diff --git a/cmd/install/install.go b/cmd/install/install.go
index 36d89c9177f..7523db3c505 100644
--- a/cmd/install/install.go
+++ b/cmd/install/install.go
@@ -37,14 +37,18 @@ import (
 	crclient "sigs.k8s.io/controller-runtime/pkg/client"
 	"sigs.k8s.io/controller-runtime/pkg/client/apiutil"
 
+	configapi "github.com/openshift/api/config/v1"
 	imageapi "github.com/openshift/api/image/v1"
 	hyperapi "github.com/openshift/hypershift/api"
 	hyperv1 "github.com/openshift/hypershift/api/v1beta1"
 	"github.com/openshift/hypershift/cmd/install/assets"
+	"github.com/openshift/hypershift/cmd/log"
 	"github.com/openshift/hypershift/cmd/util"
 	"github.com/openshift/hypershift/cmd/version"
+	"github.com/openshift/hypershift/support/capabilities"
 	"github.com/openshift/hypershift/support/metrics"
 	"github.com/openshift/hypershift/support/rhobsmonitoring"
+	"github.com/openshift/hypershift/vendor/k8s.io/client-go/discovery"
 )
 
 const (
@@ -368,6 +372,11 @@ func fetchImageRefs(file string) (map[string]string, error) {
 }
 
 func hyperShiftOperatorManifests(opts Options) ([]crclient.Object, error) {
+	mgmtClusterCaps, err := getMgmtClusterCapabilities()
+	if err != nil {
+		return nil, fmt.Errorf("unable to detect management cluster capabilities: %w", err)
+	}
+
 	var objects []crclient.Object
 
 	var images map[string]string
@@ -480,6 +489,42 @@ func hyperShiftOperatorManifests(opts Options) ([]crclient.Object, error) {
 		objects = append(objects, userCABundleCM)
 	}
 
+	if mgmtClusterCaps.Has(capabilities.CapabilityImage) && mgmtClusterCaps.Has(capabilities.CapabilityProxy) {
+		if imageRegistryCABundle := getImageRegistryCABundle(); imageRegistryCABundle != "" {
+			// Create a new configmap containing all the image registry CA certificates as a bundle
+			// Proxy expects the configmap to:
+			// 1. contain only "ca-bundle.crt" as the key
+			// 2. exist in the openshift-config namespace
+			imageRegistryCABundle := &corev1.ConfigMap{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      "user-image-registry-ca-bundle",
+					Namespace: "openshift-config",
+				},
+				Data: map[string]string{
+					"ca-bundle.crt": imageRegistryCABundle,
+				},
+			}
+			objects = append(objects, imageRegistryCABundle)
+
+			// Adding the configmap containing the bundle to the proxy object
+			// will allow the openshift-network-operator to automatically
+			// inject this bundle into the openshift-config-managed-trusted-ca-bundle configmap (created below)
+			// Reference: https://docs.openshift.com/container-platform/4.12/security/certificates/updating-ca-bundle.html
+			proxy := &configapi.Proxy{
+				ObjectMeta: metav1.ObjectMeta{Name: "cluster"},
+				Spec: configapi.ProxySpec{
+					TrustedCA: configapi.ConfigMapNameReference{
+						Name: imageRegistryCABundle.Name,
+					},
+				},
+			}
+			objects = append(objects, proxy)
+		}
+	} else {
+		log.Log.Info(`Skipping adding image registry CA bundle to Proxy.
+			Either image.config.openshift.io or proxy.config.openshift.io is not defined in the management cluster`)
+	}
+
 	trustedCABundle := &corev1.ConfigMap{
 		ObjectMeta: metav1.ObjectMeta{
 			Namespace: "hypershift",
@@ -684,3 +729,39 @@ func hyperShiftOperatorManifests(opts Options) ([]crclient.Object, error) {
 
 	return objects, nil
 }
+
+// getMgmtClusterCapabilities initializes the ManagementClusterCabilities object
+// to determine if the management cluster has the listed capabilities
+func getMgmtClusterCapabilities() (*capabilities.ManagementClusterCapabilities, error) {
+	config, err := util.GetConfig()
+	if err != nil {
+		return nil, fmt.Errorf("unable to get kubernetes config: %w", err)
+	}
+	discoveryClient, err := discovery.NewDiscoveryClientForConfig(config)
+	if err != nil {
+		return nil, fmt.Errorf("unable to get discovery client: %w", err)
+	}
+	return capabilities.DetectManagementClusterCapabilities(discoveryClient)
+}
+
+// getImageRegistryCABundle retrieves the image registry CAs listed under image.config.openshift.io
+// and merges them into one CA bundle
+func getImageRegistryCABundle() string {
+	if client, err := util.GetClient(); err == nil {
+		img := &configapi.Image{}
+		if err := client.Get(context.Background(), types.NamespacedName{Name: "cluster"}, img); err == nil && img != nil && img.Spec.AdditionalTrustedCA.Name != "" {
+			configmap := &corev1.ConfigMap{}
+			if err := client.Get(context.Background(), types.NamespacedName{Name: img.Spec.AdditionalTrustedCA.Name, Namespace: "openshift-config"}, configmap); err == nil && configmap != nil {
+				// Merge all registry CA certificates together into one bundle
+				var buf bytes.Buffer
+				for _, crt := range configmap.Data {
+					buf.WriteString(crt)
+				}
+				if buf.Len() > 0 {
+					return buf.String()
+				}
+			}
+		}
+	}
+	return ""
+}
diff --git a/support/capabilities/management_cluster_capabilities.go b/support/capabilities/management_cluster_capabilities.go
index d281100e4f4..21b75454141 100644
--- a/support/capabilities/management_cluster_capabilities.go
+++ b/support/capabilities/management_cluster_capabilities.go
@@ -27,6 +27,10 @@ const (
 	// supports security context constraints
 	CapabilitySecurityContextConstraint
 
+	// CapabilityImage indicates if the cluster supports the
+	// image.config.openshift.io api
+	CapabilityImage
+
 	// CapabilityInfrastructure indicates if the cluster supports the
 	// infrastructures.config.openshift.io api
 	CapabilityInfrastructure