diff --git a/commands/operator-sdk/cmd/up/local.go b/commands/operator-sdk/cmd/up/local.go
index b712f2255a..7355e149cf 100644
--- a/commands/operator-sdk/cmd/up/local.go
+++ b/commands/operator-sdk/cmd/up/local.go
@@ -126,6 +126,8 @@ func upLocal() {
 }
 
 func upLocalAnsible() {
+	// Set the kubeconfig that the manager will be able to grab
+	os.Setenv(k8sutil.KubeConfigEnvVar, kubeConfig)
 	mgr, err := manager.New(config.GetConfigOrDie(), manager.Options{Namespace: namespace})
 	if err != nil {
 		log.Fatal(err)
diff --git a/pkg/k8sutil/constants.go b/pkg/k8sutil/constants.go
index d5b75cd39e..0ac85c02cc 100644
--- a/pkg/k8sutil/constants.go
+++ b/pkg/k8sutil/constants.go
@@ -15,9 +15,9 @@
 package k8sutil
 
 const (
-	// KubeConfigEnvVar defines the env variable KUBERNETES_CONFIG which
+	// KubeConfigEnvVar defines the env variable KUBECONFIG which
 	// contains the kubeconfig file path.
-	KubeConfigEnvVar = "KUBERNETES_CONFIG"
+	KubeConfigEnvVar = "KUBECONFIG"
 
 	// WatchNamespaceEnvVar is the constant for env variable WATCH_NAMESPACE
 	// which is the namespace that the pod is currently running in.