diff --git a/controllers/operatorpolicy_controller.go b/controllers/operatorpolicy_controller.go
index b92bdc0f..fe85888d 100644
--- a/controllers/operatorpolicy_controller.go
+++ b/controllers/operatorpolicy_controller.go
@@ -400,7 +400,7 @@ func (r *OperatorPolicyReconciler) buildResources(ctx context.Context, policy *p
 		opLog.V(1).Info("Templates disabled by annotation")
 	}
 
-	sub, subErr := buildSubscription(policy, r.DefaultNamespace, tmplResolver)
+	sub, subErr := buildSubscription(policy, tmplResolver)
 	if subErr == nil {
 		err := r.applySubscriptionDefaults(ctx, sub)
 		if err != nil {
@@ -414,6 +414,14 @@ func (r *OperatorPolicyReconciler) buildResources(ctx context.Context, policy *p
 
 			validationErrors = append(validationErrors, err)
 		}
+
+		if sub != nil && sub.Namespace == "" {
+			if r.DefaultNamespace != "" {
+				sub.Namespace = r.DefaultNamespace
+			} else {
+				validationErrors = append(validationErrors, errors.New("namespace is required in spec.subscription"))
+			}
+		}
 	} else {
 		validationErrors = append(validationErrors, subErr)
 	}
@@ -573,7 +581,8 @@ func (r *OperatorPolicyReconciler) applySubscriptionDefaults(
 	opLog := ctrl.LoggerFrom(ctx)
 	subSpec := subscription.Spec
 
-	defaultsNeeded := subSpec.Channel == "" || subSpec.CatalogSource == "" || subSpec.CatalogSourceNamespace == ""
+	defaultsNeeded := subSpec.Channel == "" || subSpec.CatalogSource == "" ||
+		subSpec.CatalogSourceNamespace == "" || subscription.Namespace == ""
 
 	if !defaultsNeeded {
 		return nil
@@ -635,6 +644,28 @@ func (r *OperatorPolicyReconciler) applySubscriptionDefaults(
 		subSpec.CatalogSourceNamespace = catalogNamespace
 	}
 
+	if subscription.Namespace == "" {
+		channels, _, _ := unstructured.NestedSlice(packageManifest.Object, "status", "channels")
+
+		for _, channel := range channels {
+			chanObj, ok := channel.(map[string]interface{})
+			if !ok {
+				continue
+			}
+
+			chanName, _, _ := unstructured.NestedString(chanObj, "name")
+			if chanName != subSpec.Channel {
+				continue
+			}
+
+			suggestedNS, _, _ := unstructured.NestedString(chanObj, "currentCSVDesc", "annotations",
+				"operatorframework.io/suggested-namespace")
+			subscription.Namespace = suggestedNS
+
+			break
+		}
+	}
+
 	return nil
 }
 
@@ -643,7 +674,7 @@ func (r *OperatorPolicyReconciler) applySubscriptionDefaults(
 // If an error is returned, it will include details on why the policy spec if invalid and
 // why the desired subscription can't be determined.
 func buildSubscription(
-	policy *policyv1beta1.OperatorPolicy, defaultNS string, tmplResolver *templates.TemplateResolver,
+	policy *policyv1beta1.OperatorPolicy, tmplResolver *templates.TemplateResolver,
 ) (*operatorv1alpha1.Subscription, error) {
 	subscription := new(operatorv1alpha1.Subscription)
 
@@ -679,16 +710,12 @@ func buildSubscription(
 	}
 
 	ns, ok := sub["namespace"].(string)
-	if !ok {
-		if defaultNS == "" {
-			return nil, fmt.Errorf("namespace is required in spec.subscription")
+	if ok {
+		if validationErrs := validation.IsDNS1123Label(ns); len(validationErrs) != 0 {
+			return nil, fmt.Errorf(
+				"the namespace '%v' used for the subscription is not a valid namespace identifier", ns,
+			)
 		}
-
-		ns = defaultNS
-	}
-
-	if validationErrs := validation.IsDNS1123Label(ns); len(validationErrs) != 0 {
-		return nil, fmt.Errorf("the namespace '%v' used for the subscription is not a valid namespace identifier", ns)
 	}
 
 	// This field is not actually in the subscription spec
diff --git a/controllers/operatorpolicy_controller_test.go b/controllers/operatorpolicy_controller_test.go
index 677bb3ad..e772ac87 100644
--- a/controllers/operatorpolicy_controller_test.go
+++ b/controllers/operatorpolicy_controller_test.go
@@ -43,7 +43,7 @@ func TestBuildSubscription(t *testing.T) {
 	}
 
 	// Check values are correctly bootstrapped to the Subscription
-	ret, err := buildSubscription(testPolicy, "my-operators", nil)
+	ret, err := buildSubscription(testPolicy, nil)
 	assert.Equal(t, err, nil)
 	assert.Equal(t, ret.GroupVersionKind(), desiredGVK)
 	assert.Equal(t, ret.ObjectMeta.Name, "my-operator")
@@ -103,7 +103,7 @@ func TestBuildSubscriptionInvalidNames(t *testing.T) {
 				}
 
 				// Check values are correctly bootstrapped to the Subscription
-				_, err := buildSubscription(testPolicy, "my-operators", nil)
+				_, err := buildSubscription(testPolicy, nil)
 				assert.Equal(t, err.Error(), test.expected)
 			},
 		)
diff --git a/test/e2e/case38_install_operator_test.go b/test/e2e/case38_install_operator_test.go
index 861ab470..233f32a2 100644
--- a/test/e2e/case38_install_operator_test.go
+++ b/test/e2e/case38_install_operator_test.go
@@ -212,15 +212,24 @@ var _ = Describe("Testing OperatorPolicy", Ordered, Label("supports-hosted"), fu
 
 	Describe("Testing an all default operator policy", Ordered, func() {
 		const (
-			opPolYAML = "../resources/case38_operator_install/operator-policy-all-defaults.yaml"
-			opPolName = "oppol-all-defaults"
-			subName   = "project-quay"
+			opPolYAML   = "../resources/case38_operator_install/operator-policy-all-defaults.yaml"
+			opPolName   = "oppol-all-defaults"
+			subName     = "airflow-helm-operator"
+			suggestedNS = "airflow-helm"
 		)
 		BeforeAll(func() {
 			preFunc()
 
 			createObjWithParent(parentPolicyYAML, parentPolicyName,
 				opPolYAML, testNamespace, gvrPolicy, gvrOperatorPolicy)
+
+			DeferCleanup(func() {
+				utils.Kubectl("delete", "ns", suggestedNS, "--ignore-not-found")
+
+				if IsHosted {
+					KubectlTarget("delete", "ns", suggestedNS, "--ignore-not-found")
+				}
+			})
 		})
 
 		It("Should create the Subscription with default values", func(ctx context.Context) {
@@ -246,7 +255,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, Label("supports-hosted"), fu
 			)
 
 			By("Verifying the subscription has the correct defaults")
-			sub, err := targetK8sDynamic.Resource(gvrSubscription).Namespace(opPolTestNS).
+			sub, err := targetK8sDynamic.Resource(gvrSubscription).Namespace(suggestedNS).
 				Get(ctx, subName, metav1.GetOptions{})
 			Expect(err).ToNot(HaveOccurred())
 
diff --git a/test/resources/case38_operator_install/operator-policy-all-defaults.yaml b/test/resources/case38_operator_install/operator-policy-all-defaults.yaml
index a677e9c0..a8a80e30 100644
--- a/test/resources/case38_operator_install/operator-policy-all-defaults.yaml
+++ b/test/resources/case38_operator_install/operator-policy-all-defaults.yaml
@@ -18,6 +18,5 @@ spec:
   severity: medium
   complianceType: musthave
   subscription:
-    name: project-quay
-    namespace: operator-policy-testns
+    name: airflow-helm-operator
   upgradeApproval: Automatic