diff --git a/.changelog/20868.txt b/.changelog/20868.txt
new file mode 100644
index 0000000000..172cd12f24
--- /dev/null
+++ b/.changelog/20868.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+connect: Fix issue where Consul-dataplane xDS sessions would not utilize the streaming backend for wan-federated queries.
+```
diff --git a/agent/agent.go b/agent/agent.go
index 98e1252cef..641ca4848c 100644
--- a/agent/agent.go
+++ b/agent/agent.go
@@ -833,6 +833,7 @@ func (a *Agent) Start(ctx context.Context) error {
 			Segment:       a.config.SegmentName,
 			Node:          a.config.NodeName,
 			NodePartition: a.config.PartitionOrEmpty(),
+			DisableNode:   true, // Disable for agentless so that streaming RPCs can be used.
 		},
 		DNSConfig: proxycfg.DNSConfig{
 			Domain:    a.config.DNSDomain,
diff --git a/agent/rpcclient/health/health.go b/agent/rpcclient/health/health.go
index f062d2aac2..6732b2f88e 100644
--- a/agent/rpcclient/health/health.go
+++ b/agent/rpcclient/health/health.go
@@ -100,7 +100,12 @@ func (c *Client) Notify(
 }
 
 func (c *Client) useStreaming(req structs.ServiceSpecificRequest) bool {
-	return c.UseStreamingBackend && !req.Ingress && req.Source.Node == ""
+	return c.UseStreamingBackend &&
+		!req.Ingress &&
+		// Streaming is incompatible with NearestN queries (due to lack of ordering),
+		// so we can only use it if the NearestN would never work (Node == "")
+		// or if we explicitly say to ignore the Node field for queries (agentless xDS).
+		(req.Source.Node == "" || req.Source.DisableNode)
 }
 
 func (c *Client) newServiceRequest(req structs.ServiceSpecificRequest) serviceRequest {
diff --git a/agent/structs/structs.go b/agent/structs/structs.go
index d9fbac2bfe..0ac72b07fe 100644
--- a/agent/structs/structs.go
+++ b/agent/structs/structs.go
@@ -582,7 +582,11 @@ type QuerySource struct {
 	Segment       string
 	Node          string
 	NodePartition string `json:",omitempty"`
-	Ip            string
+	// DisableNode indicates that the Node and NodePartition fields should not be used
+	// for determining the flow of the RPC. This is needed for agentless + wanfed to
+	// utilize streaming RPCs.
+	DisableNode bool `json:",omitempty"`
+	Ip          string
 }
 
 func (s QuerySource) NodeEnterpriseMeta() *acl.EnterpriseMeta {