed(void);
+/* Allow memory devices and diag260. */
+bool memory_devices_allowed(void);
 
 /**
  * Returns true if (vmstate based) migration of the channel subsystem
diff --git a/target/s390x/diag.c b/target/s390x/diag.c
index c3b1e24b2c..6b33eb0efc 100644
--- a/target/s390x/diag.c
+++ b/target/s390x/diag.c
@@ -32,8 +32,8 @@ void handle_diag_260(CPUS390XState *env, uint64_t r1, uint64_t r3, uintptr_t ra)
     ram_addr_t addr, length;
     uint64_t tmp;
 
-    /* TODO: Unlock with new QEMU machine. */
-    if (false) {
+    /* Support for diag260 is glued to support for memory devices. */
+    if (!memory_devices_allowed()) {
         s390_program_interrupt(env, PGM_OPERATION, ra);
         return;
     }
