diff --git a/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/external/types.go b/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/external/types.go
index 0b3eeb9bd26..c6bf8aaad96 100644
--- a/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/external/types.go
+++ b/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/external/types.go
@@ -93,7 +93,8 @@ type Flag struct {
 }
 
 type PluginConfig struct {
-	Resources []ResourceData `json:"resources,omitempty"`
+	ProjectName string         `json:"projectname,omitempty"`
+	Resources   []ResourceData `json:"resources,omitempty"`
 }
 
 type ResourceData struct {
diff --git a/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/api.go b/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/api.go
index bf633a109a1..35934f6c0ee 100644
--- a/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/api.go
+++ b/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/api.go
@@ -21,6 +21,7 @@ import (
 
 	"github.com/spf13/pflag"
 	"sigs.k8s.io/kubebuilder/v3/pkg/plugin"
+	"sigs.k8s.io/yaml"
 	// "sigs.k8s.io/kubebuilder/v3/pkg/plugin/external"
 )
 
@@ -58,6 +59,40 @@ func ApiCmd(pr *external.PluginRequest) external.PluginResponse {
 	flags.Parse(pr.Args)
 	number, _ := flags.GetInt("number")
 
+	// Update the project config with GVK
+	cfg := external.PluginConfig{}
+	err := yaml.Unmarshal([]byte(pr.Config), &cfg)
+	if err != nil {
+		return external.PluginResponse{
+			Error: true,
+			ErrorMsgs: []string{
+				err.Error(),
+			},
+		}
+	}
+
+	// Create and append the new config info
+	newResource := external.ResourceData{
+		Group:   "group",
+		Domain:  "my.domain",
+		Version: "v1",
+		Kind:    "Externalpluginsample",
+	}
+	cfg.Resources = append(cfg.Resources, newResource)
+
+	updatedConfig, err := yaml.Marshal(cfg)
+	if err != nil {
+		return external.PluginResponse{
+			Error: true,
+			ErrorMsgs: []string{
+				err.Error(),
+			},
+		}
+	}
+
+	// Update the PluginResponse with the modified config string
+	pluginResponse.Config = string(updatedConfig)
+
 	apiFile := api.NewApiFile(api.WithNumber(number))
 
 	// Phase 2 Plugins uses the concept of a "universe" to represent the filesystem for a plugin.
diff --git a/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/init.go b/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/init.go
index d5ba4de0b80..2e726e9d2d3 100644
--- a/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/init.go
+++ b/docs/book/src/simple-external-plugin-tutorial/testdata/sampleexternalplugin/v1/scaffolds/init.go
@@ -16,6 +16,9 @@ limitations under the License.
 package scaffolds
 
 import (
+	"os"
+	"path/filepath"
+
 	"github.com/spf13/pflag"
 	"sigs.k8s.io/kubebuilder/v3/pkg/plugin"
 	"sigs.k8s.io/yaml"
@@ -59,7 +62,7 @@ func InitCmd(pr *external.PluginRequest) external.PluginResponse {
 	flags.Parse(pr.Args)
 	domain, _ := flags.GetString("domain")
 
-	// Update the project config
+	// Update the project config with ProjectName
 	cfg := external.PluginConfig{}
 	err := yaml.Unmarshal([]byte(pr.Config), &cfg)
 	if err != nil {
@@ -71,14 +74,20 @@ func InitCmd(pr *external.PluginRequest) external.PluginResponse {
 		}
 	}
 
-	// Create and append the new config info
-	newResource := external.ResourceData{
-		Group:   "group",
-		Domain:  "my.domain",
-		Version: "v1",
-		Kind:    "Externalpluginsample",
+	// Get current directory as the project name
+	cwd, err := os.Getwd()
+	if err != nil {
+		return external.PluginResponse{
+			Error: true,
+			ErrorMsgs: []string{
+				err.Error(),
+			},
+		}
 	}
-	cfg.Resources = append(cfg.Resources, newResource)
+
+	dirName := filepath.Base(cwd)
+
+	cfg.ProjectName = dirName
 
 	updatedConfig, err := yaml.Marshal(cfg)
 	if err != nil {
diff --git a/test/e2e/externalplugin/generate_test.go b/test/e2e/externalplugin/generate_test.go
index fa495485682..55750ea1c5b 100644
--- a/test/e2e/externalplugin/generate_test.go
+++ b/test/e2e/externalplugin/generate_test.go
@@ -77,6 +77,14 @@ func GenerateProject(kbc *utils.TestContext) {
 	ExpectWithOffset(1, err).NotTo(HaveOccurred(), "Check initFile.txt should return no error.")
 	ExpectWithOffset(1, initFileContainsExpr).To(BeTrue(), "The init file does not contain the expected expression.")
 
+	var initSubcommandConfigTmpl = "projectName"
+
+	initSubcommandConfigContainsExpr, err := pluginutil.HasFileContentWith(
+		filepath.Join(kbc.Dir, "PROJECT"), initSubcommandConfigTmpl)
+	ExpectWithOffset(1, err).NotTo(HaveOccurred(), "Check PROJECT should return no error.")
+	//nolint:lll
+	ExpectWithOffset(1, initSubcommandConfigContainsExpr).To(BeTrue(), "The PROJECT file does not contain the expected config with the init subcommand.")
+
 	By("creating API definition")
 	err = kbc.CreateAPI(
 		"--plugins", "sampleexternalplugin/v1",
@@ -93,6 +101,19 @@ func GenerateProject(kbc *utils.TestContext) {
 	ExpectWithOffset(1, err).NotTo(HaveOccurred(), "Check apiFile.txt should return no error.")
 	ExpectWithOffset(1, apiFileContainsExpr).To(BeTrue(), "The api file does not contain the expected expression.")
 
+	var apiSubcommandConfigTmpl = `
+resources:
+- domain: my.domain
+  group: group
+  kind: Externalpluginsample
+  version: v1`
+
+	apiSubcommandConfigContainsExpr, err := pluginutil.HasFileContentWith(
+		filepath.Join(kbc.Dir, "PROJECT"), apiSubcommandConfigTmpl)
+	ExpectWithOffset(1, err).NotTo(HaveOccurred(), "Check PROJECT should return no error.")
+	//nolint:lll
+	ExpectWithOffset(1, apiSubcommandConfigContainsExpr).To(BeTrue(), "The PROJECT file does not contain the expected config with the create api subcommand.")
+
 	By("scaffolding webhook")
 	err = kbc.CreateWebhook(
 		"--plugins", "sampleexternalplugin/v1",