diff --git a/agent/cache-types/trust_bundles.go b/agent/cache-types/trust_bundles.go
index 70c63cb4be..eddc8dabbe 100644
--- a/agent/cache-types/trust_bundles.go
+++ b/agent/cache-types/trust_bundles.go
@@ -8,6 +8,8 @@ import (
 
 	"github.com/mitchellh/hashstructure"
 	"google.golang.org/grpc"
+	"google.golang.org/grpc/codes"
+	"google.golang.org/grpc/status"
 
 	"github.com/hashicorp/consul/agent/cache"
 	external "github.com/hashicorp/consul/agent/grpc-external"
@@ -87,6 +89,13 @@ func (t *TrustBundles) Fetch(_ cache.FetchOptions, req cache.Request) (cache.Fet
 	// Fetch
 	reply, err := t.Client.TrustBundleListByService(external.ContextWithToken(context.Background(), reqReal.Token), reqReal.Request)
 	if err != nil {
+		// Return an empty result if the error is due to peering being disabled.
+		// This allows mesh gateways to receive an update and confirm that the watch is set.
+		if e, ok := status.FromError(err); ok && e.Code() == codes.FailedPrecondition {
+			result.Index = 1
+			result.Value = &pbpeering.TrustBundleListByServiceResponse{Index: 1}
+			return result, nil
+		}
 		return result, err
 	}
 
diff --git a/agent/cache-types/trust_bundles_test.go b/agent/cache-types/trust_bundles_test.go
index 09d8a80bcb..85248dba1d 100644
--- a/agent/cache-types/trust_bundles_test.go
+++ b/agent/cache-types/trust_bundles_test.go
@@ -7,6 +7,8 @@ import (
 
 	"github.com/stretchr/testify/mock"
 	"github.com/stretchr/testify/require"
+	"google.golang.org/grpc/codes"
+	grpcstatus "google.golang.org/grpc/status"
 
 	"github.com/hashicorp/consul/agent/cache"
 	"github.com/hashicorp/consul/proto/pbpeering"
@@ -48,6 +50,29 @@ func TestTrustBundles(t *testing.T) {
 	}, result)
 }
 
+func TestTrustBundles_PeeringDisabled(t *testing.T) {
+	client := NewMockTrustBundleLister(t)
+	typ := &TrustBundles{Client: client}
+
+	var resp *pbpeering.TrustBundleListByServiceResponse
+
+	// Expect the proper call.
+	// This also returns the canned response above.
+	client.On("TrustBundleListByService", mock.Anything, mock.Anything).
+		Return(resp, grpcstatus.Error(codes.FailedPrecondition, "peering must be enabled to use this endpoint"))
+
+	// Fetch and assert against the result.
+	result, err := typ.Fetch(cache.FetchOptions{}, &TrustBundleListRequest{
+		Request: &pbpeering.TrustBundleListByServiceRequest{
+			ServiceName: "foo",
+		},
+	})
+	require.NoError(t, err)
+	require.NotNil(t, result)
+	require.EqualValues(t, 1, result.Index)
+	require.NotNil(t, result.Value)
+}
+
 func TestTrustBundles_badReqType(t *testing.T) {
 	client := pbpeering.NewPeeringServiceClient(nil)
 	typ := &TrustBundles{Client: client}
diff --git a/agent/config/default.go b/agent/config/default.go
index bb78218513..861db9e3ba 100644
--- a/agent/config/default.go
+++ b/agent/config/default.go
@@ -104,9 +104,6 @@ func DefaultSource() Source {
 			kv_max_value_size = ` + strconv.FormatInt(raft.SuggestedMaxDataSize, 10) + `
 			txn_max_req_len = ` + strconv.FormatInt(raft.SuggestedMaxDataSize, 10) + `
 		}
-		peering = {
-			enabled = true
-		}
 		performance = {
 			leave_drain_time = "5s"
 			raft_multiplier = ` + strconv.Itoa(int(consul.DefaultRaftMultiplier)) + `
diff --git a/agent/config/runtime_test.go b/agent/config/runtime_test.go
index b05b314919..e0266811e3 100644
--- a/agent/config/runtime_test.go
+++ b/agent/config/runtime_test.go
@@ -5548,16 +5548,6 @@ func TestLoad_IntegrationWithFlags(t *testing.T) {
 			"tls.grpc was provided but TLS will NOT be enabled on the gRPC listener without an HTTPS listener configured (e.g. via ports.https)",
 		},
 	})
-	run(t, testCase{
-		desc: "peering.enabled defaults to true",
-		args: []string{
-			`-data-dir=` + dataDir,
-		},
-		expected: func(rt *RuntimeConfig) {
-			rt.DataDir = dataDir
-			rt.PeeringEnabled = true
-		},
-	})
 }
 
 func (tc testCase) run(format string, dataDir string) func(t *testing.T) {
diff --git a/agent/consul/config.go b/agent/consul/config.go
index 64bf90257c..b897c4f232 100644
--- a/agent/consul/config.go
+++ b/agent/consul/config.go
@@ -517,7 +517,6 @@ func DefaultConfig() *Config {
 		DefaultQueryTime:         300 * time.Second,
 		MaxQueryTime:             600 * time.Second,
 
-		PeeringEnabled:                    true,
 		PeeringTestAllowPeerRegistrations: false,
 
 		EnterpriseConfig: DefaultEnterpriseConfig(),
diff --git a/agent/consul/server_test.go b/agent/consul/server_test.go
index b9f9cc4f14..35bbe720e2 100644
--- a/agent/consul/server_test.go
+++ b/agent/consul/server_test.go
@@ -179,6 +179,7 @@ func testServerConfig(t *testing.T) (string, *Config) {
 			"IntermediateCertTTL": "288h",
 		},
 	}
+	config.PeeringEnabled = true
 	return dir, config
 }
 
diff --git a/agent/rpc/peering/service_test.go b/agent/rpc/peering/service_test.go
index a4acd945e0..54770d6a61 100644
--- a/agent/rpc/peering/service_test.go
+++ b/agent/rpc/peering/service_test.go
@@ -1283,6 +1283,7 @@ func newTestServer(t *testing.T, cb func(conf *consul.Config)) testingServer {
 
 	ports := freeport.GetN(t, 4) // {rpc, serf_lan, serf_wan, grpc}
 
+	conf.PeeringEnabled = true
 	conf.Bootstrap = true
 	conf.Datacenter = "dc1"
 	conf.DataDir = dir
diff --git a/agent/testagent.go b/agent/testagent.go
index af6ac87dc1..5701834b7c 100644
--- a/agent/testagent.go
+++ b/agent/testagent.go
@@ -138,6 +138,9 @@ func TestConfigHCL(nodeID string) string {
 		}
 		performance {
 			raft_multiplier = 1
+		}
+		peering {
+			enabled = true
 		}`, nodeID, connect.TestClusterID,
 	)
 }
diff --git a/sdk/testutil/server.go b/sdk/testutil/server.go
index 77fd90e824..db5834c3a8 100644
--- a/sdk/testutil/server.go
+++ b/sdk/testutil/server.go
@@ -105,6 +105,7 @@ type TestServerConfig struct {
 	Connect             map[string]interface{} `json:"connect,omitempty"`
 	EnableDebug         bool                   `json:"enable_debug,omitempty"`
 	SkipLeaveOnInt      bool                   `json:"skip_leave_on_interrupt"`
+	Peering             *TestPeeringConfig     `json:"peering,omitempty"`
 	ReadyTimeout        time.Duration          `json:"-"`
 	StopTimeout         time.Duration          `json:"-"`
 	Stdout              io.Writer              `json:"-"`
@@ -139,6 +140,10 @@ type TestTokens struct {
 	AgentRecovery string `json:"agent_master,omitempty"`
 }
 
+type TestPeeringConfig struct {
+	Enabled bool `json:"enabled,omitempty"`
+}
+
 // ServerConfigCallback is a function interface which can be
 // passed to NewTestServerConfig to modify the server config.
 type ServerConfigCallback func(c *TestServerConfig)
@@ -192,8 +197,9 @@ func defaultServerConfig(t TestingTB) *TestServerConfig {
 		ReturnPorts: func() {
 			freeport.Return(ports)
 		},
-		Stdout: logBuffer,
-		Stderr: logBuffer,
+		Stdout:  logBuffer,
+		Stderr:  logBuffer,
+		Peering: &TestPeeringConfig{Enabled: true},
 	}
 }
 
diff --git a/test/integration/connect/envoy/case-cross-peers-http-router/alpha/base.hcl b/test/integration/connect/envoy/case-cross-peers-http-router/alpha/base.hcl
index 68265638f9..f81ab0edd6 100644
--- a/test/integration/connect/envoy/case-cross-peers-http-router/alpha/base.hcl
+++ b/test/integration/connect/envoy/case-cross-peers-http-router/alpha/base.hcl
@@ -1,2 +1,5 @@
 primary_datacenter = "alpha"
 log_level          = "trace"
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers-http-router/primary/base.hcl b/test/integration/connect/envoy/case-cross-peers-http-router/primary/base.hcl
new file mode 100644
index 0000000000..c1e134d5a2
--- /dev/null
+++ b/test/integration/connect/envoy/case-cross-peers-http-router/primary/base.hcl
@@ -0,0 +1,3 @@
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers-http/alpha/base.hcl b/test/integration/connect/envoy/case-cross-peers-http/alpha/base.hcl
index 68265638f9..f81ab0edd6 100644
--- a/test/integration/connect/envoy/case-cross-peers-http/alpha/base.hcl
+++ b/test/integration/connect/envoy/case-cross-peers-http/alpha/base.hcl
@@ -1,2 +1,5 @@
 primary_datacenter = "alpha"
 log_level          = "trace"
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers-http/primary/base.hcl b/test/integration/connect/envoy/case-cross-peers-http/primary/base.hcl
new file mode 100644
index 0000000000..c1e134d5a2
--- /dev/null
+++ b/test/integration/connect/envoy/case-cross-peers-http/primary/base.hcl
@@ -0,0 +1,3 @@
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/alpha/base.hcl b/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/alpha/base.hcl
index 68265638f9..f81ab0edd6 100644
--- a/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/alpha/base.hcl
+++ b/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/alpha/base.hcl
@@ -1,2 +1,5 @@
 primary_datacenter = "alpha"
 log_level          = "trace"
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/primary/base.hcl b/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/primary/base.hcl
new file mode 100644
index 0000000000..c1e134d5a2
--- /dev/null
+++ b/test/integration/connect/envoy/case-cross-peers-resolver-redirect-tcp/primary/base.hcl
@@ -0,0 +1,3 @@
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers/alpha/base.hcl b/test/integration/connect/envoy/case-cross-peers/alpha/base.hcl
index 68265638f9..f81ab0edd6 100644
--- a/test/integration/connect/envoy/case-cross-peers/alpha/base.hcl
+++ b/test/integration/connect/envoy/case-cross-peers/alpha/base.hcl
@@ -1,2 +1,5 @@
 primary_datacenter = "alpha"
 log_level          = "trace"
+peering {
+  enabled = true
+}
diff --git a/test/integration/connect/envoy/case-cross-peers/primary/base.hcl b/test/integration/connect/envoy/case-cross-peers/primary/base.hcl
new file mode 100644
index 0000000000..c1e134d5a2
--- /dev/null
+++ b/test/integration/connect/envoy/case-cross-peers/primary/base.hcl
@@ -0,0 +1,3 @@
+peering {
+  enabled = true
+}
diff --git a/website/content/docs/agent/config/config-files.mdx b/website/content/docs/agent/config/config-files.mdx
index c886775084..5c4f7b909d 100644
--- a/website/content/docs/agent/config/config-files.mdx
+++ b/website/content/docs/agent/config/config-files.mdx
@@ -555,7 +555,7 @@ Valid time units are 'ns', 'us' (or 'µs'), 'ms', 's', 'm', 'h'."
 
   The following sub-keys are available:
 
-  - `enabled` ((#peering_enabled)) (Defaults to `true`) Controls whether cluster peering is enabled.
+  - `enabled` ((#peering_enabled)) (Defaults to `false`) Controls whether cluster peering is enabled.
     When disabled, the UI won't show peering, all peering APIs will return
     an error, any peerings stored in Consul already will be ignored (but they will not be deleted),
     and all peering connections from other clusters will be rejected. This was added in Consul 1.13.0.