diff --git a/.changelog/17231.txt b/.changelog/17231.txt
new file mode 100644
index 0000000000..fd25d07398
--- /dev/null
+++ b/.changelog/17231.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+acl: Fix an issue where the anonymous token was synthesized in non-primary datacenters which could cause permission errors when federating clusters with ACL replication enabled.
+```
diff --git a/agent/consul/acl_server.go b/agent/consul/acl_server.go
index 6d92c02597..f91cb77620 100644
--- a/agent/consul/acl_server.go
+++ b/agent/consul/acl_server.go
@@ -151,7 +151,7 @@ func (s *Server) ResolveIdentityFromToken(token string) (bool, structs.ACLIdenti
 	} else if aclToken != nil && !aclToken.IsExpired(time.Now()) {
 		return true, aclToken, nil
 	}
-	if aclToken == nil && token == acl.AnonymousTokenSecret {
+	if aclToken == nil && token == acl.AnonymousTokenSecret && s.InPrimaryDatacenter() {
 		// synthesize the anonymous token for early use, bootstrapping has not completed
 		s.insertAnonymousToken()
 		fallbackId := structs.ACLToken{
diff --git a/test/integration/consul-container/test/wanfed/acl_bootstrap_replication_test.go b/test/integration/consul-container/test/wanfed/acl_bootstrap_replication_test.go
new file mode 100644
index 0000000000..0caddbc302
--- /dev/null
+++ b/test/integration/consul-container/test/wanfed/acl_bootstrap_replication_test.go
@@ -0,0 +1,157 @@
+// Copyright (c) HashiCorp, Inc.
+// SPDX-License-Identifier: MPL-2.0
+
+package wanfed
+
+import (
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/require"
+
+	"github.com/hashicorp/consul/api"
+	"github.com/hashicorp/consul/sdk/testutil/retry"
+	libcluster "github.com/hashicorp/consul/test/integration/consul-container/libs/cluster"
+)
+
+const replicationPolicyRules = `
+acl      = "write"
+operator = "write"
+
+service_prefix "" {
+  policy     = "read"
+  intentions = "read"
+}
+`
+
+var retryFuncTimer = &retry.Timer{
+	Timeout: 60 * time.Second,
+	Wait:    2 * time.Second,
+}
+
+// retryFunc is a helper to retry the given function until it returns a nil
+// error. It returns the value from the function on success.
+func retryFunc[T any](t *testing.T, f func() (T, error)) T {
+	var result T
+	retry.RunWith(retryFuncTimer, t, func(r *retry.R) {
+		val, err := f()
+		require.NoError(r, err)
+		result = val
+	})
+	return result
+}
+
+// TestWanFed_ReplicationBootstrap checks the setup procedure of two federated
+// datacenters with a manual ACL bootstrap step and ACL token replication enabled.
+//
+//   - WAN join two clusters that are not ACL bootstrapped
+//     and have ACL replication enabled
+//   - ACL Bootstrap the primary datacenter
+//   - Configure the replication token in each datacenter
+//   - Validate ACL replication by creating a token
+//     and checking it is found in each datacenter.
+//
+// Added to validate this issue: https://github.com/hashicorp/consul/issues/16620
+func TestWanFed_ReplicationBootstrap(t *testing.T) {
+	cfgFunc := func(c *libcluster.ConfigBuilder) {
+		c.Set("primary_datacenter", "primary")
+		c.Set("acl.enabled", true)
+		c.Set("acl.default_policy", "deny")
+		c.Set("acl.enable_token_persistence", true)
+		c.Set("acl.enable_token_replication", true)
+	}
+
+	_, primary := createNonACLBootstrappedCluster(t, "primary", cfgFunc)
+	_, secondary := createNonACLBootstrappedCluster(t, "secondary", func(c *libcluster.ConfigBuilder) {
+		cfgFunc(c)
+		c.Set("retry_join_wan", []string{primary.GetIP()})
+	})
+
+	// ACL bootstrap the primary
+	rootToken := retryFunc(t, func() (*api.ACLToken, error) {
+		t.Logf("ACL bootstrap the primary datacenter")
+		tok, _, err := primary.GetClient().ACL().Bootstrap()
+		return tok, err
+	})
+
+	agents := []libcluster.Agent{primary, secondary}
+
+	for _, agent := range agents {
+		// Make a new client with the bootstrap token.
+		_, err := agent.NewClient(rootToken.SecretID, true)
+		require.NoError(t, err)
+
+		t.Logf("Wait for members in %s datacenter", agent.GetDatacenter())
+		libcluster.WaitForMembers(t, agent.GetClient(), 1)
+	}
+
+	// Create and set the replication token
+	replicationPolicy := retryFunc(t, func() (*api.ACLPolicy, error) {
+		t.Logf("Create the replication policy")
+		p, _, err := primary.GetClient().ACL().PolicyCreate(
+			&api.ACLPolicy{
+				Name:  "consul-server-replication",
+				Rules: replicationPolicyRules,
+			},
+			nil,
+		)
+		return p, err
+	})
+	replicationToken := retryFunc(t, func() (*api.ACLToken, error) {
+		t.Logf("Create the replication policy")
+		tok, _, err := primary.GetClient().ACL().TokenCreate(
+			&api.ACLToken{
+				Description: "Consul server replication token",
+				Policies:    []*api.ACLLink{{ID: replicationPolicy.ID}},
+			},
+			nil,
+		)
+		return tok, err
+	})
+
+	// Set the replication token in the secondary
+	retryFunc(t, func() (any, error) {
+		t.Logf("Set the replication token in the %s datacenter", secondary.GetDatacenter())
+		return secondary.GetClient().Agent().UpdateReplicationACLToken(replicationToken.SecretID, nil)
+	})
+
+	// Double check that replication happens after setting the replication token.
+	// - Create a token
+	// - Check the token is found in each datacenter
+	createdToken := retryFunc(t, func() (*api.ACLToken, error) {
+		t.Logf("Create a test token to validate ACL replication in the secondary datacenter")
+		tok, _, err := secondary.GetClient().ACL().TokenCreate(&api.ACLToken{
+			ServiceIdentities: []*api.ACLServiceIdentity{{
+				ServiceName: "test-svc",
+			}},
+		}, nil)
+		return tok, err
+	})
+	for _, agent := range agents {
+		tok := retryFunc(t, func() (*api.ACLToken, error) {
+			t.Logf("Check the test token is found in the %s datacenter", agent.GetDatacenter())
+			tok, _, err := agent.GetClient().ACL().TokenRead(createdToken.AccessorID, nil)
+			return tok, err
+		})
+		require.NotNil(t, tok)
+		require.Equal(t, tok.AccessorID, createdToken.AccessorID)
+		require.Equal(t, tok.SecretID, createdToken.SecretID)
+	}
+}
+
+func createNonACLBootstrappedCluster(t *testing.T, dc string, f func(c *libcluster.ConfigBuilder)) (*libcluster.Cluster, libcluster.Agent) {
+	ctx := libcluster.NewBuildContext(t, libcluster.BuildOptions{Datacenter: dc})
+	conf := libcluster.NewConfigBuilder(ctx).Advanced(f)
+
+	cluster, err := libcluster.New(t, []libcluster.Config{*conf.ToAgentConfig(t)})
+	require.NoError(t, err)
+
+	client := cluster.Agents[0].GetClient()
+
+	libcluster.WaitForLeader(t, cluster, client)
+	// Note: Do not wait for members yet (not ACL bootstrapped so no perms with a default deny)
+
+	agent, err := cluster.Leader()
+	require.NoError(t, err)
+	return cluster, agent
+}
diff --git a/test/integration/consul-container/test/wanfed/wanfed_peering_test.go b/test/integration/consul-container/test/wanfed/wanfed_peering_test.go
index 33503da2bf..f40b6a60d0 100644
--- a/test/integration/consul-container/test/wanfed/wanfed_peering_test.go
+++ b/test/integration/consul-container/test/wanfed/wanfed_peering_test.go
@@ -1,7 +1,7 @@
 // Copyright (c) HashiCorp, Inc.
 // SPDX-License-Identifier: MPL-2.0
 
-package peering
+package wanfed
 
 import (
 	"context"