diff --git a/docs/tutorials/backend-to-backend-auth.md b/docs/tutorials/backend-to-backend-auth.md
index 6163d4f592..cd73a95c89 100644
--- a/docs/tutorials/backend-to-backend-auth.md
+++ b/docs/tutorials/backend-to-backend-auth.md
@@ -29,7 +29,10 @@ backend-to-backend authentication to work in production.
 Requests originating from a backend plugin can be authenticated by decorating
 them with a backend token. Backend tokens can be generated using a
 `TokenManager`, which can be passed to plugin backends via the
-`PluginEnvironment`.
+`PluginEnvironment`. The `TokenManager` provided in new Backstage instances
+generated by `create-app` is a stub, which returns empty tokens and accepts any
+input string as valid. To enable backend-to-backend authentication, you'll need
+to instantiate a new one using the secret from your config instead:
 
 ```diff
 // packages/backend/src/index.ts
@@ -43,6 +46,7 @@ function makeCreateEnv(config: Config) {
 
   const cacheManager = CacheManager.fromConfig(config);
   const databaseManager = DatabaseManager.fromConfig(config);
+- const tokenManager = ServerTokenManager.noop();
 + const tokenManager = ServerTokenManager.fromConfig(config, { logger: root });
 ```
 
diff --git a/packages/backend-common/api-report.md b/packages/backend-common/api-report.md
index cd44601d8c..b929251890 100644
--- a/packages/backend-common/api-report.md
+++ b/packages/backend-common/api-report.md
@@ -501,6 +501,8 @@ export class ServerTokenManager implements TokenManager {
   getToken(): Promise<{
     token: string;
   }>;
+  // (undocumented)
+  static noop(): TokenManager;
 }
 
 // @public (undocumented)
diff --git a/packages/backend-common/src/tokens/ServerTokenManager.test.ts b/packages/backend-common/src/tokens/ServerTokenManager.test.ts
index fb82eada29..1799291544 100644
--- a/packages/backend-common/src/tokens/ServerTokenManager.test.ts
+++ b/packages/backend-common/src/tokens/ServerTokenManager.test.ts
@@ -18,6 +18,7 @@ import { ConfigReader } from '@backstage/config';
 import { ServerTokenManager } from './ServerTokenManager';
 import { Logger } from 'winston';
 import { JWK } from 'jose';
+import { TokenManager } from './types';
 
 const emptyConfig = new ConfigReader({});
 const configWithSecret = new ConfigReader({
@@ -43,6 +44,11 @@ describe('ServerTokenManager', () => {
       });
       expect((await tokenManager.getToken()).token).toBeDefined();
     });
+
+    it('should return a token string if using a noop TokenManager', async () => {
+      const tokenManager = ServerTokenManager.noop();
+      expect((await tokenManager.getToken()).token).toBeDefined();
+    });
   });
 
   describe('authenticate', () => {
@@ -126,6 +132,22 @@ describe('ServerTokenManager', () => {
       );
     });
 
+    it('should throw for server tokens created using a noop TokenManager', async () => {
+      const noopTokenManager = ServerTokenManager.noop();
+      const tokenManager = ServerTokenManager.fromConfig(
+        new ConfigReader({
+          backend: { auth: { keys: [{ secret: 'a1b2c3' }] } },
+        }),
+        { logger },
+      );
+
+      const { token } = await noopTokenManager.getToken();
+
+      await expect(tokenManager.authenticate(token)).rejects.toThrowError(
+        /invalid server token/i,
+      );
+    });
+
     it('should throw for server tokens created by a different generated secret', async () => {
       (process.env as any).NODE_ENV = 'development';
       const tokenManager1 = ServerTokenManager.fromConfig(
@@ -146,7 +168,7 @@ describe('ServerTokenManager', () => {
     });
   });
 
-  describe('default', () => {
+  describe('fromConfig', () => {
     describe('NODE_ENV === production', () => {
       it('should throw if backend auth configuration is missing', () => {
         expect(() =>
@@ -215,4 +237,38 @@ describe('ServerTokenManager', () => {
       });
     });
   });
+
+  describe('ServerTokenManager.noop', () => {
+    let noopTokenManager: TokenManager;
+
+    beforeEach(() => {
+      noopTokenManager = ServerTokenManager.noop();
+    });
+
+    it('should accept tokens it generates', async () => {
+      const { token } = await noopTokenManager.getToken();
+
+      await expect(noopTokenManager.authenticate(token)).resolves.not.toThrow();
+    });
+
+    it('should accept tokens generated by other noop token managers', async () => {
+      const noopTokenManager2 = ServerTokenManager.noop();
+      await expect(
+        noopTokenManager.authenticate(
+          (
+            await noopTokenManager2.getToken()
+          ).token,
+        ),
+      ).resolves.not.toThrow();
+    });
+
+    it('should accept signed tokens', async () => {
+      const tokenManager = ServerTokenManager.fromConfig(configWithSecret, {
+        logger,
+      });
+      await expect(
+        noopTokenManager.authenticate((await tokenManager.getToken()).token),
+      ).resolves.not.toThrow();
+    });
+  });
 });
diff --git a/packages/backend-common/src/tokens/ServerTokenManager.ts b/packages/backend-common/src/tokens/ServerTokenManager.ts
index 0b7ea49dce..7b50ff4300 100644
--- a/packages/backend-common/src/tokens/ServerTokenManager.ts
+++ b/packages/backend-common/src/tokens/ServerTokenManager.ts
@@ -20,6 +20,14 @@ import { AuthenticationError } from '@backstage/errors';
 import { TokenManager } from './types';
 import { Logger } from 'winston';
 
+class NoopTokenManager implements TokenManager {
+  async getToken() {
+    return { token: '' };
+  }
+
+  async authenticate() {}
+}
+
 /**
  * Creates and validates tokens for use during backend-to-backend
  * authentication.
@@ -30,6 +38,10 @@ export class ServerTokenManager implements TokenManager {
   private readonly verificationKeys: JWKS.KeyStore;
   private readonly signingKey: JWK.Key;
 
+  static noop(): TokenManager {
+    return new NoopTokenManager();
+  }
+
   static fromConfig(config: Config, options: { logger: Logger }) {
     const { logger } = options;
 
diff --git a/packages/backend/src/index.ts b/packages/backend/src/index.ts
index 96def8d03f..c7d9d9b5ee 100644
--- a/packages/backend/src/index.ts
+++ b/packages/backend/src/index.ts
@@ -63,7 +63,7 @@ function makeCreateEnv(config: Config) {
   const root = getRootLogger();
   const reader = UrlReaders.default({ logger: root, config });
   const discovery = SingleHostDiscovery.fromConfig(config);
-  const tokenManager = ServerTokenManager.fromConfig(config, { logger: root });
+  const tokenManager = ServerTokenManager.noop();
   const permissions = new ServerPermissionClient({
     discoveryApi: discovery,
     configApi: config,
diff --git a/packages/create-app/templates/default-app/packages/backend/src/index.ts b/packages/create-app/templates/default-app/packages/backend/src/index.ts
index 7a2d2a7a34..3f12122a3f 100644
--- a/packages/create-app/templates/default-app/packages/backend/src/index.ts
+++ b/packages/create-app/templates/default-app/packages/backend/src/index.ts
@@ -38,7 +38,7 @@ function makeCreateEnv(config: Config) {
 
   const cacheManager = CacheManager.fromConfig(config);
   const databaseManager = DatabaseManager.fromConfig(config);
-  const tokenManager = ServerTokenManager.fromConfig(config, { logger: root });
+  const tokenManager = ServerTokenManager.noop();
 
   return (plugin: string): PluginEnvironment => {
     const logger = root.child({ type: 'plugin', plugin });
diff --git a/plugins/permission-common/api-report.md b/plugins/permission-common/api-report.md
index 043b27554c..cc2a433504 100644
--- a/plugins/permission-common/api-report.md
+++ b/plugins/permission-common/api-report.md
@@ -74,6 +74,10 @@ export class PermissionClient {
     requests: AuthorizeRequest[],
     options?: AuthorizeRequestOptions,
   ): Promise<AuthorizeResponse[]>;
+  // (undocumented)
+  protected readonly enabled: boolean;
+  // (undocumented)
+  protected shouldBypass(_options?: AuthorizeRequestOptions): Promise<boolean>;
 }
 
 // @public
diff --git a/plugins/permission-common/src/PermissionClient.ts b/plugins/permission-common/src/PermissionClient.ts
index f98d40a3c4..18e618d5f0 100644
--- a/plugins/permission-common/src/PermissionClient.ts
+++ b/plugins/permission-common/src/PermissionClient.ts
@@ -72,7 +72,7 @@ export type AuthorizeRequestOptions = {
  * @public
  */
 export class PermissionClient {
-  private readonly enabled: boolean;
+  protected readonly enabled: boolean;
   private readonly discoveryApi: DiscoveryApi;
 
   constructor(options: { discoveryApi: DiscoveryApi; configApi: Config }) {
@@ -106,7 +106,7 @@ export class PermissionClient {
     // but no resourceRef. That way clients who aren't prepared to handle filtering according
     // to conditions can be guaranteed that they won't unexpectedly get a CONDITIONAL response.
 
-    if (!this.enabled) {
+    if (await this.shouldBypass(options)) {
       return requests.map(_ => ({ result: AuthorizeResult.ALLOW }));
     }
 
@@ -141,6 +141,12 @@ export class PermissionClient {
     return identifiedRequests.map(request => responsesById[request.id]);
   }
 
+  protected async shouldBypass(
+    _options?: AuthorizeRequestOptions,
+  ): Promise<boolean> {
+    return !this.enabled;
+  }
+
   private getAuthorizationHeader(token?: string): Record<string, string> {
     return token ? { Authorization: `Bearer ${token}` } : {};
   }
diff --git a/plugins/permission-node/api-report.md b/plugins/permission-node/api-report.md
index 367bcd2386..90181925c4 100644
--- a/plugins/permission-node/api-report.md
+++ b/plugins/permission-node/api-report.md
@@ -5,7 +5,6 @@
 ```ts
 import { AuthorizeRequest } from '@backstage/plugin-permission-common';
 import { AuthorizeRequestOptions } from '@backstage/plugin-permission-common';
-import { AuthorizeResponse } from '@backstage/plugin-permission-common';
 import { AuthorizeResult } from '@backstage/plugin-permission-common';
 import { BackstageIdentityResponse } from '@backstage/plugin-auth-backend';
 import { Config } from '@backstage/config';
@@ -14,7 +13,7 @@ import { PermissionClient } from '@backstage/plugin-permission-common';
 import { PermissionCondition } from '@backstage/plugin-permission-common';
 import { PermissionCriteria } from '@backstage/plugin-permission-common';
 import { Router } from 'express';
-import { ServerTokenManager } from '@backstage/backend-common';
+import { TokenManager } from '@backstage/backend-common';
 
 // @public
 export type ApplyConditionsRequest = {
@@ -131,12 +130,9 @@ export class ServerPermissionClient extends PermissionClient {
   constructor(options: {
     discoveryApi: DiscoveryApi;
     configApi: Config;
-    serverTokenManager: ServerTokenManager;
+    serverTokenManager: TokenManager;
   });
   // (undocumented)
-  authorize(
-    requests: AuthorizeRequest[],
-    options?: AuthorizeRequestOptions,
-  ): Promise<AuthorizeResponse[]>;
+  shouldBypass(options?: AuthorizeRequestOptions): Promise<boolean>;
 }
 ```
diff --git a/plugins/permission-node/package.json b/plugins/permission-node/package.json
index 7166ae5c31..92755e2012 100644
--- a/plugins/permission-node/package.json
+++ b/plugins/permission-node/package.json
@@ -40,6 +40,7 @@
   "devDependencies": {
     "@backstage/cli": "^0.10.1",
     "@types/supertest": "^2.0.8",
+    "msw": "^0.35.0",
     "supertest": "^6.1.3"
   },
   "files": [
diff --git a/plugins/permission-node/src/ServerPermissionClient.test.ts b/plugins/permission-node/src/ServerPermissionClient.test.ts
new file mode 100644
index 0000000000..8efd6414a7
--- /dev/null
+++ b/plugins/permission-node/src/ServerPermissionClient.test.ts
@@ -0,0 +1,118 @@
+/*
+ * Copyright 2021 The Backstage Authors
+ *
+ * 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.
+ */
+
+import { ServerPermissionClient } from '.';
+import {
+  DiscoveryApi,
+  Permission,
+  Identified,
+  AuthorizeRequest,
+  AuthorizeResult,
+} from '@backstage/plugin-permission-common';
+import { ConfigReader } from '@backstage/config';
+import { getVoidLogger, ServerTokenManager } from '@backstage/backend-common';
+import { setupServer } from 'msw/node';
+import { RestContext, rest } from 'msw';
+
+const server = setupServer();
+const mockAuthorizeHandler = jest.fn((req, res, { json }: RestContext) => {
+  const responses = req.body.map((r: Identified<AuthorizeRequest>) => ({
+    id: r.id,
+    result: AuthorizeResult.ALLOW,
+  }));
+
+  return res(json(responses));
+});
+const mockBaseUrl = 'http://backstage:9191/i-am-a-mock-base';
+const discoveryApi: DiscoveryApi = {
+  async getBaseUrl() {
+    return mockBaseUrl;
+  },
+};
+const testPermission: Permission = {
+  name: 'test.permission',
+  attributes: {},
+  resourceType: 'test-resource',
+};
+const config = new ConfigReader({
+  permission: { enabled: true },
+  backend: { auth: { keys: [{ secret: 'a-secret-key' }] } },
+});
+const logger = getVoidLogger();
+
+describe('ServerPermissionClient', () => {
+  beforeAll(() => server.listen({ onUnhandledRequest: 'error' }));
+  afterAll(() => server.close());
+  beforeEach(() => {
+    server.use(rest.post(`${mockBaseUrl}/authorize`, mockAuthorizeHandler));
+  });
+  afterEach(() => server.resetHandlers());
+
+  it('should bypass authorization if permissions are disabled', async () => {
+    const client = new ServerPermissionClient({
+      discoveryApi,
+      configApi: new ConfigReader({}),
+      serverTokenManager: ServerTokenManager.noop(),
+    });
+
+    await client.authorize([{ permission: testPermission }]);
+
+    expect(mockAuthorizeHandler).not.toHaveBeenCalled();
+  });
+
+  it('should bypass authorization if permissions are enabled and request has valid server token', async () => {
+    const tokenManager = ServerTokenManager.fromConfig(config, { logger });
+    const client = new ServerPermissionClient({
+      discoveryApi,
+      configApi: config,
+      serverTokenManager: tokenManager,
+    });
+
+    await client.authorize([{ permission: testPermission }], {
+      token: (await tokenManager.getToken()).token,
+    });
+
+    expect(mockAuthorizeHandler).not.toHaveBeenCalled();
+  });
+
+  it('should authorize normally if permissions are enabled and request does not have valid server token', async () => {
+    const tokenManager = ServerTokenManager.fromConfig(config, { logger });
+    const client = new ServerPermissionClient({
+      discoveryApi,
+      configApi: config,
+      serverTokenManager: tokenManager,
+    });
+
+    await client.authorize([{ permission: testPermission }], {
+      token: 'a-user-token',
+    });
+
+    expect(mockAuthorizeHandler).toHaveBeenCalled();
+  });
+
+  it('should error if permissions are enabled but a no-op token manager is configured', async () => {
+    expect(
+      () =>
+        new ServerPermissionClient({
+          discoveryApi,
+          configApi: config,
+          serverTokenManager: ServerTokenManager.noop(),
+        }),
+    ).toThrowError(
+      'You must configure at least one key in backend.auth.keys if permissions are enabled.',
+    );
+  });
+});
diff --git a/plugins/permission-node/src/ServerPermissionClient.ts b/plugins/permission-node/src/ServerPermissionClient.ts
index 0ef464c639..37d75c8ebd 100644
--- a/plugins/permission-node/src/ServerPermissionClient.ts
+++ b/plugins/permission-node/src/ServerPermissionClient.ts
@@ -14,13 +14,10 @@
  * limitations under the License.
  */
 
-import { ServerTokenManager } from '@backstage/backend-common';
+import { TokenManager, ServerTokenManager } from '@backstage/backend-common';
 import { Config } from '@backstage/config';
 import {
-  AuthorizeRequest,
   AuthorizeRequestOptions,
-  AuthorizeResponse,
-  AuthorizeResult,
   DiscoveryApi,
   PermissionClient,
 } from '@backstage/plugin-permission-common';
@@ -31,26 +28,36 @@ import {
  * @public
  */
 export class ServerPermissionClient extends PermissionClient {
-  private readonly serverTokenManager: ServerTokenManager;
+  private readonly serverTokenManager: TokenManager;
 
   constructor(options: {
     discoveryApi: DiscoveryApi;
     configApi: Config;
-    serverTokenManager: ServerTokenManager;
+    serverTokenManager: TokenManager;
   }) {
     const { discoveryApi, configApi, serverTokenManager } = options;
     super({ discoveryApi, configApi });
+
+    if (this.enabled && !(serverTokenManager instanceof ServerTokenManager)) {
+      throw new Error(
+        'You must configure at least one key in backend.auth.keys if permissions are enabled.',
+      );
+    }
     this.serverTokenManager = serverTokenManager;
   }
 
-  async authorize(
-    requests: AuthorizeRequest[],
-    options?: AuthorizeRequestOptions,
-  ): Promise<AuthorizeResponse[]> {
-    if (await this.isValidServerToken(options?.token)) {
-      return requests.map(_ => ({ result: AuthorizeResult.ALLOW }));
+  async shouldBypass(options?: AuthorizeRequestOptions): Promise<boolean> {
+    // Call super first in order to check if permissions are enabled before
+    // validating the server token. That way when permissions are disabled, the
+    // noop token manager can be used without fouling up the logic inside the
+    // ServerPermissionClient, because the code path won't be reached.
+    if (await super.shouldBypass(options)) {
+      return true;
     }
-    return super.authorize(requests, options);
+    if (await this.isValidServerToken(options?.token)) {
+      return true;
+    }
+    return false;
   }
 
   private async isValidServerToken(