diff --git a/cluster/gce/gci/configure-helper.sh b/cluster/gce/gci/configure-helper.sh
index fc9f270fd5c1a..a18ed745a7ecd 100644
--- a/cluster/gce/gci/configure-helper.sh
+++ b/cluster/gce/gci/configure-helper.sh
@@ -2463,10 +2463,10 @@ function setup-nodelocaldns-manifest {
   setup-addon-manifests "addons" "0-dns/nodelocaldns"
   local -r localdns_file="${dst_dir}/0-dns/nodelocaldns/nodelocaldns.yaml"
   setup-addon-custom-yaml "addons" "0-dns/nodelocaldns" "nodelocaldns.yaml" "${CUSTOM_NODELOCAL_DNS_YAML:-}"
-  # Replace the sed configurations with variable values.
-  sed -i -e "s/_.*_DNS__DOMAIN__/${DNS_DOMAIN}/g" "${localdns_file}"
-  sed -i -e "s/_.*_DNS__SERVER__/${DNS_SERVER_IP}/g" "${localdns_file}"
-  sed -i -e "s/_.*_LOCAL__DNS__/${LOCAL_DNS_IP}/g" "${localdns_file}"
+  # eventually all the __PILLAR__ stuff will be gone, but theyre still in nodelocaldns for backward compat.
+  sed -i -e "s/__PILLAR__DNS__DOMAIN__/${DNS_DOMAIN}/g" "${localdns_file}"
+  sed -i -e "s/__PILLAR__DNS__SERVER__/${DNS_SERVER_IP}/g" "${localdns_file}"
+  sed -i -e "s/__PILLAR__LOCAL__DNS__/${LOCAL_DNS_IP}/g" "${localdns_file}"
 }
 
 # Sets up the manifests of netd for k8s addons.
diff --git a/hack/local-up-cluster.sh b/hack/local-up-cluster.sh
index 8ebd8d7b942b4..bb370c96c203f 100755
--- a/hack/local-up-cluster.sh
+++ b/hack/local-up-cluster.sh
@@ -904,10 +904,11 @@ function start_kubedns {
 
 function start_nodelocaldns {
   cp "${KUBE_ROOT}/cluster/addons/dns/nodelocaldns/nodelocaldns.yaml" nodelocaldns.yaml
-  # .* because of the __PILLLAR__ references that eventually will be removed
-  ${SED} -i -e "s/_.*_DNS__DOMAIN__/${DNS_DOMAIN}/g" nodelocaldns.yaml
-  ${SED} -i -e "s/_.*_DNS__SERVER__/${DNS_SERVER_IP}/g" nodelocaldns.yaml
-  ${SED} -i -e "s/_.*_LOCAL__DNS__/${LOCAL_DNS_IP}/g" nodelocaldns.yaml
+  # eventually all the __PILLAR__ stuff will be gone, but theyre still in nodelocaldns for backward compat.
+  ${SED} -i -e "s/__PILLAR__DNS__DOMAIN__/${DNS_DOMAIN}/g" nodelocaldns.yaml
+  ${SED} -i -e "s/__PILLAR__DNS__SERVER__/${DNS_SERVER_IP}/g" nodelocaldns.yaml
+  ${SED} -i -e "s/__PILLAR__LOCAL__DNS__/${LOCAL_DNS_IP}/g" nodelocaldns.yaml
+
   # use kubectl to create nodelocaldns addon
   ${KUBECTL} --kubeconfig="${CERT_DIR}/admin.kubeconfig" --namespace=kube-system create -f nodelocaldns.yaml
   echo "NodeLocalDNS addon successfully deployed."