diff --git a/go.mod b/go.mod
index 42436eb0..dc1ee27a 100644
--- a/go.mod
+++ b/go.mod
@@ -45,8 +45,8 @@ require (
 	k8s.io/kubectl v0.23.1
 	sigs.k8s.io/cli-utils v0.27.0
 	sigs.k8s.io/controller-runtime v0.11.0
-	sigs.k8s.io/kustomize/api v0.10.1
-	sigs.k8s.io/kustomize/kyaml v0.13.0
+	sigs.k8s.io/kustomize/api v0.11.2
+	sigs.k8s.io/kustomize/kyaml v0.13.3
 	sigs.k8s.io/yaml v1.3.0
 )
 
diff --git a/go.sum b/go.sum
index 7714d83f..2443dff7 100644
--- a/go.sum
+++ b/go.sum
@@ -1411,16 +1411,18 @@ sigs.k8s.io/json v0.0.0-20211020170558-c049b76a60c6/go.mod h1:p4QtZmO4uMYipTQNza
 sigs.k8s.io/json v0.0.0-20211208200746-9f7c6b3444d2 h1:kDi4JBNAsJWfz1aEXhO8Jg87JJaPNLh5tIzYHgStQ9Y=
 sigs.k8s.io/json v0.0.0-20211208200746-9f7c6b3444d2/go.mod h1:B+TnT182UBxE84DiCz4CVE26eOSDAeYCpfDnC2kdKMY=
 sigs.k8s.io/kustomize/api v0.8.11/go.mod h1:a77Ls36JdfCWojpUqR6m60pdGY1AYFix4AH83nJtY1g=
-sigs.k8s.io/kustomize/api v0.10.1 h1:KgU7hfYoscuqag84kxtzKdEC3mKMb99DPI3a0eaV1d0=
 sigs.k8s.io/kustomize/api v0.10.1/go.mod h1:2FigT1QN6xKdcnGS2Ppp1uIWrtWN28Ms8A3OZUZhwr8=
+sigs.k8s.io/kustomize/api v0.11.2 h1:6YvCJHFDwsLwAX7zNHBxMZi3k7dGIXI8G9l0saYQI0E=
+sigs.k8s.io/kustomize/api v0.11.2/go.mod h1:GZuhith5YcqxIDe0GnRJNx5xxPTjlwaLTt/e+ChUtJA=
 sigs.k8s.io/kustomize/cmd/config v0.9.13/go.mod h1:7547FLF8W/lTaDf0BDqFTbZxM9zqwEJqCKN9sSR0xSs=
 sigs.k8s.io/kustomize/cmd/config v0.10.2/go.mod h1:K2aW7nXJ0AaT+VA/eO0/dzFLxmpFcTzudmAgDwPY1HQ=
 sigs.k8s.io/kustomize/kustomize/v4 v4.2.0/go.mod h1:MOkR6fmhwG7hEDRXBYELTi5GSFcLwfqwzTRHW3kv5go=
 sigs.k8s.io/kustomize/kustomize/v4 v4.4.1/go.mod h1:qOKJMMz2mBP+vcS7vK+mNz4HBLjaQSWRY22EF6Tb7Io=
 sigs.k8s.io/kustomize/kyaml v0.11.0/go.mod h1:GNMwjim4Ypgp/MueD3zXHLRJEjz7RvtPae0AwlvEMFM=
 sigs.k8s.io/kustomize/kyaml v0.12.0/go.mod h1:FTJxEZ86ScK184NpGSAQcfEqee0nul8oLCK30D47m4E=
-sigs.k8s.io/kustomize/kyaml v0.13.0 h1:9c+ETyNfSrVhxvphs+K2dzT3dh5oVPPEqPOE/cUpScY=
 sigs.k8s.io/kustomize/kyaml v0.13.0/go.mod h1:FTJxEZ86ScK184NpGSAQcfEqee0nul8oLCK30D47m4E=
+sigs.k8s.io/kustomize/kyaml v0.13.3 h1:tNNQIC+8cc+aXFTVg+RtQAOsjwUdYBZRAgYOVI3RBc4=
+sigs.k8s.io/kustomize/kyaml v0.13.3/go.mod h1:/ya3Gk4diiQzlE4mBh7wykyLRFZNvqlbh+JnwQ9Vhrc=
 sigs.k8s.io/structured-merge-diff v0.0.0-20190525122527-15d366b2352e h1:4Z09Hglb792X0kfOBBJUPFEyvVfQWrYT/l8h5EKA6JQ=
 sigs.k8s.io/structured-merge-diff v0.0.0-20190525122527-15d366b2352e/go.mod h1:wWxsB5ozmmv/SG7nM11ayaAW51xMvak/t1r0CSlcokI=
 sigs.k8s.io/structured-merge-diff/v3 v3.0.0-20200116222232-67a7b8c61874/go.mod h1:PlARxl6Hbt/+BC80dRLi1qAmnMqwqDg62YvvVkZjemw=
diff --git a/internal/utils/apply.go b/internal/utils/apply.go
index e2360adb..bfebb03d 100644
--- a/internal/utils/apply.go
+++ b/internal/utils/apply.go
@@ -23,6 +23,7 @@ import (
 	"fmt"
 	"os"
 	"path/filepath"
+	"time"
 
 	"github.com/fluxcd/pkg/ssa"
 	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
@@ -37,41 +38,53 @@ import (
 // Apply is the equivalent of 'kubectl apply --server-side -f'.
 // If the given manifest is a kustomization.yaml, then apply performs the equivalent of 'kubectl apply --server-side -k'.
 func Apply(ctx context.Context, rcg genericclioptions.RESTClientGetter, manifestPath string) (string, error) {
-	cfg, err := KubeConfig(rcg)
+	objs, err := readObjects(manifestPath)
 	if err != nil {
 		return "", err
 	}
-	restMapper, err := rcg.ToRESTMapper()
-	if err != nil {
-		return "", err
+
+	if len(objs) == 0 {
+		return "", fmt.Errorf("no Kubernetes objects found at: %s", manifestPath)
 	}
-	kubeClient, err := client.New(cfg, client.Options{Mapper: restMapper})
-	if err != nil {
+
+	if err := ssa.SetNativeKindsDefaults(objs); err != nil {
 		return "", err
 	}
-	kubePoller := polling.NewStatusPoller(kubeClient, restMapper, nil)
 
-	resourceManager := ssa.NewResourceManager(kubeClient, kubePoller, ssa.Owner{
-		Field: "flux",
-		Group: "fluxcd.io",
-	})
+	changeSet := ssa.NewChangeSet()
 
-	objs, err := readObjects(manifestPath)
-	if err != nil {
-		return "", err
+	// contains only CRDs and Namespaces
+	var stageOne []*unstructured.Unstructured
+
+	// contains all objects except for CRDs and Namespaces
+	var stageTwo []*unstructured.Unstructured
+
+	for _, u := range objs {
+		if ssa.IsClusterDefinition(u) {
+			stageOne = append(stageOne, u)
+		} else {
+			stageTwo = append(stageTwo, u)
+		}
 	}
 
-	if len(objs) < 1 {
-		return "", fmt.Errorf("no Kubernetes objects found at: %s", manifestPath)
+	if len(stageOne) > 0 {
+		cs, err := applySet(ctx, rcg, stageOne)
+		if err != nil {
+			return "", err
+		}
+		changeSet.Append(cs.Entries)
 	}
 
-	if err := ssa.SetNativeKindsDefaults(objs); err != nil {
+	if err := waitForSet(rcg, changeSet); err != nil {
 		return "", err
 	}
 
-	changeSet, err := resourceManager.ApplyAllStaged(ctx, objs, ssa.DefaultApplyOptions())
-	if err != nil {
-		return "", err
+	if len(stageTwo) > 0 {
+		cs, err := applySet(ctx, rcg, stageTwo)
+		if err != nil {
+			return "", err
+		}
+		changeSet.Append(cs.Entries)
 	}
 
 	return changeSet.String(), nil
@@ -98,3 +111,42 @@ func readObjects(manifestPath string) ([]*unstructured.Unstructured, error) {
 
 	return ssa.ReadObjects(bufio.NewReader(ms))
 }
+
+func newManager(rcg genericclioptions.RESTClientGetter) (*ssa.ResourceManager, error) {
+	cfg, err := KubeConfig(rcg)
+	if err != nil {
+		return nil, err
+	}
+	restMapper, err := rcg.ToRESTMapper()
+	if err != nil {
+		return nil, err
+	}
+	kubeClient, err := client.New(cfg, client.Options{Mapper: restMapper, Scheme: NewScheme()})
+	if err != nil {
+		return nil, err
+	}
+	kubePoller := polling.NewStatusPoller(kubeClient, restMapper, nil)
+
+	return ssa.NewResourceManager(kubeClient, kubePoller, ssa.Owner{
+		Field: "flux",
+		Group: "fluxcd.io",
+	}), nil
+
+}
+
+func applySet(ctx context.Context, rcg genericclioptions.RESTClientGetter, objects []*unstructured.Unstructured) (*ssa.ChangeSet, error) {
+	man, err := newManager(rcg)
+	if err != nil {
+		return nil, err
+	}
+
+	return man.ApplyAll(ctx, objects, ssa.DefaultApplyOptions())
+}
+
+func waitForSet(rcg genericclioptions.RESTClientGetter, changeSet *ssa.ChangeSet) error {
+	man, err := newManager(rcg)
+	if err != nil {
+		return err
+	}
+	return man.WaitForSet(changeSet.ToObjMetadataSet(), ssa.WaitOptions{Interval: 2 * time.Second, Timeout: time.Minute})
+}
diff --git a/tests/azure/go.mod b/tests/azure/go.mod
index 034c17e9..0f0ff70c 100644
--- a/tests/azure/go.mod
+++ b/tests/azure/go.mod
@@ -7,7 +7,7 @@ require (
 	github.com/fluxcd/helm-controller/api v0.16.0
 	github.com/fluxcd/image-automation-controller/api v0.20.0
 	github.com/fluxcd/image-reflector-controller/api v0.16.0
-	github.com/fluxcd/kustomize-controller/api v0.20.1
+	github.com/fluxcd/kustomize-controller/api v0.20.2
 	github.com/fluxcd/notification-controller/api v0.21.0
 	github.com/fluxcd/pkg/apis/meta v0.10.2
 	github.com/fluxcd/pkg/runtime v0.12.4
diff --git a/tests/azure/go.sum b/tests/azure/go.sum
index 68646695..125d7610 100644
--- a/tests/azure/go.sum
+++ b/tests/azure/go.sum
@@ -204,8 +204,8 @@ github.com/fluxcd/image-automation-controller/api v0.20.0 h1:Z+lxqif0KwccsuNOBZq
 github.com/fluxcd/image-automation-controller/api v0.20.0/go.mod h1:XhLYccGUbmJvTTpJ1jAFKZHr2e1GNXy0T85ZBO50mik=
 github.com/fluxcd/image-reflector-controller/api v0.16.0 h1:1O1YdoK7LsJgWLyvfZTSbvQcUQCBcgJ573HA0arlQQY=
 github.com/fluxcd/image-reflector-controller/api v0.16.0/go.mod h1:OIe3mSXc3OwQiNbiQ9vNXWYtNif31hc7WAbZWlFUUnc=
-github.com/fluxcd/kustomize-controller/api v0.20.1 h1:BMOUdKCb6bZ6kepcxU8vz9VcDbl4q6SH9j/mRPl2O1A=
-github.com/fluxcd/kustomize-controller/api v0.20.1/go.mod h1:5MdpzJVx8+KiDIRv37zLme992BAOCgE0v1n+NOgs1lo=
+github.com/fluxcd/kustomize-controller/api v0.20.2 h1:zqCvKGsNCL10WMfmjk2Sd526J6gv8ml027DwesFoZsc=
+github.com/fluxcd/kustomize-controller/api v0.20.2/go.mod h1:5MdpzJVx8+KiDIRv37zLme992BAOCgE0v1n+NOgs1lo=
 github.com/fluxcd/notification-controller/api v0.21.0 h1:D5B3TH5YtSww0SyvW1Ru5xWsh0MgHQanC/a1t3CvXq0=
 github.com/fluxcd/notification-controller/api v0.21.0/go.mod h1:gA9/j0kjh7VDuUC2Cubr9twxOdzb/0+ojcE9Lzsc9ug=
 github.com/fluxcd/pkg/apis/acl v0.0.3 h1:Lw0ZHdpnO4G7Zy9KjrzwwBmDZQuy4qEjaU/RvA6k1lc=