diff --git a/pkg/apis/v1/nodepool_conversion.go b/pkg/apis/v1/nodepool_conversion.go
index 97b0258aa9..eadc3ba783 100644
--- a/pkg/apis/v1/nodepool_conversion.go
+++ b/pkg/apis/v1/nodepool_conversion.go
@@ -32,7 +32,7 @@ import (
 )
 
 // Convert v1 NodePool to v1beta1 NodePool
-func (in *NodePool) ConvertTo(ctx context.Context, to apis.Convertible) error {
+func (in *NodePool) ConvertTo(_ context.Context, to apis.Convertible) error {
 	v1beta1NP := to.(*v1beta1.NodePool)
 	v1beta1NP.ObjectMeta = in.ObjectMeta
 
@@ -123,9 +123,9 @@ func (in *NodePool) ConvertFrom(ctx context.Context, v1beta1np apis.Convertible)
 		return err
 	}
 	if kubeletAnnotation == "" {
-		in.Annotations = lo.OmitByKeys(in.Annotations, []string{KubeletCompatibilityAnnotationKey})
+		delete(in.Annotations, KubeletCompatibilityAnnotationKey)
 	} else {
-		in.Annotations = lo.Assign(in.Annotations, map[string]string{KubeletCompatibilityAnnotationKey: kubeletAnnotation})
+		in.Annotations = lo.Assign(in.Spec.Template.Annotations, map[string]string{KubeletCompatibilityAnnotationKey: kubeletAnnotation})
 	}
 	nodeClassRefAnnotation, err := json.Marshal(v1beta1NP.Spec.Template.Spec.NodeClassRef)
 	if err != nil {
diff --git a/pkg/controllers/provisioning/scheduling/nodeclaimtemplate.go b/pkg/controllers/provisioning/scheduling/nodeclaimtemplate.go
index 73e462076f..2b7b99e7d9 100644
--- a/pkg/controllers/provisioning/scheduling/nodeclaimtemplate.go
+++ b/pkg/controllers/provisioning/scheduling/nodeclaimtemplate.go
@@ -50,6 +50,11 @@ func NewNodeClaimTemplate(nodePool *v1.NodePool) *NodeClaimTemplate {
 		NodePoolName: nodePool.Name,
 		Requirements: scheduling.NewRequirements(),
 	}
+	if v, ok := nodePool.Annotations[v1.KubeletCompatibilityAnnotationKey]; ok {
+		nct.Annotations = lo.Assign(nct.Annotations, map[string]string{
+			v1.KubeletCompatibilityAnnotationKey: v,
+		})
+	}
 	nct.Labels = lo.Assign(nct.Labels, map[string]string{v1.NodePoolLabelKey: nodePool.Name})
 	nct.Requirements.Add(scheduling.NewNodeSelectorRequirementsWithMinValues(nct.Spec.Requirements...).Values()...)
 	nct.Requirements.Add(scheduling.NewLabelRequirements(nct.Labels).Values()...)
diff --git a/pkg/controllers/provisioning/suite_test.go b/pkg/controllers/provisioning/suite_test.go
index 19db025a17..1d0530b5cc 100644
--- a/pkg/controllers/provisioning/suite_test.go
+++ b/pkg/controllers/provisioning/suite_test.go
@@ -18,10 +18,12 @@ package provisioning_test
 
 import (
 	"context"
+	"encoding/json"
 	"fmt"
 	"testing"
 	"time"
 
+	"sigs.k8s.io/karpenter/pkg/apis/v1beta1"
 	"sigs.k8s.io/karpenter/pkg/test/v1alpha1"
 
 	. "github.com/onsi/ginkgo/v2"
@@ -248,6 +250,38 @@ var _ = Describe("Provisioning", func() {
 			ExpectScheduled(ctx, env.Client, pod)
 		}
 	})
+	It("should add the NodePool's karpenter.sh/v1beta1-kubelet-conversion annotation when scheduling", func() {
+		nodePool := test.NodePool()
+		kubeletConfig := v1beta1.KubeletConfiguration{
+			ClusterDNS:                  []string{"test-cluster-dns"},
+			MaxPods:                     lo.ToPtr(int32(9383)),
+			PodsPerCore:                 lo.ToPtr(int32(9334283)),
+			SystemReserved:              map[string]string{"system-key": "reserved"},
+			KubeReserved:                map[string]string{"kube-key": "reserved"},
+			EvictionHard:                map[string]string{"eviction-key": "eviction"},
+			EvictionSoft:                map[string]string{"eviction-key": "eviction"},
+			EvictionSoftGracePeriod:     map[string]metav1.Duration{"test-soft-grace": {Duration: time.Hour}},
+			EvictionMaxPodGracePeriod:   lo.ToPtr(int32(382902)),
+			ImageGCHighThresholdPercent: lo.ToPtr(int32(382902)),
+			CPUCFSQuota:                 lo.ToPtr(false),
+		}
+		raw, err := json.Marshal(kubeletConfig)
+		Expect(err).ToNot(HaveOccurred())
+		nodePool.Annotations = lo.Assign(nodePool.Annotations, map[string]string{
+			v1.KubeletCompatibilityAnnotationKey: string(raw),
+		})
+
+		ExpectApplied(ctx, env.Client, nodePool)
+		pod := test.UnschedulablePod()
+		ExpectProvisioned(ctx, env.Client, cluster, cloudProvider, prov, pod)
+
+		nodeClaims := &v1.NodeClaimList{}
+		Expect(env.Client.List(ctx, nodeClaims)).To(Succeed())
+		Expect(nodeClaims.Items).To(HaveLen(1))
+
+		Expect(nodeClaims.Items[0].Annotations).To(HaveKeyWithValue(v1.KubeletCompatibilityAnnotationKey, nodePool.Annotations[v1.KubeletCompatibilityAnnotationKey]))
+		ExpectScheduled(ctx, env.Client, pod)
+	})
 	It("should schedule all pods on one inflight node when node is in deleting state", func() {
 		nodePool := test.NodePool()
 		its, err := cloudProvider.GetInstanceTypes(ctx, nodePool)