diff --git a/cmd/kube-apiserver/app/aggregator.go b/cmd/kube-apiserver/app/aggregator.go
index 1fb6180d606..4025281e1fc 100644
--- a/cmd/kube-apiserver/app/aggregator.go
+++ b/cmd/kube-apiserver/app/aggregator.go
@@ -37,7 +37,6 @@ import (
 	genericfeatures "k8s.io/apiserver/pkg/features"
 	genericapiserver "k8s.io/apiserver/pkg/server"
 	"k8s.io/apiserver/pkg/server/healthz"
-	genericoptions "k8s.io/apiserver/pkg/server/options"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
 	kubeexternalinformers "k8s.io/client-go/informers"
 	"k8s.io/client-go/tools/cache"
@@ -91,11 +90,16 @@ func createAggregatorConfig(
 	}
 
 	// copy the etcd options so we don't mutate originals.
+	// we assume that the etcd options have been completed already.  avoid messing with anything outside
+	// of changes to StorageConfig as that may lead to unexpected behavior when the options are applied.
 	etcdOptions := *commandOptions.Etcd
 	etcdOptions.StorageConfig.Paging = utilfeature.DefaultFeatureGate.Enabled(genericfeatures.APIListChunking)
 	etcdOptions.StorageConfig.Codec = aggregatorscheme.Codecs.LegacyCodec(v1.SchemeGroupVersion, v1beta1.SchemeGroupVersion)
 	etcdOptions.StorageConfig.EncodeVersioner = runtime.NewMultiGroupVersioner(v1.SchemeGroupVersion, schema.GroupKind{Group: v1beta1.GroupName})
-	genericConfig.RESTOptionsGetter = &genericoptions.SimpleRestOptionsFactory{Options: etcdOptions}
+	etcdOptions.SkipHealthEndpoints = true // avoid double wiring of health checks
+	if err := etcdOptions.ApplyTo(&genericConfig); err != nil {
+		return nil, err
+	}
 
 	// override MergedResourceConfig with aggregator defaults and registry
 	if err := commandOptions.APIEnablement.ApplyTo(
diff --git a/cmd/kube-apiserver/app/apiextensions.go b/cmd/kube-apiserver/app/apiextensions.go
index 24302216f37..9fb9c4776b7 100644
--- a/cmd/kube-apiserver/app/apiextensions.go
+++ b/cmd/kube-apiserver/app/apiextensions.go
@@ -29,7 +29,6 @@ import (
 	"k8s.io/apiserver/pkg/admission"
 	"k8s.io/apiserver/pkg/features"
 	genericapiserver "k8s.io/apiserver/pkg/server"
-	genericoptions "k8s.io/apiserver/pkg/server/options"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
 	"k8s.io/apiserver/pkg/util/webhook"
 	kubeexternalinformers "k8s.io/client-go/informers"
@@ -64,13 +63,18 @@ func createAPIExtensionsConfig(
 	}
 
 	// copy the etcd options so we don't mutate originals.
+	// we assume that the etcd options have been completed already.  avoid messing with anything outside
+	// of changes to StorageConfig as that may lead to unexpected behavior when the options are applied.
 	etcdOptions := *commandOptions.Etcd
 	etcdOptions.StorageConfig.Paging = utilfeature.DefaultFeatureGate.Enabled(features.APIListChunking)
 	// this is where the true decodable levels come from.
 	etcdOptions.StorageConfig.Codec = apiextensionsapiserver.Codecs.LegacyCodec(v1beta1.SchemeGroupVersion, v1.SchemeGroupVersion)
 	// prefer the more compact serialization (v1beta1) for storage until https://issue.k8s.io/82292 is resolved for objects whose v1 serialization is too big but whose v1beta1 serialization can be stored
 	etcdOptions.StorageConfig.EncodeVersioner = runtime.NewMultiGroupVersioner(v1beta1.SchemeGroupVersion, schema.GroupKind{Group: v1beta1.GroupName})
-	genericConfig.RESTOptionsGetter = &genericoptions.SimpleRestOptionsFactory{Options: etcdOptions}
+	etcdOptions.SkipHealthEndpoints = true // avoid double wiring of health checks
+	if err := etcdOptions.ApplyTo(&genericConfig); err != nil {
+		return nil, err
+	}
 
 	// override MergedResourceConfig with apiextensions defaults and registry
 	if err := commandOptions.APIEnablement.ApplyTo(
diff --git a/cmd/kube-apiserver/app/server.go b/cmd/kube-apiserver/app/server.go
index 1a3b0e9ee0e..fc36d044dbe 100644
--- a/cmd/kube-apiserver/app/server.go
+++ b/cmd/kube-apiserver/app/server.go
@@ -397,24 +397,23 @@ func buildGenericConfig(
 	kubeVersion := version.Get()
 	genericConfig.Version = &kubeVersion
 
-	storageFactoryConfig := kubeapiserver.NewStorageFactoryConfig()
-	storageFactoryConfig.APIResourceConfig = genericConfig.MergedResourceConfig
-	completedStorageFactoryConfig, err := storageFactoryConfig.Complete(s.Etcd)
-	if err != nil {
-		lastErr = err
-		return
-	}
-	storageFactory, lastErr = completedStorageFactoryConfig.New(genericConfig.DrainedNotify())
-	if lastErr != nil {
-		return
-	}
 	if genericConfig.EgressSelector != nil {
-		storageFactory.StorageConfig.Transport.EgressLookup = genericConfig.EgressSelector.Lookup
+		s.Etcd.StorageConfig.Transport.EgressLookup = genericConfig.EgressSelector.Lookup
 	}
 	if utilfeature.DefaultFeatureGate.Enabled(genericfeatures.APIServerTracing) {
-		storageFactory.StorageConfig.Transport.TracerProvider = genericConfig.TracerProvider
+		s.Etcd.StorageConfig.Transport.TracerProvider = genericConfig.TracerProvider
 	} else {
-		storageFactory.StorageConfig.Transport.TracerProvider = oteltrace.NewNoopTracerProvider()
+		s.Etcd.StorageConfig.Transport.TracerProvider = oteltrace.NewNoopTracerProvider()
+	}
+	if lastErr = s.Etcd.Complete(genericConfig.StorageObjectCountTracker, genericConfig.DrainedNotify()); lastErr != nil {
+		return
+	}
+
+	storageFactoryConfig := kubeapiserver.NewStorageFactoryConfig()
+	storageFactoryConfig.APIResourceConfig = genericConfig.MergedResourceConfig
+	storageFactory, lastErr = storageFactoryConfig.Complete(s.Etcd).New()
+	if lastErr != nil {
+		return
 	}
 	if lastErr = s.Etcd.ApplyWithStorageFactoryTo(storageFactory, genericConfig); lastErr != nil {
 		return
diff --git a/pkg/controlplane/instance_test.go b/pkg/controlplane/instance_test.go
index f677ae12cb4..691f2546153 100644
--- a/pkg/controlplane/instance_test.go
+++ b/pkg/controlplane/instance_test.go
@@ -89,6 +89,9 @@ func setUp(t *testing.T) (*etcd3testing.EtcdTestServer, Config, *assert.Assertio
 	etcdOptions := options.NewEtcdOptions(storageConfig)
 	// unit tests don't need watch cache and it leaks lots of goroutines with etcd testing functions during unit tests
 	etcdOptions.EnableWatchCache = false
+	if err := etcdOptions.Complete(config.GenericConfig.StorageObjectCountTracker, config.GenericConfig.DrainedNotify()); err != nil {
+		t.Fatal(err)
+	}
 	err := etcdOptions.ApplyWithStorageFactoryTo(storageFactory, config.GenericConfig)
 	if err != nil {
 		t.Fatal(err)
diff --git a/pkg/kubeapiserver/default_storage_factory_builder.go b/pkg/kubeapiserver/default_storage_factory_builder.go
index 1ad90354b8b..fb66d0c1f32 100644
--- a/pkg/kubeapiserver/default_storage_factory_builder.go
+++ b/pkg/kubeapiserver/default_storage_factory_builder.go
@@ -22,7 +22,6 @@ import (
 	"k8s.io/apimachinery/pkg/runtime"
 	"k8s.io/apimachinery/pkg/runtime/schema"
 	serveroptions "k8s.io/apiserver/pkg/server/options"
-	"k8s.io/apiserver/pkg/server/options/encryptionconfig"
 	"k8s.io/apiserver/pkg/server/resourceconfig"
 	serverstorage "k8s.io/apiserver/pkg/server/storage"
 	"k8s.io/apiserver/pkg/storage/storagebackend"
@@ -58,7 +57,6 @@ func DefaultWatchCacheSizes() map[schema.GroupResource]int {
 
 // NewStorageFactoryConfig returns a new StorageFactoryConfig set up with necessary resource overrides.
 func NewStorageFactoryConfig() *StorageFactoryConfig {
-
 	resources := []schema.GroupVersionResource{
 		// If a resource has to be stored in a version that is not the
 		// latest, then it can be listed here. Usually this is the case
@@ -83,23 +81,22 @@ func NewStorageFactoryConfig() *StorageFactoryConfig {
 
 // StorageFactoryConfig is a configuration for creating storage factory.
 type StorageFactoryConfig struct {
-	StorageConfig                    storagebackend.Config
-	APIResourceConfig                *serverstorage.ResourceConfig
-	DefaultResourceEncoding          *serverstorage.DefaultResourceEncodingConfig
-	DefaultStorageMediaType          string
-	Serializer                       runtime.StorageSerializer
-	ResourceEncodingOverrides        []schema.GroupVersionResource
-	EtcdServersOverrides             []string
-	EncryptionProviderConfigFilepath string
+	StorageConfig             storagebackend.Config
+	APIResourceConfig         *serverstorage.ResourceConfig
+	DefaultResourceEncoding   *serverstorage.DefaultResourceEncodingConfig
+	DefaultStorageMediaType   string
+	Serializer                runtime.StorageSerializer
+	ResourceEncodingOverrides []schema.GroupVersionResource
+	EtcdServersOverrides      []string
 }
 
 // Complete completes the StorageFactoryConfig with provided etcdOptions returning completedStorageFactoryConfig.
-func (c *StorageFactoryConfig) Complete(etcdOptions *serveroptions.EtcdOptions) (*completedStorageFactoryConfig, error) {
+// This method mutates the receiver (StorageFactoryConfig).  It must never mutate the inputs.
+func (c *StorageFactoryConfig) Complete(etcdOptions *serveroptions.EtcdOptions) *completedStorageFactoryConfig {
 	c.StorageConfig = etcdOptions.StorageConfig
 	c.DefaultStorageMediaType = etcdOptions.DefaultStorageMediaType
 	c.EtcdServersOverrides = etcdOptions.EtcdServersOverrides
-	c.EncryptionProviderConfigFilepath = etcdOptions.EncryptionProviderConfigFilepath
-	return &completedStorageFactoryConfig{c}, nil
+	return &completedStorageFactoryConfig{c}
 }
 
 // completedStorageFactoryConfig is a wrapper around StorageFactoryConfig completed with etcd options.
@@ -111,7 +108,7 @@ type completedStorageFactoryConfig struct {
 }
 
 // New returns a new storage factory created from the completed storage factory configuration.
-func (c *completedStorageFactoryConfig) New(stopCh <-chan struct{}) (*serverstorage.DefaultStorageFactory, error) {
+func (c *completedStorageFactoryConfig) New() (*serverstorage.DefaultStorageFactory, error) {
 	resourceEncodingConfig := resourceconfig.MergeResourceEncodingConfigs(c.DefaultResourceEncoding, c.ResourceEncodingOverrides)
 	storageFactory := serverstorage.NewDefaultStorageFactory(
 		c.StorageConfig,
@@ -141,14 +138,5 @@ func (c *completedStorageFactoryConfig) New(stopCh <-chan struct{}) (*serverstor
 		servers := strings.Split(tokens[1], ";")
 		storageFactory.SetEtcdLocation(groupResource, servers)
 	}
-	if len(c.EncryptionProviderConfigFilepath) != 0 {
-		transformerOverrides, err := encryptionconfig.GetTransformerOverrides(c.EncryptionProviderConfigFilepath, stopCh)
-		if err != nil {
-			return nil, err
-		}
-		for groupResource, transformer := range transformerOverrides {
-			storageFactory.SetTransformer(groupResource, transformer)
-		}
-	}
 	return storageFactory, nil
 }
diff --git a/pkg/registry/registrytest/etcd.go b/pkg/registry/registrytest/etcd.go
index e635f530a60..ba2fb1e194b 100644
--- a/pkg/registry/registrytest/etcd.go
+++ b/pkg/registry/registrytest/etcd.go
@@ -17,7 +17,6 @@ limitations under the License.
 package registrytest
 
 import (
-	"context"
 	"testing"
 
 	"k8s.io/apimachinery/pkg/runtime/schema"
@@ -36,18 +35,12 @@ func NewEtcdStorage(t *testing.T, group string) (*storagebackend.ConfigForResour
 func NewEtcdStorageForResource(t *testing.T, resource schema.GroupResource) (*storagebackend.ConfigForResource, *etcd3testing.EtcdTestServer) {
 	t.Helper()
 
-	ctx, cancel := context.WithCancel(context.Background())
-	t.Cleanup(cancel)
-
 	server, config := etcd3testing.NewUnsecuredEtcd3TestClientServer(t)
 
 	options := options.NewEtcdOptions(config)
-	completedConfig, err := kubeapiserver.NewStorageFactoryConfig().Complete(options)
-	if err != nil {
-		t.Fatal(err)
-	}
+	completedConfig := kubeapiserver.NewStorageFactoryConfig().Complete(options)
 	completedConfig.APIResourceConfig = serverstorage.NewResourceConfig()
-	factory, err := completedConfig.New(ctx.Done())
+	factory, err := completedConfig.New()
 	if err != nil {
 		t.Fatal(err)
 	}
diff --git a/staging/src/k8s.io/apiextensions-apiserver/pkg/cmd/server/testing/testserver.go b/staging/src/k8s.io/apiextensions-apiserver/pkg/cmd/server/testing/testserver.go
index af72d9ce7ed..e7ebf78beda 100644
--- a/staging/src/k8s.io/apiextensions-apiserver/pkg/cmd/server/testing/testserver.go
+++ b/staging/src/k8s.io/apiextensions-apiserver/pkg/cmd/server/testing/testserver.go
@@ -28,13 +28,13 @@ import (
 
 	"github.com/spf13/pflag"
 
+	"k8s.io/apiextensions-apiserver/pkg/apiserver"
 	"k8s.io/apiextensions-apiserver/pkg/cmd/server/options"
 	"k8s.io/apimachinery/pkg/util/wait"
 	genericapiserver "k8s.io/apiserver/pkg/server"
 	"k8s.io/apiserver/pkg/storage/storagebackend"
 	"k8s.io/client-go/kubernetes"
 	restclient "k8s.io/client-go/rest"
-
 	"k8s.io/klog/v2"
 )
 
@@ -47,10 +47,11 @@ type TestServerInstanceOptions struct {
 
 // TestServer return values supplied by kube-test-ApiServer
 type TestServer struct {
-	ClientConfig *restclient.Config                              // Rest client config
-	ServerOpts   *options.CustomResourceDefinitionsServerOptions // ServerOpts
-	TearDownFn   TearDownFunc                                    // TearDown function
-	TmpDir       string                                          // Temp Dir used, by the apiserver
+	ClientConfig    *restclient.Config                              // Rest client config
+	ServerOpts      *options.CustomResourceDefinitionsServerOptions // ServerOpts
+	TearDownFn      TearDownFunc                                    // TearDown function
+	TmpDir          string                                          // Temp Dir used, by the apiserver
+	CompletedConfig apiserver.CompletedConfig
 }
 
 // Logger allows t.Testing and b.Testing to be passed to StartTestServer and StartTestServerOrDie
@@ -144,7 +145,8 @@ func StartTestServer(t Logger, _ *TestServerInstanceOptions, customFlags []strin
 	if err != nil {
 		return result, fmt.Errorf("failed to create config from options: %v", err)
 	}
-	server, err := config.Complete().New(genericapiserver.NewEmptyDelegate())
+	completedConfig := config.Complete()
+	server, err := completedConfig.New(genericapiserver.NewEmptyDelegate())
 	if err != nil {
 		return result, fmt.Errorf("failed to create server: %v", err)
 	}
@@ -187,6 +189,7 @@ func StartTestServer(t Logger, _ *TestServerInstanceOptions, customFlags []strin
 	result.ClientConfig = server.GenericAPIServer.LoopbackClientConfig
 	result.ServerOpts = s
 	result.TearDownFn = tearDown
+	result.CompletedConfig = completedConfig
 
 	return result, nil
 }
diff --git a/staging/src/k8s.io/apiextensions-apiserver/test/integration/fixtures/server.go b/staging/src/k8s.io/apiextensions-apiserver/test/integration/fixtures/server.go
index ad6bfe0a7d8..f330e0d65e5 100644
--- a/staging/src/k8s.io/apiextensions-apiserver/test/integration/fixtures/server.go
+++ b/staging/src/k8s.io/apiextensions-apiserver/test/integration/fixtures/server.go
@@ -26,21 +26,38 @@ import (
 	"go.etcd.io/etcd/client/pkg/v3/transport"
 	clientv3 "go.etcd.io/etcd/client/v3"
 	"google.golang.org/grpc"
-	serveroptions "k8s.io/apiextensions-apiserver/pkg/cmd/server/options"
-	"k8s.io/apimachinery/pkg/runtime/schema"
 
+	"k8s.io/apiextensions-apiserver/pkg/apiserver"
 	"k8s.io/apiextensions-apiserver/pkg/client/clientset/clientset"
+	serveroptions "k8s.io/apiextensions-apiserver/pkg/cmd/server/options"
 	servertesting "k8s.io/apiextensions-apiserver/pkg/cmd/server/testing"
+	"k8s.io/apimachinery/pkg/runtime/schema"
 	"k8s.io/client-go/dynamic"
 	"k8s.io/client-go/rest"
 )
 
 // StartDefaultServer starts a test server.
 func StartDefaultServer(t servertesting.Logger, flags ...string) (func(), *rest.Config, *serveroptions.CustomResourceDefinitionsServerOptions, error) {
+	tearDownFn, s, err := startDefaultServer(t, flags...)
+	if err != nil {
+		return nil, nil, nil, err
+	}
+	return tearDownFn, s.ClientConfig, s.ServerOpts, nil
+}
+
+func StartDefaultServerWithConfigAccess(t servertesting.Logger, flags ...string) (func(), *rest.Config, apiserver.CompletedConfig, error) {
+	tearDownFn, s, err := startDefaultServer(t, flags...)
+	if err != nil {
+		return nil, nil, apiserver.CompletedConfig{}, err
+	}
+	return tearDownFn, s.ClientConfig, s.CompletedConfig, nil
+}
+
+func startDefaultServer(t servertesting.Logger, flags ...string) (func(), servertesting.TestServer, error) {
 	// create kubeconfig which will not actually be used. But authz/authn needs it to startup.
 	fakeKubeConfig, err := ioutil.TempFile("", "kubeconfig")
 	if err != nil {
-		return nil, nil, nil, err
+		return nil, servertesting.TestServer{}, err
 	}
 	fakeKubeConfig.WriteString(`
 apiVersion: v1
@@ -75,7 +92,7 @@ users:
 	), nil)
 	if err != nil {
 		os.Remove(fakeKubeConfig.Name())
-		return nil, nil, nil, err
+		return nil, servertesting.TestServer{}, err
 	}
 
 	tearDownFn := func() {
@@ -83,7 +100,7 @@ users:
 		s.TearDownFn()
 	}
 
-	return tearDownFn, s.ClientConfig, s.ServerOpts, nil
+	return tearDownFn, s, nil
 }
 
 // StartDefaultServerWithClients starts a test server and returns clients for it.
diff --git a/staging/src/k8s.io/apiextensions-apiserver/test/integration/pruning_test.go b/staging/src/k8s.io/apiextensions-apiserver/test/integration/pruning_test.go
index 2101e6cb434..eb8f38925a9 100644
--- a/staging/src/k8s.io/apiextensions-apiserver/test/integration/pruning_test.go
+++ b/staging/src/k8s.io/apiextensions-apiserver/test/integration/pruning_test.go
@@ -298,7 +298,7 @@ func TestPruningStatus(t *testing.T) {
 }
 
 func TestPruningFromStorage(t *testing.T) {
-	tearDown, config, options, err := fixtures.StartDefaultServer(t)
+	tearDown, config, completedConfig, err := fixtures.StartDefaultServerWithConfigAccess(t)
 	if err != nil {
 		t.Fatal(err)
 	}
@@ -314,11 +314,6 @@ func TestPruningFromStorage(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	serverConfig, err := options.Config()
-	if err != nil {
-		t.Fatal(err)
-	}
-
 	crd := pruningFixture.DeepCopy()
 	crd.Spec.Versions[0].Schema = &apiextensionsv1.CustomResourceValidation{}
 	if err := yaml.Unmarshal([]byte(fooSchema), &crd.Spec.Versions[0].Schema.OpenAPIV3Schema); err != nil {
@@ -330,7 +325,7 @@ func TestPruningFromStorage(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	restOptions, err := serverConfig.GenericConfig.RESTOptionsGetter.GetRESTOptions(schema.GroupResource{Group: crd.Spec.Group, Resource: crd.Spec.Names.Plural})
+	restOptions, err := completedConfig.GenericConfig.RESTOptionsGetter.GetRESTOptions(schema.GroupResource{Group: crd.Spec.Group, Resource: crd.Spec.Names.Plural})
 	if err != nil {
 		t.Fatal(err)
 	}
diff --git a/staging/src/k8s.io/apiserver/pkg/apis/config/validation/validation.go b/staging/src/k8s.io/apiserver/pkg/apis/config/validation/validation.go
index 866e6149614..fc30efa92fa 100644
--- a/staging/src/k8s.io/apiserver/pkg/apis/config/validation/validation.go
+++ b/staging/src/k8s.io/apiserver/pkg/apis/config/validation/validation.go
@@ -43,10 +43,12 @@ const (
 )
 
 var (
-	aesKeySizes = []int{16, 24, 32}
 	// See https://golang.org/pkg/crypto/aes/#NewCipher for details on supported key sizes for AES.
-	secretBoxKeySizes = []int{32}
+	aesKeySizes = []int{16, 24, 32}
+
 	// See https://godoc.org/golang.org/x/crypto/nacl/secretbox#Open for details on the supported key sizes for Secretbox.
+	secretBoxKeySizes = []int{32}
+
 	root = field.NewPath("resources")
 )
 
diff --git a/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config.go b/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config.go
index bb6c948614c..af750674200 100644
--- a/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config.go
+++ b/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config.go
@@ -94,16 +94,6 @@ func (p *kmsv2PluginProbe) toHealthzCheck(idx int) healthz.HealthChecker {
 	})
 }
 
-func GetKMSPluginHealthzCheckers(filepath string, stopCh <-chan struct{}) ([]healthz.HealthChecker, error) {
-	_, kmsHealthChecks, err := LoadEncryptionConfig(filepath, stopCh)
-	return kmsHealthChecks, err
-}
-
-func GetTransformerOverrides(filepath string, stopCh <-chan struct{}) (map[schema.GroupResource]value.Transformer, error) {
-	transformers, _, err := LoadEncryptionConfig(filepath, stopCh)
-	return transformers, err
-}
-
 func LoadEncryptionConfig(filepath string, stopCh <-chan struct{}) (map[schema.GroupResource]value.Transformer, []healthz.HealthChecker, error) {
 	config, err := loadConfig(filepath)
 	if err != nil {
@@ -159,7 +149,7 @@ func getTransformerOverridesAndKMSPluginProbes(config *apiserverconfig.Encryptio
 	for gr, transList := range resourceToPrefixTransformer {
 		gr := gr
 		transList := transList
-		transformers[gr] = value.NewMutableTransformer(value.NewPrefixTransformers(fmt.Errorf("no matching prefix found"), transList...))
+		transformers[gr] = value.NewPrefixTransformers(fmt.Errorf("no matching prefix found"), transList...)
 	}
 
 	return transformers, probes, nil
@@ -425,8 +415,8 @@ var (
 	// The factory to create kms service. This is to make writing test easier.
 	envelopeServiceFactory = envelope.NewGRPCService
 
-	// The factory to create kmsv2 service.
-	envelopeKMSv2ServiceFactory = envelopekmsv2.NewGRPCService
+	// The factory to create kmsv2 service.  Exported for integration tests.
+	EnvelopeKMSv2ServiceFactory = envelopekmsv2.NewGRPCService
 )
 
 func kmsPrefixTransformer(config *apiserverconfig.KMSConfiguration, stopCh <-chan struct{}) (value.PrefixTransformer, healthChecker, error) {
@@ -458,7 +448,7 @@ func kmsPrefixTransformer(config *apiserverconfig.KMSConfiguration, stopCh <-cha
 			return value.PrefixTransformer{}, nil, fmt.Errorf("could not configure KMSv2 plugin %q, KMSv2 feature is not enabled", kmsName)
 		}
 
-		envelopeService, err := envelopeKMSv2ServiceFactory(ctx, config.Endpoint, config.Timeout.Duration)
+		envelopeService, err := EnvelopeKMSv2ServiceFactory(ctx, config.Endpoint, config.Timeout.Duration)
 		if err != nil {
 			return value.PrefixTransformer{}, nil, fmt.Errorf("could not configure KMSv2-Plugin's probe %q, error: %v", kmsName, err)
 		}
diff --git a/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config_test.go b/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config_test.go
index edff1c2896a..15c0e93cb95 100644
--- a/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config_test.go
+++ b/staging/src/k8s.io/apiserver/pkg/server/options/encryptionconfig/config_test.go
@@ -163,12 +163,12 @@ func TestEncryptionProviderConfigCorrect(t *testing.T) {
 	defer featuregatetesting.SetFeatureGateDuringTest(t, utilfeature.DefaultFeatureGate, features.KMSv2, true)()
 	// Set factory for mock envelope service
 	factory := envelopeServiceFactory
-	factoryKMSv2 := envelopeKMSv2ServiceFactory
+	factoryKMSv2 := EnvelopeKMSv2ServiceFactory
 	envelopeServiceFactory = newMockEnvelopeService
-	envelopeKMSv2ServiceFactory = newMockEnvelopeKMSv2Service
+	EnvelopeKMSv2ServiceFactory = newMockEnvelopeKMSv2Service
 	defer func() {
 		envelopeServiceFactory = factory
-		envelopeKMSv2ServiceFactory = factoryKMSv2
+		EnvelopeKMSv2ServiceFactory = factoryKMSv2
 	}()
 
 	ctx := testContext(t)
diff --git a/staging/src/k8s.io/apiserver/pkg/server/options/etcd.go b/staging/src/k8s.io/apiserver/pkg/server/options/etcd.go
index 380d44d94bf..6a0a5891410 100644
--- a/staging/src/k8s.io/apiserver/pkg/server/options/etcd.go
+++ b/staging/src/k8s.io/apiserver/pkg/server/options/etcd.go
@@ -36,6 +36,7 @@ import (
 	"k8s.io/apiserver/pkg/storage/storagebackend"
 	storagefactory "k8s.io/apiserver/pkg/storage/storagebackend/factory"
 	"k8s.io/apiserver/pkg/storage/value"
+	flowcontrolrequest "k8s.io/apiserver/pkg/util/flowcontrol/request"
 	"k8s.io/klog/v2"
 )
 
@@ -59,6 +60,15 @@ type EtcdOptions struct {
 	DefaultWatchCacheSize int
 	// WatchCacheSizes represents override to a given resource
 	WatchCacheSizes []string
+
+	// complete guards fields that must be initialized via Complete before the Apply methods can be used.
+	complete               bool
+	transformerOverrides   map[schema.GroupResource]value.Transformer
+	kmsPluginHealthzChecks []healthz.HealthChecker
+
+	// SkipHealthEndpoints, when true, causes the Apply methods to not set up health endpoints.
+	// This allows multiple invocations of the Apply methods without duplication of said endpoints.
+	SkipHealthEndpoints bool
 }
 
 var storageTypes = sets.NewString(
@@ -190,39 +200,65 @@ func (s *EtcdOptions) AddFlags(fs *pflag.FlagSet) {
 		"The time in seconds that each lease is reused. A lower value could avoid large number of objects reusing the same lease. Notice that a too small value may cause performance problems at storage layer.")
 }
 
+// Complete must be called exactly once before using any of the Apply methods.  It is responsible for setting
+// up objects that must be created once and reused across multiple invocations such as storage transformers.
+// This method mutates the receiver (EtcdOptions).  It must never mutate the inputs.
+func (s *EtcdOptions) Complete(storageObjectCountTracker flowcontrolrequest.StorageObjectCountTracker, stopCh <-chan struct{}) error {
+	if s == nil {
+		return nil
+	}
+
+	if s.complete {
+		return fmt.Errorf("EtcdOptions.Complete called more than once")
+	}
+
+	if len(s.EncryptionProviderConfigFilepath) != 0 {
+		transformerOverrides, kmsPluginHealthzChecks, err := encryptionconfig.LoadEncryptionConfig(s.EncryptionProviderConfigFilepath, stopCh)
+		if err != nil {
+			return err
+		}
+		s.transformerOverrides = transformerOverrides
+		s.kmsPluginHealthzChecks = kmsPluginHealthzChecks
+	}
+
+	s.StorageConfig.StorageObjectCountTracker = storageObjectCountTracker
+
+	s.complete = true
+
+	return nil
+}
+
+// ApplyTo mutates the provided server.Config.  It must never mutate the receiver (EtcdOptions).
 func (s *EtcdOptions) ApplyTo(c *server.Config) error {
 	if s == nil {
 		return nil
 	}
-	if err := s.addEtcdHealthEndpoint(c); err != nil {
-		return err
+
+	return s.ApplyWithStorageFactoryTo(&SimpleStorageFactory{StorageConfig: s.StorageConfig}, c)
+}
+
+// ApplyWithStorageFactoryTo mutates the provided server.Config.  It must never mutate the receiver (EtcdOptions).
+func (s *EtcdOptions) ApplyWithStorageFactoryTo(factory serverstorage.StorageFactory, c *server.Config) error {
+	if s == nil {
+		return nil
 	}
-	transformerOverrides := make(map[schema.GroupResource]value.Transformer)
-	if len(s.EncryptionProviderConfigFilepath) > 0 {
-		var err error
-		transformerOverrides, err = encryptionconfig.GetTransformerOverrides(s.EncryptionProviderConfigFilepath, c.DrainedNotify())
-		if err != nil {
+
+	if !s.complete {
+		return fmt.Errorf("EtcdOptions.Apply called without completion")
+	}
+
+	if !s.SkipHealthEndpoints {
+		if err := s.addEtcdHealthEndpoint(c); err != nil {
 			return err
 		}
 	}
 
-	// use the StorageObjectCountTracker interface instance from server.Config
-	s.StorageConfig.StorageObjectCountTracker = c.StorageObjectCountTracker
-
-	c.RESTOptionsGetter = &SimpleRestOptionsFactory{
-		Options:              *s,
-		TransformerOverrides: transformerOverrides,
+	if len(s.transformerOverrides) > 0 {
+		factory = &transformerStorageFactory{
+			delegate:             factory,
+			transformerOverrides: s.transformerOverrides,
+		}
 	}
-	return nil
-}
-
-func (s *EtcdOptions) ApplyWithStorageFactoryTo(factory serverstorage.StorageFactory, c *server.Config) error {
-	if err := s.addEtcdHealthEndpoint(c); err != nil {
-		return err
-	}
-
-	// use the StorageObjectCountTracker interface instance from server.Config
-	s.StorageConfig.StorageObjectCountTracker = c.StorageObjectCountTracker
 
 	c.RESTOptionsGetter = &StorageFactoryRestOptionsFactory{Options: *s, StorageFactory: factory}
 	return nil
@@ -245,57 +281,11 @@ func (s *EtcdOptions) addEtcdHealthEndpoint(c *server.Config) error {
 		return readyCheck()
 	}))
 
-	if s.EncryptionProviderConfigFilepath != "" {
-		kmsPluginHealthzChecks, err := encryptionconfig.GetKMSPluginHealthzCheckers(s.EncryptionProviderConfigFilepath, c.DrainedNotify())
-		if err != nil {
-			return err
-		}
-		c.AddHealthChecks(kmsPluginHealthzChecks...)
-	}
+	c.AddHealthChecks(s.kmsPluginHealthzChecks...)
 
 	return nil
 }
 
-type SimpleRestOptionsFactory struct {
-	Options              EtcdOptions
-	TransformerOverrides map[schema.GroupResource]value.Transformer
-}
-
-func (f *SimpleRestOptionsFactory) GetRESTOptions(resource schema.GroupResource) (generic.RESTOptions, error) {
-	ret := generic.RESTOptions{
-		StorageConfig:             f.Options.StorageConfig.ForResource(resource),
-		Decorator:                 generic.UndecoratedStorage,
-		EnableGarbageCollection:   f.Options.EnableGarbageCollection,
-		DeleteCollectionWorkers:   f.Options.DeleteCollectionWorkers,
-		ResourcePrefix:            resource.Group + "/" + resource.Resource,
-		CountMetricPollPeriod:     f.Options.StorageConfig.CountMetricPollPeriod,
-		StorageObjectCountTracker: f.Options.StorageConfig.StorageObjectCountTracker,
-	}
-	if f.TransformerOverrides != nil {
-		if transformer, ok := f.TransformerOverrides[resource]; ok {
-			ret.StorageConfig.Transformer = transformer
-		}
-	}
-	if f.Options.EnableWatchCache {
-		sizes, err := ParseWatchCacheSizes(f.Options.WatchCacheSizes)
-		if err != nil {
-			return generic.RESTOptions{}, err
-		}
-		size, ok := sizes[resource]
-		if ok && size > 0 {
-			klog.Warningf("Dropping watch-cache-size for %v - watchCache size is now dynamic", resource)
-		}
-		if ok && size <= 0 {
-			klog.V(3).InfoS("Not using watch cache", "resource", resource)
-			ret.Decorator = generic.UndecoratedStorage
-		} else {
-			klog.V(3).InfoS("Using watch cache", "resource", resource)
-			ret.Decorator = genericregistry.StorageWithCacher()
-		}
-	}
-	return ret, nil
-}
-
 type StorageFactoryRestOptionsFactory struct {
 	Options        EtcdOptions
 	StorageFactory serverstorage.StorageFactory
@@ -316,6 +306,7 @@ func (f *StorageFactoryRestOptionsFactory) GetRESTOptions(resource schema.GroupR
 		CountMetricPollPeriod:     f.Options.StorageConfig.CountMetricPollPeriod,
 		StorageObjectCountTracker: f.Options.StorageConfig.StorageObjectCountTracker,
 	}
+
 	if f.Options.EnableWatchCache {
 		sizes, err := ParseWatchCacheSizes(f.Options.WatchCacheSizes)
 		if err != nil {
@@ -326,8 +317,10 @@ func (f *StorageFactoryRestOptionsFactory) GetRESTOptions(resource schema.GroupR
 			klog.Warningf("Dropping watch-cache-size for %v - watchCache size is now dynamic", resource)
 		}
 		if ok && size <= 0 {
+			klog.V(3).InfoS("Not using watch cache", "resource", resource)
 			ret.Decorator = generic.UndecoratedStorage
 		} else {
+			klog.V(3).InfoS("Using watch cache", "resource", resource)
 			ret.Decorator = genericregistry.StorageWithCacher()
 		}
 	}
@@ -369,3 +362,60 @@ func WriteWatchCacheSizes(watchCacheSizes map[schema.GroupResource]int) ([]strin
 	}
 	return cacheSizes, nil
 }
+
+var _ serverstorage.StorageFactory = &SimpleStorageFactory{}
+
+// SimpleStorageFactory provides a StorageFactory implementation that should be used when different
+// resources essentially share the same storage config (as defined by the given storagebackend.Config).
+// It assumes the resources are stored at a path that is purely based on the schema.GroupResource.
+// Users that need flexibility and per resource overrides should use DefaultStorageFactory instead.
+type SimpleStorageFactory struct {
+	StorageConfig storagebackend.Config
+}
+
+func (s *SimpleStorageFactory) NewConfig(resource schema.GroupResource) (*storagebackend.ConfigForResource, error) {
+	return s.StorageConfig.ForResource(resource), nil
+}
+
+func (s *SimpleStorageFactory) ResourcePrefix(resource schema.GroupResource) string {
+	return resource.Group + "/" + resource.Resource
+}
+
+func (s *SimpleStorageFactory) Backends() []serverstorage.Backend {
+	// nothing should ever call this method but we still provide a functional implementation
+	return serverstorage.Backends(s.StorageConfig)
+}
+
+var _ serverstorage.StorageFactory = &transformerStorageFactory{}
+
+type transformerStorageFactory struct {
+	delegate             serverstorage.StorageFactory
+	transformerOverrides map[schema.GroupResource]value.Transformer
+}
+
+func (t *transformerStorageFactory) NewConfig(resource schema.GroupResource) (*storagebackend.ConfigForResource, error) {
+	config, err := t.delegate.NewConfig(resource)
+	if err != nil {
+		return nil, err
+	}
+
+	transformer, ok := t.transformerOverrides[resource]
+	if !ok {
+		return config, nil
+	}
+
+	configCopy := *config
+	resourceConfig := configCopy.Config
+	resourceConfig.Transformer = transformer
+	configCopy.Config = resourceConfig
+
+	return &configCopy, nil
+}
+
+func (t *transformerStorageFactory) ResourcePrefix(resource schema.GroupResource) string {
+	return t.delegate.ResourcePrefix(resource)
+}
+
+func (t *transformerStorageFactory) Backends() []serverstorage.Backend {
+	return t.delegate.Backends()
+}
diff --git a/staging/src/k8s.io/apiserver/pkg/server/options/etcd_test.go b/staging/src/k8s.io/apiserver/pkg/server/options/etcd_test.go
index 0d380f0762d..6fac3d53b7c 100644
--- a/staging/src/k8s.io/apiserver/pkg/server/options/etcd_test.go
+++ b/staging/src/k8s.io/apiserver/pkg/server/options/etcd_test.go
@@ -204,6 +204,7 @@ func TestKMSHealthzEndpoint(t *testing.T) {
 		name                 string
 		encryptionConfigPath string
 		wantChecks           []string
+		skipHealth           bool
 	}{
 		{
 			name:                 "single kms-provider, expect single kms healthz check",
@@ -215,6 +216,12 @@ func TestKMSHealthzEndpoint(t *testing.T) {
 			encryptionConfigPath: "testdata/encryption-configs/multiple-kms-providers.yaml",
 			wantChecks:           []string{"etcd", "kms-provider-0", "kms-provider-1"},
 		},
+		{
+			name:                 "two kms-providers with skip, expect zero kms healthz checks",
+			encryptionConfigPath: "testdata/encryption-configs/multiple-kms-providers.yaml",
+			wantChecks:           nil,
+			skipHealth:           true,
+		},
 	}
 
 	scheme := runtime.NewScheme()
@@ -225,8 +232,12 @@ func TestKMSHealthzEndpoint(t *testing.T) {
 			serverConfig := server.NewConfig(codecs)
 			etcdOptions := &EtcdOptions{
 				EncryptionProviderConfigFilepath: tc.encryptionConfigPath,
+				SkipHealthEndpoints:              tc.skipHealth,
 			}
-			if err := etcdOptions.addEtcdHealthEndpoint(serverConfig); err != nil {
+			if err := etcdOptions.Complete(serverConfig.StorageObjectCountTracker, serverConfig.DrainedNotify()); err != nil {
+				t.Fatal(err)
+			}
+			if err := etcdOptions.ApplyTo(serverConfig); err != nil {
 				t.Fatalf("Failed to add healthz error: %v", err)
 			}
 
@@ -244,12 +255,19 @@ func TestReadinessCheck(t *testing.T) {
 		name              string
 		wantReadyzChecks  []string
 		wantHealthzChecks []string
+		skipHealth        bool
 	}{
 		{
 			name:              "Readyz should have etcd-readiness check",
 			wantReadyzChecks:  []string{"etcd", "etcd-readiness"},
 			wantHealthzChecks: []string{"etcd"},
 		},
+		{
+			name:              "skip health, Readyz should not have etcd-readiness check",
+			wantReadyzChecks:  nil,
+			wantHealthzChecks: nil,
+			skipHealth:        true,
+		},
 	}
 
 	scheme := runtime.NewScheme()
@@ -258,8 +276,11 @@ func TestReadinessCheck(t *testing.T) {
 	for _, tc := range testCases {
 		t.Run(tc.name, func(t *testing.T) {
 			serverConfig := server.NewConfig(codecs)
-			etcdOptions := &EtcdOptions{}
-			if err := etcdOptions.addEtcdHealthEndpoint(serverConfig); err != nil {
+			etcdOptions := &EtcdOptions{SkipHealthEndpoints: tc.skipHealth}
+			if err := etcdOptions.Complete(serverConfig.StorageObjectCountTracker, serverConfig.DrainedNotify()); err != nil {
+				t.Fatal(err)
+			}
+			if err := etcdOptions.ApplyTo(serverConfig); err != nil {
 				t.Fatalf("Failed to add healthz error: %v", err)
 			}
 
diff --git a/staging/src/k8s.io/apiserver/pkg/server/options/recommended.go b/staging/src/k8s.io/apiserver/pkg/server/options/recommended.go
index 5746baa02d2..4fc2d5b9905 100644
--- a/staging/src/k8s.io/apiserver/pkg/server/options/recommended.go
+++ b/staging/src/k8s.io/apiserver/pkg/server/options/recommended.go
@@ -101,6 +101,9 @@ func (o *RecommendedOptions) AddFlags(fs *pflag.FlagSet) {
 // ApplyTo adds RecommendedOptions to the server configuration.
 // pluginInitializers can be empty, it is only need for additional initializers.
 func (o *RecommendedOptions) ApplyTo(config *server.RecommendedConfig) error {
+	if err := o.Etcd.Complete(config.Config.StorageObjectCountTracker, config.Config.DrainedNotify()); err != nil {
+		return err
+	}
 	if err := o.Etcd.ApplyTo(&config.Config); err != nil {
 		return err
 	}
diff --git a/staging/src/k8s.io/apiserver/pkg/server/storage/storage_factory.go b/staging/src/k8s.io/apiserver/pkg/server/storage/storage_factory.go
index f2f69883ae0..5b1c24446c7 100644
--- a/staging/src/k8s.io/apiserver/pkg/server/storage/storage_factory.go
+++ b/staging/src/k8s.io/apiserver/pkg/server/storage/storage_factory.go
@@ -29,7 +29,6 @@ import (
 	"k8s.io/apimachinery/pkg/util/sets"
 	"k8s.io/apiserver/pkg/features"
 	"k8s.io/apiserver/pkg/storage/storagebackend"
-	"k8s.io/apiserver/pkg/storage/value"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
 )
 
@@ -112,8 +111,6 @@ type groupResourceOverrides struct {
 	// decoderDecoratorFn is optional and may wrap the provided decoders (can add new decoders). The order of
 	// returned decoders will be priority for attempt to decode.
 	decoderDecoratorFn func([]runtime.Decoder) []runtime.Decoder
-	// transformer is optional and shall encrypt that resource at rest.
-	transformer value.Transformer
 	// disablePaging will prevent paging on the provided resource.
 	disablePaging bool
 }
@@ -139,9 +136,6 @@ func (o groupResourceOverrides) Apply(config *storagebackend.Config, options *St
 	if o.decoderDecoratorFn != nil {
 		options.DecoderDecoratorFn = o.decoderDecoratorFn
 	}
-	if o.transformer != nil {
-		config.Transformer = o.transformer
-	}
 	if o.disablePaging {
 		config.Paging = false
 	}
@@ -210,12 +204,6 @@ func (s *DefaultStorageFactory) SetSerializer(groupResource schema.GroupResource
 	s.Overrides[groupResource] = overrides
 }
 
-func (s *DefaultStorageFactory) SetTransformer(groupResource schema.GroupResource, transformer value.Transformer) {
-	overrides := s.Overrides[groupResource]
-	overrides.transformer = transformer
-	s.Overrides[groupResource] = overrides
-}
-
 // AddCohabitatingResources links resources together the order of the slice matters!  its the priority order of lookup for finding a storage location
 func (s *DefaultStorageFactory) AddCohabitatingResources(groupResources ...schema.GroupResource) {
 	for _, groupResource := range groupResources {
@@ -291,25 +279,35 @@ func (s *DefaultStorageFactory) NewConfig(groupResource schema.GroupResource) (*
 // Backends returns all backends for all registered storage destinations.
 // Used for getting all instances for health validations.
 func (s *DefaultStorageFactory) Backends() []Backend {
-	servers := sets.NewString(s.StorageConfig.Transport.ServerList...)
+	return backends(s.StorageConfig, s.Overrides)
+}
 
-	for _, overrides := range s.Overrides {
+// Backends returns all backends for all registered storage destinations.
+// Used for getting all instances for health validations.
+func Backends(storageConfig storagebackend.Config) []Backend {
+	return backends(storageConfig, nil)
+}
+
+func backends(storageConfig storagebackend.Config, grOverrides map[schema.GroupResource]groupResourceOverrides) []Backend {
+	servers := sets.NewString(storageConfig.Transport.ServerList...)
+
+	for _, overrides := range grOverrides {
 		servers.Insert(overrides.etcdLocation...)
 	}
 
 	tlsConfig := &tls.Config{
 		InsecureSkipVerify: true,
 	}
-	if len(s.StorageConfig.Transport.CertFile) > 0 && len(s.StorageConfig.Transport.KeyFile) > 0 {
-		cert, err := tls.LoadX509KeyPair(s.StorageConfig.Transport.CertFile, s.StorageConfig.Transport.KeyFile)
+	if len(storageConfig.Transport.CertFile) > 0 && len(storageConfig.Transport.KeyFile) > 0 {
+		cert, err := tls.LoadX509KeyPair(storageConfig.Transport.CertFile, storageConfig.Transport.KeyFile)
 		if err != nil {
 			klog.Errorf("failed to load key pair while getting backends: %s", err)
 		} else {
 			tlsConfig.Certificates = []tls.Certificate{cert}
 		}
 	}
-	if len(s.StorageConfig.Transport.TrustedCAFile) > 0 {
-		if caCert, err := ioutil.ReadFile(s.StorageConfig.Transport.TrustedCAFile); err != nil {
+	if len(storageConfig.Transport.TrustedCAFile) > 0 {
+		if caCert, err := ioutil.ReadFile(storageConfig.Transport.TrustedCAFile); err != nil {
 			klog.Errorf("failed to read ca file while getting backends: %s", err)
 		} else {
 			caPool := x509.NewCertPool()
diff --git a/staging/src/k8s.io/apiserver/pkg/storage/storagebackend/factory/etcd3.go b/staging/src/k8s.io/apiserver/pkg/storage/storagebackend/factory/etcd3.go
index e23c360b8eb..c1785964956 100644
--- a/staging/src/k8s.io/apiserver/pkg/storage/storagebackend/factory/etcd3.go
+++ b/staging/src/k8s.io/apiserver/pkg/storage/storagebackend/factory/etcd3.go
@@ -48,7 +48,7 @@ import (
 	"k8s.io/apiserver/pkg/storage/etcd3"
 	"k8s.io/apiserver/pkg/storage/etcd3/metrics"
 	"k8s.io/apiserver/pkg/storage/storagebackend"
-	"k8s.io/apiserver/pkg/storage/value"
+	"k8s.io/apiserver/pkg/storage/value/encrypt/identity"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
 	"k8s.io/component-base/metrics/legacyregistry"
 	tracing "k8s.io/component-base/tracing"
@@ -395,7 +395,7 @@ func newETCD3Storage(c storagebackend.ConfigForResource, newFunc func() runtime.
 	}
 	transformer := c.Transformer
 	if transformer == nil {
-		transformer = value.IdentityTransformer
+		transformer = identity.NewEncryptCheckTransformer()
 	}
 	return etcd3.New(client, c.Codec, newFunc, c.Prefix, c.GroupResource, transformer, c.Paging, c.LeaseManagerConfig), destroyFunc, nil
 }
diff --git a/staging/src/k8s.io/apiserver/pkg/storage/tests/cacher_test.go b/staging/src/k8s.io/apiserver/pkg/storage/tests/cacher_test.go
index 0966d234a99..4a3b1ddaa4f 100644
--- a/staging/src/k8s.io/apiserver/pkg/storage/tests/cacher_test.go
+++ b/staging/src/k8s.io/apiserver/pkg/storage/tests/cacher_test.go
@@ -48,7 +48,7 @@ import (
 	"k8s.io/apiserver/pkg/storage/etcd3"
 	etcd3testing "k8s.io/apiserver/pkg/storage/etcd3/testing"
 	storagetesting "k8s.io/apiserver/pkg/storage/testing"
-	"k8s.io/apiserver/pkg/storage/value"
+	"k8s.io/apiserver/pkg/storage/value/encrypt/identity"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
 	featuregatetesting "k8s.io/component-base/featuregate/testing"
 	"k8s.io/utils/clock"
@@ -107,7 +107,7 @@ func newPodList() runtime.Object { return &example.PodList{} }
 
 func newEtcdTestStorage(t *testing.T, prefix string) (*etcd3testing.EtcdTestServer, storage.Interface) {
 	server, _ := etcd3testing.NewUnsecuredEtcd3TestClientServer(t)
-	storage := etcd3.New(server.V3Client, apitesting.TestCodec(codecs, examplev1.SchemeGroupVersion), newPod, prefix, schema.GroupResource{Resource: "pods"}, value.IdentityTransformer, true, etcd3.NewDefaultLeaseManagerConfig())
+	storage := etcd3.New(server.V3Client, apitesting.TestCodec(codecs, examplev1.SchemeGroupVersion), newPod, prefix, schema.GroupResource{Resource: "pods"}, identity.NewEncryptCheckTransformer(), true, etcd3.NewDefaultLeaseManagerConfig())
 	return server, storage
 }
 
diff --git a/staging/src/k8s.io/apiserver/pkg/storage/value/encrypt/identity/identity.go b/staging/src/k8s.io/apiserver/pkg/storage/value/encrypt/identity/identity.go
index 7bdd5f6823e..8d967d70681 100644
--- a/staging/src/k8s.io/apiserver/pkg/storage/value/encrypt/identity/identity.go
+++ b/staging/src/k8s.io/apiserver/pkg/storage/value/encrypt/identity/identity.go
@@ -24,6 +24,12 @@ import (
 	"k8s.io/apiserver/pkg/storage/value"
 )
 
+var (
+	transformer      = identityTransformer{}
+	encryptedPrefix  = []byte("k8s:enc:")
+	errEncryptedData = fmt.Errorf("identity transformer tried to read encrypted data")
+)
+
 // identityTransformer performs no transformation on provided data, but validates
 // that the data is not encrypted data during TransformFromStorage
 type identityTransformer struct{}
@@ -31,7 +37,7 @@ type identityTransformer struct{}
 // NewEncryptCheckTransformer returns an identityTransformer which returns an error
 // on attempts to read encrypted data
 func NewEncryptCheckTransformer() value.Transformer {
-	return identityTransformer{}
+	return transformer
 }
 
 // TransformFromStorage returns the input bytes if the data is not encrypted
@@ -39,8 +45,8 @@ func (identityTransformer) TransformFromStorage(ctx context.Context, data []byte
 	// identityTransformer has to return an error if the data is encoded using another transformer.
 	// JSON data starts with '{'. Protobuf data has a prefix 'k8s[\x00-\xFF]'.
 	// Prefix 'k8s:enc:' is reserved for encrypted data on disk.
-	if bytes.HasPrefix(data, []byte("k8s:enc:")) {
-		return []byte{}, false, fmt.Errorf("identity transformer tried to read encrypted data")
+	if bytes.HasPrefix(data, encryptedPrefix) {
+		return nil, false, errEncryptedData
 	}
 	return data, false, nil
 }
diff --git a/staging/src/k8s.io/apiserver/pkg/storage/value/transformer.go b/staging/src/k8s.io/apiserver/pkg/storage/value/transformer.go
index 3c0ca7a60da..970d8d36288 100644
--- a/staging/src/k8s.io/apiserver/pkg/storage/value/transformer.go
+++ b/staging/src/k8s.io/apiserver/pkg/storage/value/transformer.go
@@ -21,7 +21,6 @@ import (
 	"bytes"
 	"context"
 	"fmt"
-	"sync"
 	"time"
 
 	"k8s.io/apimachinery/pkg/util/errors"
@@ -51,54 +50,11 @@ type Transformer interface {
 	TransformToStorage(ctx context.Context, data []byte, dataCtx Context) (out []byte, err error)
 }
 
-type identityTransformer struct{}
-
-// IdentityTransformer performs no transformation of the provided data.
-var IdentityTransformer Transformer = identityTransformer{}
-
-func (identityTransformer) TransformFromStorage(ctx context.Context, data []byte, dataCtx Context) ([]byte, bool, error) {
-	return data, false, nil
-}
-func (identityTransformer) TransformToStorage(ctx context.Context, data []byte, dataCtx Context) ([]byte, error) {
-	return data, nil
-}
-
 // DefaultContext is a simple implementation of Context for a slice of bytes.
 type DefaultContext []byte
 
 // AuthenticatedData returns itself.
-func (c DefaultContext) AuthenticatedData() []byte { return []byte(c) }
-
-// MutableTransformer allows a transformer to be changed safely at runtime.
-type MutableTransformer struct {
-	lock        sync.RWMutex
-	transformer Transformer
-}
-
-// NewMutableTransformer creates a transformer that can be updated at any time by calling Set()
-func NewMutableTransformer(transformer Transformer) *MutableTransformer {
-	return &MutableTransformer{transformer: transformer}
-}
-
-// Set updates the nested transformer.
-func (t *MutableTransformer) Set(transformer Transformer) {
-	t.lock.Lock()
-	t.transformer = transformer
-	t.lock.Unlock()
-}
-
-func (t *MutableTransformer) TransformFromStorage(ctx context.Context, data []byte, dataCtx Context) (out []byte, stale bool, err error) {
-	t.lock.RLock()
-	transformer := t.transformer
-	t.lock.RUnlock()
-	return transformer.TransformFromStorage(ctx, data, dataCtx)
-}
-func (t *MutableTransformer) TransformToStorage(ctx context.Context, data []byte, dataCtx Context) (out []byte, err error) {
-	t.lock.RLock()
-	transformer := t.transformer
-	t.lock.RUnlock()
-	return transformer.TransformToStorage(ctx, data, dataCtx)
-}
+func (c DefaultContext) AuthenticatedData() []byte { return c }
 
 // PrefixTransformer holds a transformer interface and the prefix that the transformation is located under.
 type PrefixTransformer struct {
diff --git a/test/integration/controlplane/transformation/kmsv2_transformation_test.go b/test/integration/controlplane/transformation/kmsv2_transformation_test.go
index d8db16d705d..dfb250a938f 100644
--- a/test/integration/controlplane/transformation/kmsv2_transformation_test.go
+++ b/test/integration/controlplane/transformation/kmsv2_transformation_test.go
@@ -29,17 +29,25 @@ import (
 	"time"
 
 	"github.com/gogo/protobuf/proto"
+
+	apiextensionsclientset "k8s.io/apiextensions-apiserver/pkg/client/clientset/clientset"
+	"k8s.io/apimachinery/pkg/api/meta"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime/schema"
 	"k8s.io/apimachinery/pkg/types"
 	"k8s.io/apimachinery/pkg/util/uuid"
 	"k8s.io/apiserver/pkg/features"
+	"k8s.io/apiserver/pkg/server/options/encryptionconfig"
 	"k8s.io/apiserver/pkg/storage/value"
 	aestransformer "k8s.io/apiserver/pkg/storage/value/encrypt/aes"
+	"k8s.io/apiserver/pkg/storage/value/encrypt/envelope/kmsv2"
 	kmstypes "k8s.io/apiserver/pkg/storage/value/encrypt/envelope/kmsv2/v2alpha1"
 	kmsv2mock "k8s.io/apiserver/pkg/storage/value/encrypt/envelope/testing/v2alpha1"
 	utilfeature "k8s.io/apiserver/pkg/util/feature"
+	"k8s.io/client-go/dynamic"
 	featuregatetesting "k8s.io/component-base/featuregate/testing"
 	kmsv2api "k8s.io/kms/apis/v2alpha1"
+	"k8s.io/kubernetes/test/integration/etcd"
 )
 
 type envelopekmsv2 struct {
@@ -273,3 +281,81 @@ resources:
 	mustBeHealthy(t, "kms-provider-0", test.kubeAPIServer.ClientConfig)
 	mustBeUnHealthy(t, "kms-provider-1", test.kubeAPIServer.ClientConfig)
 }
+
+func TestKMSv2SingleService(t *testing.T) {
+	defer featuregatetesting.SetFeatureGateDuringTest(t, utilfeature.DefaultFeatureGate, features.KMSv2, true)()
+
+	var kmsv2Calls int
+	origEnvelopeKMSv2ServiceFactory := encryptionconfig.EnvelopeKMSv2ServiceFactory
+	encryptionconfig.EnvelopeKMSv2ServiceFactory = func(ctx context.Context, endpoint string, callTimeout time.Duration) (kmsv2.Service, error) {
+		kmsv2Calls++
+		return origEnvelopeKMSv2ServiceFactory(ctx, endpoint, callTimeout)
+	}
+	t.Cleanup(func() {
+		encryptionconfig.EnvelopeKMSv2ServiceFactory = origEnvelopeKMSv2ServiceFactory
+	})
+
+	// check resources provided by the three servers that we have wired together
+	// - pods and config maps from KAS
+	// - CRDs and CRs from API extensions
+	// - API services from aggregator
+	encryptionConfig := `
+kind: EncryptionConfiguration
+apiVersion: apiserver.config.k8s.io/v1
+resources:
+  - resources:
+    - pods
+    - configmaps
+    - customresourcedefinitions.apiextensions.k8s.io
+    - pandas.awesome.bears.com
+    - apiservices.apiregistration.k8s.io
+    providers:
+    - kms:
+       apiVersion: v2
+       name: kms-provider
+       cachesize: 1000
+       endpoint: unix:///@kms-provider.sock
+`
+
+	pluginMock, err := kmsv2mock.NewBase64Plugin("@kms-provider.sock")
+	if err != nil {
+		t.Fatalf("failed to create mock of KMSv2 Plugin: %v", err)
+	}
+
+	go pluginMock.Start()
+	if err := kmsv2mock.WaitForBase64PluginToBeUp(pluginMock); err != nil {
+		t.Fatalf("Failed start plugin, err: %v", err)
+	}
+	t.Cleanup(pluginMock.CleanUp)
+
+	test, err := newTransformTest(t, encryptionConfig)
+	if err != nil {
+		t.Fatalf("failed to start KUBE API Server with encryptionConfig\n %s, error: %v", encryptionConfig, err)
+	}
+	t.Cleanup(test.cleanUp)
+
+	// the storage registry for CRs is dynamic so create one to exercise the wiring
+	etcd.CreateTestCRDs(t, apiextensionsclientset.NewForConfigOrDie(test.kubeAPIServer.ClientConfig), false, etcd.GetCustomResourceDefinitionData()...)
+
+	ctx, cancel := context.WithTimeout(context.Background(), 30*time.Second)
+	t.Cleanup(cancel)
+
+	gvr := schema.GroupVersionResource{Group: "awesome.bears.com", Version: "v1", Resource: "pandas"}
+	stub := etcd.GetEtcdStorageData()[gvr].Stub
+	dynamicClient, obj, err := etcd.JSONToUnstructured(stub, "", &meta.RESTMapping{
+		Resource:         gvr,
+		GroupVersionKind: gvr.GroupVersion().WithKind("Panda"),
+		Scope:            meta.RESTScopeRoot,
+	}, dynamic.NewForConfigOrDie(test.kubeAPIServer.ClientConfig))
+	if err != nil {
+		t.Fatal(err)
+	}
+	_, err = dynamicClient.Create(ctx, obj, metav1.CreateOptions{})
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	if kmsv2Calls != 1 {
+		t.Fatalf("expected a single call to KMS v2 service factory: %v", kmsv2Calls)
+	}
+}