diff --git a/internal/controller/kustomization_controller_test.go b/internal/controller/kustomization_controller_test.go
index 90c03bbd..1e12bb22 100644
--- a/internal/controller/kustomization_controller_test.go
+++ b/internal/controller/kustomization_controller_test.go
@@ -17,11 +17,18 @@ limitations under the License.
 package controller
 
 import (
+	"context"
+	"fmt"
 	"testing"
+	"time"
 
+	"github.com/fluxcd/pkg/apis/meta"
+	sourcev1 "github.com/fluxcd/source-controller/api/v1"
 	. "github.com/onsi/gomega"
 	corev1 "k8s.io/api/core/v1"
+	"k8s.io/apimachinery/pkg/api/errors"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
 	"k8s.io/client-go/tools/record"
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
@@ -29,6 +36,69 @@ import (
 	kustomizev1 "github.com/fluxcd/kustomize-controller/api/v1"
 )
 
+func TestKustomizationReconciler_StagedApply(t *testing.T) {
+	g := NewWithT(t)
+
+	namespaceName := "kust-" + randStringRunes(5)
+	namespace := &corev1.Namespace{
+		ObjectMeta: metav1.ObjectMeta{Name: namespaceName},
+	}
+	g.Expect(k8sClient.Create(ctx, namespace)).ToNot(HaveOccurred())
+	t.Cleanup(func() {
+		g.Expect(k8sClient.Delete(ctx, namespace)).NotTo(HaveOccurred())
+	})
+
+	err := createKubeConfigSecret(namespaceName)
+	g.Expect(err).NotTo(HaveOccurred(), "failed to create kubeconfig secret")
+
+	artifactName := "val-" + randStringRunes(5)
+	artifactChecksum, err := testServer.ArtifactFromDir("testdata/crds", artifactName)
+	g.Expect(err).ToNot(HaveOccurred())
+
+	repositoryName := types.NamespacedName{
+		Name:      fmt.Sprintf("val-%s", randStringRunes(5)),
+		Namespace: namespaceName,
+	}
+
+	err = applyGitRepository(repositoryName, artifactName, "main/"+artifactChecksum)
+	g.Expect(err).NotTo(HaveOccurred())
+
+	kustomization := &kustomizev1.Kustomization{}
+	kustomization.Name = "test-kust"
+	kustomization.Namespace = namespaceName
+	kustomization.Spec = kustomizev1.KustomizationSpec{
+		Interval: metav1.Duration{Duration: interval},
+		Prune:    true,
+		Path:     "./",
+		SourceRef: kustomizev1.CrossNamespaceSourceReference{
+			Name:      repositoryName.Name,
+			Namespace: repositoryName.Namespace,
+			Kind:      sourcev1.GitRepositoryKind,
+		},
+		KubeConfig: &meta.KubeConfigReference{
+			SecretRef: meta.SecretKeyReference{
+				Name: "kubeconfig",
+			},
+		},
+	}
+
+	g.Expect(k8sClient.Create(context.Background(), kustomization)).To(Succeed())
+
+	g.Eventually(func() bool {
+		var obj kustomizev1.Kustomization
+		_ = k8sClient.Get(context.Background(), client.ObjectKeyFromObject(kustomization), &obj)
+		return isReconcileSuccess(&obj) && obj.Status.LastAttemptedRevision == "main/"+artifactChecksum
+	}, timeout, time.Second).Should(BeTrue())
+
+	g.Expect(k8sClient.Delete(context.Background(), kustomization)).To(Succeed())
+
+	g.Eventually(func() bool {
+		var obj kustomizev1.Kustomization
+		err = k8sClient.Get(context.Background(), client.ObjectKeyFromObject(kustomization), &obj)
+		return errors.IsNotFound(err)
+	}, timeout, time.Second).Should(BeTrue())
+}
+
 func TestKustomizationReconciler_deleteBeforeFinalizer(t *testing.T) {
 	g := NewWithT(t)
 
diff --git a/internal/controller/testdata/crds/crd.yaml b/internal/controller/testdata/crds/crd.yaml
new file mode 100644
index 00000000..155c2b06
--- /dev/null
+++ b/internal/controller/testdata/crds/crd.yaml
@@ -0,0 +1,69 @@
+apiVersion: apiextensions.k8s.io/v1
+kind: CustomResourceDefinition
+metadata:
+  name: namespaces.servicebus.azure.com
+spec:
+  group: servicebus.azure.com
+  names:
+    kind: Namespace
+    listKind: NamespaceList
+    plural: namespaces
+    singular: namespace
+  scope: Namespaced
+  versions:
+    - additionalPrinterColumns:
+        - jsonPath: .spec.type
+          name: TYPE
+          type: string
+      name: v1api20210101preview
+      schema:
+        openAPIV3Schema:
+          description: Test is the Schema for the testing API
+          properties:
+            apiVersion:
+              type: string
+            kind:
+              type: string
+            metadata:
+              type: object
+            spec:
+              description: TestSpec defines the desired state of a test run
+              properties:
+                type:
+                  description: Type of test
+                  type: string
+                  enum:
+                    - unit
+                    - integration
+                valuesFrom:
+                  description: config reference
+                  type: string
+              type: object
+            status:
+              default:
+                observedGeneration: -1
+              properties:
+                observedGeneration:
+                  description: ObservedGeneration is the last observed generation.
+                  format: int64
+                  type: integer
+              type: object
+          type: object
+      served: true
+      storage: true
+      subresources:
+        status: {}
+---
+apiVersion: servicebus.azure.com/v1api20210101preview
+kind: Namespace
+metadata:
+  name: aso-namespace
+  namespace: test-namespace
+spec:
+  type: integration
+  valuesFrom: test-config
+---
+apiVersion: v1
+kind: Namespace
+metadata:
+  name: test-namespace