diff --git a/.github/workflows/bootstrap.yaml b/.github/workflows/bootstrap.yaml
index 60c86385fff2c67b7f86d86ae9210286f13f60d6..5b2f96661c1bbbd2b40896bce7bf7a8abda56f3e 100644
--- a/.github/workflows/bootstrap.yaml
+++ b/.github/workflows/bootstrap.yaml
@@ -91,16 +91,24 @@ jobs:
         run: |
           /tmp/flux uninstall -s --keep-namespace
           kubectl delete ns flux-system --timeout=10m --wait=true
-      - name: bootstrap reinstall
+      - name: test image automation
         run: |
+          make setup-image-automation
           /tmp/flux bootstrap github --manifests ./manifests/install/ \
           --owner=fluxcd-testing \
           --repository=${{ steps.vars.outputs.test_repo_name }} \
           --branch=main \
           --path=test-cluster \
-          --team=team-z
+          --read-write-key
+          /tmp/flux reconcile image repository podinfo
+          /tmp/flux reconcile image update flux-system
+          /tmp/flux get images all
+          /tmp/flux get images policy podinfo | grep "5.2.1"
+          /tmp/flux get image update flux-system | grep commit
         env:
           GITHUB_TOKEN: ${{ secrets.GITPROVIDER_BOT_TOKEN }}
+          GITHUB_REPO_NAME: ${{ steps.vars.outputs.test_repo_name }}
+          GITHUB_ORG_NAME: fluxcd-testing
       - name: delete repository
         run: |
           curl \
diff --git a/Makefile b/Makefile
index 631d2767505232908fac4799ab81263af601487e..3d375d429c47b26f2d2d44968334c89bbf9adb5d 100644
--- a/Makefile
+++ b/Makefile
@@ -64,6 +64,9 @@ install-envtest:  setup-envtest
 setup-bootstrap-patch:
 	go run ./tests/bootstrap/main.go
 
+setup-image-automation:
+	cd tests/image-automation && go run main.go
+
 # Find or download setup-envtest
 setup-envtest:
 ifeq (, $(shell which setup-envtest))
diff --git a/tests/image-automation/auto.yaml b/tests/image-automation/auto.yaml
new file mode 100644
index 0000000000000000000000000000000000000000..321012c044f8439281316c2126aab199f518716e
--- /dev/null
+++ b/tests/image-automation/auto.yaml
@@ -0,0 +1,45 @@
+apiVersion: image.toolkit.fluxcd.io/v1beta1
+kind: ImageRepository
+metadata:
+  name: podinfo
+  namespace: flux-system
+spec:
+  image: ghcr.io/stefanprodan/podinfo
+  interval: 1m0s
+---
+apiVersion: image.toolkit.fluxcd.io/v1beta1
+kind: ImagePolicy
+metadata:
+  name: podinfo
+  namespace: flux-system
+spec:
+  imageRepositoryRef:
+    name: podinfo
+  policy:
+    semver:
+      range: 5.2.x
+---
+apiVersion: image.toolkit.fluxcd.io/v1beta1
+kind: ImageUpdateAutomation
+metadata:
+  name: flux-system
+  namespace: flux-system
+spec:
+  interval: 5m0s
+  sourceRef:
+    kind: GitRepository
+    name: flux-system
+  git:
+    checkout:
+      ref:
+        branch: main
+    commit:
+      author:
+        email: fluxcdbot@users.noreply.github.com
+        name: fluxcdbot
+      messageTemplate: '{{range .Updated.Images}}{{println .}}{{end}}'
+    push:
+      branch: main
+  update:
+    path: ./test-cluster/podinfo-auto
+    strategy: Setters
diff --git a/tests/image-automation/kustomization.yaml b/tests/image-automation/kustomization.yaml
new file mode 100644
index 0000000000000000000000000000000000000000..64cb51fc197ce934efcd93ed988e984e61a2eb1f
--- /dev/null
+++ b/tests/image-automation/kustomization.yaml
@@ -0,0 +1,10 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+namespace: flux-system
+resources:
+  - https://raw.githubusercontent.com/stefanprodan/podinfo/5.2.0/kustomize/deployment.yaml
+  - auto.yaml
+images:
+  - name: ghcr.io/stefanprodan/podinfo
+    newName: ghcr.io/stefanprodan/podinfo
+    newTag: 5.2.0 # {"$imagepolicy": "flux-system:podinfo:tag"}
diff --git a/tests/image-automation/main.go b/tests/image-automation/main.go
new file mode 100644
index 0000000000000000000000000000000000000000..026f19cb768bc395522cb17ddcc57ee8345bb3a3
--- /dev/null
+++ b/tests/image-automation/main.go
@@ -0,0 +1,71 @@
+package main
+
+import (
+	"context"
+	"log"
+	"os"
+
+	"github.com/fluxcd/go-git-providers/github"
+	"github.com/fluxcd/go-git-providers/gitprovider"
+	"k8s.io/client-go/util/retry"
+)
+
+func main() {
+	ksPath := "test-cluster/podinfo-auto/kustomization.yaml"
+	autoPath := "test-cluster/podinfo-auto/auto.yaml"
+
+	ksContent, err := os.ReadFile("kustomization.yaml")
+	if err != nil {
+		log.Fatal(err)
+	}
+	ks := string(ksContent)
+
+	autoContent, err := os.ReadFile("auto.yaml")
+	if err != nil {
+		log.Fatal(err)
+	}
+	auto := string(autoContent)
+
+	commitFiles := []gitprovider.CommitFile{
+		{
+			Path:    &ksPath,
+			Content: &ks,
+		},
+		{
+			Path:    &autoPath,
+			Content: &auto,
+		},
+	}
+
+	orgName := os.Getenv("GITHUB_ORG_NAME")
+	repoName := os.Getenv("GITHUB_REPO_NAME")
+	githubToken := os.Getenv(github.TokenVariable)
+	client, err := github.NewClient(gitprovider.WithOAuth2Token(githubToken))
+	if err != nil {
+		log.Fatalf("error initializing github client: %s", err)
+	}
+
+	repoRef := gitprovider.OrgRepositoryRef{
+		OrganizationRef: gitprovider.OrganizationRef{
+			Organization: orgName,
+			Domain:       github.DefaultDomain,
+		},
+		RepositoryName: repoName,
+	}
+
+	var repo gitprovider.OrgRepository
+	err = retry.OnError(retry.DefaultRetry, func(err error) bool {
+		return err != nil
+	}, func() error {
+		repo, err = client.OrgRepositories().Get(context.Background(), repoRef)
+		return err
+	})
+	if err != nil {
+		log.Fatalf("error getting %s repository in org %s: %s", repoRef.RepositoryName, repoRef.Organization, err)
+	}
+
+	_, err = repo.Commits().Create(context.Background(), "main", "automation test", commitFiles)
+	if err != nil {
+		log.Fatalf("error making commit: %s", err)
+	}
+}