diff --git a/.gitignore b/.gitignore
index 5ba3da3148..6db4bf549c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -94,6 +94,7 @@ typings/
 # dotenv environment variables file
 .env
 .env.test
+.envrc
 
 # parcel-bundler cache (https://parceljs.org/)
 .cache
diff --git a/packages/backend/src/index.ts b/packages/backend/src/index.ts
index a4acd19cf2..621d912844 100644
--- a/packages/backend/src/index.ts
+++ b/packages/backend/src/index.ts
@@ -21,7 +21,7 @@ const backend = createBackend();
 backend.add(import('@backstage/plugin-auth-backend'));
 backend.add(import('./authModuleGithubProvider'));
 backend.add(import('@backstage/plugin-auth-backend-module-guest-provider'));
-
+backend.add(import('@backstage/plugin-catalog-backend-module-gitlab-org'));
 backend.add(import('@backstage/plugin-app-backend/alpha'));
 backend.add(import('@backstage/plugin-catalog-backend-module-unprocessed'));
 backend.add(
diff --git a/plugins/catalog-backend-module-gitlab/src/lib/client.ts b/plugins/catalog-backend-module-gitlab/src/lib/client.ts
index 8f56657f68..54c19bd3cc 100644
--- a/plugins/catalog-backend-module-gitlab/src/lib/client.ts
+++ b/plugins/catalog-backend-module-gitlab/src/lib/client.ts
@@ -23,6 +23,7 @@ import { LoggerService } from '@backstage/backend-plugin-api';
 import {
   GitLabDescendantGroupsResponse,
   GitLabGroup,
+  GitlabGroupMember,
   GitLabGroupMembersResponse,
   GitLabProject,
   GitLabUser,
@@ -114,8 +115,19 @@ export class GitLabClient {
     return response;
   }
 
+  async listGroupMembers(
+    groupPath: string,
+    options?: CommonListOptions,
+  ): Promise<PagedResponse<GitLabUser>> {
+    return this.pagedRequest(
+      `/groups/${encodeURIComponent(groupPath)}/members/all`,
+      options,
+    );
+  }
+
   async listUsers(
     options?: UserListOptions,
+    global?: boolean,
   ): Promise<PagedResponse<GitLabUser>> {
     return this.pagedRequest(`/users?`, {
       ...options,
@@ -128,6 +140,14 @@ export class GitLabClient {
     groupPath: string,
     options?: CommonListOptions,
   ): Promise<PagedResponse<GitLabUser>> {
+    return this.listGroupMembers(groupPath, {
+      ...options,
+      show_seat_info: true,
+    }).then(resp => {
+      resp.items = resp.items.filter(user => user.is_using_seat);
+      return resp;
+    });
+    /*
     return this.pagedRequest(
       `/groups/${encodeURIComponent(groupPath)}/members/all`,
       {
@@ -138,6 +158,7 @@ export class GitLabClient {
       resp.items = resp.items.filter(user => user.is_using_seat);
       return resp;
     });
+*/
   }
 
   async listGroups(
diff --git a/plugins/catalog-backend-module-gitlab/src/lib/types.ts b/plugins/catalog-backend-module-gitlab/src/lib/types.ts
index 2857fea162..89d2ceba1b 100644
--- a/plugins/catalog-backend-module-gitlab/src/lib/types.ts
+++ b/plugins/catalog-backend-module-gitlab/src/lib/types.ts
@@ -60,6 +60,7 @@ export type GitLabUser = {
   avatar_url: string;
   groups?: GitLabGroup[];
   group_saml_identity?: GitLabGroupSamlIdentity;
+  is_using_seat?: boolean; // Only available in responses from the group members endpoint
 };
 
 /**
@@ -149,6 +150,13 @@ export type GitlabProviderConfig = {
    * Accepts only groups under the provided path (which will be stripped)
    */
   group: string;
+
+  /**
+   * If true, the provider will only ingest users that are part of the configured group.
+   * Only valid for self-hosted GitLab instances.
+   */
+  restrictUsersToGroup?: boolean;
+
   /**
    * ???
    */
diff --git a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
index e10f9ee313..67a5134f25 100644
--- a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
+++ b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
@@ -356,7 +356,24 @@ export class GitlabOrgDiscoveryEntityProvider implements EntityProvider {
     let groups;
     let users;
 
-    if (this.gitLabClient.isSelfManaged()) {
+    // Doesn't matter if we are on SaaS or not, we can either get the users from the defined group or from the root group.
+    if (this.gitLabClient.isSelfManaged() && this.config.restrictUsersToGroup) {
+      groups = (await this.gitLabClient.listDescendantGroups(this.config.group))
+        .items;
+      users = paginated<GitLabUser>(
+        options =>
+          this.gitLabClient.listGroupMembers(this.config.group, options),
+        {
+          page: 1,
+          per_page: 100,
+        },
+      );
+    }
+
+    if (
+      this.gitLabClient.isSelfManaged() &&
+      !this.config.restrictUsersToGroup
+    ) {
       groups = paginated<GitLabGroup>(
         options => this.gitLabClient.listGroups(options),
         {
@@ -365,19 +382,19 @@ export class GitlabOrgDiscoveryEntityProvider implements EntityProvider {
           all_available: true,
         },
       );
-
       users = paginated<GitLabUser>(
         options => this.gitLabClient.listUsers(options),
-        {
-          page: 1,
-          per_page: 100,
-          active: true,
-        },
+        { page: 1, per_page: 100, active: true },
       );
-    } else {
+    }
+
+    // For SaaS, the only difference is the root group
+    if (!this.gitLabClient.isSelfManaged()) {
       groups = (await this.gitLabClient.listDescendantGroups(this.config.group))
         .items;
-      const rootGroup = this.config.group.split('/')[0];
+      const rootGroup = this.config.restrictUsersToGroup
+        ? this.config.group
+        : this.config.group.split('/')[0];
       users = paginated<GitLabUser>(
         options => this.gitLabClient.listSaaSUsers(rootGroup, options),
         {
diff --git a/plugins/catalog-backend-module-gitlab/src/providers/config.test.ts b/plugins/catalog-backend-module-gitlab/src/providers/config.test.ts
index 09b42e6475..f53121e064 100644
--- a/plugins/catalog-backend-module-gitlab/src/providers/config.test.ts
+++ b/plugins/catalog-backend-module-gitlab/src/providers/config.test.ts
@@ -61,6 +61,7 @@ describe('config', () => {
         allowInherited: false,
         schedule: undefined,
         skipForkedRepos: false,
+        restrictUsersToGroup: false,
       }),
     );
   });
@@ -99,6 +100,7 @@ describe('config', () => {
         allowInherited: false,
         schedule: undefined,
         skipForkedRepos: false,
+        restrictUsersToGroup: false,
       }),
     );
   });
@@ -137,6 +139,7 @@ describe('config', () => {
         orgEnabled: false,
         allowInherited: false,
         schedule: undefined,
+        restrictUsersToGroup: false,
         skipForkedRepos: true,
       }),
     );
@@ -178,6 +181,7 @@ describe('config', () => {
         orgEnabled: false,
         allowInherited: false,
         skipForkedRepos: false,
+        restrictUsersToGroup: false,
         schedule: {
           frequency: Duration.fromISO('PT30M'),
           timeout: {
diff --git a/plugins/catalog-backend-module-gitlab/src/providers/config.ts b/plugins/catalog-backend-module-gitlab/src/providers/config.ts
index 8606a525bd..68eba7165a 100644
--- a/plugins/catalog-backend-module-gitlab/src/providers/config.ts
+++ b/plugins/catalog-backend-module-gitlab/src/providers/config.ts
@@ -51,6 +51,8 @@ function readGitlabConfig(id: string, config: Config): GitlabProviderConfig {
   const schedule = config.has('schedule')
     ? readTaskScheduleDefinitionFromConfig(config.getConfig('schedule'))
     : undefined;
+  const restrictUsersToGroup =
+    config.getOptionalBoolean('restrictUsersToGroup') ?? false;
 
   return {
     id,
@@ -66,6 +68,7 @@ function readGitlabConfig(id: string, config: Config): GitlabProviderConfig {
     orgEnabled,
     allowInherited,
     skipForkedRepos,
+    restrictUsersToGroup,
   };
 }