diff --git a/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.test.ts b/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.test.ts
new file mode 100644
index 0000000000..abc62fff69
--- /dev/null
+++ b/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.test.ts
@@ -0,0 +1,45 @@
+/*
+ * Copyright 2022 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 {
+  LoggerService,
+  ServiceFactory,
+  TokenManagerService,
+} from '@backstage/backend-plugin-api';
+import { ConfigReader } from '@backstage/config';
+import { tokenManagerFactory } from './tokenManagerFactory';
+
+describe('tokenManagerFactory', () => {
+  it('should create managers that can share tokens in development', async () => {
+    (process.env as { NODE_ENV?: string }).NODE_ENV = 'development';
+
+    const factory = tokenManagerFactory() as Exclude<
+      ServiceFactory<TokenManagerService>,
+      { scope: 'root' }
+    >;
+    const deps = {
+      config: new ConfigReader({}),
+      logger: { warn() {} } as unknown as LoggerService,
+    };
+
+    const ctx = await factory.createRootContext?.(deps);
+    const manager1 = await factory.factory!(deps, ctx);
+    const manager2 = await factory.factory!(deps, ctx);
+
+    const { token } = await manager1.getToken();
+    await expect(manager2.authenticate(token)).resolves.toBeUndefined();
+  });
+});
diff --git a/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.ts b/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.ts
index bb45f1f92c..ae0b402eec 100644
--- a/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.ts
+++ b/packages/backend-app-api/src/services/implementations/tokenManager/tokenManagerFactory.ts
@@ -27,10 +27,12 @@ export const tokenManagerFactory = createServiceFactory({
     config: coreServices.config,
     logger: coreServices.rootLogger,
   },
-  async factory({ config, logger }) {
-    const tokenManager = ServerTokenManager.fromConfig(config, {
+  createRootContext({ config, logger }) {
+    return ServerTokenManager.fromConfig(config, {
       logger,
     });
+  },
+  async factory(_deps, tokenManager) {
     return tokenManager;
   },
 });