diff --git a/CHANGELOG.md b/CHANGELOG.md
index 404e5425c8..0c3b8e24fb 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -51,6 +51,7 @@ IMPROVEMENTS:
   * Allow addition of extra labels to Connect Inject pods. [[GH-1678](https://github.com/hashicorp/consul-k8s/pull/1678)]
   * Add fields `localConnectTimeoutMs` and `localRequestTimeoutMs` to the `ServiceDefaults` CRD. [[GH-1647](https://github.com/hashicorp/consul-k8s/pull/1647)]
   * API Gateway: Enable API Gateways to directly connect to Consul servers when running in the agentless configuration. [[GH-1694](https://github.com/hashicorp/consul-k8s/pull/1694)]
+  * API Gateway: Add support for using dynamic server discovery strings when running without agents. [[GH-1732](https://github.com/hashicorp/consul-k8s/pull/1732)]
 
 BUG FIXES:
 * Peering
diff --git a/charts/consul/templates/api-gateway-controller-deployment.yaml b/charts/consul/templates/api-gateway-controller-deployment.yaml
index 84ba22dd5c..56d9d14d94 100644
--- a/charts/consul/templates/api-gateway-controller-deployment.yaml
+++ b/charts/consul/templates/api-gateway-controller-deployment.yaml
@@ -119,6 +119,10 @@ spec:
           value: {{ .Values.global.adminPartitions.name }}
         {{- end }}
         {{- end }}
+        {{- if not .Values.client.enabled }}
+        - name: CONSUL_DYNAMIC_SERVER_DISCOVERY
+          value: "true"
+        {{- end }}
         command:
         - "/bin/sh"
         - "-ec"
diff --git a/charts/consul/test/unit/api-gateway-controller-deployment.bats b/charts/consul/test/unit/api-gateway-controller-deployment.bats
index c97a671c5f..d376026ae0 100755
--- a/charts/consul/test/unit/api-gateway-controller-deployment.bats
+++ b/charts/consul/test/unit/api-gateway-controller-deployment.bats
@@ -1346,3 +1346,27 @@ load _helpers
       yq '.spec.template.spec.containers[0].env[6].value == "hashi"' | tee /dev/stderr)
   [ "${actual}" = "true" ]
 }
+
+@test "apiGateway/Deployment: CONSUL_DYNAMIC_SERVER_DISCOVERY is set when not using clients" {
+  cd `chart_dir`
+  local actual=$(helm template \
+      -s templates/api-gateway-controller-deployment.yaml  \
+      --set 'apiGateway.enabled=true' \
+      --set 'apiGateway.image=bar' \
+      --set 'client.enabled=false' \
+      . | tee /dev/stderr |
+      yq '.spec.template.spec.containers[0].env[3].value == "true"' | tee /dev/stderr)
+  [ "${actual}" = "true" ]
+}
+
+@test "apiGateway/Deployment: CONSUL_DYNAMIC_SERVER_DISCOVERY is not set when using clients" {
+  cd `chart_dir`
+  local actual=$(helm template \
+      -s templates/api-gateway-controller-deployment.yaml  \
+      --set 'apiGateway.enabled=true' \
+      --set 'apiGateway.image=bar' \
+      --set 'client.enabled=true' \
+      . | tee /dev/stderr |
+      yq '.spec.template.spec.containers[0].env[3]' | tee /dev/stderr)
+  [ "${actual}" = "null" ]
+}