diff --git a/common/core/network.go b/common/core/network.go
index ce560450..0c397e28 100644
--- a/common/core/network.go
+++ b/common/core/network.go
@@ -219,10 +219,22 @@ func (plugin *netPlugin) Add(args *cniSkel.CmdArgs) (resultError error) {
 	// Apply the Network Policy for Endpoint
 	epInfo.Policies = append(epInfo.Policies, networkInfo.Policies...)
 
-	// If LoopbackDSR is set, add to policies
+	hnsIPAM := false
+	// If LoopbackDSR is set and IP is already allocated via IPAM, add to policies before endpoint creation
 	if cniConfig.OptionalFlags.LoopbackDSR {
-		hcnLoopbackRoute, _ := network.GetLoopbackDSRPolicy(&epInfo.IPAddress)
-		epInfo.Policies = append(epInfo.Policies, hcnLoopbackRoute)
+		if len(epInfo.IPAddress) > 0 {
+			hcnLoopbackRoute, err := network.GetLoopbackDSRPolicy(epInfo.IPAddress)
+			if err != nil {
+				logrus.Errorf("[cni-net] Failed to create loopbackDSR policy: %v, IPAddress: %v", err, epInfo.IPAddress)
+				return err
+			}
+			logrus.Debugf("[cni-net] Created loopbackDSR policy for IP: %v", epInfo.IPAddress)
+			epInfo.Policies = append(epInfo.Policies, hcnLoopbackRoute)
+		} else {
+			// IP will be assigned by HCN, add the loopbackDSR policy after endpoint creation
+			hnsIPAM = true
+			logrus.Debugf("[cni-net] IP not yet assigned, add loopbackDSR policy after endpoint creation")
+		}
 	}
 
 	epInfo, err = plugin.nm.CreateEndpoint(nwConfig.ID, epInfo, args.Netns)
@@ -231,6 +243,28 @@ func (plugin *netPlugin) Add(args *cniSkel.CmdArgs) (resultError error) {
 		return err
 	}
 
+	// If LoopbackDSR is set but IP wasn't allocated via IPAM, add the policy after endpoint creation
+	if hnsIPAM {
+		if len(epInfo.IPAddress) == 0 {
+			logrus.Errorf("[cni-net] LoopbackDSR is enabled but endpoint IP address is not set after endpoint creation")
+			return errors.New("loopbackDSR requires IP address to be allocated")
+		}
+
+		logrus.Debugf("[cni-net] Adding loopbackDSR policy for IP: %v after endpoint creation", epInfo.IPAddress)
+		hcnLoopbackRoute, err := network.GetLoopbackDSRPolicy(epInfo.IPAddress)
+		if err != nil {
+			logrus.Errorf("[cni-net] Failed to create loopbackDSR policy after endpoint creation: %v, IPAddress: %v", err, epInfo.IPAddress)
+			return err
+		}
+
+		err = plugin.nm.ApplyPolicy(epInfo.ID, hcnLoopbackRoute)
+		if err != nil {
+			logrus.Errorf("[cni-net] Failed to apply loopbackDSR policy to endpoint: %v", err)
+			return err
+		}
+		logrus.Debugf("[cni-net] Successfully applied loopbackDSR policy to endpoint")
+	}
+
 	// Convert result to the requested CNI version.
 	res := cni.GetCurrResult(nwConfig, epInfo, args.IfName, cniConfig)
 	result, err := res.GetAsVersion(cniConfig.CniVersion)
diff --git a/network/manager.go b/network/manager.go
index d9e1d6a7..73fc5c20 100644
--- a/network/manager.go
+++ b/network/manager.go
@@ -4,6 +4,7 @@
 package network
 
 import (
+	"encoding/json"
 	"fmt"
 	"github.com/Microsoft/hcsshim/hcn"
 	"github.com/Microsoft/windows-container-networking/common"
@@ -33,6 +34,7 @@ type Manager interface {
 	DeleteEndpoint(endpointID string) error
 	GetEndpoint(endpointID string, withIpv6 bool) (*EndpointInfo, error)
 	GetEndpointByName(endpointName string, withIpv6 bool) (*EndpointInfo, error)
+	ApplyPolicy(endpointID string, policy Policy) error
 }
 
 // NewManager creates a new networkManager.
@@ -210,3 +212,31 @@ func (nm *networkManager) GetEndpointByName(endpointName string, withIpv6 bool)
 
 	return GetEndpointInfoFromHostComputeEndpoint(hcnEndpoint, withIpv6), nil
 }
+
+// ApplyPolicy applies a policy to an existing endpoint.
+func (nm *networkManager) ApplyPolicy(endpointID string, policy Policy) error {
+	nm.Lock()
+	defer nm.Unlock()
+
+	hcnEndpoint, err := hcn.GetEndpointByID(endpointID)
+	if err != nil {
+		return fmt.Errorf("failed to get endpoint %s: %v", endpointID, err)
+	}
+
+	var endpointPolicy hcn.EndpointPolicy
+	err = json.Unmarshal(policy.Data, &endpointPolicy)
+	if err != nil {
+		return fmt.Errorf("failed to unmarshal policy: %v", err)
+	}
+
+	policyRequest := hcn.PolicyEndpointRequest{
+		Policies: []hcn.EndpointPolicy{endpointPolicy},
+	}
+
+	err = hcnEndpoint.ApplyPolicy(hcn.RequestTypeAdd, policyRequest)
+	if err != nil {
+		return fmt.Errorf("failed to apply policy to endpoint: %v", err)
+	}
+
+	return nil
+}
diff --git a/network/policy.go b/network/policy.go
index 2212106a..45ccfd04 100644
--- a/network/policy.go
+++ b/network/policy.go
@@ -6,6 +6,7 @@ package network
 import (
 	"encoding/json"
 	"errors"
+	"fmt"
 	"net"
 	"strconv"
 	"strings"
@@ -81,7 +82,10 @@ func GetPortMappingPolicy(externalPort int, internalPort int, protocol string, h
 }
 
 // GetLoopbackDSRPolicy creates a policy to support loopback direct server return.
-func GetLoopbackDSRPolicy(ip *net.IP) (Policy, error) {
+func GetLoopbackDSRPolicy(ip net.IP) (Policy, error) {
+	if len(ip) == 0 {
+		return Policy{}, fmt.Errorf("IP address cannot be empty for loopbackDSR policy")
+	}
 	hcnLoopbackRoute := hcn.OutboundNatPolicySetting{
 		Destinations: []string{ip.String()},
 	}