diff --git a/controllers/clusterpolicy_controller.go b/controllers/clusterpolicy_controller.go
index 1ac447b4c..30b7dec0c 100644
--- a/controllers/clusterpolicy_controller.go
+++ b/controllers/clusterpolicy_controller.go
@@ -185,11 +185,11 @@ func (r *ClusterPolicyReconciler) Reconcile(ctx context.Context, req ctrl.Reques
 
 		errStr := fmt.Sprintf("ClusterPolicy is not ready, states not ready: %v", statesNotReady)
 		r.Log.Error(nil, errStr)
+		updateCRState(ctx, r, req.NamespacedName, gpuv1.NotReady)
 		condErr = r.conditionUpdater.SetConditionsError(ctx, instance, conditions.OperandNotReady, errStr)
 		if condErr != nil {
 			r.Log.V(consts.LogLevelDebug).Error(nil, condErr.Error())
 		}
-		updateCRState(ctx, r, req.NamespacedName, gpuv1.NotReady)
 		return ctrl.Result{RequeueAfter: time.Second * 5}, nil
 	}
 
@@ -322,7 +322,6 @@ func addWatchNewGPUNode(ctx context.Context, r *ClusterPolicyReconciler, c contr
 					"osTreeLabelChanged", osTreeLabelChanged,
 				)
 			}
-
 			return needsUpdate
 		},
 		DeleteFunc: func(e event.DeleteEvent) bool {
@@ -361,7 +360,7 @@ func (r *ClusterPolicyReconciler) SetupWithManager(ctx context.Context, mgr ctrl
 	r.conditionUpdater = conditions.NewClusterPolicyUpdater(mgr.GetClient())
 
 	// Watch for changes to primary resource ClusterPolicy
-	err = c.Watch(source.Kind(mgr.GetCache(), &gpuv1.ClusterPolicy{}), &handler.EnqueueRequestForObject{})
+	err = c.Watch(source.Kind(mgr.GetCache(), &gpuv1.ClusterPolicy{}), &handler.EnqueueRequestForObject{}, predicate.GenerationChangedPredicate{})
 	if err != nil {
 		return err
 	}
diff --git a/controllers/nvidiadriver_controller.go b/controllers/nvidiadriver_controller.go
index f2975abb3..0707d69a0 100644
--- a/controllers/nvidiadriver_controller.go
+++ b/controllers/nvidiadriver_controller.go
@@ -19,9 +19,11 @@ package controllers
 import (
 	"context"
 	"fmt"
+	"maps"
 	"time"
 
 	"github.com/NVIDIA/k8s-operator-libs/pkg/consts"
+	corev1 "k8s.io/api/core/v1"
 	apierrors "k8s.io/apimachinery/pkg/api/errors"
 	"k8s.io/apimachinery/pkg/runtime"
 	"k8s.io/apimachinery/pkg/types"
@@ -29,6 +31,7 @@ import (
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
 	"sigs.k8s.io/controller-runtime/pkg/controller"
+	"sigs.k8s.io/controller-runtime/pkg/event"
 	"sigs.k8s.io/controller-runtime/pkg/handler"
 	"sigs.k8s.io/controller-runtime/pkg/log"
 	"sigs.k8s.io/controller-runtime/pkg/predicate"
@@ -179,7 +182,6 @@ func (r *NVIDIADriverReconciler) Reconcile(ctx context.Context, req ctrl.Request
 	if condErr = r.conditionUpdater.SetConditionsReady(ctx, instance, "Reconciled", "All resources have been successfully reconciled"); condErr != nil {
 		return ctrl.Result{}, condErr
 	}
-
 	return reconcile.Result{}, nil
 }
 
@@ -212,7 +214,7 @@ func (r *NVIDIADriverReconciler) updateCrStatus(
 }
 
 // SetupWithManager sets up the controller with the Manager.
-func (r *NVIDIADriverReconciler) SetupWithManager(mgr ctrl.Manager) error {
+func (r *NVIDIADriverReconciler) SetupWithManager(ctx context.Context, mgr ctrl.Manager) error {
 	// Create state manager
 	stateManager, err := state.NewManager(
 		nvidiav1alpha1.NVIDIADriverCRDName,
@@ -240,7 +242,7 @@ func (r *NVIDIADriverReconciler) SetupWithManager(mgr ctrl.Manager) error {
 	}
 
 	// Watch for changes to the primary resource NVIDIaDriver
-	err = c.Watch(source.Kind(mgr.GetCache(), &nvidiav1alpha1.NVIDIADriver{}), &handler.EnqueueRequestForObject{})
+	err = c.Watch(source.Kind(mgr.GetCache(), &nvidiav1alpha1.NVIDIADriver{}), &handler.EnqueueRequestForObject{}, predicate.GenerationChangedPredicate{})
 	if err != nil {
 		return err
 	}
@@ -281,6 +283,42 @@ func (r *NVIDIADriverReconciler) SetupWithManager(mgr ctrl.Manager) error {
 		return err
 	}
 
+	nodePredicate := predicate.Funcs{
+		CreateFunc: func(e event.CreateEvent) bool {
+			labels := e.Object.GetLabels()
+			return hasGPULabels(labels)
+		},
+		UpdateFunc: func(e event.UpdateEvent) bool {
+			logger := log.FromContext(ctx)
+			newLabels := e.ObjectNew.GetLabels()
+			oldLabels := e.ObjectOld.GetLabels()
+			nodeName := e.ObjectNew.GetName()
+
+			needsUpdate := hasGPULabels(newLabels) && !maps.Equal(newLabels, oldLabels)
+
+			if needsUpdate {
+				logger.Info("Node labels have been changed",
+					"name", nodeName,
+				)
+			}
+			return needsUpdate
+		},
+		DeleteFunc: func(e event.DeleteEvent) bool {
+			labels := e.Object.GetLabels()
+			return hasGPULabels(labels)
+		},
+	}
+
+	// Watch for changes to node labels
+	err = c.Watch(
+		source.Kind(mgr.GetCache(), &corev1.Node{}),
+		handler.EnqueueRequestsFromMapFunc(mapFn),
+		nodePredicate,
+	)
+	if err != nil {
+		return err
+	}
+
 	// Watch for changes to secondary resources which each state manager manages
 	watchSources := stateManager.GetWatchSources(mgr)
 	for _, watchSource := range watchSources {
diff --git a/controllers/upgrade_controller.go b/controllers/upgrade_controller.go
index 58e7d16a8..ea413990f 100644
--- a/controllers/upgrade_controller.go
+++ b/controllers/upgrade_controller.go
@@ -209,7 +209,7 @@ func (r *UpgradeReconciler) removeNodeUpgradeStateLabels(ctx context.Context) er
 // SetupWithManager sets up the controller with the Manager.
 //
 //nolint:dupl
-func (r *UpgradeReconciler) SetupWithManager(mgr ctrl.Manager) error {
+func (r *UpgradeReconciler) SetupWithManager(ctx context.Context, mgr ctrl.Manager) error {
 	// Create a new controller
 	c, err := controller.New("upgrade-controller", mgr, controller.Options{Reconciler: r, MaxConcurrentReconciles: 1, RateLimiter: workqueue.NewItemExponentialFailureRateLimiter(minDelayCR, maxDelayCR)})
 	if err != nil {
@@ -217,7 +217,7 @@ func (r *UpgradeReconciler) SetupWithManager(mgr ctrl.Manager) error {
 	}
 
 	// Watch for changes to primary resource ClusterPolicy
-	err = c.Watch(source.Kind(mgr.GetCache(), &gpuv1.ClusterPolicy{}), &handler.EnqueueRequestForObject{})
+	err = c.Watch(source.Kind(mgr.GetCache(), &gpuv1.ClusterPolicy{}), &handler.EnqueueRequestForObject{}, predicate.GenerationChangedPredicate{})
 	if err != nil {
 		return err
 	}
diff --git a/main.go b/main.go
index 93c8bf6fe..eaf8a1853 100644
--- a/main.go
+++ b/main.go
@@ -139,7 +139,7 @@ func main() {
 		Log:          upgradeLogger,
 		Scheme:       mgr.GetScheme(),
 		StateManager: clusterUpgradeStateManager,
-	}).SetupWithManager(mgr); err != nil {
+	}).SetupWithManager(ctx, mgr); err != nil {
 		setupLog.Error(err, "unable to create controller", "controller", "Upgrade")
 		os.Exit(1)
 	}
@@ -158,7 +158,7 @@ func main() {
 		Client:      mgr.GetClient(),
 		Scheme:      mgr.GetScheme(),
 		ClusterInfo: clusterInfo,
-	}).SetupWithManager(mgr); err != nil {
+	}).SetupWithManager(ctx, mgr); err != nil {
 		setupLog.Error(err, "unable to create controller", "controller", "NVIDIADriver")
 		os.Exit(1)
 	}