diff --git a/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/examples/ManagedClustersCreate_PodIdentity.json b/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/examples/ManagedClustersCreate_PodIdentity.json
new file mode 100644
index 000000000000..7b2dbe55b961
--- /dev/null
+++ b/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/examples/ManagedClustersCreate_PodIdentity.json
@@ -0,0 +1,245 @@
+{
+  "parameters": {
+    "api-version": "2021-02-01",
+    "subscriptionId": "subid1",
+    "resourceGroupName": "rg1",
+    "resourceName": "clustername1",
+    "parameters": {
+      "location": "location1",
+      "tags": {
+        "tier": "production",
+        "archv2": ""
+      },
+      "sku": {
+        "name": "Basic",
+        "tier": "Free"
+      },
+      "properties": {
+        "kubernetesVersion": "",
+        "dnsPrefix": "dnsprefix1",
+        "agentPoolProfiles": [
+          {
+            "name": "nodepool1",
+            "count": 3,
+            "vmSize": "Standard_DS2_v2",
+            "osType": "Linux",
+            "type": "VirtualMachineScaleSets",
+            "enableNodePublicIP": true,
+            "mode": "System"
+          }
+        ],
+        "linuxProfile": {
+          "adminUsername": "azureuser",
+          "ssh": {
+            "publicKeys": [
+              {
+                "keyData": "keydata"
+              }
+            ]
+          }
+        },
+        "networkProfile": {
+          "loadBalancerSku": "standard",
+          "outboundType": "loadBalancer",
+          "loadBalancerProfile": {
+            "managedOutboundIPs": {
+              "count": 2
+            }
+          }
+        },
+        "autoScalerProfile": {
+          "scan-interval": "20s",
+          "scale-down-delay-after-add": "15m"
+        },
+        "windowsProfile": {
+          "adminUsername": "azureuser",
+          "adminPassword": "replacePassword1234$"
+        },
+        "servicePrincipalProfile": {
+          "clientId": "clientid",
+          "secret": "secret"
+        },
+        "addonProfiles": {},
+        "enableRBAC": true,
+        "diskEncryptionSetID": "/subscriptions/subid1/resourceGroups/rg1/providers/Microsoft.Compute/diskEncryptionSets/des",
+        "enablePodSecurityPolicy": true,
+        "podIdentityProfile": {
+          "enabled": true,
+          "allowNetworkPluginKubenet": true
+        }
+      }
+    }
+  },
+  "responses": {
+    "200": {
+      "body": {
+        "id": "/subscriptions/subid1/resourcegroups/rg1/providers/Microsoft.ContainerService/managedClusters/clustername1",
+        "location": "location1",
+        "name": "clustername1",
+        "tags": {
+          "archv2": "",
+          "tier": "production"
+        },
+        "type": "Microsoft.ContainerService/ManagedClusters",
+        "properties": {
+          "provisioningState": "Succeeded",
+          "maxAgentPools": 1,
+          "kubernetesVersion": "1.9.6",
+          "dnsPrefix": "dnsprefix1",
+          "agentPoolProfiles": [
+            {
+              "name": "nodepool1",
+              "count": 3,
+              "vmSize": "Standard_DS2_v2",
+              "maxPods": 110,
+              "osType": "Linux",
+              "provisioningState": "Succeeded",
+              "orchestratorVersion": "1.9.6",
+              "type": "VirtualMachineScaleSets",
+              "enableNodePublicIP": true,
+              "mode": "System",
+              "nodeImageVersion": "AKSUbuntu:1604:2020.03.11"
+            }
+          ],
+          "linuxProfile": {
+            "adminUsername": "azureuser",
+            "ssh": {
+              "publicKeys": [
+                {
+                  "keyData": "keydata"
+                }
+              ]
+            }
+          },
+          "windowsProfile": {
+            "adminUsername": "azureuser"
+          },
+          "servicePrincipalProfile": {
+            "clientId": "clientid"
+          },
+          "nodeResourceGroup": "MC_rg1_clustername1_location1",
+          "enableRBAC": true,
+          "diskEncryptionSetID": "/subscriptions/subid1/resourceGroups/rg1/providers/Microsoft.Compute/diskEncryptionSets/des",
+          "enablePodSecurityPolicy": true,
+          "fqdn": "dnsprefix1-abcd1234.hcp.eastus.azmk8s.io",
+          "networkProfile": {
+            "loadBalancerSku": "basic",
+            "networkPlugin": "kubenet",
+            "podCidr": "10.244.0.0/16",
+            "serviceCidr": "10.0.0.0/16",
+            "dnsServiceIP": "10.0.0.10",
+            "dockerBridgeCidr": "172.17.0.1/16",
+            "outboundType": "loadBalancer",
+            "loadBalancerProfile": {
+              "allocatedOutboundPorts": 2000,
+              "idleTimeoutInMinutes": 10,
+              "managedOutboundIPs": {
+                "count": 2
+              },
+              "effectiveOutboundIPs": [
+                {
+                  "id": "/subscriptions/subid1/resourceGroups/MC_rg1/providers/Microsoft.Network/publicIPAddresses/mgdoutboundip1"
+                },
+                {
+                  "id": "/subscriptions/subid1/resourceGroups/MC_rg1/providers/Microsoft.Network/publicIPAddresses/mgdoutboundip2"
+                }
+              ]
+            }
+          },
+          "autoScalerProfile": {
+            "scan-interval": "20s",
+            "scale-down-delay-after-add": "15m"
+          },
+          "podIdentityProfile": {
+            "enabled": true,
+            "allowNetworkPluginKubenet": true
+          }
+        }
+      }
+    },
+    "201": {
+      "body": {
+        "id": "/subscriptions/subid1/resourcegroups/rg1/providers/Microsoft.ContainerService/managedClusters/clustername1",
+        "location": "location1",
+        "name": "clustername1",
+        "tags": {
+          "archv2": "",
+          "tier": "production"
+        },
+        "type": "Microsoft.ContainerService/ManagedClusters",
+        "properties": {
+          "provisioningState": "Creating",
+          "maxAgentPools": 1,
+          "kubernetesVersion": "1.9.6",
+          "dnsPrefix": "dnsprefix1",
+          "agentPoolProfiles": [
+            {
+              "name": "nodepool1",
+              "count": 3,
+              "vmSize": "Standard_DS2_v2",
+              "maxPods": 110,
+              "osType": "Linux",
+              "provisioningState": "Creating",
+              "orchestratorVersion": "1.9.6",
+              "type": "VirtualMachineScaleSets",
+              "enableNodePublicIP": true,
+              "mode": "System"
+            }
+          ],
+          "linuxProfile": {
+            "adminUsername": "azureuser",
+            "ssh": {
+              "publicKeys": [
+                {
+                  "keyData": "keydata"
+                }
+              ]
+            }
+          },
+          "windowsProfile": {
+            "adminUsername": "azureuser"
+          },
+          "servicePrincipalProfile": {
+            "clientId": "clientid"
+          },
+          "nodeResourceGroup": "MC_rg1_clustername1_location1",
+          "enableRBAC": true,
+          "diskEncryptionSetID": "/subscriptions/subid1/resourceGroups/rg1/providers/Microsoft.Compute/diskEncryptionSets/des",
+          "enablePodSecurityPolicy": true,
+          "networkProfile": {
+            "networkPlugin": "kubenet",
+            "podCidr": "10.244.0.0/16",
+            "serviceCidr": "10.0.0.0/16",
+            "dnsServiceIP": "10.0.0.10",
+            "dockerBridgeCidr": "172.17.0.1/16",
+            "loadBalancerSku": "standard",
+            "outboundType": "loadBalancer",
+            "loadBalancerProfile": {
+              "allocatedOutboundPorts": 2000,
+              "idleTimeoutInMinutes": 10,
+              "managedOutboundIPs": {
+                "count": 2
+              },
+              "effectiveOutboundIPs": [
+                {
+                  "id": "/subscriptions/subid1/resourceGroups/MC_rg1/providers/Microsoft.Network/publicIPAddresses/mgdoutboundip1"
+                },
+                {
+                  "id": "/subscriptions/subid1/resourceGroups/MC_rg1/providers/Microsoft.Network/publicIPAddresses/mgdoutboundip2"
+                }
+              ]
+            }
+          },
+          "autoScalerProfile": {
+            "scan-interval": "20s",
+            "scale-down-delay-after-add": "15m"
+          },
+          "podIdentityProfile": {
+            "enabled": true,
+            "allowNetworkPluginKubenet": true
+          }
+        }
+      }
+    }
+  }
+}
diff --git a/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/managedClusters.json b/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/managedClusters.json
index b9bff86da15f..07bf32abb8d1 100644
--- a/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/managedClusters.json
+++ b/specification/containerservice/resource-manager/Microsoft.ContainerService/stable/2021-02-01/managedClusters.json
@@ -479,6 +479,9 @@
           },
           "Create Managed Cluster with EncryptionAtHost enabled": {
             "$ref": "./examples/ManagedClustersCreate_EnableEncryptionAtHost.json"
+          },
+          "Create Managed Cluster with PodIdentity enabled": {
+            "$ref": "./examples/ManagedClustersCreate_PodIdentity.json"
           }
         }
       },
@@ -3331,6 +3334,10 @@
           "type": "boolean",
           "description": "Whether the pod identity addon is enabled."
         },
+        "allowNetworkPluginKubenet": {
+          "type": "boolean",
+          "description": "Customer consent for enabling AAD pod identity addon in cluster using Kubenet network plugin."
+        },
         "userAssignedIdentities": {
           "description": "User assigned pod identity settings.",
           "type": "array",