diff --git a/pkg/background/mutate/mutate.go b/pkg/background/mutate/mutate.go
index bcdf38af2d..3fedc3f1d2 100644
--- a/pkg/background/mutate/mutate.go
+++ b/pkg/background/mutate/mutate.go
@@ -18,10 +18,12 @@ import (
 	"github.com/kyverno/kyverno/pkg/event"
 	"github.com/kyverno/kyverno/pkg/registryclient"
 	"github.com/kyverno/kyverno/pkg/utils"
+	engineutils "github.com/kyverno/kyverno/pkg/utils/engine"
 	"go.uber.org/multierr"
 	yamlv2 "gopkg.in/yaml.v2"
 	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
 	"k8s.io/apimachinery/pkg/runtime/schema"
+	corev1listers "k8s.io/client-go/listers/core/v1"
 	"k8s.io/client-go/tools/cache"
 )
 
@@ -35,6 +37,7 @@ type MutateExistingController struct {
 	// listers
 	policyLister  kyvernov1listers.ClusterPolicyLister
 	npolicyLister kyvernov1listers.PolicyLister
+	nsLister      corev1listers.NamespaceLister
 
 	configuration          config.Configuration
 	informerCacheResolvers resolvers.ConfigmapResolver
@@ -50,6 +53,7 @@ func NewMutateExistingController(
 	rclient registryclient.Client,
 	policyLister kyvernov1listers.ClusterPolicyLister,
 	npolicyLister kyvernov1listers.PolicyLister,
+	nsLister corev1listers.NamespaceLister,
 	dynamicConfig config.Configuration,
 	informerCacheResolvers resolvers.ConfigmapResolver,
 	eventGen event.Interface,
@@ -61,6 +65,7 @@ func NewMutateExistingController(
 		rclient:                rclient,
 		policyLister:           policyLister,
 		npolicyLister:          npolicyLister,
+		nsLister:               nsLister,
 		configuration:          dynamicConfig,
 		informerCacheResolvers: informerCacheResolvers,
 		eventGen:               eventGen,
@@ -85,13 +90,14 @@ func (c *MutateExistingController) ProcessUR(ur *kyvernov1beta1.UpdateRequest) e
 		}
 
 		trigger, err := common.GetResource(c.client, ur.Spec, c.log)
-		if err != nil {
+		if err != nil || trigger == nil {
 			logger.WithName(rule.Name).Error(err, "failed to get trigger resource")
 			errs = append(errs, err)
 			continue
 		}
 
-		policyContext, _, err := common.NewBackgroundContext(c.client, ur, policy, trigger, c.configuration, c.informerCacheResolvers, nil, logger)
+		namespaceLabels := engineutils.GetNamespaceSelectorsFromNamespaceLister(trigger.GetKind(), trigger.GetNamespace(), c.nsLister, logger)
+		policyContext, _, err := common.NewBackgroundContext(c.client, ur, policy, trigger, c.configuration, c.informerCacheResolvers, namespaceLabels, logger)
 		if err != nil {
 			logger.WithName(rule.Name).Error(err, "failed to build policy context")
 			errs = append(errs, err)
diff --git a/pkg/background/update_request_controller.go b/pkg/background/update_request_controller.go
index 92acd5f6ce..2edeb8a53a 100644
--- a/pkg/background/update_request_controller.go
+++ b/pkg/background/update_request_controller.go
@@ -420,7 +420,7 @@ func (c *controller) processUR(ur *kyvernov1beta1.UpdateRequest) error {
 	statusControl := common.NewStatusControl(c.kyvernoClient, c.urLister)
 	switch ur.Spec.Type {
 	case kyvernov1beta1.Mutate:
-		ctrl := mutate.NewMutateExistingController(c.client, statusControl, c.rclient, c.cpolLister, c.polLister, c.configuration, c.informerCacheResolvers, c.eventGen, logger)
+		ctrl := mutate.NewMutateExistingController(c.client, statusControl, c.rclient, c.cpolLister, c.polLister, c.nsLister, c.configuration, c.informerCacheResolvers, c.eventGen, logger)
 		return ctrl.ProcessUR(ur)
 	case kyvernov1beta1.Generate:
 		ctrl := generate.NewGenerateController(c.client, c.kyvernoClient, statusControl, c.rclient, c.cpolLister, c.polLister, c.urLister, c.nsLister, c.configuration, c.informerCacheResolvers, c.eventGen, logger)
diff --git a/pkg/policy/policy_controller.go b/pkg/policy/policy_controller.go
index e85841d691..356853653b 100644
--- a/pkg/policy/policy_controller.go
+++ b/pkg/policy/policy_controller.go
@@ -28,6 +28,7 @@ import (
 	"github.com/kyverno/kyverno/pkg/event"
 	"github.com/kyverno/kyverno/pkg/metrics"
 	"github.com/kyverno/kyverno/pkg/registryclient"
+	engineutils "github.com/kyverno/kyverno/pkg/utils/engine"
 	kubeutils "github.com/kyverno/kyverno/pkg/utils/kube"
 	"github.com/pkg/errors"
 	"go.uber.org/multierr"
@@ -512,7 +513,8 @@ func (pc *PolicyController) updateUR(policyKey string, policy kyvernov1.PolicyIn
 }
 
 func (pc *PolicyController) handleUpdateRequest(ur *kyvernov1beta1.UpdateRequest, triggerResource *unstructured.Unstructured, rule kyvernov1.Rule, policy kyvernov1.PolicyInterface) (skip bool, err error) {
-	policyContext, _, err := backgroundcommon.NewBackgroundContext(pc.client, ur, policy, triggerResource, pc.configHandler, pc.informerCacheResolvers, nil, pc.log)
+	namespaceLabels := engineutils.GetNamespaceSelectorsFromNamespaceLister(triggerResource.GetKind(), triggerResource.GetNamespace(), pc.nsLister, pc.log)
+	policyContext, _, err := backgroundcommon.NewBackgroundContext(pc.client, ur, policy, triggerResource, pc.configHandler, pc.informerCacheResolvers, namespaceLabels, pc.log)
 	if err != nil {
 		return false, errors.Wrapf(err, "failed to build policy context for rule %s", rule.Name)
 	}
diff --git a/pkg/webhooks/resource/handlers.go b/pkg/webhooks/resource/handlers.go
index 421cd1d2de..252de3c0f9 100644
--- a/pkg/webhooks/resource/handlers.go
+++ b/pkg/webhooks/resource/handlers.go
@@ -137,9 +137,9 @@ func (h *handlers) Validate(ctx context.Context, logger logr.Logger, request *ad
 		namespaceLabels = engineutils.GetNamespaceSelectorsFromNamespaceLister(request.Kind.Kind, request.Namespace, h.nsLister, logger)
 	}
 
+	policyContext = policyContext.WithNamespaceLabels(namespaceLabels)
 	vh := validation.NewValidationHandler(logger, h.kyvernoClient, h.rclient, h.pCache, h.pcBuilder, h.eventGen, h.admissionReports, h.metricsConfig)
-
-	ok, msg, warnings := vh.HandleValidation(ctx, request, policies, policyContext, namespaceLabels, startTime)
+	ok, msg, warnings := vh.HandleValidation(ctx, request, policies, policyContext, startTime)
 	if !ok {
 		logger.Info("admission request denied")
 		return admissionutils.Response(request.UID, errors.New(msg), warnings...)
diff --git a/pkg/webhooks/resource/validation/validation.go b/pkg/webhooks/resource/validation/validation.go
index 7a9275f9f5..5c764a2e75 100644
--- a/pkg/webhooks/resource/validation/validation.go
+++ b/pkg/webhooks/resource/validation/validation.go
@@ -31,7 +31,7 @@ type ValidationHandler interface {
 	// HandleValidation handles validating webhook admission request
 	// If there are no errors in validating rule we apply generation rules
 	// patchedResource is the (resource + patches) after applying mutation rules
-	HandleValidation(context.Context, *admissionv1.AdmissionRequest, []kyvernov1.PolicyInterface, *engine.PolicyContext, map[string]string, time.Time) (bool, string, []string)
+	HandleValidation(context.Context, *admissionv1.AdmissionRequest, []kyvernov1.PolicyInterface, *engine.PolicyContext, time.Time) (bool, string, []string)
 }
 
 func NewValidationHandler(
@@ -72,15 +72,8 @@ func (v *validationHandler) HandleValidation(
 	request *admissionv1.AdmissionRequest,
 	policies []kyvernov1.PolicyInterface,
 	policyContext *engine.PolicyContext,
-	namespaceLabels map[string]string,
 	admissionRequestTimestamp time.Time,
 ) (bool, string, []string) {
-	if len(policies) == 0 {
-		// invoke handleAudit as we may have some policies in audit mode to consider
-		go v.handleAudit(ctx, policyContext.NewResource(), request, namespaceLabels)
-		return true, "", nil
-	}
-
 	resourceName := admissionutils.GetResourceName(request)
 	logger := v.log.WithValues("action", "validate", "resource", resourceName, "operation", request.Operation, "gvk", request.Kind)
 
@@ -105,7 +98,7 @@ func (v *validationHandler) HandleValidation(
 			"pkg/webhooks/resource/validate",
 			fmt.Sprintf("POLICY %s/%s", policy.GetNamespace(), policy.GetName()),
 			func(ctx context.Context, span trace.Span) {
-				policyContext := policyContext.WithPolicy(policy).WithNamespaceLabels(namespaceLabels)
+				policyContext := policyContext.WithPolicy(policy)
 				if policy.GetSpec().GetFailurePolicy() == kyvernov1.Fail {
 					failurePolicy = kyvernov1.Fail
 				}
@@ -144,7 +137,7 @@ func (v *validationHandler) HandleValidation(
 		return false, webhookutils.GetBlockedMessages(engineResponses), nil
 	}
 
-	go v.handleAudit(ctx, policyContext.NewResource(), request, namespaceLabels, engineResponses...)
+	go v.handleAudit(ctx, policyContext.NewResource(), request, engineResponses...)
 
 	warnings := webhookutils.GetWarningMessages(engineResponses)
 	return true, "", warnings
@@ -154,7 +147,6 @@ func (v *validationHandler) buildAuditResponses(
 	ctx context.Context,
 	resource unstructured.Unstructured,
 	request *admissionv1.AdmissionRequest,
-	namespaceLabels map[string]string,
 ) ([]*response.EngineResponse, error) {
 	policies := v.pCache.GetPolicies(policycache.ValidateAudit, request.Kind.Kind, request.Namespace)
 	policyContext, err := v.pcBuilder.Build(request)
@@ -168,7 +160,7 @@ func (v *validationHandler) buildAuditResponses(
 			"pkg/webhooks/resource/validate",
 			fmt.Sprintf("POLICY %s/%s", policy.GetNamespace(), policy.GetName()),
 			func(ctx context.Context, span trace.Span) {
-				policyContext := policyContext.WithPolicy(policy).WithNamespaceLabels(namespaceLabels)
+				policyContext := policyContext.WithPolicy(policy)
 				responses = append(responses, engine.Validate(ctx, v.rclient, policyContext))
 			},
 		)
@@ -180,7 +172,6 @@ func (v *validationHandler) handleAudit(
 	ctx context.Context,
 	resource unstructured.Unstructured,
 	request *admissionv1.AdmissionRequest,
-	namespaceLabels map[string]string,
 	engineResponses ...*response.EngineResponse,
 ) {
 	if !v.admissionReports {
@@ -202,7 +193,7 @@ func (v *validationHandler) handleAudit(
 		"",
 		fmt.Sprintf("AUDIT %s %s", request.Operation, request.Kind),
 		func(ctx context.Context, span trace.Span) {
-			responses, err := v.buildAuditResponses(ctx, resource, request, namespaceLabels)
+			responses, err := v.buildAuditResponses(ctx, resource, request)
 			if err != nil {
 				v.log.Error(err, "failed to build audit responses")
 			}
diff --git a/scripts/config/standard/kyverno.yaml b/scripts/config/standard/kyverno.yaml
index b9c670c4f3..e424b363f8 100644
--- a/scripts/config/standard/kyverno.yaml
+++ b/scripts/config/standard/kyverno.yaml
@@ -6,6 +6,9 @@ extraArgs:
   - --loggingFormat=json
   - --enablePolicyException
 
+generatecontrollerExtraResources:
+  - pods
+
 cleanupController:
   rbac:
     clusterRole:
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/01-manifests.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/01-manifests.yaml
deleted file mode 100644
index 706fb39f53..0000000000
--- a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/01-manifests.yaml
+++ /dev/null
@@ -1,58 +0,0 @@
-apiVersion: v1
-kind: Namespace
-metadata:
-  name: staging-2
-  labels:
-    app-type: corp
-  annotations:
-    cloud.platformzero.com/serviceClass: "xl2"
----
-apiVersion: v1
-data:
-  foo: bar
-kind: ConfigMap
-metadata:
-  name: dictionary-2
-  namespace: staging-2
----
-apiVersion: v1
-data:
-  foo: YmFy
-kind: Secret
-metadata:
-  name: test-secret-2
-  namespace: staging-2
-type: Opaque
----
-apiVersion: kyverno.io/v1
-kind: ClusterPolicy
-metadata:
-  name: test-post-mutation-delete-trigger
-spec:
-  mutateExistingOnPolicyUpdate: false
-  rules:
-    - name: mutate-secret-on-configmap-delete
-      match:
-        any:
-        - resources:
-            kinds:
-            - ConfigMap
-            names:
-            - dictionary-2
-            namespaces:
-            - staging-2
-      preconditions:
-        any:
-        - key: "{{ request.operation }}"
-          operator: Equals
-          value: DELETE
-      mutate:
-        targets:
-        - apiVersion: v1
-          kind: Secret
-          name: test-secret-2
-          namespace: "{{ request.object.metadata.namespace }}"
-        patchStrategicMerge:
-          metadata:
-            labels:
-              foo: "{{ request.object.metadata.name }}"
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/02-delete-cm.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/02-delete-cm.yaml
deleted file mode 100644
index 82f33a28bc..0000000000
--- a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/02-delete-cm.yaml
+++ /dev/null
@@ -1,7 +0,0 @@
-apiVersion: kuttl.dev/v1beta1
-kind: TestStep
-delete:
-- apiVersion: v1
-  kind: ConfigMap
-  name: dictionary-2
-  namespace: staging-2
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/03-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/03-assert.yaml
deleted file mode 100644
index fc44140bd6..0000000000
--- a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/03-assert.yaml
+++ /dev/null
@@ -1,7 +0,0 @@
-apiVersion: v1
-kind: Secret
-metadata:
-  name: test-secret-2
-  namespace: staging-2
-  labels:
-    foo: dictionary-2
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/README.md b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/README.md
deleted file mode 100644
index 9abd9c3007..0000000000
--- a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/README.md
+++ /dev/null
@@ -1,11 +0,0 @@
-## Description
-
-This is a basic test for the mutate existing capability which ensures that specifically deleting a triggering resource, via a precondition, results in the correct mutation of a different resource.
-
-## Expected Behavior
-
-When the `dictionary-2` ConfigMap is deleted, this should result in the mutation of the Secret named `test-secret-2` within the same Namespace to add the label `foo` with value set to the name or `dictionary-2` in this case. If the Secret is mutated so that the label `foo: dictionary-2` is present, the test passes. If not, the test fails.
-
-## Reference Issue(s)
-
-N/A
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/cleanup.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/cleanup.yaml
deleted file mode 100644
index 15c3c49051..0000000000
--- a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/cleanup.yaml
+++ /dev/null
@@ -1,4 +0,0 @@
-apiVersion: kuttl.dev/v1beta1
-kind: TestStep
-commands:
-  - command: kubectl delete -f 01-manifests.yaml --force --wait=true --ignore-not-found=true
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/01-policy.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/01-policy.yaml
new file mode 100644
index 0000000000..b088ed7601
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/01-policy.yaml
@@ -0,0 +1,6 @@
+apiVersion: kuttl.dev/v1beta1
+kind: TestStep
+apply:
+- policy.yaml
+assert:
+- policy-assert.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/02-pod.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/02-pod.yaml
new file mode 100644
index 0000000000..b7d7b9997f
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/02-pod.yaml
@@ -0,0 +1,6 @@
+apiVersion: kuttl.dev/v1beta1
+kind: TestStep
+apply:
+- file: pod.yaml
+assert:
+- pod.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/03-configmap.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/03-configmap.yaml
new file mode 100644
index 0000000000..9a4f3b3c14
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/03-configmap.yaml
@@ -0,0 +1,6 @@
+apiVersion: kuttl.dev/v1beta1
+kind: TestStep
+apply:
+- file: configmap.yaml
+assert:
+- configmap.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/04-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/04-assert.yaml
new file mode 100644
index 0000000000..030f798740
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/04-assert.yaml
@@ -0,0 +1,7 @@
+apiVersion: v1
+kind: Pod
+metadata:
+  annotations:
+    org: kyverno-test
+  name: test-org
+  namespace: test
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/README.md b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/README.md
new file mode 100644
index 0000000000..a2935c8bfe
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/README.md
@@ -0,0 +1,19 @@
+## Description
+
+The `namespaceSelector` should applies to mutateExisting policies upon admission reviews.
+
+## Expected Behavior
+The pod is mutated with annotation `org: kyverno-test`.
+
+## Steps
+
+### Test Steps
+
+1. Create a `ClusterPolicy` that mutates existing pod upon configmap operations in namespaces with label `org`.
+2. Create a pod in `test` namespace labeled by `org: kyverno-test`.
+3. Create a configmap in `test` namespace.
+4. The pod should be mutated with the annotation `org: kyverno-test`.
+
+## Reference Issue(s)
+
+https://github.com/kyverno/kyverno/issues/6176
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/configmap.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/configmap.yaml
new file mode 100644
index 0000000000..1656a39674
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/configmap.yaml
@@ -0,0 +1,5 @@
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: test-org
+  namespace: test
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/pod.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/pod.yaml
new file mode 100644
index 0000000000..cb7280f482
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/pod.yaml
@@ -0,0 +1,9 @@
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-org
+  namespace: test
+spec:
+  containers:
+  - image: nginx:latest
+    name: test-org
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/01-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/policy-assert.yaml
similarity index 76%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/01-assert.yaml
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/policy-assert.yaml
index 0ac1ea7dcc..11ec9368ec 100644
--- a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-delete/01-assert.yaml
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/policy-assert.yaml
@@ -1,7 +1,7 @@
 apiVersion: kyverno.io/v1
 kind: ClusterPolicy
 metadata:
-  name: test-post-mutation-delete-trigger
+  name: org-label-inheritance-existing
 status:
   conditions:
   - reason: Succeeded
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/policy.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/policy.yaml
new file mode 100644
index 0000000000..58ccd6fb4a
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/namespaceselector/policy.yaml
@@ -0,0 +1,42 @@
+apiVersion: kyverno.io/v1
+kind: ClusterPolicy
+metadata:
+  name: org-label-inheritance-existing
+  annotations:  
+    pod-policies.kyverno.io/autogen-controllers: none
+spec:
+  mutateExistingOnPolicyUpdate: false
+  validationFailureAction: enforce
+  rules:
+  - name: propagate org label from namespace
+    match:
+      any:
+      - resources:
+          kinds:
+          - ConfigMap
+          namespaceSelector:
+            matchExpressions:
+              - key: org
+                operator: Exists
+    context:
+    - name: org
+      apiCall:
+        urlPath: /api/v1/namespaces/{{ request.object.metadata.namespace }}
+        jmesPath: metadata.labels.org
+    mutate:
+      targets:
+      - apiVersion: v1
+        kind: Pod
+        namespace: "{{ request.object.metadata.namespace }}"
+        name: "{{ request.object.metadata.name }}"
+      patchStrategicMerge:
+        metadata:
+          annotations:
+            org: "{{ org }}"
+---
+apiVersion: v1
+kind: Namespace
+metadata:
+  labels:
+    org: kyverno-test
+  name: test
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/01-manifests.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/01-manifests.yaml
similarity index 100%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/01-manifests.yaml
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/01-manifests.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/02-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/02-assert.yaml
similarity index 100%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/02-assert.yaml
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/02-assert.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/02-create-clusterpolicy.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/02-create-clusterpolicy.yaml
similarity index 100%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/02-create-clusterpolicy.yaml
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/02-create-clusterpolicy.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/03-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/03-assert.yaml
similarity index 100%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/03-assert.yaml
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/03-assert.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/README.md b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/README.md
similarity index 100%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/README.md
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/README.md
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/cleanup.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/cleanup.yaml
similarity index 100%
rename from test/conformance/kuttl/mutate/clusterpolicy/standard/existing/basic-create-policy/cleanup.yaml
rename to test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/basic-create-policy/cleanup.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/01-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/01-assert.yaml
new file mode 100644
index 0000000000..945c00b098
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/01-assert.yaml
@@ -0,0 +1,22 @@
+apiVersion: v1
+kind: Namespace
+metadata:
+  labels:
+    org: kyverno-test
+  name: test
+---
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: test-org
+  namespace: test
+---
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-org
+  namespace: test
+spec:
+  containers:
+  - image: nginx:latest
+    name: test-org
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/01-manifests.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/01-manifests.yaml
new file mode 100644
index 0000000000..945c00b098
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/01-manifests.yaml
@@ -0,0 +1,22 @@
+apiVersion: v1
+kind: Namespace
+metadata:
+  labels:
+    org: kyverno-test
+  name: test
+---
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: test-org
+  namespace: test
+---
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-org
+  namespace: test
+spec:
+  containers:
+  - image: nginx:latest
+    name: test-org
\ No newline at end of file
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/02-policy.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/02-policy.yaml
new file mode 100644
index 0000000000..b088ed7601
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/02-policy.yaml
@@ -0,0 +1,6 @@
+apiVersion: kuttl.dev/v1beta1
+kind: TestStep
+apply:
+- policy.yaml
+assert:
+- policy-assert.yaml
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/03-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/03-assert.yaml
new file mode 100644
index 0000000000..030f798740
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/03-assert.yaml
@@ -0,0 +1,7 @@
+apiVersion: v1
+kind: Pod
+metadata:
+  annotations:
+    org: kyverno-test
+  name: test-org
+  namespace: test
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/README.md b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/README.md
new file mode 100644
index 0000000000..13f2ed58e1
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/README.md
@@ -0,0 +1,18 @@
+## Description
+
+The `namespaceSelector` should applies to mutateExisting policies upon policy events.
+
+## Expected Behavior
+The pod is mutated with annotation `org: kyverno-test`.
+
+## Steps
+
+### Test Steps
+
+1. Create a pod and a configmap in `test` namespace labeled by `org: kyverno-test`.
+2. Create a `ClusterPolicy` that mutates existing pod.
+4. The pod should be mutated with the annotation `org: kyverno-test`.
+
+## Reference Issue(s)
+
+https://github.com/kyverno/kyverno/issues/6176
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/policy-assert.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/policy-assert.yaml
new file mode 100644
index 0000000000..11ec9368ec
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/policy-assert.yaml
@@ -0,0 +1,9 @@
+apiVersion: kyverno.io/v1
+kind: ClusterPolicy
+metadata:
+  name: org-label-inheritance-existing
+status:
+  conditions:
+  - reason: Succeeded
+    status: "True"
+    type: Ready
diff --git a/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/policy.yaml b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/policy.yaml
new file mode 100644
index 0000000000..7156633e4d
--- /dev/null
+++ b/test/conformance/kuttl/mutate/clusterpolicy/standard/existing/onpolicyupdate/namespaceselector/policy.yaml
@@ -0,0 +1,35 @@
+apiVersion: kyverno.io/v1
+kind: ClusterPolicy
+metadata:
+  name: org-label-inheritance-existing
+  annotations:  
+    pod-policies.kyverno.io/autogen-controllers: none
+spec:
+  mutateExistingOnPolicyUpdate: true
+  validationFailureAction: enforce
+  rules:
+  - name: propagate org label from namespace
+    match:
+      any:
+      - resources:
+          kinds:
+          - ConfigMap
+          namespaceSelector:
+            matchExpressions:
+              - key: org
+                operator: Exists
+    context:
+    - name: org
+      apiCall:
+        urlPath: /api/v1/namespaces/{{ request.object.metadata.namespace }}
+        jmesPath: metadata.labels.org
+    mutate:
+      targets:
+      - apiVersion: v1
+        kind: Pod
+        namespace: "{{ request.object.metadata.namespace }}"
+        name: "{{ request.object.metadata.name }}"
+      patchStrategicMerge:
+        metadata:
+          annotations:
+            org: "{{ org }}"