diff --git a/polkadot/node/service/src/parachains_db.rs b/polkadot/node/service/src/parachains_db/mod.rs
similarity index 89%
rename from polkadot/node/service/src/parachains_db.rs
rename to polkadot/node/service/src/parachains_db/mod.rs
index 954254d89b..dbaae5c825 100644
--- a/polkadot/node/service/src/parachains_db.rs
+++ b/polkadot/node/service/src/parachains_db/mod.rs
@@ -22,6 +22,7 @@ use {
 	kvdb::KeyValueDB,
 };
 
+mod upgrade;
 
 mod columns {
 	#[cfg(feature = "real-overseer")]
@@ -72,6 +73,11 @@ impl Default for CacheSizes {
 	}
 }
 
+#[cfg(feature = "real-overseer")]
+fn other_io_error(err: String) -> io::Error {
+	io::Error::new(io::ErrorKind::Other, err)
+}
+
 /// Open the database on disk, creating it if it doesn't exist.
 #[cfg(feature = "real-overseer")]
 pub fn open_creating(
@@ -91,13 +97,13 @@ pub fn open_creating(
 	let _ = db_config.memory_budget
 		.insert(columns::COL_APPROVAL_DATA, cache_sizes.approval_data);
 
-	let path = path.to_str().ok_or_else(|| io::Error::new(
-		io::ErrorKind::Other,
+	let path_str = path.to_str().ok_or_else(|| other_io_error(
 		format!("Bad database path: {:?}", path),
 	))?;
 
-	std::fs::create_dir_all(&path)?;
-	let db = Database::open(&db_config, &path)?;
+	std::fs::create_dir_all(&path_str)?;
+	upgrade::try_upgrade_db(&path)?;
+	let db = Database::open(&db_config, &path_str)?;
 
 	Ok(Arc::new(db))
 }
diff --git a/polkadot/node/service/src/parachains_db/upgrade.rs b/polkadot/node/service/src/parachains_db/upgrade.rs
new file mode 100644
index 0000000000..dbfa0213d3
--- /dev/null
+++ b/polkadot/node/service/src/parachains_db/upgrade.rs
@@ -0,0 +1,92 @@
+// Copyright 2021 Parity Technologies (UK) Ltd.
+// This file is part of Polkadot.
+
+// Polkadot is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Polkadot is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+//! Migration code for the parachain's DB.
+
+
+#![cfg(feature = "real-overseer")]
+
+use std::fs;
+use std::io;
+use std::path::{Path, PathBuf};
+use std::str::FromStr;
+
+type Version = u32;
+
+/// Version file name.
+const VERSION_FILE_NAME: &'static str = "parachain_db_version";
+
+/// Current db version.
+const CURRENT_VERSION: Version = 0;
+
+#[derive(thiserror::Error, Debug)]
+pub enum Error {
+	#[error("I/O error when reading/writing the version")]
+	Io(#[from] io::Error),
+	#[error("The version file format is incorrect")]
+	CorruptedVersionFile,
+	#[error("Future version (expected {current:?}, found {got:?})")]
+	FutureVersion {
+		current: Version,
+		got: Version,
+	},
+}
+
+impl From<Error> for io::Error {
+	fn from(me: Error) -> io::Error {
+		match me {
+			Error::Io(e) => e,
+			_ => super::other_io_error(me.to_string()),
+		}
+	}
+}
+
+/// Try upgrading parachain's database to the current version.
+pub fn try_upgrade_db(db_path: &Path) -> Result<(), Error> {
+	let is_empty = db_path.read_dir().map_or(true, |mut d| d.next().is_none());
+	if !is_empty {
+		match current_version(db_path)? {
+			CURRENT_VERSION => (),
+			v => return Err(Error::FutureVersion {
+				current: CURRENT_VERSION,
+				got: v,
+			}),
+		}
+	}
+
+	update_version(db_path)
+}
+
+/// Reads current database version from the file at given path.
+/// If the file does not exist, assumes version 0.
+fn current_version(path: &Path) -> Result<Version, Error> {
+	match fs::read_to_string(version_file_path(path)) {
+		Err(ref err) if err.kind() == io::ErrorKind::NotFound => Ok(0),
+		Err(err) => Err(err.into()),
+		Ok(content) => u32::from_str(&content).map_err(|_| Error::CorruptedVersionFile),
+	}
+}
+
+/// Writes current database version to the file.
+/// Creates a new file if the version file does not exist yet.
+fn update_version(path: &Path) -> Result<(), Error> {
+	fs::create_dir_all(path)?;
+	fs::write(version_file_path(path), CURRENT_VERSION.to_string()).map_err(Into::into)
+}
+
+/// Returns the version file path.
+fn version_file_path(path: &Path) -> PathBuf {
+	let mut file_path = path.to_owned();
+	file_path.push(VERSION_FILE_NAME);
+	file_path
+}