diff --git a/.changeset/shiny-meals-chew.md b/.changeset/shiny-meals-chew.md
new file mode 100644
index 0000000000..b1763a610f
--- /dev/null
+++ b/.changeset/shiny-meals-chew.md
@@ -0,0 +1,6 @@
+---
+'@backstage/plugin-kubernetes-backend': patch
+---
+
+Fixed a bug where the proxy endpoint would error when used in combination with
+a local kubectl proxy process and a token-based auth strategy on-cluster.
diff --git a/plugins/kubernetes-backend/src/service/KubernetesProxy.test.ts b/plugins/kubernetes-backend/src/service/KubernetesProxy.test.ts
index 1bd79e9401..199ef404ad 100644
--- a/plugins/kubernetes-backend/src/service/KubernetesProxy.test.ts
+++ b/plugins/kubernetes-backend/src/service/KubernetesProxy.test.ts
@@ -548,15 +548,17 @@ describe('KubernetesProxy', () => {
     });
 
     worker.use(
-      rest.get('http://localhost:8001/api/v1/namespaces', (_req, res, ctx) => {
-        return res(
-          ctx.status(200),
-          ctx.json({
-            kind: 'NamespaceList',
-            apiVersion: 'v1',
-            items: [],
-          }),
-        );
+      rest.get('http://localhost:8001/api/v1/namespaces', (req, res, ctx) => {
+        return req.headers.get('Authorization')
+          ? res(ctx.status(401))
+          : res(
+              ctx.status(200),
+              ctx.json({
+                kind: 'NamespaceList',
+                apiVersion: 'v1',
+                items: [],
+              }),
+            );
       }),
     );
 
diff --git a/plugins/kubernetes-backend/src/service/KubernetesProxy.ts b/plugins/kubernetes-backend/src/service/KubernetesProxy.ts
index b0f2e2759b..ec9bbb346e 100644
--- a/plugins/kubernetes-backend/src/service/KubernetesProxy.ts
+++ b/plugins/kubernetes-backend/src/service/KubernetesProxy.ts
@@ -93,14 +93,12 @@ export class KubernetesProxy {
   ): RequestHandler {
     const { permissionApi } = options;
     return async (req, res, next) => {
-      const token = getBearerTokenFromAuthorizationHeader(
-        req.header('authorization'),
-      );
-
       const authorizeResponse = await permissionApi.authorize(
         [{ permission: kubernetesProxyPermission }],
         {
-          token,
+          token: getBearerTokenFromAuthorizationHeader(
+            req.header('authorization'),
+          ),
         },
       );
       const auth = authorizeResponse[0];
@@ -110,15 +108,19 @@ export class KubernetesProxy {
         return;
       }
 
-      req.headers.authorization =
-        req.header(HEADER_KUBERNETES_AUTH) ??
-        `Bearer ${
-          (
-            await this.getClusterForRequest(req).then(cd =>
-              this.authTranslator.decorateClusterDetailsWithAuth(cd, {}),
-            )
-          ).serviceAccountToken
-        }`;
+      const authHeader = req.header(HEADER_KUBERNETES_AUTH);
+      if (authHeader) {
+        req.headers.authorization = authHeader;
+      } else {
+        const { serviceAccountToken } = await this.getClusterForRequest(
+          req,
+        ).then(cd =>
+          this.authTranslator.decorateClusterDetailsWithAuth(cd, {}),
+        );
+        if (serviceAccountToken) {
+          req.headers.authorization = `Bearer ${serviceAccountToken}`;
+        }
+      }
 
       const middleware = await this.getMiddleware(req);
       middleware(req, res, next);