diff --git a/integration/proxy/proxy_helpers.go b/integration/proxy/proxy_helpers.go
index 7e1dff01fbd0e..47ecddcab5b49 100644
--- a/integration/proxy/proxy_helpers.go
+++ b/integration/proxy/proxy_helpers.go
@@ -22,20 +22,25 @@ import (
 	"crypto/tls"
 	"crypto/x509/pkix"
 	"encoding/json"
+	"fmt"
+	"io"
 	"net"
 	"net/http"
 	"net/http/httptest"
 	"net/url"
 	"path/filepath"
+	"strings"
 	"testing"
 	"time"
 
+	"github.com/aws/aws-sdk-go/aws/credentials"
 	"github.com/google/uuid"
 	"github.com/gravitational/trace"
 	"github.com/jackc/pgconn"
 	"github.com/sirupsen/logrus"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
+	"golang.org/x/crypto/ssh"
 	v1 "k8s.io/api/core/v1"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 	"k8s.io/client-go/tools/clientcmd"
@@ -46,7 +51,9 @@ import (
 	apiutils "github.com/gravitational/teleport/api/utils"
 	"github.com/gravitational/teleport/api/utils/retryutils"
 	"github.com/gravitational/teleport/integration/helpers"
+	"github.com/gravitational/teleport/lib/auth"
 	"github.com/gravitational/teleport/lib/defaults"
+	"github.com/gravitational/teleport/lib/fixtures"
 	"github.com/gravitational/teleport/lib/reversetunnel"
 	"github.com/gravitational/teleport/lib/service/servicecfg"
 	"github.com/gravitational/teleport/lib/services"
@@ -55,6 +62,7 @@ import (
 	"github.com/gravitational/teleport/lib/srv/db/postgres"
 	"github.com/gravitational/teleport/lib/tlsca"
 	"github.com/gravitational/teleport/lib/utils"
+	awsutils "github.com/gravitational/teleport/lib/utils/aws"
 )
 
 type Suite struct {
@@ -692,3 +700,75 @@ func mustParseURL(t *testing.T, rawURL string) *url.URL {
 	require.NoError(t, err)
 	return u
 }
+
+// fakeSTSClient is a fake HTTP client used to fake STS responses when Auth
+// server sends out pre-signed STS requests for IAM join verification.
+type fakeSTSClient struct {
+	accountID   string
+	arn         string
+	credentials *credentials.Credentials
+}
+
+func (f fakeSTSClient) Do(req *http.Request) (*http.Response, error) {
+	if err := awsutils.VerifyAWSSignature(req, f.credentials); err != nil {
+		return nil, trace.Wrap(err)
+	}
+	response := fmt.Sprintf(`{"GetCallerIdentityResponse": {"GetCallerIdentityResult": {"Account": "%s", "Arn": "%s" }}}`, f.accountID, f.arn)
+	return &http.Response{
+		StatusCode: http.StatusOK,
+		Body:       io.NopCloser(strings.NewReader(response)),
+	}, nil
+}
+
+func mustCreateIAMJoinProvisionToken(t *testing.T, name, awsAccountID, allowedARN string) types.ProvisionToken {
+	t.Helper()
+
+	provisionToken, err := types.NewProvisionTokenFromSpec(
+		name,
+		time.Now().Add(time.Hour),
+		types.ProvisionTokenSpecV2{
+			Roles: []types.SystemRole{types.RoleNode},
+			Allow: []*types.TokenRule{
+				{
+					AWSAccount: awsAccountID,
+					AWSARN:     allowedARN,
+				},
+			},
+			JoinMethod: types.JoinMethodIAM,
+		},
+	)
+	require.NoError(t, err)
+	return provisionToken
+}
+
+func mustRegisterUsingIAMMethod(t *testing.T, proxyAddr utils.NetAddr, token string, credentials *credentials.Credentials) {
+	t.Helper()
+
+	cred, err := credentials.Get()
+	require.NoError(t, err)
+
+	t.Setenv("AWS_ACCESS_KEY_ID", cred.AccessKeyID)
+	t.Setenv("AWS_SECRET_ACCESS_KEY", cred.SecretAccessKey)
+	t.Setenv("AWS_SESSION_TOKEN", cred.SessionToken)
+	t.Setenv("AWS_REGION", "us-west-2")
+
+	privateKey, err := ssh.ParseRawPrivateKey([]byte(fixtures.SSHCAPrivateKey))
+	require.NoError(t, err)
+	pubTLS, err := tlsca.MarshalPublicKeyFromPrivateKeyPEM(privateKey)
+	require.NoError(t, err)
+
+	node := uuid.NewString()
+	_, err = auth.Register(auth.RegisterParams{
+		Token: token,
+		ID: auth.IdentityID{
+			Role:     types.RoleNode,
+			HostUUID: node,
+			NodeName: node,
+		},
+		ProxyServer:  proxyAddr,
+		JoinMethod:   types.JoinMethodIAM,
+		PublicTLSKey: pubTLS,
+		PublicSSHKey: []byte(fixtures.SSHCAPublicKey),
+	})
+	require.NoError(t, err, trace.DebugReport(err))
+}
diff --git a/integration/proxy/proxy_test.go b/integration/proxy/proxy_test.go
index 32aa114a59d35..f03b8f8b94ebd 100644
--- a/integration/proxy/proxy_test.go
+++ b/integration/proxy/proxy_test.go
@@ -29,6 +29,7 @@ import (
 	"testing"
 	"time"
 
+	"github.com/aws/aws-sdk-go/aws/credentials"
 	"github.com/google/uuid"
 	"github.com/gravitational/trace"
 	"github.com/jonboulle/clockwork"
@@ -46,6 +47,7 @@ import (
 	"github.com/gravitational/teleport/integration/helpers"
 	"github.com/gravitational/teleport/integration/kube"
 	"github.com/gravitational/teleport/lib"
+	"github.com/gravitational/teleport/lib/auth"
 	"github.com/gravitational/teleport/lib/auth/testauthority"
 	libclient "github.com/gravitational/teleport/lib/client"
 	"github.com/gravitational/teleport/lib/defaults"
@@ -1505,3 +1507,39 @@ func TestALPNProxyHTTPProxyBasicAuthDial(t *testing.T) {
 	require.NoError(t, helpers.WaitForNodeCount(context.Background(), rc, rc.Secrets.SiteName, 1))
 	require.Greater(t, ph.Count(), 0)
 }
+
+// TestALPNSNIProxyGRPCInsecure tests ALPN protocol ProtocolProxyGRPCInsecure
+// by registering a node with IAM join method.
+func TestALPNSNIProxyGRPCInsecure(t *testing.T) {
+	lib.SetInsecureDevMode(true)
+	defer lib.SetInsecureDevMode(false)
+
+	nodeAccount := "123456789012"
+	nodeRoleARN := "arn:aws:iam::123456789012:role/test"
+	nodeCredentials := credentials.NewStaticCredentials("FAKE_ID", "FAKE_KEY", "FAKE_TOKEN")
+	provisionToken := mustCreateIAMJoinProvisionToken(t, "iam-join-token", nodeAccount, nodeRoleARN)
+
+	suite := newSuite(t,
+		withRootClusterConfig(rootClusterStandardConfig(t), func(config *servicecfg.Config) {
+			config.Auth.BootstrapResources = []types.Resource{provisionToken}
+			config.Auth.ServerOptions = []auth.ServerOption{auth.WithHTTPClientForAWSSTS(fakeSTSClient{
+				accountID:   nodeAccount,
+				arn:         nodeRoleARN,
+				credentials: nodeCredentials,
+			})}
+		}),
+		withLeafClusterConfig(leafClusterStandardConfig(t)),
+	)
+
+	// Test register through Proxy.
+	mustRegisterUsingIAMMethod(t, suite.root.Config.Proxy.WebAddr, provisionToken.GetName(), nodeCredentials)
+
+	// Test register through Proxy behind a L7 load balancer.
+	t.Run("ALPN conn upgrade", func(t *testing.T) {
+		albProxy := mustStartMockALBProxy(t, suite.root.Config.Proxy.WebAddr.Addr)
+		albAddr, err := utils.ParseAddr(albProxy.Addr().String())
+		require.NoError(t, err)
+
+		mustRegisterUsingIAMMethod(t, *albAddr, provisionToken.GetName(), nodeCredentials)
+	})
+}
diff --git a/lib/auth/auth.go b/lib/auth/auth.go
index c3fcee6f9ef8e..91406c1d4baea 100644
--- a/lib/auth/auth.go
+++ b/lib/auth/auth.go
@@ -593,6 +593,10 @@ type Server struct {
 	loginHooksMu sync.RWMutex
 	// loginHooks are a list of hooks that will be called on login.
 	loginHooks []LoginHook
+
+	// httpClientForAWSSTS overwrites the default HTTP client used for making
+	// STS requests.
+	httpClientForAWSSTS stsClient
 }
 
 // SetSAMLService registers svc as the SAMLService that provides the SAML
@@ -5398,3 +5402,12 @@ func DefaultDNSNamesForRole(role types.SystemRole) []string {
 	}
 	return nil
 }
+
+// WithHTTPClientForAWSSTS is a ServerOption that overwrites default HTTP
+// client used for STS requests.
+func WithHTTPClientForAWSSTS(client stsClient) ServerOption {
+	return func(s *Server) error {
+		s.httpClientForAWSSTS = client
+		return nil
+	}
+}
diff --git a/lib/auth/helpers.go b/lib/auth/helpers.go
index 19af0f15273bb..0018454a99186 100644
--- a/lib/auth/helpers.go
+++ b/lib/auth/helpers.go
@@ -985,7 +985,7 @@ func NewServerIdentity(clt *Server, hostID string, role types.SystemRole) (*Iden
 		&proto.HostCertsRequest{
 			HostID:       hostID,
 			NodeName:     hostID,
-			Role:         types.RoleAuth,
+			Role:         role,
 			PublicTLSKey: publicTLS,
 			PublicSSHKey: pub,
 		})
diff --git a/lib/auth/join_iam.go b/lib/auth/join_iam.go
index cfa6f2fa2dbf7..b63ef32567283 100644
--- a/lib/auth/join_iam.go
+++ b/lib/auth/join_iam.go
@@ -196,21 +196,12 @@ type stsClient interface {
 	Do(*http.Request) (*http.Response, error)
 }
 
-type stsClientKey struct{}
-
-// stsClientFromContext allows the default http client to be overridden for tests
-func stsClientFromContext(ctx context.Context) stsClient {
-	client, ok := ctx.Value(stsClientKey{}).(stsClient)
-	if ok {
-		return client
-	}
-	return http.DefaultClient
-}
-
 // executeSTSIdentityRequest sends the sts:GetCallerIdentity HTTP request to the
 // AWS API, parses the response, and returns the awsIdentity
-func executeSTSIdentityRequest(ctx context.Context, req *http.Request) (*awsIdentity, error) {
-	client := stsClientFromContext(ctx)
+func executeSTSIdentityRequest(ctx context.Context, client stsClient, req *http.Request) (*awsIdentity, error) {
+	if client == nil {
+		client = http.DefaultClient
+	}
 
 	// set the http request context so it can be canceled
 	req = req.WithContext(ctx)
@@ -312,7 +303,7 @@ func (a *Server) checkIAMRequest(ctx context.Context, challenge string, req *pro
 
 	// send the signed request to the public AWS API and get the node identity
 	// from the response
-	identity, err := executeSTSIdentityRequest(ctx, identityRequest)
+	identity, err := executeSTSIdentityRequest(ctx, a.httpClientForAWSSTS, identityRequest)
 	if err != nil {
 		return trace.Wrap(err)
 	}
diff --git a/lib/auth/join_iam_test.go b/lib/auth/join_iam_test.go
index c67b40f67ea18..3a8ef165b9fda 100644
--- a/lib/auth/join_iam_test.go
+++ b/lib/auth/join_iam_test.go
@@ -490,6 +490,9 @@ func TestAuth_RegisterUsingIAMMethod(t *testing.T) {
 
 	for _, tc := range testCases {
 		t.Run(tc.desc, func(t *testing.T) {
+			// Set mock client.
+			a.httpClientForAWSSTS = tc.stsClient
+
 			// add token to auth server
 			token, err := types.NewProvisionTokenFromSpec(
 				tc.tokenName,
@@ -503,7 +506,6 @@ func TestAuth_RegisterUsingIAMMethod(t *testing.T) {
 
 			requestContext := context.Background()
 			requestContext = authz.ContextWithClientAddr(requestContext, &net.IPAddr{})
-			requestContext = context.WithValue(requestContext, stsClientKey{}, tc.stsClient)
 
 			_, err = a.RegisterUsingIAMMethod(requestContext, func(challenge string) (*proto.RegisterUsingIAMMethodRequest, error) {
 				templateInput := defaultIdentityRequestTemplateInput(challenge)
diff --git a/lib/auth/register.go b/lib/auth/register.go
index 4dbba6bc270ec..f4ccdc2de5a9b 100644
--- a/lib/auth/register.go
+++ b/lib/auth/register.go
@@ -18,12 +18,14 @@ package auth
 
 import (
 	"context"
+	"crypto/tls"
 	"crypto/x509"
 	"os"
 	"time"
 
 	"github.com/gravitational/trace"
 	"github.com/jonboulle/clockwork"
+	"golang.org/x/exp/slices"
 	"golang.org/x/net/http2"
 	"google.golang.org/grpc"
 	"google.golang.org/grpc/credentials"
@@ -32,6 +34,8 @@ import (
 	"github.com/gravitational/teleport/api/breaker"
 	"github.com/gravitational/teleport/api/client"
 	"github.com/gravitational/teleport/api/client/proto"
+	"github.com/gravitational/teleport/api/constants"
+	apidefaults "github.com/gravitational/teleport/api/defaults"
 	"github.com/gravitational/teleport/api/metadata"
 	"github.com/gravitational/teleport/api/types"
 	"github.com/gravitational/teleport/lib"
@@ -300,7 +304,7 @@ func registerThroughProxy(token string, params RegisterParams) (*proto.Certs, er
 	switch params.JoinMethod {
 	case types.JoinMethodIAM, types.JoinMethodAzure:
 		// IAM and Azure join methods require gRPC client
-		conn, err := proxyJoinServiceConn(params)
+		conn, err := proxyJoinServiceConn(params, lib.IsInsecureDevMode())
 		if err != nil {
 			return nil, trace.Wrap(err)
 		}
@@ -402,19 +406,44 @@ func registerThroughAuth(token string, params RegisterParams) (*proto.Certs, err
 // proxyJoinServiceConn attempts to connect to the join service running on the
 // proxy. The Proxy's TLS cert will be verified using the host's root CA pool
 // (PKI) unless the --insecure flag was passed.
-func proxyJoinServiceConn(params RegisterParams) (*grpc.ClientConn, error) {
+func proxyJoinServiceConn(params RegisterParams, insecure bool) (*grpc.ClientConn, error) {
 	tlsConfig := utils.TLSConfig(params.CipherSuites)
 	tlsConfig.Time = params.Clock.Now
 	// set NextProtos for TLS routing, the actual protocol will be h2
 	tlsConfig.NextProtos = []string{string(common.ProtocolProxyGRPCInsecure), http2.NextProtoTLS}
 
-	if lib.IsInsecureDevMode() {
+	if insecure {
 		tlsConfig.InsecureSkipVerify = true
 		log.Warnf("Joining cluster without validating the identity of the Proxy Server.")
 	}
 
+	// Check if proxy is behind a load balancer. If so, the connection upgrade
+	// will verify the load balancer's cert using system cert pool. This
+	// provides the same level of security as the client only verifies Proxy's
+	// web cert against system cert pool when connection upgrade is not
+	// required.
+	//
+	// With the ALPN connection upgrade, the tunneled TLS Routing request will
+	// skip verify as the Proxy server will present its host cert which is not
+	// fully verifiable at this point since the client does not have the host
+	// CAs yet before completing registration.
+	alpnConnUpgrade := client.IsALPNConnUpgradeRequired(getHostAddresses(params)[0], insecure)
+	if alpnConnUpgrade && !insecure {
+		tlsConfig.InsecureSkipVerify = true
+		tlsConfig.VerifyConnection = verifyALPNUpgradedConn(params.Clock)
+	}
+
+	dialer := client.NewDialer(
+		context.Background(),
+		apidefaults.DefaultIdleTimeout,
+		apidefaults.DefaultIOTimeout,
+		client.WithInsecureSkipVerify(insecure),
+		client.WithALPNConnUpgrade(alpnConnUpgrade),
+	)
+
 	conn, err := grpc.Dial(
 		getHostAddresses(params)[0],
+		grpc.WithContextDialer(client.GRPCContextDialer(dialer)),
 		grpc.WithUnaryInterceptor(metadata.UnaryClientInterceptor),
 		grpc.WithStreamInterceptor(metadata.StreamClientInterceptor),
 		grpc.WithTransportCredentials(credentials.NewTLS(tlsConfig)),
@@ -422,6 +451,25 @@ func proxyJoinServiceConn(params RegisterParams) (*grpc.ClientConn, error) {
 	return conn, trace.Wrap(err)
 }
 
+// verifyALPNUpgradedConn is a tls.Config.VerifyConnection callback function
+// used by the tunneled TLS Routing request to verify the host cert of a Proxy
+// behind a L7 load balancer.
+//
+// Since the client has not obtained the cluster CAs at this point, the
+// presented cert cannot be fully verified yet. For now, this function only
+// checks if "teleport.cluster.local" is present as one of the DNS names and
+// verifies the cert is not expired.
+func verifyALPNUpgradedConn(clock clockwork.Clock) func(tls.ConnectionState) error {
+	return func(server tls.ConnectionState) error {
+		for _, cert := range server.PeerCertificates {
+			if slices.Contains(cert.DNSNames, constants.APIDomain) && clock.Now().Before(cert.NotAfter) {
+				return nil
+			}
+		}
+		return trace.AccessDenied("server is not a Teleport proxy or server certificate is expired")
+	}
+}
+
 // insecureRegisterClient attempts to connects to the Auth Server using the
 // CA on disk. If no CA is found on disk, Teleport will not verify the Auth
 // Server it is connecting to.
diff --git a/lib/auth/register_test.go b/lib/auth/register_test.go
new file mode 100644
index 0000000000000..674d41eef7eca
--- /dev/null
+++ b/lib/auth/register_test.go
@@ -0,0 +1,74 @@
+// Copyright 2023 Gravitational, Inc
+//
+// 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 auth
+
+import (
+	"crypto/tls"
+	"testing"
+	"time"
+
+	"github.com/jonboulle/clockwork"
+	"github.com/stretchr/testify/require"
+
+	"github.com/gravitational/teleport/api/types"
+	"github.com/gravitational/teleport/lib/defaults"
+	"github.com/gravitational/teleport/lib/fixtures"
+	"github.com/gravitational/teleport/lib/utils"
+)
+
+func TestVerifyALPNUpgradedConn(t *testing.T) {
+	t.Parallel()
+
+	auth := newTestTLSServer(t)
+	proxy, err := NewServerIdentity(auth.Auth(), "test-proxy", types.RoleProxy)
+	require.NoError(t, err)
+
+	tests := []struct {
+		name       string
+		serverCert []byte
+		clock      clockwork.Clock
+		checkError require.ErrorAssertionFunc
+	}{
+		{
+			name:       "proxy verified",
+			serverCert: proxy.TLSCertBytes,
+			clock:      auth.Clock(),
+			checkError: require.NoError,
+		},
+		{
+			name:       "proxy expired",
+			serverCert: proxy.TLSCertBytes,
+			clock:      clockwork.NewFakeClockAt(auth.Clock().Now().Add(defaults.CATTL + time.Hour)),
+			checkError: require.Error,
+		},
+		{
+			name:       "not proxy",
+			serverCert: []byte(fixtures.TLSCACertPEM),
+			clock:      auth.Clock(),
+			checkError: require.Error,
+		},
+	}
+
+	for _, test := range tests {
+		t.Run(test.name, func(t *testing.T) {
+			serverCert, err := utils.ReadCertificates(test.serverCert)
+			require.NoError(t, err)
+
+			test.checkError(t, verifyALPNUpgradedConn(test.clock)(tls.ConnectionState{
+				PeerCertificates: serverCert,
+			}))
+		})
+	}
+}
diff --git a/lib/service/service.go b/lib/service/service.go
index 117847984e7fc..9b1358ff12040 100644
--- a/lib/service/service.go
+++ b/lib/service/service.go
@@ -1623,7 +1623,7 @@ func (process *TeleportProcess) initAuthService() error {
 		FIPS:                    cfg.FIPS,
 		LoadAllCAs:              cfg.Auth.LoadAllCAs,
 		Clock:                   cfg.Clock,
-	}, func(as *auth.Server) error {
+	}, append(cfg.Auth.ServerOptions, func(as *auth.Server) error {
 		if !process.Config.CachePolicy.Enabled {
 			return nil
 		}
@@ -1641,7 +1641,7 @@ func (process *TeleportProcess) initAuthService() error {
 		as.Cache = cache
 
 		return nil
-	})
+	})...)
 	if err != nil {
 		return trace.Wrap(err)
 	}
diff --git a/lib/service/servicecfg/auth.go b/lib/service/servicecfg/auth.go
index 039d1927d723b..e73e0cfc2d5af 100644
--- a/lib/service/servicecfg/auth.go
+++ b/lib/service/servicecfg/auth.go
@@ -19,6 +19,7 @@ import (
 	"github.com/jonboulle/clockwork"
 
 	"github.com/gravitational/teleport/api/types"
+	"github.com/gravitational/teleport/lib/auth"
 	"github.com/gravitational/teleport/lib/auth/keystore"
 	"github.com/gravitational/teleport/lib/backend"
 	"github.com/gravitational/teleport/lib/limiter"
@@ -101,6 +102,9 @@ type AuthConfig struct {
 	// Clock is the clock instance auth uses. Typically you'd only want to set
 	// this during testing.
 	Clock clockwork.Clock
+
+	// ServerOptions is a list of auth.Init options used in test.
+	ServerOptions []auth.ServerOption
 }
 
 // HostedPluginsConfig configures the hosted plugin runtime.