diff --git a/pkg/cloud/services/autoscaling/autoscalinggroup.go b/pkg/cloud/services/autoscaling/autoscalinggroup.go
index e3355b3eb7..e7204b3165 100644
--- a/pkg/cloud/services/autoscaling/autoscalinggroup.go
+++ b/pkg/cloud/services/autoscaling/autoscalinggroup.go
@@ -277,16 +277,28 @@ func (s *Service) UpdateASG(machinePoolScope *scope.MachinePoolScope) error {
 		return fmt.Errorf("getting subnets for ASG: %w", err)
 	}
 
+	minSize := machinePoolScope.AWSMachinePool.Spec.MinSize
+	maxSize := machinePoolScope.AWSMachinePool.Spec.MaxSize
+
 	input := &autoscaling.UpdateAutoScalingGroupInput{
 		AutoScalingGroupName: aws.String(machinePoolScope.Name()), // TODO: define dynamically - borrow logic from ec2
-		MaxSize:              aws.Int32(machinePoolScope.AWSMachinePool.Spec.MaxSize),
-		MinSize:              aws.Int32(machinePoolScope.AWSMachinePool.Spec.MinSize),
+		MaxSize:              aws.Int32(maxSize),
+		MinSize:              aws.Int32(minSize),
 		VPCZoneIdentifier:    aws.String(strings.Join(subnetIDs, ",")),
 		CapacityRebalance:    aws.Bool(machinePoolScope.AWSMachinePool.Spec.CapacityRebalance),
 	}
 
 	if machinePoolScope.MachinePool.Spec.Replicas != nil && !annotations.ReplicasManagedByExternalAutoscaler(machinePoolScope.MachinePool) {
-		input.DesiredCapacity = aws.Int32(*machinePoolScope.MachinePool.Spec.Replicas)
+		replicas := *machinePoolScope.MachinePool.Spec.Replicas
+
+		if replicas < minSize {
+			replicas = minSize
+		}
+		if replicas > maxSize {
+			replicas = maxSize
+		}
+
+		input.DesiredCapacity = aws.Int32(replicas)
 	}
 
 	if machinePoolScope.AWSMachinePool.Spec.MixedInstancesPolicy != nil {
diff --git a/pkg/cloud/services/autoscaling/autoscalinggroup_test.go b/pkg/cloud/services/autoscaling/autoscalinggroup_test.go
index 392fbfc93f..37a841f241 100644
--- a/pkg/cloud/services/autoscaling/autoscalinggroup_test.go
+++ b/pkg/cloud/services/autoscaling/autoscalinggroup_test.go
@@ -764,6 +764,42 @@ func TestServiceUpdateASG(t *testing.T) {
 				})
 			},
 		},
+		{
+			name:            "replicas below minSize",
+			machinePoolName: "update-asg-replicas-below-min",
+			wantErr:         false,
+			setupMachinePoolScope: func(mps *scope.MachinePoolScope) {
+				mps.MachinePool.Spec.Replicas = ptr.To[int32](0)
+				mps.AWSMachinePool.Spec.MinSize = 2
+				mps.AWSMachinePool.Spec.MaxSize = 5
+			},
+			expect: func(e *mocks.MockEC2APIMockRecorder, m *mock_autoscalingiface.MockAutoScalingAPIMockRecorder, g *WithT) {
+				m.UpdateAutoScalingGroup(context.TODO(), gomock.AssignableToTypeOf(&autoscaling.UpdateAutoScalingGroupInput{})).DoAndReturn(func(ctx context.Context, input *autoscaling.UpdateAutoScalingGroupInput, options ...autoscaling.Options) (*autoscaling.UpdateAutoScalingGroupOutput, error) {
+					g.Expect(input.MinSize).To(BeComparableTo(ptr.To[int32](2)))
+					g.Expect(input.MaxSize).To(BeComparableTo(ptr.To[int32](5)))
+					g.Expect(input.DesiredCapacity).To(BeComparableTo(ptr.To[int32](2)))
+					return &autoscaling.UpdateAutoScalingGroupOutput{}, nil
+				})
+			},
+		},
+		{
+			name:            "replicas above maxSize",
+			machinePoolName: "update-asg-replicas-above-max",
+			wantErr:         false,
+			setupMachinePoolScope: func(mps *scope.MachinePoolScope) {
+				mps.MachinePool.Spec.Replicas = ptr.To[int32](10)
+				mps.AWSMachinePool.Spec.MinSize = 1
+				mps.AWSMachinePool.Spec.MaxSize = 5
+			},
+			expect: func(e *mocks.MockEC2APIMockRecorder, m *mock_autoscalingiface.MockAutoScalingAPIMockRecorder, g *WithT) {
+				m.UpdateAutoScalingGroup(context.TODO(), gomock.AssignableToTypeOf(&autoscaling.UpdateAutoScalingGroupInput{})).DoAndReturn(func(ctx context.Context, input *autoscaling.UpdateAutoScalingGroupInput, options ...autoscaling.Options) (*autoscaling.UpdateAutoScalingGroupOutput, error) {
+					g.Expect(input.MinSize).To(BeComparableTo(ptr.To[int32](1)))
+					g.Expect(input.MaxSize).To(BeComparableTo(ptr.To[int32](5)))
+					g.Expect(input.DesiredCapacity).To(BeComparableTo(ptr.To[int32](5)))
+					return &autoscaling.UpdateAutoScalingGroupOutput{}, nil
+				})
+			},
+		},
 	}
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
diff --git a/pkg/cloud/services/eks/nodegroup.go b/pkg/cloud/services/eks/nodegroup.go
index e89c97b16a..62cf45052c 100644
--- a/pkg/cloud/services/eks/nodegroup.go
+++ b/pkg/cloud/services/eks/nodegroup.go
@@ -94,23 +94,35 @@ func (s *NodegroupService) describeASGs(ctx context.Context, ng *ekstypes.Nodegr
 }
 
 func (s *NodegroupService) scalingConfig() *ekstypes.NodegroupScalingConfig {
-	var replicas int32 = 1
-	if s.scope.MachinePool.Spec.Replicas != nil {
-		replicas = *s.scope.MachinePool.Spec.Replicas
-	}
-	cfg := ekstypes.NodegroupScalingConfig{
-		DesiredSize: aws.Int32(replicas),
-	}
+	cfg := ekstypes.NodegroupScalingConfig{}
+
 	scaling := s.scope.ManagedMachinePool.Spec.Scaling
-	if scaling == nil {
+	if scaling != nil {
+		if scaling.MaxSize != nil {
+			cfg.MaxSize = aws.Int32(*scaling.MaxSize)
+		}
+		if scaling.MinSize != nil {
+			cfg.MinSize = aws.Int32(*scaling.MinSize)
+		}
+	}
+
+	if annotations.ReplicasManagedByExternalAutoscaler(s.scope.MachinePool) {
 		return &cfg
 	}
-	if scaling.MaxSize != nil {
-		cfg.MaxSize = aws.Int32(*scaling.MaxSize)
+
+	replicas := int32(1)
+	if s.scope.MachinePool.Spec.Replicas != nil {
+		replicas = *s.scope.MachinePool.Spec.Replicas
+	}
+
+	if cfg.MinSize != nil && replicas < *cfg.MinSize {
+		replicas = *cfg.MinSize
 	}
-	if scaling.MaxSize != nil {
-		cfg.MinSize = aws.Int32(*scaling.MinSize)
+	if cfg.MaxSize != nil && replicas > *cfg.MaxSize {
+		replicas = *cfg.MaxSize
 	}
+
+	cfg.DesiredSize = aws.Int32(replicas)
 	return &cfg
 }
 
diff --git a/pkg/cloud/services/eks/nodegroup_test.go b/pkg/cloud/services/eks/nodegroup_test.go
new file mode 100644
index 0000000000..5087485bd1
--- /dev/null
+++ b/pkg/cloud/services/eks/nodegroup_test.go
@@ -0,0 +1,175 @@
+/*
+Copyright 2020 The Kubernetes Authors.
+
+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 eks
+
+import (
+	"testing"
+
+	"github.com/aws/aws-sdk-go-v2/aws"
+	. "github.com/onsi/gomega"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+
+	expinfrav1 "sigs.k8s.io/cluster-api-provider-aws/v2/exp/api/v1beta2"
+	"sigs.k8s.io/cluster-api-provider-aws/v2/pkg/cloud/scope"
+	clusterv1 "sigs.k8s.io/cluster-api/api/core/v1beta2"
+)
+
+func TestScalingConfig(t *testing.T) {
+	tests := []struct {
+		name                       string
+		replicas                   *int32
+		minSize                    *int32
+		maxSize                    *int32
+		externalAutoscalerManaged  bool
+		expectDesiredSize          *int32
+		expectMinSize              *int32
+		expectMaxSize              *int32
+	}{
+		{
+			name:              "external autoscaler",
+			replicas:          aws.Int32(3),
+			minSize:           aws.Int32(1),
+			maxSize:           aws.Int32(5),
+			externalAutoscalerManaged: true,
+			expectDesiredSize: nil,
+			expectMinSize:     aws.Int32(1),
+			expectMaxSize:     aws.Int32(5),
+		},
+		{
+			name:              "replicas within bounds",
+			replicas:          aws.Int32(3),
+			minSize:           aws.Int32(1),
+			maxSize:           aws.Int32(5),
+			expectDesiredSize: aws.Int32(3),
+			expectMinSize:     aws.Int32(1),
+			expectMaxSize:     aws.Int32(5),
+		},
+		{
+			name:              "replicas below minSize",
+			replicas:          aws.Int32(0),
+			minSize:           aws.Int32(2),
+			maxSize:           aws.Int32(5),
+			expectDesiredSize: aws.Int32(2),
+			expectMinSize:     aws.Int32(2),
+			expectMaxSize:     aws.Int32(5),
+		},
+		{
+			name:              "replicas above maxSize",
+			replicas:          aws.Int32(10),
+			minSize:           aws.Int32(1),
+			maxSize:           aws.Int32(5),
+			expectDesiredSize: aws.Int32(5),
+			expectMinSize:     aws.Int32(1),
+			expectMaxSize:     aws.Int32(5),
+		},
+		{
+			name:              "nil replicas defaults to 1",
+			replicas:          nil,
+			minSize:           aws.Int32(0),
+			maxSize:           aws.Int32(5),
+			expectDesiredSize: aws.Int32(1),
+			expectMinSize:     aws.Int32(0),
+			expectMaxSize:     aws.Int32(5),
+		},
+		{
+			name:              "nil replicas clamped to minSize",
+			replicas:          nil,
+			minSize:           aws.Int32(3),
+			maxSize:           aws.Int32(5),
+			expectDesiredSize: aws.Int32(3),
+			expectMinSize:     aws.Int32(3),
+			expectMaxSize:     aws.Int32(5),
+		},
+		{
+			name:              "no scaling config",
+			replicas:          aws.Int32(3),
+			minSize:           nil,
+			maxSize:           nil,
+			expectDesiredSize: aws.Int32(3),
+			expectMinSize:     nil,
+			expectMaxSize:     nil,
+		},
+	}
+
+	for _, tc := range tests {
+		t.Run(tc.name, func(t *testing.T) {
+			g := NewWithT(t)
+
+			machinePool := &clusterv1.MachinePool{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      "test-pool",
+					Namespace: "default",
+				},
+				Spec: clusterv1.MachinePoolSpec{
+					Replicas: tc.replicas,
+				},
+			}
+
+			if tc.externalAutoscalerManaged {
+				machinePool.ObjectMeta.Annotations = map[string]string{
+					clusterv1.ReplicasManagedByAnnotation: "cluster-autoscaler",
+				}
+			}
+
+			var scaling *expinfrav1.ManagedMachinePoolScaling
+			if tc.minSize != nil || tc.maxSize != nil {
+				scaling = &expinfrav1.ManagedMachinePoolScaling{
+					MinSize: tc.minSize,
+					MaxSize: tc.maxSize,
+				}
+			}
+
+			managedMachinePool := &expinfrav1.AWSManagedMachinePool{
+				Spec: expinfrav1.AWSManagedMachinePoolSpec{
+					Scaling: scaling,
+				},
+			}
+
+			mockScope := &scope.ManagedMachinePoolScope{
+				MachinePool:        machinePool,
+				ManagedMachinePool: managedMachinePool,
+			}
+
+			service := &NodegroupService{
+				scope: mockScope,
+			}
+
+			cfg := service.scalingConfig()
+
+			if tc.expectDesiredSize == nil {
+				g.Expect(cfg.DesiredSize).To(BeNil())
+			} else {
+				g.Expect(cfg.DesiredSize).ToNot(BeNil())
+				g.Expect(*cfg.DesiredSize).To(Equal(*tc.expectDesiredSize))
+			}
+
+			if tc.expectMinSize == nil {
+				g.Expect(cfg.MinSize).To(BeNil())
+			} else {
+				g.Expect(cfg.MinSize).ToNot(BeNil())
+				g.Expect(*cfg.MinSize).To(Equal(*tc.expectMinSize))
+			}
+
+			if tc.expectMaxSize == nil {
+				g.Expect(cfg.MaxSize).To(BeNil())
+			} else {
+				g.Expect(cfg.MaxSize).ToNot(BeNil())
+				g.Expect(*cfg.MaxSize).To(Equal(*tc.expectMaxSize))
+			}
+		})
+	}
+}