diff --git a/pkg/asset/manifests/proxy.go b/pkg/asset/manifests/proxy.go
index 16f4738464..8555dfb542 100644
--- a/pkg/asset/manifests/proxy.go
+++ b/pkg/asset/manifests/proxy.go
@@ -153,6 +153,9 @@ func createNoProxy(installConfig *installconfig.InstallConfig, network *Networki
 		} else {
 			set.Insert(fmt.Sprintf(".%s.compute.internal", region))
 		}
+		// AWS DNS resolver's IP. One of the resolvers used when UserProvisionedDNS is enabled.
+		// https://docs.aws.amazon.com/vpc/latest/userguide/AmazonDNS-concepts.html
+		set.Insert("169.254.169.253")
 	}
 
 	// TODO: IBM[#95]: proxy