diff --git a/agent/xds/clusters.go b/agent/xds/clusters.go
index 5cb2bff43ed3..f74b6e5dd09d 100644
--- a/agent/xds/clusters.go
+++ b/agent/xds/clusters.go
@@ -360,8 +360,7 @@ func (s *Server) makeUpstreamClusterForPreparedQuery(upstream structs.Upstream,
 			CircuitBreakers: &envoycluster.CircuitBreakers{
 				Thresholds: makeThresholdsIfNeeded(cfg.Limits),
 			},
-			// Having an empty config enables outlier detection with default config.
-			OutlierDetection: &envoycluster.OutlierDetection{},
+			OutlierDetection: cfg.PassiveHealthCheck.AsOutlierDetection(),
 		}
 		if cfg.Protocol == "http2" || cfg.Protocol == "grpc" {
 			c.Http2ProtocolOptions = &envoycore.Http2ProtocolOptions{}
@@ -462,8 +461,7 @@ func (s *Server) makeUpstreamClustersForDiscoveryChain(
 			CircuitBreakers: &envoycluster.CircuitBreakers{
 				Thresholds: makeThresholdsIfNeeded(cfg.Limits),
 			},
-			// Having an empty config enables outlier detection with default config.
-			OutlierDetection: &envoycluster.OutlierDetection{},
+			OutlierDetection: cfg.PassiveHealthCheck.AsOutlierDetection(),
 		}
 
 		proto := cfg.Protocol
diff --git a/agent/xds/config.go b/agent/xds/config.go
index a97161e4db58..756ca51f44f3 100644
--- a/agent/xds/config.go
+++ b/agent/xds/config.go
@@ -1,10 +1,13 @@
 package xds
 
 import (
-	"github.com/hashicorp/consul/lib"
 	"strings"
+	"time"
 
+	envoycluster "github.com/envoyproxy/go-control-plane/envoy/api/v2/cluster"
+	"github.com/gogo/protobuf/types"
 	"github.com/hashicorp/consul/agent/structs"
+	"github.com/hashicorp/consul/lib"
 	"github.com/mitchellh/mapstructure"
 )
 
@@ -160,11 +163,48 @@ type UpstreamConfig struct {
 	// Limits are the set of limits that are applied to the proxy for a specific upstream of a
 	// service instance.
 	Limits UpstreamLimits `mapstructure:"limits"`
+
+	// PassiveHealthCheck configuration
+	PassiveHealthCheck PassiveHealthCheck `mapstructure:"passive_health_check"`
+}
+
+type PassiveHealthCheck struct {
+	// Interval between health check analysis sweeps. Each sweep may remove
+	// hosts or return hosts to the pool.
+	Interval time.Duration
+	// MaxFailures is the count of consecutive failures that results in a host
+	// being removed from the pool.
+	MaxFailures uint32 `mapstructure:"max_failures"`
+}
+
+// Return an envoy.OutlierDetection populated by the values from this struct.
+// If all values are zero a default empty OutlierDetection will be returned to
+// enable outlier detection with default values.
+func (p PassiveHealthCheck) AsOutlierDetection() *envoycluster.OutlierDetection {
+	od := &envoycluster.OutlierDetection{}
+	if p.Interval != 0 {
+		od.Interval = types.DurationProto(p.Interval)
+	}
+	if p.MaxFailures != 0 {
+		od.Consecutive_5Xx = &types.UInt32Value{Value: p.MaxFailures}
+	}
+	return od
 }
 
 func ParseUpstreamConfigNoDefaults(m map[string]interface{}) (UpstreamConfig, error) {
 	var cfg UpstreamConfig
-	err := mapstructure.WeakDecode(m, &cfg)
+	config := &mapstructure.DecoderConfig{
+		DecodeHook:       mapstructure.StringToTimeDurationHookFunc(),
+		Result:           &cfg,
+		WeaklyTypedInput: true,
+	}
+
+	decoder, err := mapstructure.NewDecoder(config)
+	if err != nil {
+		return cfg, err
+	}
+
+	err = decoder.Decode(m)
 	return cfg, err
 }
 
diff --git a/agent/xds/config_test.go b/agent/xds/config_test.go
index 0957e6d6ed5f..23629089e8be 100644
--- a/agent/xds/config_test.go
+++ b/agent/xds/config_test.go
@@ -1,9 +1,10 @@
 package xds
 
 import (
-	"github.com/hashicorp/consul/agent/structs"
 	"testing"
+	"time"
 
+	"github.com/hashicorp/consul/agent/structs"
 	"github.com/stretchr/testify/require"
 )
 
@@ -244,6 +245,23 @@ func TestParseUpstreamConfig(t *testing.T) {
 				},
 			},
 		},
+		{
+			name: "passive health check map",
+			input: map[string]interface{}{
+				"passive_health_check": map[string]interface{}{
+					"interval":     "22s",
+					"max_failures": 7,
+				},
+			},
+			want: UpstreamConfig{
+				ConnectTimeoutMs: 5000,
+				Protocol:         "tcp",
+				PassiveHealthCheck: PassiveHealthCheck{
+					Interval:    22 * time.Second,
+					MaxFailures: 7,
+				},
+			},
+		},
 	}
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
diff --git a/test/integration/connect/envoy/case-centralconf/s1.hcl b/test/integration/connect/envoy/case-centralconf/s1.hcl
index 7f48b1c515a1..0d8957c000b5 100644
--- a/test/integration/connect/envoy/case-centralconf/s1.hcl
+++ b/test/integration/connect/envoy/case-centralconf/s1.hcl
@@ -13,4 +13,4 @@ services {
       }
     }
   }
-}
\ No newline at end of file
+}
diff --git a/test/integration/connect/envoy/case-upstream-connection-limits/s1.hcl b/test/integration/connect/envoy/case-upstream-config/s1.hcl
similarity index 78%
rename from test/integration/connect/envoy/case-upstream-connection-limits/s1.hcl
rename to test/integration/connect/envoy/case-upstream-config/s1.hcl
index 3bdf91c05878..b3d4db73b8fd 100644
--- a/test/integration/connect/envoy/case-upstream-connection-limits/s1.hcl
+++ b/test/integration/connect/envoy/case-upstream-config/s1.hcl
@@ -14,6 +14,10 @@ services {
                 max_pending_requests = 4
                 max_concurrent_requests = 5
               }
+              passive_health_check {
+                interval = "22s"
+                max_failures = 4
+              }
             }
           }
         ]
diff --git a/test/integration/connect/envoy/case-upstream-connection-limits/s2.hcl b/test/integration/connect/envoy/case-upstream-config/s2.hcl
similarity index 100%
rename from test/integration/connect/envoy/case-upstream-connection-limits/s2.hcl
rename to test/integration/connect/envoy/case-upstream-config/s2.hcl
diff --git a/test/integration/connect/envoy/case-upstream-connection-limits/setup.sh b/test/integration/connect/envoy/case-upstream-config/setup.sh
similarity index 100%
rename from test/integration/connect/envoy/case-upstream-connection-limits/setup.sh
rename to test/integration/connect/envoy/case-upstream-config/setup.sh
diff --git a/test/integration/connect/envoy/case-upstream-connection-limits/verify.bats b/test/integration/connect/envoy/case-upstream-config/verify.bats
similarity index 72%
rename from test/integration/connect/envoy/case-upstream-connection-limits/verify.bats
rename to test/integration/connect/envoy/case-upstream-config/verify.bats
index 116f78cc176a..a6c025ac89a6 100644
--- a/test/integration/connect/envoy/case-upstream-connection-limits/verify.bats
+++ b/test/integration/connect/envoy/case-upstream-config/verify.bats
@@ -27,7 +27,7 @@ load helpers
 }
 
 @test "s1 proxy should have been configured with max_connections on the cluster" {
-  CLUSTER_THRESHOLD=$(get_envoy_cluster_threshold localhost:19000 s2.default.primary)
+  CLUSTER_THRESHOLD=$(get_envoy_cluster_config localhost:19000 s2.default.primary | jq '.circuit_breakers.thresholds[0]')
   echo $CLUSTER_THRESHOLD
 
   MAX_CONNS=$(echo $CLUSTER_THRESHOLD | jq  --raw-output '.max_connections')
@@ -42,3 +42,11 @@ load helpers
   [ "$MAX_PENDING_REQS" = "4" ]
   [ "$MAX_REQS" = "5" ]
 }
+
+@test "s1 proxy should have been configured with passive_health_check" {
+  CLUSTER_CONFIG=$(get_envoy_cluster_config localhost:19000 s2.default.primary)
+  echo $CLUSTER_CONFIG
+
+  [ "$(echo $CLUSTER_CONFIG | jq --raw-output '.outlier_detection.consecutive_5xx')" = "4" ]
+  [ "$(echo $CLUSTER_CONFIG | jq --raw-output '.outlier_detection.interval')" = "22s" ]
+}
diff --git a/test/integration/connect/envoy/helpers.bash b/test/integration/connect/envoy/helpers.bash
index 94f4ca59f1bc..3f8cbd5cc9c5 100755
--- a/test/integration/connect/envoy/helpers.bash
+++ b/test/integration/connect/envoy/helpers.bash
@@ -156,7 +156,7 @@ function get_envoy_listener_filters {
   echo "$output" | jq --raw-output "$QUERY"
 }
 
-function get_envoy_cluster_threshold {
+function get_envoy_cluster_config {
   local HOSTPORT=$1
   local CLUSTER_NAME=$2
   run retry_default curl -s -f $HOSTPORT/config_dump
@@ -164,7 +164,7 @@ function get_envoy_cluster_threshold {
   echo "$output" | jq --raw-output "
     .configs[1].dynamic_active_clusters[]
     | select(.cluster.name|startswith(\"${CLUSTER_NAME}\"))
-    | .cluster.circuit_breakers.thresholds[0]
+    | .cluster
   "
 }
 
diff --git a/website/pages/docs/connect/proxies/envoy.mdx b/website/pages/docs/connect/proxies/envoy.mdx
index a028fb3ba7cb..8209ea7ea7e0 100644
--- a/website/pages/docs/connect/proxies/envoy.mdx
+++ b/website/pages/docs/connect/proxies/envoy.mdx
@@ -277,6 +277,17 @@ definition](/docs/connect/registration/service-registration) or
     since HTTP/2 has many requests per connection. For this configuration to be
     respected, a L7 protocol must be defined in the `protocol` field.
 
+- `passive_health_check` - Passive health checks are used to remove hosts from
+  the upstream cluster which are unreachable or are returning errors.
+
+  - `interval` - The time between checks. Each check will cause hosts which
+    have exceeded `max_failures` to be removed from the load balancer, and
+    any hosts which have passed their ejection time to be returned to the
+    load balancer.
+  - `max_failures` - The number of consecutive failures which cause a host to be
+    removed from the load balancer.
+
+
 ### Gateway Options
 
 These fields may also be overridden explicitly in the [proxy service