diff --git a/.vscode/launch.json b/.vscode/launch.json
index 5380ddcd..7800e10a 100644
--- a/.vscode/launch.json
+++ b/.vscode/launch.json
@@ -1,48 +1,89 @@
 {
-    "version": "0.2.0",
-    "configurations": [
-        // Run `make kind-bootstrap-cluster-dev` before launching this.
-        {
-            "name": "Launch Package",
-            "type": "go",
-            "request": "launch",
-            "mode": "auto",
-            "program": "${workspaceFolder}/main.go",
-            "args": ["controller", "--leader-elect=false", "--log-level=3", "--v=5", "--enable-operator-policy=true"],
-            "env": {
-                "WATCH_NAMESPACE": "managed",
-                "KUBECONFIG": "${workspaceFolder}/kubeconfig_managed",
-            }
-        },
-        // Set FDescribe or FIt on the test to debug. Then set the desired breakpoint.
-        {
-            "name": "Launch Test Function (instructions in launch.json)",
-            "type": "go",
-            "request": "launch",
-            "mode": "auto",
-            "program": "${workspaceFolder}/test/e2e/e2e_suite_test.go",
-            "args": [
-                "-ginkgo.debug",
-                "-ginkgo.v",
-            ],
-            "env": {
-                "KUBECONFIG": "${workspaceFolder}/kubeconfig_managed_e2e",
-            }
-        },
-        // Set the correct path to the governance-policy-framework repo directory in the env section.
-        {
-            "name": "Launch Package (Framework E2E) (instructions in launch.json)",
-            "type": "go",
-            "request": "launch",
-            "mode": "auto",
-            "program": "${workspaceFolder}/main.go",
-            "args": ["controller", "--leader-elect=false", "--log-level=3", "--v=5", "--enable-operator-policy=true"],
-            "env": {
-                "WATCH_NAMESPACE": "managed",
-                "HUB_CONFIG": "${userHome}/git/governance-policy-framework/kubeconfig_hub",
-                "MANAGED_CONFIG": "${userHome}/git/governance-policy-framework/kubeconfig_managed",
-                "KUBECONFIG": "${userHome}/git/governance-policy-framework/kubeconfig_managed",
-            }
+  "version": "0.2.0",
+  "configurations": [
+    // Run `make kind-bootstrap-cluster-dev` before launching this.
+    {
+      "name": "Launch Package",
+      "type": "go",
+      "request": "launch",
+      "mode": "auto",
+      "program": "${workspaceFolder}/main.go",
+      "args": [
+        "controller",
+        "--leader-elect=false",
+        "--log-level=3",
+        "--v=5",
+        "--enable-operator-policy=true"
+      ],
+      "env": {
+        "WATCH_NAMESPACE": "managed",
+        "KUBECONFIG": "${workspaceFolder}/kubeconfig_managed"
+      }
+    },
+    {
+        "name": "Launch hosted Package",
+        "type": "go",
+        "request": "launch",
+        "mode": "auto",
+        "program": "${workspaceFolder}/main.go",
+        "args": [
+          "controller",
+          "--leader-elect=false",
+          "--log-level=3",
+          "--v=5",
+          "--enable-operator-policy=true",
+          "--target-kubeconfig-path=${workspaceFolder}/kubeconfig_managed2"
+        ],
+        "env": {
+          "WATCH_NAMESPACE": "managed",
+          "KUBECONFIG": "${workspaceFolder}/kubeconfig_managed"
         }
-    ]
+      },
+    // Set FDescribe or FIt on the test to debug. Then set the desired breakpoint.
+    {
+      "name": "Launch Test Function (instructions in launch.json)",
+      "type": "go",
+      "request": "launch",
+      "mode": "auto",
+      "program": "${workspaceFolder}/test/e2e/e2e_suite_test.go",
+      "args": ["-ginkgo.debug", "-ginkgo.v"],
+      "env": {
+        "KUBECONFIG": "${workspaceFolder}/kubeconfig_managed_e2e"
+      }
+    },
+    // Set FDescribe or FIt on the test to debug. Then set the desired breakpoint.
+    {
+      "name": "Launch Hosted Test Function (instructions in launch.json)",
+      "type": "go",
+      "request": "launch",
+      "mode": "auto",
+      "program": "${workspaceFolder}/test/e2e/e2e_suite_test.go",
+      "args": ["-ginkgo.debug", "-ginkgo.v", "--is_hosted=true"],
+      "env": {
+        "KUBECONFIG": "${workspaceFolder}/kubeconfig_managed_e2e",
+        "TARGET_KUBECONFIG_PATH": "${workspaceFolder}/kubeconfig_managed2_e2e",
+      }
+    },
+    // Set the correct path to the governance-policy-framework repo directory in the env section.
+    {
+      "name": "Launch Package (Framework E2E) (instructions in launch.json)",
+      "type": "go",
+      "request": "launch",
+      "mode": "auto",
+      "program": "${workspaceFolder}/main.go",
+      "args": [
+        "controller",
+        "--leader-elect=false",
+        "--log-level=3",
+        "--v=5",
+        "--enable-operator-policy=true"
+      ],
+      "env": {
+        "WATCH_NAMESPACE": "managed",
+        "HUB_CONFIG": "${userHome}/git/governance-policy-framework/kubeconfig_hub",
+        "MANAGED_CONFIG": "${userHome}/git/governance-policy-framework/kubeconfig_managed",
+        "KUBECONFIG": "${userHome}/git/governance-policy-framework/kubeconfig_managed"
+      }
+    }
+  ]
 }
diff --git a/Makefile b/Makefile
index 4cbbd718..9ca8b387 100644
--- a/Makefile
+++ b/Makefile
@@ -106,7 +106,7 @@ create-ns:
 # Run against the current locally configured Kubernetes cluster
 .PHONY: run
 run:
-	WATCH_NAMESPACE=$(WATCH_NAMESPACE) go run ./main.go controller --leader-elect=false
+	WATCH_NAMESPACE=$(WATCH_NAMESPACE) go run ./main.go controller --leader-elect=false --log-level=1 --enable-operator-policy=true --target-kubeconfig-path=./kubeconfig_managed2
 
 ############################################################
 # clean section
@@ -193,7 +193,7 @@ kind-create-cluster:
 .PHONY: kind-additional-cluster
 kind-additional-cluster: MANAGED_CLUSTER_SUFFIX = 2
 kind-additional-cluster: CLUSTER_NAME = $(MANAGED_CLUSTER_NAME)
-kind-additional-cluster: kind-create-cluster kind-controller-kubeconfig
+kind-additional-cluster: kind-create-cluster kind-controller-kubeconfig install-crds-hosted
 
 .PHONY: kind-delete-cluster
 kind-delete-cluster:
@@ -204,11 +204,10 @@ kind-delete-cluster:
 kind-tests: kind-delete-cluster kind-bootstrap-cluster-dev kind-deploy-controller-dev e2e-test
 
 OLM_VERSION := v0.26.0
+OLM_INSTALLER = $(LOCAL_BIN)/install.sh
 
 .PHONY: install-crds
-install-crds:
-	@echo installing olm
-	curl -L https://github.com/operator-framework/operator-lifecycle-manager/releases/download/$(OLM_VERSION)/install.sh -o $(LOCAL_BIN)/install.sh
+install-crds:  $(OLM_INSTALLER)
 	chmod +x $(LOCAL_BIN)/install.sh
 	$(LOCAL_BIN)/install.sh $(OLM_VERSION)
 	@echo installing crds
@@ -221,6 +220,18 @@ install-crds:
 	kubectl apply -f deploy/crds/policy.open-cluster-management.io_configurationpolicies.yaml
 	kubectl apply -f deploy/crds/policy.open-cluster-management.io_operatorpolicies.yaml
 
+
+
+$(OLM_INSTALLER):
+	@echo installing olm
+	curl -L https://github.com/operator-framework/operator-lifecycle-manager/releases/download/$(OLM_VERSION)/install.sh -o $(LOCAL_BIN)/install.sh
+
+install-crds-hosted: export KUBECONFIG=./kubeconfig_managed$(MANAGED_CLUSTER_SUFFIX)_e2e
+install-crds-hosted: $(OLM_INSTALLER)
+	chmod +x $(LOCAL_BIN)/install.sh
+	$(LOCAL_BIN)/install.sh $(OLM_VERSION)
+
+
 .PHONY: install-resources
 install-resources:
 	# creating namespaces
@@ -230,20 +241,22 @@ install-resources:
 	kubectl apply -k deploy/rbac
 	kubectl apply -f deploy/manager/service-account.yaml -n $(KIND_NAMESPACE)
 
+IS_HOSTED ?= false
+
 .PHONY: e2e-test
 e2e-test: e2e-dependencies
-	$(GINKGO) -v --procs=20 $(E2E_TEST_ARGS) test/e2e
+	$(GINKGO) -v --procs=20 $(E2E_TEST_ARGS) test/e2e -- -is_hosted=$(IS_HOSTED)
 
 .PHONY: e2e-test-coverage
 e2e-test-coverage: E2E_TEST_ARGS = --json-report=report_e2e.json --label-filter='!hosted-mode && !running-in-cluster' --output-dir=.
 e2e-test-coverage: e2e-run-instrumented e2e-test e2e-stop-instrumented
 
 .PHONY: e2e-test-hosted-mode-coverage
-e2e-test-hosted-mode-coverage: E2E_TEST_ARGS = --json-report=report_e2e_hosted_mode.json --label-filter="hosted-mode && !running-in-cluster" --output-dir=.
+e2e-test-hosted-mode-coverage: E2E_TEST_ARGS = --json-report=report_e2e_hosted_mode.json --label-filter="hosted-mode && hosted-as-well && !running-in-cluster" --output-dir=.
 e2e-test-hosted-mode-coverage: COVERAGE_E2E_OUT = coverage_e2e_hosted_mode.out
+e2e-test-hosted-mode-coverage: IS_HOSTED=true
 e2e-test-hosted-mode-coverage: export TARGET_KUBECONFIG_PATH = $(PWD)/kubeconfig_managed2
 e2e-test-hosted-mode-coverage: e2e-run-instrumented e2e-test e2e-stop-instrumented
-
 .PHONY: e2e-test-running-in-cluster
 e2e-test-running-in-cluster: E2E_TEST_ARGS = --label-filter="running-in-cluster" --covermode=atomic --coverprofile=coverage_e2e_uninstall.out --coverpkg=open-cluster-management.io/config-policy-controller/pkg/triggeruninstall
 e2e-test-running-in-cluster: e2e-test
diff --git a/controllers/operatorpolicy_controller.go b/controllers/operatorpolicy_controller.go
index 720d550b..a38dbbe9 100644
--- a/controllers/operatorpolicy_controller.go
+++ b/controllers/operatorpolicy_controller.go
@@ -103,6 +103,7 @@ type OperatorPolicyReconciler struct {
 	DynamicWatcher   depclient.DynamicWatcher
 	InstanceName     string
 	DefaultNamespace string
+	TargetClient     client.Client
 }
 
 // SetupWithManager sets up the controller with the Manager and will reconcile when the dynamic watcher
@@ -745,7 +746,7 @@ func (r *OperatorPolicyReconciler) musthaveOpGroup(
 
 		desiredOpGroup.ResourceVersion = opGroup.GetResourceVersion()
 
-		err = r.Update(ctx, &opGroup)
+		err = r.TargetClient.Update(ctx, &opGroup)
 		if err != nil {
 			return nil, changed, fmt.Errorf("error updating the OperatorGroup: %w", err)
 		}
@@ -766,7 +767,7 @@ func (r *OperatorPolicyReconciler) musthaveOpGroup(
 func (r *OperatorPolicyReconciler) createWithNamespace(
 	ctx context.Context, policy *policyv1beta1.OperatorPolicy, object client.Object,
 ) error {
-	err := r.Create(ctx, object)
+	err := r.TargetClient.Create(ctx, object)
 	if err == nil {
 		return nil
 	}
@@ -784,13 +785,13 @@ func (r *OperatorPolicyReconciler) createWithNamespace(
 		},
 	}
 
-	err = r.Create(ctx, &ns)
+	err = r.TargetClient.Create(ctx, &ns)
 	if err != nil && !k8serrors.IsAlreadyExists(err) {
 		return err
 	}
 
 	// Try creating the object again now that the namespace was created.
-	return r.Create(ctx, object)
+	return r.TargetClient.Create(ctx, object)
 }
 
 // isNamespaceNotFound detects if the input error from r.Create failed due to the specified namespace not existing.
@@ -899,7 +900,7 @@ func (r *OperatorPolicyReconciler) mustnothaveOpGroup(
 		earlyConds = append(earlyConds, calculateComplianceCondition(policy))
 	}
 
-	err := r.Delete(ctx, desiredOpGroup)
+	err := r.TargetClient.Delete(ctx, desiredOpGroup)
 	if err != nil {
 		return earlyConds, changed, fmt.Errorf("error deleting the OperatorGroup: %w", err)
 	}
@@ -1036,7 +1037,7 @@ func (r *OperatorPolicyReconciler) musthaveSubscription(
 		earlyConds = append(earlyConds, calculateComplianceCondition(policy))
 	}
 
-	err = r.Update(ctx, foundSub)
+	err = r.TargetClient.Update(ctx, foundSub)
 	if err != nil {
 		return mergedSub, nil, changed, fmt.Errorf("error updating the Subscription: %w", err)
 	}
@@ -1090,7 +1091,7 @@ func (r *OperatorPolicyReconciler) mustnothaveSubscription(
 		earlyConds = append(earlyConds, calculateComplianceCondition(policy))
 	}
 
-	err := r.Delete(ctx, foundUnstructSub)
+	err := r.TargetClient.Delete(ctx, foundUnstructSub)
 	if err != nil {
 		return foundSub, earlyConds, changed, fmt.Errorf("error deleting the Subscription: %w", err)
 	}
@@ -1354,7 +1355,7 @@ func (r *OperatorPolicyReconciler) musthaveInstallPlan(
 		return false, fmt.Errorf("error approving InstallPlan: %w", err)
 	}
 
-	if err := r.Update(ctx, &approvableInstallPlans[0]); err != nil {
+	if err := r.TargetClient.Update(ctx, &approvableInstallPlans[0]); err != nil {
 		return false, fmt.Errorf("error updating approved InstallPlan: %w", err)
 	}
 
@@ -1482,7 +1483,7 @@ func (r *OperatorPolicyReconciler) mustnothaveCSV(
 			continue
 		}
 
-		err := r.Delete(ctx, &csvList[i])
+		err := r.TargetClient.Delete(ctx, &csvList[i])
 		if err != nil {
 			changed := updateStatus(policy, foundNotWantedCond("ClusterServiceVersion", csvNames...), relatedCSVs...)
 
@@ -1636,7 +1637,7 @@ func (r *OperatorPolicyReconciler) handleCRDs(
 			continue
 		}
 
-		err := r.Delete(ctx, &crdList[i])
+		err := r.TargetClient.Delete(ctx, &crdList[i])
 		if err != nil {
 			changed := updateStatus(policy, foundNotWantedCond("CustomResourceDefinition"), relatedCRDs...)
 
@@ -1755,7 +1756,7 @@ func (r *OperatorPolicyReconciler) mergeObjects(
 	}
 
 	if updateNeeded {
-		err := r.Update(ctx, existing, client.DryRunAll)
+		err := r.TargetClient.Update(ctx, existing, client.DryRunAll)
 		if err != nil {
 			if k8serrors.IsForbidden(err) {
 				// This indicates the update would make a change, but the change is not allowed,
diff --git a/main.go b/main.go
index a17ad797..6a9e31df 100644
--- a/main.go
+++ b/main.go
@@ -322,6 +322,7 @@ func main() {
 	var targetK8sClient kubernetes.Interface
 	var targetK8sDynamicClient dynamic.Interface
 	var targetK8sConfig *rest.Config
+	var targetClient client.Client
 	var nsSelMgr manager.Manager // A separate controller-manager is needed in hosted mode
 
 	if opts.targetKubeConfig == "" {
@@ -329,6 +330,7 @@ func main() {
 		targetK8sClient = kubernetes.NewForConfigOrDie(targetK8sConfig)
 		targetK8sDynamicClient = dynamic.NewForConfigOrDie(targetK8sConfig)
 		nsSelMgr = mgr
+		targetClient = mgr.GetClient()
 	} else { // "Hosted mode"
 		var err error
 
@@ -343,6 +345,11 @@ func main() {
 
 		targetK8sClient = kubernetes.NewForConfigOrDie(targetK8sConfig)
 		targetK8sDynamicClient = dynamic.NewForConfigOrDie(targetK8sConfig)
+		targetClient, err = client.New(targetK8sConfig, client.Options{Scheme: scheme})
+		if err != nil {
+			log.Error(err, "Failed to load the target kubeconfig", "path", opts.targetKubeConfig)
+			os.Exit(1)
+		}
 
 		// The managed cluster's API server is potentially not the same as the hosting cluster and it could be
 		// offline already as part of the uninstall process. In this case, the manager's instantiation will fail.
@@ -428,7 +435,7 @@ func main() {
 	if opts.enableOperatorPolicy {
 		depReconciler, depEvents := depclient.NewControllerRuntimeSource()
 
-		watcher, err := depclient.New(cfg, depReconciler,
+		watcher, err := depclient.New(targetK8sConfig, depReconciler,
 			&depclient.Options{
 				DisableInitialReconcile: true,
 				EnableCache:             true,
@@ -455,6 +462,7 @@ func main() {
 			DynamicWatcher:   watcher,
 			InstanceName:     instanceName,
 			DefaultNamespace: opts.operatorPolDefaultNS,
+			TargetClient:     targetClient,
 		}
 
 		if err = OpReconciler.SetupWithManager(mgr, depEvents); err != nil {
diff --git a/test/e2e/case38_install_operator_test.go b/test/e2e/case38_install_operator_test.go
index 91b9b1a5..12e4ecb4 100644
--- a/test/e2e/case38_install_operator_test.go
+++ b/test/e2e/case38_install_operator_test.go
@@ -20,7 +20,7 @@ import (
 	"open-cluster-management.io/config-policy-controller/test/utils"
 )
 
-var _ = Describe("Testing OperatorPolicy", Ordered, func() {
+var _ = Describe("Testing OperatorPolicy", Ordered, Label("hosted-as-well"), func() {
 	const (
 		opPolTestNS          = "operator-policy-testns"
 		parentPolicyYAML     = "../resources/case38_operator_install/parent-policy.yaml"
@@ -167,6 +167,19 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 		ConsistentlyWithOffset(1, checkFunc, consistentlyDuration, 1).Should(Succeed())
 	}
 
+	preFunc := func() {
+		if IsHosted {
+			KubectlTarget("create", "ns", opPolTestNS)
+			DeferCleanup(func() {
+				KubectlTarget("delete", "ns", opPolTestNS)
+			})
+		}
+		utils.Kubectl("create", "ns", opPolTestNS)
+		DeferCleanup(func() {
+			utils.Kubectl("delete", "ns", opPolTestNS)
+		})
+	}
+
 	Describe("Testing an all default operator policy", Ordered, func() {
 		const (
 			opPolYAML = "../resources/case38_operator_install/operator-policy-all-defaults.yaml"
@@ -174,6 +187,12 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			subName   = "project-quay"
 		)
 		BeforeAll(func() {
+			if IsHosted {
+				KubectlTarget("create", "ns", opPolTestNS)
+				DeferCleanup(func() {
+					KubectlTarget("delete", "ns", opPolTestNS)
+				})
+			}
 			utils.Kubectl("create", "ns", opPolTestNS)
 			DeferCleanup(func() {
 				utils.Kubectl("delete", "ns", opPolTestNS)
@@ -206,7 +225,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			)
 
 			By("Verifying the subscription has the correct defaults")
-			sub, err := clientManagedDynamic.Resource(gvrSubscription).Namespace(opPolTestNS).
+			sub, err := targetK8sDynamic.Resource(gvrSubscription).Namespace(opPolTestNS).
 				Get(ctx, subName, metav1.GetOptions{})
 			Expect(err).ToNot(HaveOccurred())
 
@@ -229,6 +248,13 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			subName   = "project-quay"
 		)
 		BeforeAll(func() {
+			if IsHosted {
+				KubectlTarget("create", "ns", opPolTestNS)
+				DeferCleanup(func() {
+					KubectlTarget("delete", "ns", opPolTestNS)
+				})
+			}
+
 			utils.Kubectl("create", "ns", opPolTestNS)
 			DeferCleanup(func() {
 				utils.Kubectl("delete", "ns", opPolTestNS)
@@ -267,10 +293,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			extraOpGroupName = "extra-operator-group"
 		)
 		BeforeAll(func() {
-			utils.Kubectl("create", "ns", opPolTestNS)
-			DeferCleanup(func() {
-				utils.Kubectl("delete", "ns", opPolTestNS)
-			})
+			preFunc()
 
 			createObjWithParent(parentPolicyYAML, parentPolicyName,
 				opPolYAML, opPolTestNS, gvrPolicy, gvrOperatorPolicy)
@@ -325,7 +348,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			)
 		})
 		It("Should become NonCompliant when an extra OperatorGroup is added", func() {
-			utils.Kubectl("apply", "-f", extraOpGroupYAML, "-n", opPolTestNS)
+			KubectlTarget("apply", "-f", extraOpGroupYAML, "-n", opPolTestNS)
 			check(
 				opPolName,
 				true,
@@ -360,8 +383,8 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 		It("Should warn about the OperatorGroup when it doesn't match the default", func() {
 			utils.Kubectl("patch", "operatorpolicy", opPolName, "-n", opPolTestNS, "--type=json", "-p",
 				`[{"op": "replace", "path": "/spec/remediationAction", "value": "inform"}]`)
-			utils.Kubectl("delete", "operatorgroup", "-n", opPolTestNS, "--all")
-			utils.Kubectl("apply", "-f", extraOpGroupYAML, "-n", opPolTestNS)
+			KubectlTarget("delete", "operatorgroup", "-n", opPolTestNS, "--all")
+			KubectlTarget("apply", "-f", extraOpGroupYAML, "-n", opPolTestNS)
 			check(
 				opPolName,
 				false,
@@ -391,11 +414,12 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			opPolName = "oppol-no-group-enforce"
 		)
 		BeforeAll(func() {
+			preFunc()
+
 			DeferCleanup(func() {
 				utils.Kubectl(
 					"delete", "-f", parentPolicyYAML, "-n", testNamespace, "--ignore-not-found", "--cascade=foreground",
 				)
-				utils.Kubectl("delete", "ns", opPolTestNS, "--ignore-not-found")
 			})
 
 			createObjWithParent(
@@ -410,7 +434,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 		})
 	})
 
-	Describe("Testing OperatorGroup behavior when it is specified in the policy", Ordered, func() {
+	FDescribe("Testing OperatorGroup behavior when it is specified in the policy", Ordered, func() {
 		const (
 			opPolYAML            = "../resources/case38_operator_install/operator-policy-with-group.yaml"
 			opPolName            = "oppol-with-group"
@@ -423,12 +447,9 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 		)
 
 		BeforeAll(func() {
-			utils.Kubectl("create", "ns", opPolTestNS)
-			DeferCleanup(func() {
-				utils.Kubectl("delete", "ns", opPolTestNS)
-			})
+			preFunc()
 
-			utils.Kubectl("apply", "-f", incorrectOpGroupYAML, "-n", opPolTestNS)
+			KubectlTarget("apply", "-f", incorrectOpGroupYAML, "-n", opPolTestNS)
 
 			createObjWithParent(parentPolicyYAML, parentPolicyName,
 				opPolYAML, opPolTestNS, gvrPolicy, gvrOperatorPolicy)
@@ -471,8 +492,8 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			)
 		})
 		It("Should match when the OperatorGroup is manually corrected", func() {
-			utils.Kubectl("delete", "operatorgroup", incorrectOpGroupName, "-n", opPolTestNS)
-			utils.Kubectl("apply", "-f", scopedOpGroupYAML, "-n", opPolTestNS)
+			KubectlTarget("delete", "operatorgroup", incorrectOpGroupName, "-n", opPolTestNS)
+			KubectlTarget("apply", "-f", scopedOpGroupYAML, "-n", opPolTestNS)
 			check(
 				opPolName,
 				false,
@@ -498,7 +519,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			)
 		})
 		It("Should report a mismatch when the OperatorGroup is manually edited", func() {
-			utils.Kubectl("patch", "operatorgroup", scopedOpGroupName, "-n", opPolTestNS, "--type=json", "-p",
+			KubectlTarget("patch", "operatorgroup", scopedOpGroupName, "-n", opPolTestNS, "--type=json", "-p",
 				`[{"op": "replace", "path": "/spec/targetNamespaces", "value": []}]`)
 			check(
 				opPolName,
@@ -552,7 +573,7 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 			)
 		})
 		It("Should become NonCompliant when an extra OperatorGroup is added", func() {
-			utils.Kubectl("apply", "-f", extraOpGroupYAML, "-n", opPolTestNS)
+			KubectlTarget("apply", "-f", extraOpGroupYAML, "-n", opPolTestNS)
 			check(
 				opPolName,
 				true,
@@ -593,9 +614,9 @@ var _ = Describe("Testing OperatorPolicy", Ordered, func() {
 		)
 
 		BeforeAll(func() {
-			utils.Kubectl("create", "ns", opPolTestNS)
+			KubectlTarget("create", "ns", opPolTestNS)
 			DeferCleanup(func() {
-				utils.Kubectl("delete", "ns", opPolTestNS)
+				KubectlTarget("delete", "ns", opPolTestNS)
 			})
 
 			createObjWithParent(parentPolicyYAML, parentPolicyName,
diff --git a/test/e2e/e2e_suite_test.go b/test/e2e/e2e_suite_test.go
index 4e80feca..f3ec06b5 100644
--- a/test/e2e/e2e_suite_test.go
+++ b/test/e2e/e2e_suite_test.go
@@ -54,8 +54,14 @@ var (
 	gvrInstallPlan              schema.GroupVersionResource
 	gvrClusterServiceVersion    schema.GroupVersionResource
 	defaultImageRegistry        string
+	IsHosted                    bool
+	targetK8sClient             kubernetes.Interface
+	targetK8sDynamic            dynamic.Interface
+	KubectlTarget               func(args ...string)
 )
 
+const targetEnvName = "TARGET_KUBECONFIG_PATH"
+
 func TestE2e(t *testing.T) {
 	RegisterFailHandler(Fail)
 	RunSpecs(t, "Config policy controller e2e Suite")
@@ -66,6 +72,11 @@ func init() {
 	klog.InitFlags(nil)
 	flag.StringVar(&kubeconfigManaged, "kubeconfig_managed", "../../kubeconfig_managed_e2e",
 		"Location of the kubeconfig to use; defaults to current kubeconfig if set to an empty string")
+
+	flag.BoolVar(
+		&IsHosted, "is_hosted", false,
+		"Whether is hosted mode or not",
+	)
 }
 
 var _ = BeforeSuite(func() {
@@ -156,6 +167,36 @@ var _ = BeforeSuite(func() {
 		}, metav1.CreateOptions{})).NotTo(BeNil())
 	}
 	Expect(namespaces.Get(context.TODO(), testNamespace, metav1.GetOptions{})).NotTo(BeNil())
+
+	if IsHosted {
+		By("Checking that the " + targetEnvName + " environment variable is valid")
+		altKubeconfigPath := os.Getenv(targetEnvName)
+		Expect(altKubeconfigPath).ToNot(Equal(""))
+
+		targetK8sConfig, err := clientcmd.BuildConfigFromFlags("", altKubeconfigPath)
+		Expect(err).ToNot(HaveOccurred())
+
+		targetK8sClient, err = kubernetes.NewForConfig(targetK8sConfig)
+		Expect(err).ToNot(HaveOccurred())
+
+		targetK8sDynamic, err = dynamic.NewForConfig(targetK8sConfig)
+		Expect(err).ToNot(HaveOccurred())
+	} else {
+		targetK8sClient = clientManaged
+		targetK8sDynamic = clientManagedDynamic
+
+	}
+
+	KubectlTarget = func(args ...string) {
+		kubeconfig := "../../kubeconfig_managed_e2e"
+		if IsHosted {
+			kubeconfig = "../../kubeconfig_managed2_e2e"
+		}
+
+		args = append(args, "--kubeconfig="+kubeconfig)
+
+		utils.Kubectl(args...)
+	}
 })
 
 func NewKubeClient(url, kubeconfig, context string) kubernetes.Interface {