diff --git a/internal/controllers/machinedeployment/machinedeployment_controller.go b/internal/controllers/machinedeployment/machinedeployment_controller.go
index 41184e4b69aa..8b724b923f20 100644
--- a/internal/controllers/machinedeployment/machinedeployment_controller.go
+++ b/internal/controllers/machinedeployment/machinedeployment_controller.go
@@ -513,6 +513,12 @@ func reconcileExternalTemplateReference(ctx context.Context, c client.Client, cl
 		return errors.New(err.Error())
 	}
 
+	// Ensure the ref namespace is populated for objects not yet defaulted by webhook
+	if ref.Namespace == "" {
+		ref = ref.DeepCopy()
+		ref.Namespace = cluster.Namespace
+	}
+
 	obj, err := external.Get(ctx, c, ref)
 	if err != nil {
 		return err
diff --git a/internal/controllers/machineset/machineset_controller.go b/internal/controllers/machineset/machineset_controller.go
index 960be34095e6..d4807fca138b 100644
--- a/internal/controllers/machineset/machineset_controller.go
+++ b/internal/controllers/machineset/machineset_controller.go
@@ -1516,6 +1516,12 @@ func (r *Reconciler) reconcileExternalTemplateReference(ctx context.Context, clu
 		return false, err
 	}
 
+	// Ensure the ref namespace is populated for objects not yet defaulted by webhook
+	if ref.Namespace == "" {
+		ref = ref.DeepCopy()
+		ref.Namespace = cluster.Namespace
+	}
+
 	obj, err := external.Get(ctx, r.Client, ref)
 	if err != nil {
 		if apierrors.IsNotFound(err) {