diff --git a/lib/kube/proxy/forwarder.go b/lib/kube/proxy/forwarder.go
index 3665505fffaef..bbba5c91d8f54 100644
--- a/lib/kube/proxy/forwarder.go
+++ b/lib/kube/proxy/forwarder.go
@@ -1539,7 +1539,7 @@ func (f *Forwarder) execNonInteractive(ctx *authContext, w http.ResponseWriter,
 		}
 	}()
 
-	executor, err := f.getExecutor(*ctx, sess, req)
+	executor, err := f.getExecutor(sess, req)
 	if err != nil {
 		execEvent.Code = events.ExecFailureCode
 		execEvent.Error, execEvent.ExitCode = exitCode(err)
@@ -1712,7 +1712,7 @@ func (f *Forwarder) exec(authCtx *authContext, w http.ResponseWriter, req *http.
 func (f *Forwarder) remoteExec(ctx *authContext, w http.ResponseWriter, req *http.Request, p httprouter.Params, sess *clusterSession, request remoteCommandRequest, proxy *remoteCommandProxy) (resp any, err error) {
 	defer proxy.Close()
 
-	executor, err := f.getExecutor(*ctx, sess, req)
+	executor, err := f.getExecutor(sess, req)
 	if err != nil {
 		f.log.WithError(err).Warning("Failed creating executor.")
 		return nil, trace.Wrap(err)
@@ -1777,7 +1777,7 @@ func (f *Forwarder) portForward(authCtx *authContext, w http.ResponseWriter, req
 		return nil, trace.Wrap(err)
 	}
 
-	dialer, err := f.getSPDYDialer(*authCtx, sess, req)
+	dialer, err := f.getSPDYDialer(sess, req)
 	if err != nil {
 		return nil, trace.Wrap(err)
 	}
@@ -1856,7 +1856,7 @@ const (
 
 func (f *Forwarder) setupForwardingHeaders(sess *clusterSession, req *http.Request, withImpersonationHeaders bool) error {
 	if withImpersonationHeaders {
-		if err := setupImpersonationHeaders(f.log, sess.authContext, req.Header); err != nil {
+		if err := setupImpersonationHeaders(f.log, sess, req.Header); err != nil {
 			return trace.Wrap(err)
 		}
 	}
@@ -1882,12 +1882,14 @@ func (f *Forwarder) setupForwardingHeaders(sess *clusterSession, req *http.Reque
 }
 
 // setupImpersonationHeaders sets up Impersonate-User and Impersonate-Group headers
-func setupImpersonationHeaders(log logrus.FieldLogger, ctx authContext, headers http.Header) error {
-	if ctx.teleportCluster.isRemote {
+func setupImpersonationHeaders(log logrus.FieldLogger, sess *clusterSession, headers http.Header) error {
+	// If the request is remote or this instance is a proxy,
+	// do not set up impersonation headers.
+	if sess.teleportCluster.isRemote || sess.kubeAPICreds == nil {
 		return nil
 	}
 
-	impersonateUser, impersonateGroups, err := computeImpersonatedPrincipals(ctx.kubeUsers, ctx.kubeGroups, headers)
+	impersonateUser, impersonateGroups, err := computeImpersonatedPrincipals(sess.kubeUsers, sess.kubeGroups, headers)
 	if err != nil {
 		return trace.Wrap(err)
 	}
@@ -2075,7 +2077,7 @@ func (f *Forwarder) catchAll(authCtx *authContext, w http.ResponseWriter, req *h
 	}
 }
 
-func (f *Forwarder) getExecutor(ctx authContext, sess *clusterSession, req *http.Request) (remotecommand.Executor, error) {
+func (f *Forwarder) getExecutor(sess *clusterSession, req *http.Request) (remotecommand.Executor, error) {
 	tlsConfig, useImpersonation, err := f.getTLSConfig(sess)
 	if err != nil {
 		return nil, trace.Wrap(err)
@@ -2083,7 +2085,7 @@ func (f *Forwarder) getExecutor(ctx authContext, sess *clusterSession, req *http
 
 	upgradeRoundTripper := NewSpdyRoundTripperWithDialer(roundTripperConfig{
 		ctx:                   req.Context(),
-		authCtx:               ctx,
+		sess:                  sess,
 		dialWithContext:       sess.DialWithContext(),
 		tlsConfig:             tlsConfig,
 		pingPeriod:            f.cfg.ConnPingPeriod,
@@ -2108,7 +2110,7 @@ func (f *Forwarder) getExecutor(ctx authContext, sess *clusterSession, req *http
 // to SPDY protocol.
 // SPDY is a deprecated protocol, but it is still used by kubectl to manage data streams.
 // The dialer uses an HTTP1.1 connection to upgrade to SPDY.
-func (f *Forwarder) getSPDYDialer(ctx authContext, sess *clusterSession, req *http.Request) (httpstream.Dialer, error) {
+func (f *Forwarder) getSPDYDialer(sess *clusterSession, req *http.Request) (httpstream.Dialer, error) {
 	tlsConfig, useImpersonation, err := f.getTLSConfig(sess)
 	if err != nil {
 		return nil, trace.Wrap(err)
@@ -2116,7 +2118,7 @@ func (f *Forwarder) getSPDYDialer(ctx authContext, sess *clusterSession, req *ht
 
 	upgradeRoundTripper := NewSpdyRoundTripperWithDialer(roundTripperConfig{
 		ctx:                   req.Context(),
-		authCtx:               ctx,
+		sess:                  sess,
 		dialWithContext:       sess.DialWithContext(),
 		tlsConfig:             tlsConfig,
 		pingPeriod:            f.cfg.ConnPingPeriod,
diff --git a/lib/kube/proxy/forwarder_test.go b/lib/kube/proxy/forwarder_test.go
index 7c2a94c53f107..7b30fc81431b8 100644
--- a/lib/kube/proxy/forwarder_test.go
+++ b/lib/kube/proxy/forwarder_test.go
@@ -815,6 +815,7 @@ func TestSetupImpersonationHeaders(t *testing.T) {
 		kubeUsers     []string
 		kubeGroups    []string
 		remoteCluster bool
+		isProxy       bool
 		inHeaders     http.Header
 		wantHeaders   http.Header
 		errAssertion  require.ErrorAssertionFunc
@@ -935,26 +936,59 @@ func TestSetupImpersonationHeaders(t *testing.T) {
 			},
 			errAssertion: require.NoError,
 		},
+		{
+			desc:         "no existing impersonation headers, proxy service",
+			kubeUsers:    []string{"kube-user-a"},
+			kubeGroups:   []string{"kube-group-a", "kube-group-b"},
+			isProxy:      true,
+			inHeaders:    http.Header{},
+			wantHeaders:  http.Header{},
+			errAssertion: require.NoError,
+		},
+		{
+			desc:       "existing impersonation headers, proxy service",
+			kubeUsers:  []string{"kube-user-a"},
+			kubeGroups: []string{"kube-group-a", "kube-group-b"},
+			isProxy:    true,
+			inHeaders: http.Header{
+				ImpersonateGroupHeader: []string{"kube-group-a"},
+			},
+			wantHeaders: http.Header{
+				ImpersonateGroupHeader: []string{"kube-group-a"},
+			},
+			errAssertion: require.NoError,
+		},
 	}
 	for _, tt := range tests {
-		err := setupImpersonationHeaders(
-			logrus.NewEntry(logrus.New()),
-			authContext{
-				kubeUsers:       utils.StringsSet(tt.kubeUsers),
-				kubeGroups:      utils.StringsSet(tt.kubeGroups),
-				teleportCluster: teleportClusterClient{isRemote: tt.remoteCluster},
-			},
-			tt.inHeaders,
-		)
-		tt.errAssertion(t, err)
+		tt := tt
+		t.Run(tt.desc, func(t *testing.T) {
+			var kubeCreds kubeCreds
+			if !tt.isProxy {
+				kubeCreds = &staticKubeCreds{}
+			}
+			err := setupImpersonationHeaders(
+				logrus.NewEntry(logrus.New()),
+				&clusterSession{
+					kubeAPICreds: kubeCreds,
+					authContext: authContext{
+						kubeUsers:       utils.StringsSet(tt.kubeUsers),
+						kubeGroups:      utils.StringsSet(tt.kubeGroups),
+						teleportCluster: teleportClusterClient{isRemote: tt.remoteCluster},
+					},
+				},
+				tt.inHeaders,
+			)
+			tt.errAssertion(t, err)
 
-		if err == nil {
-			// Sort header values to get predictable ordering.
-			for _, vals := range tt.inHeaders {
-				sort.Strings(vals)
+			if err == nil {
+				// Sort header values to get predictable ordering.
+				for _, vals := range tt.inHeaders {
+					sort.Strings(vals)
+				}
+				require.Empty(t, cmp.Diff(tt.inHeaders, tt.wantHeaders))
 			}
-			require.Empty(t, cmp.Diff(tt.inHeaders, tt.wantHeaders))
-		}
+		},
+		)
 	}
 }
 
diff --git a/lib/kube/proxy/resource_deletecollection.go b/lib/kube/proxy/resource_deletecollection.go
index e3ef02d7bb9dc..567ef44eec43d 100644
--- a/lib/kube/proxy/resource_deletecollection.go
+++ b/lib/kube/proxy/resource_deletecollection.go
@@ -497,7 +497,7 @@ func (f *Forwarder) handleDeleteCustomResourceCollection(w http.ResponseWriter,
 	kubeUsers, kubeGroups := fillDefaultKubePrincipalDetails(allowedKubeGroups, allowedKubeUsers, sess.User.GetName())
 	sess.kubeUsers = utils.StringsSet(kubeUsers)
 	sess.kubeGroups = utils.StringsSet(kubeGroups)
-	if err := setupImpersonationHeaders(f.log, sess.authContext, req.Header); err != nil {
+	if err := setupImpersonationHeaders(f.log, sess, req.Header); err != nil {
 		return 0, trace.Wrap(err)
 	}
 
diff --git a/lib/kube/proxy/roundtrip.go b/lib/kube/proxy/roundtrip.go
index b7b460a7fbb14..f5507170ffecc 100644
--- a/lib/kube/proxy/roundtrip.go
+++ b/lib/kube/proxy/roundtrip.go
@@ -69,8 +69,8 @@ var (
 type roundTripperConfig struct {
 	// ctx is a context for this round tripper
 	ctx context.Context
-	// authCtx is the auth context to use for this round tripper
-	authCtx authContext
+	// sess is the cluster session
+	sess *clusterSession
 	// dialWithContext is the function used connect to remote address
 	dialWithContext dialContextFunc
 	// tlsConfig holds the TLS configuration settings to use when connecting
@@ -207,7 +207,7 @@ func (s *SpdyRoundTripper) RoundTrip(req *http.Request) (*http.Response, error)
 	copyImpersonationHeaders(header, s.originalHeaders)
 	header.Set(httpstream.HeaderConnection, httpstream.HeaderUpgrade)
 	header.Set(httpstream.HeaderUpgrade, streamspdy.HeaderSpdy31)
-	if err := setupImpersonationHeaders(log.StandardLogger(), s.authCtx, header); err != nil {
+	if err := setupImpersonationHeaders(log.StandardLogger(), s.sess, header); err != nil {
 		return nil, trace.Wrap(err)
 	}
 
diff --git a/lib/kube/proxy/sess.go b/lib/kube/proxy/sess.go
index 490878a12838b..fc72ece14e2b9 100644
--- a/lib/kube/proxy/sess.go
+++ b/lib/kube/proxy/sess.go
@@ -597,7 +597,7 @@ func (s *session) launch() error {
 
 	var executor remotecommand.Executor
 
-	executor, err = s.forwarder.getExecutor(s.ctx, s.sess, s.req)
+	executor, err = s.forwarder.getExecutor(s.sess, s.req)
 	if err != nil {
 		s.log.WithError(err).Warning("Failed creating executor.")
 		return trace.Wrap(err)