diff --git a/api/v1beta1/ocicluster_webhook.go b/api/v1beta1/ocicluster_webhook.go
new file mode 100644
index 000000000..45c20a19d
--- /dev/null
+++ b/api/v1beta1/ocicluster_webhook.go
@@ -0,0 +1,115 @@
+/*
+ *
+ * Copyright (c) 2022, Oracle and/or its affiliates.
+ *
+ * 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.
+ * /
+ *
+ */
+
+package v1beta1
+
+import (
+	"fmt"
+
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/util/validation/field"
+
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/webhook"
+)
+
+var clusterlogger = ctrl.Log.WithName("ocicluster-resource")
+
+var (
+	_ webhook.Validator = &OCICluster{}
+	_ webhook.Defaulter = &OCICluster{}
+)
+
+// +kubebuilder:webhook:verbs=create;update,path=/validate-infrastructure-cluster-x-k8s-io-v1beta1-ocicluster,mutating=false,failurePolicy=fail,matchPolicy=Equivalent,groups=infrastructure.cluster.x-k8s.io,resources=ociclusters,versions=v1beta1,name=validation.ocicluster.infrastructure.cluster.x-k8s.io,sideEffects=None,admissionReviewVersions=v1beta1
+// +kubebuilder:webhook:verbs=create;update,path=/mutate-infrastructure-cluster-x-k8s-io-v1beta1-ocicluster,mutating=true,failurePolicy=fail,matchPolicy=Equivalent,groups=infrastructure.cluster.x-k8s.io,resources=ociclusters,versions=v1beta1,name=default.ocicluster.infrastructure.cluster.x-k8s.io,sideEffects=None,admissionReviewVersions=v1beta1
+
+// Default implements webhook.Defaulter so a webhook will be registered for the type.
+func (c *OCICluster) Default() {}
+
+func (c *OCICluster) SetupWebhookWithManager(mgr ctrl.Manager) error {
+	clusterlogger.Info("validate create cluster", "name", c.Name)
+
+	return ctrl.NewWebhookManagedBy(mgr).
+		For(c).
+		Complete()
+}
+
+// ValidateCreate implements webhook.Validator so a webhook will be registered for the type.
+func (c *OCICluster) ValidateCreate() error {
+	clusterlogger.Info("validate update cluster", "name", c.Name)
+
+	var allErrs field.ErrorList
+
+	allErrs = append(allErrs, c.validate()...)
+
+	if len(allErrs) == 0 {
+		return nil
+	}
+
+	return apierrors.NewInvalid(c.GroupVersionKind().GroupKind(), c.Name, allErrs)
+}
+
+// ValidateDelete implements webhook.Validator so a webhook will be registered for the type.
+func (c *OCICluster) ValidateDelete() error {
+	clusterlogger.Info("validate delete cluster", "name", c.Name)
+
+	return nil
+}
+
+// ValidateUpdate implements webhook.Validator so a webhook will be registered for the type.
+func (c *OCICluster) ValidateUpdate(old runtime.Object) error {
+	clusterlogger.Info("validate update cluster", "name", c.Name)
+
+	var allErrs field.ErrorList
+
+	oldCluster, ok := old.(*OCICluster)
+	if !ok {
+		return apierrors.NewBadRequest(fmt.Sprintf("expected an OCICluster but got a %T", old))
+	}
+
+	if c.Spec.Region != oldCluster.Spec.Region {
+		allErrs = append(allErrs, field.Invalid(field.NewPath("spec", "region"), c.Spec.Region, "field is immutable"))
+	}
+
+	allErrs = append(allErrs, c.validate()...)
+
+	if len(allErrs) == 0 {
+		return nil
+	}
+
+	return apierrors.NewInvalid(c.GroupVersionKind().GroupKind(), c.Name, allErrs)
+}
+
+func (c *OCICluster) validate() field.ErrorList {
+	var allErrs field.ErrorList
+
+	// simple validity test for compartment
+	if !validOcid(c.Spec.CompartmentId) {
+		allErrs = append(
+			allErrs,
+			field.Invalid(field.NewPath("spec", "compartmentId"), c.Spec.CompartmentId, "field is invalid"))
+	}
+
+	if len(allErrs) == 0 {
+		return nil
+	}
+
+	return allErrs
+}
diff --git a/api/v1beta1/ocicluster_webhook_test.go b/api/v1beta1/ocicluster_webhook_test.go
new file mode 100644
index 000000000..a955b6c02
--- /dev/null
+++ b/api/v1beta1/ocicluster_webhook_test.go
@@ -0,0 +1,124 @@
+/*
+ *
+ * Copyright (c) 2022, Oracle and/or its affiliates.
+ *
+ * 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.
+ * /
+ *
+ */
+
+package v1beta1
+
+import (
+	"testing"
+
+	"github.com/onsi/gomega"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+)
+
+func TestOCICluster_ValidateCreate(t *testing.T) {
+
+	tests := []struct {
+		name      string
+		c         *OCICluster
+		expectErr bool
+	}{
+		{
+			name: "shouldn't allow bad ImageId",
+			c: &OCICluster{
+				ObjectMeta: metav1.ObjectMeta{},
+				Spec: OCIClusterSpec{
+					CompartmentId: "badocid",
+				},
+			},
+			expectErr: true,
+		},
+		{
+			name: "should succeed",
+			c: &OCICluster{
+				ObjectMeta: metav1.ObjectMeta{},
+				Spec: OCIClusterSpec{
+					CompartmentId: "ocid",
+				},
+			},
+			expectErr: false,
+		},
+	}
+	for _, test := range tests {
+		t.Run(test.name, func(t *testing.T) {
+			g := gomega.NewWithT(t)
+
+			if test.expectErr {
+				g.Expect(test.c.ValidateCreate()).NotTo(gomega.Succeed())
+			} else {
+				g.Expect(test.c.ValidateCreate()).To(gomega.Succeed())
+			}
+		})
+	}
+}
+
+func TestOCICluster_ValidateUpdate(t *testing.T) {
+	tests := []struct {
+		name      string
+		c         *OCICluster
+		old       *OCICluster
+		expectErr bool
+	}{
+		{
+			name: "shouldn't region change",
+			c: &OCICluster{
+				ObjectMeta: metav1.ObjectMeta{},
+				Spec: OCIClusterSpec{
+					Region: "new-region",
+				},
+			},
+			old: &OCICluster{
+				ObjectMeta: metav1.ObjectMeta{},
+				Spec: OCIClusterSpec{
+					Region: "old-region",
+				},
+			},
+			expectErr: true,
+		},
+		{
+			name: "should succeed",
+			c: &OCICluster{
+				ObjectMeta: metav1.ObjectMeta{},
+				Spec: OCIClusterSpec{
+					CompartmentId: "ocid",
+					Region:        "old-region",
+				},
+			},
+			old: &OCICluster{
+				ObjectMeta: metav1.ObjectMeta{},
+				Spec: OCIClusterSpec{
+					Region: "old-region",
+				},
+			},
+			expectErr: false,
+		},
+	}
+
+	for _, test := range tests {
+		t.Run(test.name, func(t *testing.T) {
+			g := gomega.NewWithT(t)
+
+			if test.expectErr {
+				g.Expect(test.c.ValidateUpdate(test.old)).NotTo(gomega.Succeed())
+			} else {
+				g.Expect(test.c.ValidateUpdate(test.old)).To(gomega.Succeed())
+			}
+		})
+	}
+
+}
diff --git a/api/v1beta1/ocimachinetemplate_webhook.go b/api/v1beta1/ocimachinetemplate_webhook.go
new file mode 100644
index 000000000..9a400c040
--- /dev/null
+++ b/api/v1beta1/ocimachinetemplate_webhook.go
@@ -0,0 +1,113 @@
+/*
+ *
+ * Copyright (c) 2022, Oracle and/or its affiliates.
+ *
+ * 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.
+ * /
+ *
+ */
+
+package v1beta1
+
+import (
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/util/validation/field"
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/webhook"
+)
+
+var (
+	_ webhook.Validator = &OCIMachineTemplate{}
+	_ webhook.Defaulter = &OCIMachineTemplate{}
+)
+
+// +kubebuilder:webhook:verbs=create;update,path=/validate-infrastructure-cluster-x-k8s-io-v1beta1-ocimachinetemplate,mutating=false,failurePolicy=fail,matchPolicy=Equivalent,groups=infrastructure.cluster.x-k8s.io,resources=ocimachinetemplates,versions=v1beta1,name=validation.ocimachinetemplate.infrastructure.cluster.x-k8s.io,sideEffects=None,admissionReviewVersions=v1beta1
+// +kubebuilder:webhook:verbs=create;update,path=/mutate-infrastructure-cluster-x-k8s-io-v1beta1-ocimachinetemplate,mutating=true,failurePolicy=fail,matchPolicy=Equivalent,groups=infrastructure.cluster.x-k8s.io,resources=ocimachinetemplates,versions=v1beta1,name=default.ocimachinetemplate.infrastructure.cluster.x-k8s.io,sideEffects=None,admissionReviewVersions=v1beta1
+
+// Default implements webhook.Defaulter so a webhook will be registered for the type.
+func (m *OCIMachineTemplate) Default() {}
+
+func (m *OCIMachineTemplate) SetupWebhookWithManager(mgr ctrl.Manager) error {
+	return ctrl.NewWebhookManagedBy(mgr).
+		For(m).
+		Complete()
+}
+
+// ValidateCreate implements webhook.Validator so a webhook will be registered for the type.
+func (m *OCIMachineTemplate) ValidateCreate() error {
+	clusterlogger.Info("validate create machinetemplate", "name", m.Name)
+
+	var allErrs field.ErrorList
+
+	allErrs = append(allErrs, m.validate()...)
+
+	if len(allErrs) == 0 {
+		return nil
+	}
+
+	return apierrors.NewInvalid(m.GroupVersionKind().GroupKind(), m.Name, allErrs)
+}
+
+// ValidateDelete implements webhook.Validator so a webhook will be registered for the type.
+func (m *OCIMachineTemplate) ValidateDelete() error {
+	clusterlogger.Info("validate delete machinetemplate", "name", m.Name)
+
+	return nil
+}
+
+// ValidateUpdate implements webhook.Validator so a webhook will be registered for the type.
+func (m *OCIMachineTemplate) ValidateUpdate(old runtime.Object) error {
+	clusterlogger.Info("validate update machinetemplate", "name", m.Name)
+
+	var allErrs field.ErrorList
+
+	allErrs = append(allErrs, m.validate()...)
+
+	if len(allErrs) == 0 {
+		return nil
+	}
+
+	return apierrors.NewInvalid(m.GroupVersionKind().GroupKind(), m.Name, allErrs)
+}
+
+func (m *OCIMachineTemplate) validate() field.ErrorList {
+	var allErrs field.ErrorList
+
+	if !validOcid(m.Spec.Template.Spec.ImageId) {
+		allErrs = append(
+			allErrs,
+			field.Invalid(
+				field.NewPath("Spec", "Template", "Spec", "imageId"),
+				m.Spec.Template.Spec.ImageId,
+				"field is invalid"),
+		)
+	}
+
+	// simple validity test for compartment
+	if len(m.Spec.Template.Spec.CompartmentId) > 0 && !validOcid(m.Spec.Template.Spec.CompartmentId) {
+		allErrs = append(
+			allErrs,
+			field.Invalid(
+				field.NewPath("Spec", "Template", "Spec", "compartmentId"),
+				m.Spec.Template.Spec.CompartmentId,
+				"field is invalid"),
+		)
+	}
+
+	if len(allErrs) == 0 {
+		return nil
+	}
+
+	return allErrs
+}
diff --git a/api/v1beta1/ocimachinetemplate_webhook_test.go b/api/v1beta1/ocimachinetemplate_webhook_test.go
new file mode 100644
index 000000000..23da2913b
--- /dev/null
+++ b/api/v1beta1/ocimachinetemplate_webhook_test.go
@@ -0,0 +1,105 @@
+/*
+ *
+ * Copyright (c) 2022, Oracle and/or its affiliates.
+ *
+ * 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.
+ * /
+ *
+ */
+
+package v1beta1
+
+import (
+	"testing"
+
+	"github.com/onsi/gomega"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+)
+
+var tests = []struct {
+	name          string
+	inputTemplate *OCIMachineTemplate
+	expectErr     bool
+}{
+	{
+		name: "shouldn't allow bad ImageId",
+		inputTemplate: &OCIMachineTemplate{
+			ObjectMeta: metav1.ObjectMeta{},
+			Spec: OCIMachineTemplateSpec{
+				Template: OCIMachineTemplateResource{
+					Spec: OCIMachineSpec{
+						ImageId: "badocid",
+					},
+				},
+			},
+		},
+		expectErr: true,
+	},
+	{
+		name: "shouldn't allow bad CompartmentId",
+		inputTemplate: &OCIMachineTemplate{
+			ObjectMeta: metav1.ObjectMeta{},
+			Spec: OCIMachineTemplateSpec{
+				Template: OCIMachineTemplateResource{
+					Spec: OCIMachineSpec{
+						CompartmentId: "badocid",
+					},
+				},
+			},
+		},
+		expectErr: true,
+	},
+	{
+		name: "should succeed",
+		inputTemplate: &OCIMachineTemplate{
+			ObjectMeta: metav1.ObjectMeta{},
+			Spec: OCIMachineTemplateSpec{
+				Template: OCIMachineTemplateResource{
+					Spec: OCIMachineSpec{
+						ImageId:       "ocid",
+						CompartmentId: "ocid",
+					},
+				},
+			},
+		},
+		expectErr: false,
+	},
+}
+
+func TestOCIMachineTemplate_ValidateCreate(t *testing.T) {
+	for _, test := range tests {
+		t.Run(test.name, func(t *testing.T) {
+			g := gomega.NewWithT(t)
+
+			if test.expectErr {
+				g.Expect(test.inputTemplate.ValidateCreate()).NotTo(gomega.Succeed())
+			} else {
+				g.Expect(test.inputTemplate.ValidateCreate()).To(gomega.Succeed())
+			}
+		})
+	}
+}
+
+func TestOCIMachineTemplate_ValidateUpdate(t *testing.T) {
+	for _, test := range tests {
+		t.Run(test.name, func(t *testing.T) {
+			g := gomega.NewWithT(t)
+
+			if test.expectErr {
+				g.Expect(test.inputTemplate.ValidateUpdate(nil)).NotTo(gomega.Succeed())
+			} else {
+				g.Expect(test.inputTemplate.ValidateUpdate(nil)).To(gomega.Succeed())
+			}
+		})
+	}
+}
diff --git a/api/v1beta1/webhooks.go b/api/v1beta1/webhooks.go
new file mode 100644
index 000000000..afc0702c8
--- /dev/null
+++ b/api/v1beta1/webhooks.go
@@ -0,0 +1,29 @@
+/*
+ *
+ * Copyright (c) 2022, Oracle and/or its affiliates.
+ *
+ * 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.
+ * /
+ *
+ */
+
+package v1beta1
+
+func validOcid(ocid string) bool {
+
+	if len(ocid) >= 4 && ocid[:4] == "ocid" {
+		return true
+	}
+
+	return false
+}
diff --git a/api/v1beta1/zz_generated.deepcopy.go b/api/v1beta1/zz_generated.deepcopy.go
index f9cdf9ea6..5afe11ab2 100644
--- a/api/v1beta1/zz_generated.deepcopy.go
+++ b/api/v1beta1/zz_generated.deepcopy.go
@@ -2,7 +2,7 @@
 // +build !ignore_autogenerated
 
 /*
-Copyright (c) 2022 Oracle and/or its affiliates.
+Copyright (c) 2022, Oracle and/or its affiliates.
 
 Licensed under the Apache License, Version 2.0 (the "License");
 you may not use this file except in compliance with the License.
@@ -22,7 +22,7 @@ limitations under the License.
 package v1beta1
 
 import (
-	runtime "k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/apimachinery/pkg/runtime"
 	apiv1beta1 "sigs.k8s.io/cluster-api/api/v1beta1"
 	"sigs.k8s.io/cluster-api/errors"
 )
diff --git a/config/certmanager/certificate.yaml b/config/certmanager/certificate.yaml
new file mode 100644
index 000000000..476be88c1
--- /dev/null
+++ b/config/certmanager/certificate.yaml
@@ -0,0 +1,24 @@
+# The following manifests contain a self-signed issuer CR and a certificate CR.
+# More document can be found at https://docs.cert-manager.io
+apiVersion: cert-manager.io/v1
+kind: Issuer
+metadata:
+  name: selfsigned-issuer
+  namespace: system
+spec:
+  selfSigned: {}
+---
+apiVersion: cert-manager.io/v1
+kind: Certificate
+metadata:
+  name: serving-cert  # this name should match the one appeared in kustomizeconfig.yaml
+  namespace: system
+spec:
+  # $(SERVICE_NAME) and $(SERVICE_NAMESPACE) will be substituted by kustomize
+  dnsNames:
+    - $(SERVICE_NAME).$(SERVICE_NAMESPACE).svc
+    - $(SERVICE_NAME).$(SERVICE_NAMESPACE).svc.cluster.local
+  issuerRef:
+    kind: Issuer
+    name: selfsigned-issuer
+  secretName: $(SERVICE_NAME)-cert # this secret will not be prefixed, since it's not managed by kustomize
\ No newline at end of file
diff --git a/config/certmanager/kustomization.yaml b/config/certmanager/kustomization.yaml
new file mode 100644
index 000000000..48e61b9c9
--- /dev/null
+++ b/config/certmanager/kustomization.yaml
@@ -0,0 +1,7 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+resources:
+  - certificate.yaml
+
+configurations:
+  - kustomizeconfig.yaml
\ No newline at end of file
diff --git a/config/certmanager/kustomizeconfig.yaml b/config/certmanager/kustomizeconfig.yaml
new file mode 100644
index 000000000..cf148912c
--- /dev/null
+++ b/config/certmanager/kustomizeconfig.yaml
@@ -0,0 +1,19 @@
+# This configuration is for teaching kustomize how to update name ref and var substitution
+nameReference:
+  - kind: Issuer
+    group: cert-manager.io
+    fieldSpecs:
+      - kind: Certificate
+        group: cert-manager.io
+        path: spec/issuerRef/name
+
+varReference:
+  - kind: Certificate
+    group: cert-manager.io
+    path: spec/commonName
+  - kind: Certificate
+    group: cert-manager.io
+    path: spec/dnsNames
+  - kind: Certificate
+    group: cert-manager.io
+    path: spec/secretName
\ No newline at end of file
diff --git a/config/crd/kustomization.yaml b/config/crd/kustomization.yaml
index 5131ef34e..698803c3c 100644
--- a/config/crd/kustomization.yaml
+++ b/config/crd/kustomization.yaml
@@ -15,15 +15,15 @@ resources:
 patchesStrategicMerge:
 # [WEBHOOK] To enable webhook, uncomment all the sections with [WEBHOOK] prefix.
 # patches here are for enabling the conversion webhook for each CRD
-#- patches/webhook_in_ociclusters.yaml
-#- patches/webhook_in_ocimachines.yaml
-#+kubebuilder:scaffold:crdkustomizewebhookpatch
+- patches/webhook_in_ociclusters.yaml
+- patches/webhook_in_ocimachines.yaml
+# +kubebuilder:scaffold:crdkustomizewebhookpatch
 
 # [CERTMANAGER] To enable webhook, uncomment all the sections with [CERTMANAGER] prefix.
 # patches here are for enabling the CA injection for each CRD
-#- patches/cainjection_in_ociclusters.yaml
-#- patches/cainjection_in_ocimachines.yaml
-#+kubebuilder:scaffold:crdkustomizecainjectionpatch
+- patches/cainjection_in_ociclusters.yaml
+- patches/cainjection_in_ocimachines.yaml
+# +kubebuilder:scaffold:crdkustomizecainjectionpatch
 
 # the following config is for teaching kustomize how to do kustomization for CRDs.
 configurations:
diff --git a/config/crd/patches/webhook_in_ociclusters.yaml b/config/crd/patches/webhook_in_ociclusters.yaml
index 713171771..c52d5b29b 100644
--- a/config/crd/patches/webhook_in_ociclusters.yaml
+++ b/config/crd/patches/webhook_in_ociclusters.yaml
@@ -14,3 +14,4 @@ spec:
           path: /convert
       conversionReviewVersions:
       - v1
+      - v1beta1
diff --git a/config/crd/patches/webhook_in_ocimachines.yaml b/config/crd/patches/webhook_in_ocimachines.yaml
index 0767de44a..479b8cde3 100644
--- a/config/crd/patches/webhook_in_ocimachines.yaml
+++ b/config/crd/patches/webhook_in_ocimachines.yaml
@@ -14,3 +14,4 @@ spec:
           path: /convert
       conversionReviewVersions:
       - v1
+      - v1beta1
diff --git a/config/default/kustomization.yaml b/config/default/kustomization.yaml
index 3e3be1a73..979bb0a4a 100644
--- a/config/default/kustomization.yaml
+++ b/config/default/kustomization.yaml
@@ -21,9 +21,9 @@ bases:
 - ../manager
 # [WEBHOOK] To enable webhook, uncomment all the sections with [WEBHOOK] prefix including the one in
 # crd/kustomization.yaml
-#- ../webhook
+- ../webhook
 # [CERTMANAGER] To enable cert-manager, uncomment all sections with 'CERTMANAGER'. 'WEBHOOK' components are required.
-#- ../certmanager
+- ../certmanager
 # [PROMETHEUS] To enable prometheus monitor, uncomment all sections with 'PROMETHEUS'.
 #- ../prometheus
 
@@ -41,39 +41,42 @@ patchesStrategicMerge:
 
 # [WEBHOOK] To enable webhook, uncomment all the sections with [WEBHOOK] prefix including the one in
 # crd/kustomization.yaml
-#- manager_webhook_patch.yaml
+- manager_webhook_patch.yaml
 
 # [CERTMANAGER] To enable cert-manager, uncomment all sections with 'CERTMANAGER'.
 # Uncomment 'CERTMANAGER' sections in crd/kustomization.yaml to enable the CA injection in the admission webhooks.
 # 'CERTMANAGER' needs to be enabled to use ca injection
-#- webhookcainjection_patch.yaml
+- webhookcainjection_patch.yaml
 
 # the following config is for teaching kustomize how to do var substitution
 vars:
 # [CERTMANAGER] To enable cert-manager, uncomment all sections with 'CERTMANAGER' prefix.
-#- name: CERTIFICATE_NAMESPACE # namespace of the certificate CR
-#  objref:
-#    kind: Certificate
-#    group: cert-manager.io
-#    version: v1
-#    name: serving-cert # this name should match the one in certificate.yaml
-#  fieldref:
-#    fieldpath: metadata.namespace
-#- name: CERTIFICATE_NAME
-#  objref:
-#    kind: Certificate
-#    group: cert-manager.io
-#    version: v1
-#    name: serving-cert # this name should match the one in certificate.yaml
-#- name: SERVICE_NAMESPACE # namespace of the service
-#  objref:
-#    kind: Service
-#    version: v1
-#    name: webhook-service
-#  fieldref:
-#    fieldpath: metadata.namespace
-#- name: SERVICE_NAME
-#  objref:
-#    kind: Service
-#    version: v1
-#    name: webhook-service
+- name: CERTIFICATE_NAMESPACE # namespace of the certificate CR
+  objref:
+    kind: Certificate
+    group: cert-manager.io
+    version: v1
+    name: serving-cert # this name should match the one in certificate.yaml
+  fieldref:
+    fieldpath: metadata.namespace
+- name: CERTIFICATE_NAME
+  objref:
+    kind: Certificate
+    group: cert-manager.io
+    version: v1
+    name: serving-cert # this name should match the one in certificate.yaml
+- name: SERVICE_NAMESPACE # namespace of the service
+  objref:
+    kind: Service
+    version: v1
+    name: webhook-service
+  fieldref:
+    fieldpath: metadata.namespace
+- name: SERVICE_NAME
+  objref:
+    kind: Service
+    version: v1
+    name: webhook-service
+
+configurations:
+  - kustomizeconfig.yaml
\ No newline at end of file
diff --git a/config/default/kustomizeconfig.yaml b/config/default/kustomizeconfig.yaml
new file mode 100644
index 000000000..2e04a4f01
--- /dev/null
+++ b/config/default/kustomizeconfig.yaml
@@ -0,0 +1,4 @@
+# This configuration is for teaching kustomize how to update name ref and var substitution
+varReference:
+  - kind: Deployment
+    path: spec/template/spec/volumes/secret/secretName
\ No newline at end of file
diff --git a/config/default/manager_webhook_patch.yaml b/config/default/manager_webhook_patch.yaml
new file mode 100644
index 000000000..e116610fa
--- /dev/null
+++ b/config/default/manager_webhook_patch.yaml
@@ -0,0 +1,23 @@
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  name: controller-manager
+  namespace: system
+spec:
+  template:
+    spec:
+      containers:
+        - name: manager
+          ports:
+            - containerPort: 9443
+              name: webhook-server
+              protocol: TCP
+          volumeMounts:
+            - mountPath: /tmp/k8s-webhook-server/serving-certs
+              name: cert
+              readOnly: true
+      volumes:
+      - name: cert
+        secret:
+          defaultMode: 420
+          secretName: $(SERVICE_NAME)-cert
\ No newline at end of file
diff --git a/config/default/webhookcainjection_patch.yaml b/config/default/webhookcainjection_patch.yaml
new file mode 100644
index 000000000..02ab515d4
--- /dev/null
+++ b/config/default/webhookcainjection_patch.yaml
@@ -0,0 +1,15 @@
+# This patch add annotation to admission webhook config and
+# the variables $(CERTIFICATE_NAMESPACE) and $(CERTIFICATE_NAME) will be substituted by kustomize.
+apiVersion: admissionregistration.k8s.io/v1
+kind: MutatingWebhookConfiguration
+metadata:
+  name: mutating-webhook-configuration
+  annotations:
+    cert-manager.io/inject-ca-from: $(CERTIFICATE_NAMESPACE)/$(CERTIFICATE_NAME)
+---
+apiVersion: admissionregistration.k8s.io/v1
+kind: ValidatingWebhookConfiguration
+metadata:
+  name: validating-webhook-configuration
+  annotations:
+    cert-manager.io/inject-ca-from: $(CERTIFICATE_NAMESPACE)/$(CERTIFICATE_NAME)
diff --git a/config/webhook/kustomization.yaml b/config/webhook/kustomization.yaml
new file mode 100644
index 000000000..fbd74f349
--- /dev/null
+++ b/config/webhook/kustomization.yaml
@@ -0,0 +1,6 @@
+resources:
+  - manifests.yaml
+  - service.yaml
+
+configurations:
+  - kustomizeconfig.yaml
\ No newline at end of file
diff --git a/config/webhook/kustomizeconfig.yaml b/config/webhook/kustomizeconfig.yaml
new file mode 100644
index 000000000..15185025d
--- /dev/null
+++ b/config/webhook/kustomizeconfig.yaml
@@ -0,0 +1,25 @@
+# the following config is for teaching kustomize where to look at when substituting vars.
+# It requires kustomize v2.1.0 or newer to work properly.
+nameReference:
+  - kind: Service
+    version: v1
+    fieldSpecs:
+      - kind: MutatingWebhookConfiguration
+        group: admissionregistration.k8s.io
+        path: webhooks/clientConfig/service/name
+      - kind: ValidatingWebhookConfiguration
+        group: admissionregistration.k8s.io
+        path: webhooks/clientConfig/service/name
+
+namespace:
+  - kind: MutatingWebhookConfiguration
+    group: admissionregistration.k8s.io
+    path: webhooks/clientConfig/service/namespace
+    create: true
+  - kind: ValidatingWebhookConfiguration
+    group: admissionregistration.k8s.io
+    path: webhooks/clientConfig/service/namespace
+    create: true
+
+varReference:
+  - path: metadata/annotations
\ No newline at end of file
diff --git a/config/webhook/manifests.yaml b/config/webhook/manifests.yaml
new file mode 100644
index 000000000..95b140c6f
--- /dev/null
+++ b/config/webhook/manifests.yaml
@@ -0,0 +1,100 @@
+
+---
+apiVersion: admissionregistration.k8s.io/v1
+kind: MutatingWebhookConfiguration
+metadata:
+  creationTimestamp: null
+  name: mutating-webhook-configuration
+webhooks:
+- admissionReviewVersions:
+  - v1beta1
+  clientConfig:
+    service:
+      name: webhook-service
+      namespace: system
+      path: /mutate-infrastructure-cluster-x-k8s-io-v1beta1-ocicluster
+  failurePolicy: Fail
+  matchPolicy: Equivalent
+  name: default.ocicluster.infrastructure.cluster.x-k8s.io
+  rules:
+  - apiGroups:
+    - infrastructure.cluster.x-k8s.io
+    apiVersions:
+    - v1beta1
+    operations:
+    - CREATE
+    - UPDATE
+    resources:
+    - ociclusters
+  sideEffects: None
+- admissionReviewVersions:
+  - v1beta1
+  clientConfig:
+    service:
+      name: webhook-service
+      namespace: system
+      path: /mutate-infrastructure-cluster-x-k8s-io-v1beta1-ocimachinetemplate
+  failurePolicy: Fail
+  matchPolicy: Equivalent
+  name: default.ocimachinetemplate.infrastructure.cluster.x-k8s.io
+  rules:
+  - apiGroups:
+    - infrastructure.cluster.x-k8s.io
+    apiVersions:
+    - v1beta1
+    operations:
+    - CREATE
+    - UPDATE
+    resources:
+    - ocimachinetemplates
+  sideEffects: None
+
+---
+apiVersion: admissionregistration.k8s.io/v1
+kind: ValidatingWebhookConfiguration
+metadata:
+  creationTimestamp: null
+  name: validating-webhook-configuration
+webhooks:
+- admissionReviewVersions:
+  - v1beta1
+  clientConfig:
+    service:
+      name: webhook-service
+      namespace: system
+      path: /validate-infrastructure-cluster-x-k8s-io-v1beta1-ocicluster
+  failurePolicy: Fail
+  matchPolicy: Equivalent
+  name: validation.ocicluster.infrastructure.cluster.x-k8s.io
+  rules:
+  - apiGroups:
+    - infrastructure.cluster.x-k8s.io
+    apiVersions:
+    - v1beta1
+    operations:
+    - CREATE
+    - UPDATE
+    resources:
+    - ociclusters
+  sideEffects: None
+- admissionReviewVersions:
+  - v1beta1
+  clientConfig:
+    service:
+      name: webhook-service
+      namespace: system
+      path: /validate-infrastructure-cluster-x-k8s-io-v1beta1-ocimachinetemplate
+  failurePolicy: Fail
+  matchPolicy: Equivalent
+  name: validation.ocimachinetemplate.infrastructure.cluster.x-k8s.io
+  rules:
+  - apiGroups:
+    - infrastructure.cluster.x-k8s.io
+    apiVersions:
+    - v1beta1
+    operations:
+    - CREATE
+    - UPDATE
+    resources:
+    - ocimachinetemplates
+  sideEffects: None
diff --git a/config/webhook/service.yaml b/config/webhook/service.yaml
new file mode 100644
index 000000000..9290b06f9
--- /dev/null
+++ b/config/webhook/service.yaml
@@ -0,0 +1,9 @@
+apiVersion: v1
+kind: Service
+metadata:
+  name: webhook-service
+  namespace: system
+spec:
+  ports:
+    - port: 443
+      targetPort: webhook-server
\ No newline at end of file
diff --git a/hack/boilerplate.go.txt b/hack/boilerplate.go.txt
index d094e7aca..8e805e6d7 100644
--- a/hack/boilerplate.go.txt
+++ b/hack/boilerplate.go.txt
@@ -1,5 +1,5 @@
 /*
-Copyright (c) 2022 Oracle and/or its affiliates.
+Copyright (c) 2022, Oracle and/or its affiliates.
 
 Licensed under the Apache License, Version 2.0 (the "License");
 you may not use this file except in compliance with the License.
diff --git a/main.go b/main.go
index a6f347dbb..b7272d96f 100644
--- a/main.go
+++ b/main.go
@@ -39,8 +39,10 @@ import (
 )
 
 var (
-	scheme   = runtime.NewScheme()
-	setupLog = ctrl.Log.WithName("setup")
+	scheme         = runtime.NewScheme()
+	setupLog       = ctrl.Log.WithName("setup")
+	webhookPort    int
+	webhookCertDir string
 )
 
 const (
@@ -58,7 +60,7 @@ func main() {
 	var metricsAddr string
 	var enableLeaderElection bool
 	var probeAddr string
-	var webhookPort int
+	//var webhookPort int
 
 	flag.StringVar(&metricsAddr, "metrics-bind-address", ":8080", "The address the metric endpoint binds to.")
 	flag.StringVar(&probeAddr, "health-probe-bind-address", ":8081", "The address the probe endpoint binds to.")
@@ -70,6 +72,8 @@ func main() {
 		9443,
 		"Webhook Server port.",
 	)
+	flag.StringVar(&webhookCertDir, "webhook-cert-dir", "/tmp/k8s-webhook-server/serving-certs/",
+		"Webhook cert dir, only used when webhook-port is specified.")
 
 	opts := zap.Options{
 		Development: true,
@@ -86,6 +90,7 @@ func main() {
 		HealthProbeBindAddress: probeAddr,
 		LeaderElection:         enableLeaderElection,
 		LeaderElectionID:       "controller-leader-elect-capoci",
+		CertDir:                webhookCertDir,
 	})
 	if err != nil {
 		setupLog.Error(err, "unable to start manager")
@@ -151,6 +156,17 @@ func main() {
 		setupLog.Error(err, "unable to create controller", "controller", scope.OCIMachineKind)
 		os.Exit(1)
 	}
+
+	if err = (&infrastructurev1beta1.OCICluster{}).SetupWebhookWithManager(mgr); err != nil {
+		setupLog.Error(err, "unable to create webhook", "webhook", "OCICluster")
+		os.Exit(1)
+	}
+
+	if err = (&infrastructurev1beta1.OCIMachineTemplate{}).SetupWebhookWithManager(mgr); err != nil {
+		setupLog.Error(err, "unable to create webhook", "webhook", "OCIMachineTemplate")
+		os.Exit(1)
+	}
+
 	//+kubebuilder:scaffold:builder
 
 	if err := mgr.AddHealthzCheck("healthz", healthz.Ping); err != nil {