diff --git a/pkg/controllers/resources/nodes/fake_syncer.go b/pkg/controllers/resources/nodes/fake_syncer.go
index 9adba0557..71dfe93e8 100644
--- a/pkg/controllers/resources/nodes/fake_syncer.go
+++ b/pkg/controllers/resources/nodes/fake_syncer.go
@@ -159,7 +159,7 @@ func CreateFakeNode(ctx context.Context,
 				"beta.kubernetes.io/arch":    "amd64",
 				"beta.kubernetes.io/os":      "linux",
 				"kubernetes.io/arch":         "amd64",
-				"kubernetes.io/hostname":     translate.SafeConcatName("fake", name),
+				"kubernetes.io/hostname":     GetNodeHost(name),
 				"kubernetes.io/os":           "linux",
 			},
 			Annotations: map[string]string{
diff --git a/pkg/controllers/resources/nodes/fake_syncer_test.go b/pkg/controllers/resources/nodes/fake_syncer_test.go
index 4b91449a4..84169be3e 100644
--- a/pkg/controllers/resources/nodes/fake_syncer_test.go
+++ b/pkg/controllers/resources/nodes/fake_syncer_test.go
@@ -66,7 +66,7 @@ func TestFakeSync(t *testing.T) {
 				"beta.kubernetes.io/arch":    "amd64",
 				"beta.kubernetes.io/os":      "linux",
 				"kubernetes.io/arch":         "amd64",
-				"kubernetes.io/hostname":     "fake-" + baseName.Name,
+				"kubernetes.io/hostname":     GetNodeHost(baseName.Name),
 				"kubernetes.io/os":           "linux",
 			},
 			Annotations: map[string]string{
diff --git a/pkg/controllers/resources/nodes/syncer_test.go b/pkg/controllers/resources/nodes/syncer_test.go
index 61aad3e04..9ee7710f1 100644
--- a/pkg/controllers/resources/nodes/syncer_test.go
+++ b/pkg/controllers/resources/nodes/syncer_test.go
@@ -81,12 +81,14 @@ func TestSync(t *testing.T) {
 		ObjectMeta: metav1.ObjectMeta{
 			Name: baseName.Name,
 			Labels: map[string]string{
-				"test": "true",
+				"test":                   "true",
+				"kubernetes.io/hostname": GetNodeHost(baseName.Name),
 			},
 			Annotations: map[string]string{
 				"test":                                 "true",
 				translate.ManagedAnnotationsAnnotation: "test",
-				translate.ManagedLabelsAnnotation:      "test",
+				translate.ManagedLabelsAnnotation:      "kubernetes.io/hostname\ntest",
+				"vcluster.loft.sh/managed-annotations": "vcluster.loft.sh/original-taints",
 			},
 		},
 		Status: corev1.NodeStatus{
@@ -184,8 +186,12 @@ func TestSync(t *testing.T) {
 	baseNode = &corev1.Node{
 		ObjectMeta: metav1.ObjectMeta{
 			Name: baseName.Name,
+			Labels: map[string]string{
+				"kubernetes.io/hostname": GetNodeHost(baseName.Name),
+			},
 			Annotations: map[string]string{
-				TaintsAnnotation: "[\"{\\\"key\\\":\\\"key1\\\",\\\"value\\\":\\\"value1\\\",\\\"effect\\\":\\\"NoSchedule\\\"}\"]",
+				translate.ManagedLabelsAnnotation: "kubernetes.io/hostname",
+				TaintsAnnotation:                  "[\"{\\\"key\\\":\\\"key1\\\",\\\"value\\\":\\\"value1\\\",\\\"effect\\\":\\\"NoSchedule\\\"}\"]",
 			},
 		},
 		Spec: corev1.NodeSpec{
@@ -218,8 +224,12 @@ func TestSync(t *testing.T) {
 	editedNode = &corev1.Node{
 		ObjectMeta: metav1.ObjectMeta{
 			Name: baseName.Name,
+			Labels: map[string]string{
+				"kubernetes.io/hostname": GetNodeHost(baseName.Name),
+			},
 			Annotations: map[string]string{
-				TaintsAnnotation: "[\"{\\\"key\\\":\\\"key1\\\",\\\"value\\\":\\\"value1\\\",\\\"effect\\\":\\\"NoSchedule\\\"}\"]",
+				translate.ManagedLabelsAnnotation: "kubernetes.io/hostname",
+				TaintsAnnotation:                  "[\"{\\\"key\\\":\\\"key1\\\",\\\"value\\\":\\\"value1\\\",\\\"effect\\\":\\\"NoSchedule\\\"}\"]",
 			},
 		},
 		Spec: corev1.NodeSpec{
@@ -345,7 +355,8 @@ func TestSync(t *testing.T) {
 				translate.ManagedLabelsAnnotation: "test",
 			},
 			Labels: map[string]string{
-				"test": "true",
+				"test":                   "true",
+				"kubernetes.io/hostname": GetNodeHost(baseName.Name),
 			},
 		},
 		Status: corev1.NodeStatus{
@@ -486,7 +497,8 @@ func TestSync(t *testing.T) {
 				translate.ManagedLabelsAnnotation: "test",
 			},
 			Labels: map[string]string{
-				"test": "true",
+				"test":                   "true",
+				"kubernetes.io/hostname": GetNodeHost(baseName.Name),
 			},
 		},
 		Status: corev1.NodeStatus{
@@ -533,7 +545,8 @@ func TestSync(t *testing.T) {
 				translate.ManagedLabelsAnnotation: "test",
 			},
 			Labels: map[string]string{
-				"test": "true",
+				"test":                   "true",
+				"kubernetes.io/hostname": GetNodeHost(baseName.Name),
 			},
 		},
 		Status: corev1.NodeStatus{
diff --git a/pkg/controllers/resources/nodes/translate.go b/pkg/controllers/resources/nodes/translate.go
index 87860cd40..aa582a292 100644
--- a/pkg/controllers/resources/nodes/translate.go
+++ b/pkg/controllers/resources/nodes/translate.go
@@ -100,6 +100,10 @@ func (s *nodeSyncer) translateUpdateBackwards(pNode *corev1.Node, vNode *corev1.
 		}
 	}
 
+	if s.useFakeKubelets {
+		labels["kubernetes.io/hostname"] = GetNodeHost(vNode.Name)
+	}
+
 	// Omit those taints for which the vcluster has enforced tolerations defined
 	if len(s.enforcedTolerations) > 0 && len(translatedSpec.Taints) > 0 {
 		translatedSpec.Taints = s.filterOutTaintsMatchingTolerations(translatedSpec.Taints)
diff --git a/test/e2e_node/node.go b/test/e2e_node/node.go
index 1ba7be0fe..0fb1f326e 100644
--- a/test/e2e_node/node.go
+++ b/test/e2e_node/node.go
@@ -21,11 +21,15 @@ var _ = ginkgo.Describe("Node sync", func() {
 
 		hostNodeLabels := make(map[string]map[string]string)
 		for _, node := range hostNodes.Items {
+			pHostname := node.Labels[corev1.LabelHostname]
+			pHostname += ".nodes.vcluster.com"
+			node.Labels[corev1.LabelHostname] = pHostname
 			hostNodeLabels[node.Name] = node.Labels
 		}
 
 		virtualNodeLabels := make(map[string]map[string]string)
 		for _, node := range virtualNodes.Items {
+			delete(node.Labels, "vcluster.loft.sh/fake-node")
 			virtualNodeLabels[node.Name] = node.Labels
 		}