diff --git a/.github/actions/e2e/install-karpenter/action.yaml b/.github/actions/e2e/install-karpenter/action.yaml
index 137f6237bb26..936f8676c820 100644
--- a/.github/actions/e2e/install-karpenter/action.yaml
+++ b/.github/actions/e2e/install-karpenter/action.yaml
@@ -27,6 +27,9 @@ inputs:
   private_cluster:
     description: "Whether the cluster is private or not. Valid values are 'true' or 'false'"
     default: 'false'
+  webhooks_enabled:
+    description: "Whether webhooks are enabled or not. Valid values are 'true' or 'false'"
+    default: 'true'
 runs:
   using: "composite"
   steps:
@@ -57,6 +60,7 @@ runs:
       CLUSTER_NAME: ${{ inputs.cluster_name }}
       K8S_VERSION: ${{ inputs.k8s_version }}
       PRIVATE_CLUSTER: ${{ inputs.private_cluster }}
+      WEBHOOKS_ENABLED: ${{ inputs.webhooks_enabled }}
     run: |
       ./test/hack/e2e_scripts/install_karpenter.sh
   - name: diff-karpenter
diff --git a/.github/actions/e2e/setup-cluster/action.yaml b/.github/actions/e2e/setup-cluster/action.yaml
index c829662294f0..0835657cdfbe 100644
--- a/.github/actions/e2e/setup-cluster/action.yaml
+++ b/.github/actions/e2e/setup-cluster/action.yaml
@@ -47,6 +47,9 @@ inputs:
     default: 'false'
   codebuild_role:
     description: "Codebuild Role that must be given an access entry in case of private cluster"
+  webhooks_enabled:
+    description: "Whether webhooks are enabled or not. Valid values are 'true' or 'false'"
+    default: 'true'
 runs:
   using: "composite"
   steps:
@@ -269,3 +272,4 @@ runs:
       k8s_version: ${{ inputs.k8s_version }}
       git_ref: ${{ inputs.git_ref }}
       private_cluster: ${{ inputs.private_cluster }}
+      webhooks_enabled: ${{ inputs.webhooks_enabled }}
diff --git a/.github/workflows/e2e-matrix.yaml b/.github/workflows/e2e-matrix.yaml
index c6d8ba7a89a6..93ceb3f1e61f 100644
--- a/.github/workflows/e2e-matrix.yaml
+++ b/.github/workflows/e2e-matrix.yaml
@@ -76,6 +76,8 @@ jobs:
             region: ${{ inputs.region }}
           - name: IPv6
             region: ${{ inputs.region }}
+          - name: Webhooks
+            region: ${{ inputs.region }}
           - name: LocalZone
             # LAX is the only local zone available in the CI account, therefore only use us-west-2
             region: us-west-2
diff --git a/.github/workflows/e2e.yaml b/.github/workflows/e2e.yaml
index dc120754be4a..a8e782e2893b 100644
--- a/.github/workflows/e2e.yaml
+++ b/.github/workflows/e2e.yaml
@@ -27,6 +27,7 @@ on:
           - Scale
           - PrivateCluster
           - LocalZone
+          - Webhooks
       k8s_version:
         type: choice
         options:
@@ -143,6 +144,7 @@ jobs:
           enable_local_zones: ${{ inputs.suite == 'LocalZone' }}
           cleanup: ${{ inputs.cleanup }}
           codebuild_role: ${{ vars[format('{0}_CODEBUILD_ROLE', inputs.codebuild_region)] }}
+          webhooks_enabled: ${{ inputs.suite != 'Webhooks' && true }} # Set webhooks_enabled to false if running webhook smoke test suite
       - name: run tests for private cluster
         if: ${{ inputs.workflow_trigger == 'private_cluster' }}
         uses: ./.github/actions/e2e/run-tests-private-cluster
diff --git a/test/hack/e2e_scripts/install_karpenter.sh b/test/hack/e2e_scripts/install_karpenter.sh
index e6d10ce1df3b..da9a71266708 100755
--- a/test/hack/e2e_scripts/install_karpenter.sh
+++ b/test/hack/e2e_scripts/install_karpenter.sh
@@ -2,7 +2,6 @@ aws eks update-kubeconfig --name "$CLUSTER_NAME"
 
 # Parse minor version to determine whether to enable the webhooks
 K8S_VERSION_MINOR="${K8S_VERSION#*.}"
-WEBHOOK_ENABLED=true
 
 CHART="oci://$ECR_ACCOUNT_ID.dkr.ecr.$ECR_REGION.amazonaws.com/karpenter/snapshot/karpenter"
 ADDITIONAL_FLAGS=""
@@ -16,7 +15,7 @@ helm upgrade --install karpenter "${CHART}" \
   -n kube-system \
   --version "0-$(git rev-parse HEAD)" \
   --set logLevel=debug \
-  --set webhook.enabled=${WEBHOOK_ENABLED} \
+  --set webhook.enabled=${WEBHOOKS_ENABLED} \
   --set settings.isolatedVPC=${PRIVATE_CLUSTER} \
   --set serviceAccount.annotations."eks\.amazonaws\.com/role-arn"="arn:aws:iam::$ACCOUNT_ID:role/karpenter-irsa-$CLUSTER_NAME" \
   $ADDITIONAL_FLAGS \
diff --git a/test/suites/webhooks/suite_test.go b/test/suites/webhooks/suite_test.go
new file mode 100644
index 000000000000..b66ce2fa82aa
--- /dev/null
+++ b/test/suites/webhooks/suite_test.go
@@ -0,0 +1,66 @@
+/*
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package webhooks_test
+
+import (
+	"context"
+	"testing"
+
+	v1beta1 "github.com/aws/karpenter-provider-aws/pkg/apis/v1beta1"
+	"github.com/aws/karpenter-provider-aws/test/pkg/environment/aws"
+
+	karpv1beta1 "sigs.k8s.io/karpenter/pkg/apis/v1beta1"
+
+	karptest "sigs.k8s.io/karpenter/pkg/test"
+
+	. "github.com/onsi/ginkgo/v2"
+	. "github.com/onsi/gomega"
+	. "knative.dev/pkg/logging/testing"
+)
+
+var ctx context.Context
+var env *aws.Environment
+var nodeClass *v1beta1.EC2NodeClass
+var nodePool *karpv1beta1.NodePool
+
+func TestWebhooks(t *testing.T) {
+	RegisterFailHandler(Fail)
+
+	ctx = TestContextWithLogger(t)
+	BeforeSuite(func() {
+		env = aws.NewEnvironment(t)
+	})
+	AfterSuite(func() {
+		env.Stop()
+	})
+	RunSpecs(t, "Webhooks")
+}
+
+var _ = BeforeEach(func() {
+	env.BeforeEach()
+	nodeClass = env.DefaultEC2NodeClass()
+	nodePool = env.DefaultNodePool(nodeClass)
+})
+var _ = AfterEach(func() { env.Cleanup() })
+var _ = AfterEach(func() { env.AfterEach() })
+
+var _ = Describe("Webhooks", func() {
+	It("should schedule pods when webhooks are disabled", func() {
+		pod := karptest.Pod()
+		env.ExpectCreated(pod, nodeClass, nodePool)
+		env.EventuallyExpectHealthy(pod)
+		env.ExpectCreatedNodeCount("==", 1)
+	})
+})