diff --git a/cmd/conf/database.go b/cmd/conf/database.go
index 6fde00579f..a75cca77d5 100644
--- a/cmd/conf/database.go
+++ b/cmd/conf/database.go
@@ -32,7 +32,7 @@ var PersistentConfigDefault = PersistentConfig{
 	LogDir:       "",
 	Handles:      512,
 	Ancient:      "",
-	DBEngine:     "leveldb",
+	DBEngine:     "", // auto-detect database type based on the db dir contents
 	Pebble:       PebbleConfigDefault,
 }
 
@@ -42,7 +42,7 @@ func PersistentConfigAddOptions(prefix string, f *flag.FlagSet) {
 	f.String(prefix+".log-dir", PersistentConfigDefault.LogDir, "directory to store log file")
 	f.Int(prefix+".handles", PersistentConfigDefault.Handles, "number of file descriptor handles to use for the database")
 	f.String(prefix+".ancient", PersistentConfigDefault.Ancient, "directory of ancient where the chain freezer can be opened")
-	f.String(prefix+".db-engine", PersistentConfigDefault.DBEngine, "backing database implementation to use ('leveldb' or 'pebble')")
+	f.String(prefix+".db-engine", PersistentConfigDefault.DBEngine, "backing database implementation to use. If set to empty string the database type will be autodetected and if no pre-existing database is found it will default to creating new pebble database ('leveldb', 'pebble' or '' = auto-detect)")
 	PebbleConfigAddOptions(prefix+".pebble", f)
 }
 
@@ -97,11 +97,12 @@ func DatabaseInDirectory(path string) bool {
 }
 
 func (c *PersistentConfig) Validate() error {
-	// we are validating .db-engine here to avoid unintended behaviour as empty string value also has meaning in geth's node.Config.DBEngine
-	if c.DBEngine != "leveldb" && c.DBEngine != "pebble" {
-		return fmt.Errorf(`invalid .db-engine choice: %q, allowed "leveldb" or "pebble"`, c.DBEngine)
+	if c.DBEngine != "leveldb" && c.DBEngine != "pebble" && c.DBEngine != "" {
+		return fmt.Errorf(`invalid .db-engine choice: %q, allowed "leveldb", "pebble" or ""`, c.DBEngine)
 	}
-	if c.DBEngine == "pebble" {
+	// if DBEngine == "" then we may end up opening pebble database, so we want to validate the Pebble config
+	// if pre-existing database is leveldb backed, then user shouldn't change the Pebble config defaults => this check should also succeed
+	if c.DBEngine == "pebble" || c.DBEngine == "" {
 		if err := c.Pebble.Validate(); err != nil {
 			return err
 		}
diff --git a/cmd/nitro/init.go b/cmd/nitro/init.go
index 49d30fd59c..9c23cdf852 100644
--- a/cmd/nitro/init.go
+++ b/cmd/nitro/init.go
@@ -17,6 +17,7 @@ import (
 	"os"
 	"path"
 	"path/filepath"
+	"regexp"
 	"runtime"
 	"strings"
 	"sync"
@@ -326,6 +327,16 @@ func dirExists(path string) bool {
 	return info.IsDir()
 }
 
+var pebbleNotExistErrorRegex = regexp.MustCompile("pebble: database .* does not exist")
+
+func isPebbleNotExistError(err error) bool {
+	return pebbleNotExistErrorRegex.MatchString(err.Error())
+}
+
+func isLeveldbNotExistError(err error) bool {
+	return os.IsNotExist(err)
+}
+
 func openInitializeChainDb(ctx context.Context, stack *node.Node, config *NodeConfig, chainId *big.Int, cacheConfig *core.CacheConfig, persistentConfig *conf.PersistentConfig, l1Client arbutil.L1Interface, rollupAddrs chaininfo.RollupAddresses) (ethdb.Database, *core.BlockChain, error) {
 	if !config.Init.Force {
 		if readOnlyDb, err := stack.OpenDatabaseWithFreezerWithExtraOptions("l2chaindata", 0, 0, "", "l2chaindata/", true, persistentConfig.Pebble.ExtraOptions("l2chaindata")); err == nil {
@@ -396,6 +407,9 @@ func openInitializeChainDb(ctx context.Context, stack *node.Node, config *NodeCo
 				return chainDb, l2BlockChain, nil
 			}
 			readOnlyDb.Close()
+		} else if !isLeveldbNotExistError(err) && !isPebbleNotExistError(err) {
+			// we only want to continue if the error is pebble or leveldb not exist error
+			return nil, nil, fmt.Errorf("Failed to open database: %w", err)
 		}
 	}
 
diff --git a/cmd/nitro/init_test.go b/cmd/nitro/init_test.go
index 17bac3d670..47ab4b4491 100644
--- a/cmd/nitro/init_test.go
+++ b/cmd/nitro/init_test.go
@@ -17,6 +17,7 @@ import (
 	"testing"
 	"time"
 
+	"github.com/ethereum/go-ethereum/node"
 	"github.com/offchainlabs/nitro/cmd/conf"
 	"github.com/offchainlabs/nitro/util/testhelpers"
 )
@@ -177,3 +178,35 @@ func startFileServer(t *testing.T, ctx context.Context, dir string) string {
 	}()
 	return addr
 }
+
+func testIsNotExistError(t *testing.T, dbEngine string, isNotExist func(error) bool) {
+	stackConf := node.DefaultConfig
+	stackConf.DataDir = t.TempDir()
+	stackConf.DBEngine = dbEngine
+	stack, err := node.New(&stackConf)
+	if err != nil {
+		t.Fatalf("Failed to created test stack: %v", err)
+	}
+	defer stack.Close()
+	readonly := true
+	_, err = stack.OpenDatabaseWithExtraOptions("test", 16, 16, "", readonly, nil)
+	if err == nil {
+		t.Fatal("Opening non-existent database did not fail")
+	}
+	if !isNotExist(err) {
+		t.Fatalf("Failed to classify error as not exist error - internal implementation of OpenDatabaseWithExtraOptions might have changed, err: %v", err)
+	}
+	err = errors.New("some other error")
+	if isNotExist(err) {
+		t.Fatalf("Classified other error as not exist, err: %v", err)
+	}
+}
+
+func TestIsNotExistError(t *testing.T) {
+	t.Run("TestIsPebbleNotExistError", func(t *testing.T) {
+		testIsNotExistError(t, "pebble", isPebbleNotExistError)
+	})
+	t.Run("TestIsLeveldbNotExistError", func(t *testing.T) {
+		testIsNotExistError(t, "leveldb", isLeveldbNotExistError)
+	})
+}