diff --git a/libs/pageserver_api/src/models.rs b/libs/pageserver_api/src/models.rs
index d52fb5e93d4b..80ca69631331 100644
--- a/libs/pageserver_api/src/models.rs
+++ b/libs/pageserver_api/src/models.rs
@@ -10,6 +10,7 @@ use std::{
     io::{BufRead, Read},
     num::{NonZeroU64, NonZeroUsize},
     str::FromStr,
+    sync::atomic::AtomicUsize,
     time::{Duration, SystemTime},
 };
 
@@ -308,13 +309,88 @@ pub struct TenantConfig {
     pub switch_aux_file_policy: Option<AuxFilePolicy>,
 }
 
+/// The policy for the aux file storage. It can be switched through `switch_aux_file_policy`
+/// tenant config. When the first aux file written, the policy will be persisted in the
+/// `index_part.json` file and has a limited migration path.
+///
+/// Currently, we only allow the following migration path:
+///
+/// Unset -> V1
+///       -> V2
+///       -> CrossValidation -> V2
 #[derive(Debug, Clone, Copy, PartialEq, Eq, Serialize, Deserialize)]
 pub enum AuxFilePolicy {
+    /// V1 aux file policy: store everything in AUX_FILE_KEY
     V1,
+    /// V2 aux file policy: store in the AUX_FILE keyspace
     V2,
+    /// Cross validation runs both formats on the write path and does validation
+    /// on the read path.
     CrossValidation,
 }
 
+impl AuxFilePolicy {
+    pub fn is_valid_migration_path(from: Option<Self>, to: Self) -> bool {
+        matches!(
+            (from, to),
+            (None, _) | (Some(AuxFilePolicy::CrossValidation), AuxFilePolicy::V2)
+        )
+    }
+
+    /// If a tenant writes aux files without setting `switch_aux_policy`, this value will be used.
+    pub fn default_tenant_config() -> Self {
+        Self::V1
+    }
+}
+
+/// The aux file policy memory flag. Users can store `Option<AuxFilePolicy>` into this atomic flag. 0 == unspecified.
+pub struct AtomicAuxFilePolicy(AtomicUsize);
+
+impl AtomicAuxFilePolicy {
+    pub fn new(policy: Option<AuxFilePolicy>) -> Self {
+        Self(AtomicUsize::new(
+            policy.map(AuxFilePolicy::to_usize).unwrap_or_default(),
+        ))
+    }
+
+    pub fn load(&self) -> Option<AuxFilePolicy> {
+        match self.0.load(std::sync::atomic::Ordering::Acquire) {
+            0 => None,
+            other => Some(AuxFilePolicy::from_usize(other)),
+        }
+    }
+
+    pub fn store(&self, policy: Option<AuxFilePolicy>) {
+        self.0.store(
+            policy.map(AuxFilePolicy::to_usize).unwrap_or_default(),
+            std::sync::atomic::Ordering::Release,
+        );
+    }
+}
+
+impl AuxFilePolicy {
+    pub fn to_usize(self) -> usize {
+        match self {
+            Self::V1 => 1,
+            Self::CrossValidation => 2,
+            Self::V2 => 3,
+        }
+    }
+
+    pub fn try_from_usize(this: usize) -> Option<Self> {
+        match this {
+            1 => Some(Self::V1),
+            2 => Some(Self::CrossValidation),
+            3 => Some(Self::V2),
+            _ => None,
+        }
+    }
+
+    pub fn from_usize(this: usize) -> Self {
+        Self::try_from_usize(this).unwrap()
+    }
+}
+
 impl FromStr for AuxFilePolicy {
     type Err = anyhow::Error;
 
@@ -604,6 +680,9 @@ pub struct TimelineInfo {
     pub state: TimelineState,
 
     pub walreceiver_status: String,
+
+    /// The last aux file policy being used on this timeline
+    pub last_aux_file_policy: Option<AuxFilePolicy>,
 }
 
 #[derive(Debug, Clone, Serialize, Deserialize)]
@@ -1505,4 +1584,59 @@ mod tests {
             assert_eq!(actual, expected, "example on {line}");
         }
     }
+
+    #[test]
+    fn test_aux_file_migration_path() {
+        assert!(AuxFilePolicy::is_valid_migration_path(
+            None,
+            AuxFilePolicy::V1
+        ));
+        assert!(AuxFilePolicy::is_valid_migration_path(
+            None,
+            AuxFilePolicy::V2
+        ));
+        assert!(AuxFilePolicy::is_valid_migration_path(
+            None,
+            AuxFilePolicy::CrossValidation
+        ));
+        // Self-migration is not a valid migration path, and the caller should handle it by itself.
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::V1),
+            AuxFilePolicy::V1
+        ));
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::V2),
+            AuxFilePolicy::V2
+        ));
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::CrossValidation),
+            AuxFilePolicy::CrossValidation
+        ));
+        // Migrations not allowed
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::CrossValidation),
+            AuxFilePolicy::V1
+        ));
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::V1),
+            AuxFilePolicy::V2
+        ));
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::V2),
+            AuxFilePolicy::V1
+        ));
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::V2),
+            AuxFilePolicy::CrossValidation
+        ));
+        assert!(!AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::V1),
+            AuxFilePolicy::CrossValidation
+        ));
+        // Migrations allowed
+        assert!(AuxFilePolicy::is_valid_migration_path(
+            Some(AuxFilePolicy::CrossValidation),
+            AuxFilePolicy::V2
+        ));
+    }
 }
diff --git a/pageserver/ctl/src/main.rs b/pageserver/ctl/src/main.rs
index 1fb75584fc92..e92c352dab1d 100644
--- a/pageserver/ctl/src/main.rs
+++ b/pageserver/ctl/src/main.rs
@@ -219,6 +219,7 @@ fn handle_metadata(
     let mut meta = TimelineMetadata::from_bytes(&metadata_bytes)?;
     println!("Current metadata:\n{meta:?}");
     let mut update_meta = false;
+    // TODO: simplify this part
     if let Some(disk_consistent_lsn) = disk_consistent_lsn {
         meta = TimelineMetadata::new(
             *disk_consistent_lsn,
diff --git a/pageserver/src/http/routes.rs b/pageserver/src/http/routes.rs
index b8d5c67ce0ab..7efd48afc7a4 100644
--- a/pageserver/src/http/routes.rs
+++ b/pageserver/src/http/routes.rs
@@ -439,6 +439,8 @@ async fn build_timeline_info_common(
         state,
 
         walreceiver_status,
+
+        last_aux_file_policy: timeline.last_aux_file_policy.load(),
     };
     Ok(info)
 }
diff --git a/pageserver/src/pgdatadir_mapping.rs b/pageserver/src/pgdatadir_mapping.rs
index 1092d64d33fe..402f075365ab 100644
--- a/pageserver/src/pgdatadir_mapping.rs
+++ b/pageserver/src/pgdatadir_mapping.rs
@@ -35,7 +35,7 @@ use std::ops::ControlFlow;
 use std::ops::Range;
 use strum::IntoEnumIterator;
 use tokio_util::sync::CancellationToken;
-use tracing::{debug, trace, warn};
+use tracing::{debug, info, trace, warn};
 use utils::bin_ser::DeserializeError;
 use utils::vec_map::{VecMap, VecMapOrdering};
 use utils::{bin_ser::BeSer, lsn::Lsn};
@@ -718,10 +718,11 @@ impl Timeline {
         lsn: Lsn,
         ctx: &RequestContext,
     ) -> Result<HashMap<String, Bytes>, PageReconstructError> {
-        match self.get_switch_aux_file_policy() {
-            AuxFilePolicy::V1 => self.list_aux_files_v1(lsn, ctx).await,
-            AuxFilePolicy::V2 => self.list_aux_files_v2(lsn, ctx).await,
-            AuxFilePolicy::CrossValidation => {
+        let current_policy = self.last_aux_file_policy.load();
+        match current_policy {
+            Some(AuxFilePolicy::V1) | None => self.list_aux_files_v1(lsn, ctx).await,
+            Some(AuxFilePolicy::V2) => self.list_aux_files_v2(lsn, ctx).await,
+            Some(AuxFilePolicy::CrossValidation) => {
                 let v1_result = self.list_aux_files_v1(lsn, ctx).await;
                 let v2_result = self.list_aux_files_v2(lsn, ctx).await;
                 match (v1_result, v2_result) {
@@ -1469,7 +1470,27 @@ impl<'a> DatadirModification<'a> {
         content: &[u8],
         ctx: &RequestContext,
     ) -> anyhow::Result<()> {
-        let policy = self.tline.get_switch_aux_file_policy();
+        let switch_policy = self.tline.get_switch_aux_file_policy();
+
+        let policy = {
+            let current_policy = self.tline.last_aux_file_policy.load();
+            // Allowed switch path:
+            // * no aux files -> v1/v2/cross-validation
+            // * cross-validation->v2
+            if AuxFilePolicy::is_valid_migration_path(current_policy, switch_policy) {
+                self.tline.last_aux_file_policy.store(Some(switch_policy));
+                self.tline
+                    .remote_client
+                    .schedule_index_upload_for_aux_file_policy_update(Some(switch_policy))?;
+                info!(current=?current_policy, next=?switch_policy, "switching aux file policy");
+                switch_policy
+            } else {
+                // This branch handles non-valid migration path, and the case that switch_policy == current_policy.
+                // And actually, because the migration path always allow unspecified -> *, this unwrap_or will never be hit.
+                current_policy.unwrap_or(AuxFilePolicy::default_tenant_config())
+            }
+        };
+
         if let AuxFilePolicy::V2 | AuxFilePolicy::CrossValidation = policy {
             let key = aux_file::encode_aux_file_key(path);
             // retrieve the key from the engine
diff --git a/pageserver/src/tenant.rs b/pageserver/src/tenant.rs
index 54b63f70425a..d42b9082b783 100644
--- a/pageserver/src/tenant.rs
+++ b/pageserver/src/tenant.rs
@@ -20,6 +20,7 @@ use futures::stream::FuturesUnordered;
 use futures::FutureExt;
 use futures::StreamExt;
 use pageserver_api::models;
+use pageserver_api::models::AuxFilePolicy;
 use pageserver_api::models::TimelineState;
 use pageserver_api::models::TopTenantShardItem;
 use pageserver_api::models::WalRedoManagerStatus;
@@ -529,6 +530,7 @@ impl Tenant {
         index_part: Option<IndexPart>,
         metadata: TimelineMetadata,
         ancestor: Option<Arc<Timeline>>,
+        last_aux_file_policy: Option<AuxFilePolicy>,
         _ctx: &RequestContext,
     ) -> anyhow::Result<()> {
         let tenant_id = self.tenant_shard_id;
@@ -539,6 +541,10 @@ impl Tenant {
             ancestor.clone(),
             resources,
             CreateTimelineCause::Load,
+            // This could be derived from ancestor branch + index part. Though the only caller of `timeline_init_and_sync` is `load_remote_timeline`,
+            // there will potentially be other caller of this function in the future, and we don't know whether `index_part` or `ancestor` takes precedence.
+            // Therefore, we pass this field explicitly for now, and remove it once we fully migrate to aux file v2.
+            last_aux_file_policy,
         )?;
         let disk_consistent_lsn = timeline.get_disk_consistent_lsn();
         anyhow::ensure!(
@@ -553,6 +559,10 @@ impl Tenant {
 
         if let Some(index_part) = index_part.as_ref() {
             timeline.remote_client.init_upload_queue(index_part)?;
+
+            timeline
+                .last_aux_file_policy
+                .store(index_part.last_aux_file_policy());
         } else {
             // No data on the remote storage, but we have local metadata file. We can end up
             // here with timeline_create being interrupted before finishing index part upload.
@@ -1173,12 +1183,15 @@ impl Tenant {
             None
         };
 
+        let last_aux_file_policy = index_part.last_aux_file_policy();
+
         self.timeline_init_and_sync(
             timeline_id,
             resources,
             Some(index_part),
             remote_metadata,
             ancestor,
+            last_aux_file_policy,
             ctx,
         )
         .await
@@ -1358,6 +1371,7 @@ impl Tenant {
             create_guard,
             initdb_lsn,
             None,
+            None,
         )
         .await
     }
@@ -2441,6 +2455,7 @@ impl Tenant {
         ancestor: Option<Arc<Timeline>>,
         resources: TimelineResources,
         cause: CreateTimelineCause,
+        last_aux_file_policy: Option<AuxFilePolicy>,
     ) -> anyhow::Result<Arc<Timeline>> {
         let state = match cause {
             CreateTimelineCause::Load => {
@@ -2469,6 +2484,7 @@ impl Tenant {
             resources,
             pg_version,
             state,
+            last_aux_file_policy,
             self.cancel.child_token(),
         );
 
@@ -3119,6 +3135,7 @@ impl Tenant {
                 timeline_create_guard,
                 start_lsn + 1,
                 Some(Arc::clone(src_timeline)),
+                src_timeline.last_aux_file_policy.load(),
             )
             .await?;
 
@@ -3312,6 +3329,7 @@ impl Tenant {
                 timeline_create_guard,
                 pgdata_lsn,
                 None,
+                None,
             )
             .await?;
 
@@ -3383,6 +3401,7 @@ impl Tenant {
         create_guard: TimelineCreateGuard<'a>,
         start_lsn: Lsn,
         ancestor: Option<Arc<Timeline>>,
+        last_aux_file_policy: Option<AuxFilePolicy>,
     ) -> anyhow::Result<UninitializedTimeline> {
         let tenant_shard_id = self.tenant_shard_id;
 
@@ -3398,6 +3417,7 @@ impl Tenant {
                 ancestor,
                 resources,
                 CreateTimelineCause::Load,
+                last_aux_file_policy,
             )
             .context("Failed to create timeline data structure")?;
 
@@ -5621,4 +5641,280 @@ mod tests {
 
         Ok(())
     }
+
+    #[tokio::test]
+    async fn test_branch_copies_dirty_aux_file_flag() {
+        let harness = TenantHarness::create("test_branch_copies_dirty_aux_file_flag").unwrap();
+
+        // the default aux file policy to switch is v1 if not set by the admins
+        assert_eq!(
+            harness.tenant_conf.switch_aux_file_policy,
+            AuxFilePolicy::V1
+        );
+        let (tenant, ctx) = harness.load().await;
+
+        let mut lsn = Lsn(0x08);
+
+        let tline: Arc<Timeline> = tenant
+            .create_test_timeline(TIMELINE_ID, lsn, DEFAULT_PG_VERSION, &ctx)
+            .await
+            .unwrap();
+
+        // no aux file is written at this point, so the persistent flag should be unset
+        assert_eq!(tline.last_aux_file_policy.load(), None);
+
+        {
+            lsn += 8;
+            let mut modification = tline.begin_modification(lsn);
+            modification
+                .put_file("pg_logical/mappings/test1", b"first", &ctx)
+                .await
+                .unwrap();
+            modification.commit(&ctx).await.unwrap();
+        }
+
+        // there is no tenant manager to pass the configuration through, so lets mimic it
+        tenant.set_new_location_config(
+            AttachedTenantConf::try_from(LocationConf::attached_single(
+                TenantConfOpt {
+                    switch_aux_file_policy: Some(AuxFilePolicy::V2),
+                    ..Default::default()
+                },
+                tenant.generation,
+                &pageserver_api::models::ShardParameters::default(),
+            ))
+            .unwrap(),
+        );
+
+        assert_eq!(
+            tline.get_switch_aux_file_policy(),
+            AuxFilePolicy::V2,
+            "wanted state has been updated"
+        );
+        assert_eq!(
+            tline.last_aux_file_policy.load(),
+            Some(AuxFilePolicy::V1),
+            "aux file is written with switch_aux_file_policy unset (which is v1), so we should keep v1"
+        );
+
+        // we can read everything from the storage
+        let files = tline.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(
+            files.get("pg_logical/mappings/test1"),
+            Some(&bytes::Bytes::from_static(b"first"))
+        );
+
+        {
+            lsn += 8;
+            let mut modification = tline.begin_modification(lsn);
+            modification
+                .put_file("pg_logical/mappings/test2", b"second", &ctx)
+                .await
+                .unwrap();
+            modification.commit(&ctx).await.unwrap();
+        }
+
+        assert_eq!(
+            tline.last_aux_file_policy.load(),
+            Some(AuxFilePolicy::V1),
+            "keep v1 storage format when new files are written"
+        );
+
+        let files = tline.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(
+            files.get("pg_logical/mappings/test2"),
+            Some(&bytes::Bytes::from_static(b"second"))
+        );
+
+        let child = tenant
+            .branch_timeline_test(&tline, NEW_TIMELINE_ID, Some(lsn), &ctx)
+            .await
+            .unwrap();
+
+        // child copies the last flag even if that is not on remote storage yet
+        assert_eq!(child.get_switch_aux_file_policy(), AuxFilePolicy::V2);
+        assert_eq!(child.last_aux_file_policy.load(), Some(AuxFilePolicy::V1));
+
+        let files = child.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(files.get("pg_logical/mappings/test1"), None);
+        assert_eq!(files.get("pg_logical/mappings/test2"), None);
+
+        // even if we crash here without flushing parent timeline with it's new
+        // last_aux_file_policy we are safe, because child was never meant to access ancestor's
+        // files. the ancestor can even switch back to V1 because of a migration safely.
+    }
+
+    #[tokio::test]
+    async fn aux_file_policy_switch() {
+        let mut harness = TenantHarness::create("aux_file_policy_switch").unwrap();
+        harness.tenant_conf.switch_aux_file_policy = AuxFilePolicy::CrossValidation; // set to cross-validation mode
+        let (tenant, ctx) = harness.load().await;
+
+        let mut lsn = Lsn(0x08);
+
+        let tline: Arc<Timeline> = tenant
+            .create_test_timeline(TIMELINE_ID, lsn, DEFAULT_PG_VERSION, &ctx)
+            .await
+            .unwrap();
+
+        assert_eq!(
+            tline.last_aux_file_policy.load(),
+            None,
+            "no aux file is written so it should be unset"
+        );
+
+        {
+            lsn += 8;
+            let mut modification = tline.begin_modification(lsn);
+            modification
+                .put_file("pg_logical/mappings/test1", b"first", &ctx)
+                .await
+                .unwrap();
+            modification.commit(&ctx).await.unwrap();
+        }
+
+        // there is no tenant manager to pass the configuration through, so lets mimic it
+        tenant.set_new_location_config(
+            AttachedTenantConf::try_from(LocationConf::attached_single(
+                TenantConfOpt {
+                    switch_aux_file_policy: Some(AuxFilePolicy::V2),
+                    ..Default::default()
+                },
+                tenant.generation,
+                &pageserver_api::models::ShardParameters::default(),
+            ))
+            .unwrap(),
+        );
+
+        assert_eq!(
+            tline.get_switch_aux_file_policy(),
+            AuxFilePolicy::V2,
+            "wanted state has been updated"
+        );
+        assert_eq!(
+            tline.last_aux_file_policy.load(),
+            Some(AuxFilePolicy::CrossValidation),
+            "dirty index_part.json reflected state is yet to be updated"
+        );
+
+        // we can still read the auxfile v1 before we ingest anything new
+        let files = tline.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(
+            files.get("pg_logical/mappings/test1"),
+            Some(&bytes::Bytes::from_static(b"first"))
+        );
+
+        {
+            lsn += 8;
+            let mut modification = tline.begin_modification(lsn);
+            modification
+                .put_file("pg_logical/mappings/test2", b"second", &ctx)
+                .await
+                .unwrap();
+            modification.commit(&ctx).await.unwrap();
+        }
+
+        assert_eq!(
+            tline.last_aux_file_policy.load(),
+            Some(AuxFilePolicy::V2),
+            "ingesting a file should apply the wanted switch state when applicable"
+        );
+
+        let files = tline.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(
+            files.get("pg_logical/mappings/test1"),
+            Some(&bytes::Bytes::from_static(b"first")),
+            "cross validation writes to both v1 and v2 so this should be available in v2"
+        );
+        assert_eq!(
+            files.get("pg_logical/mappings/test2"),
+            Some(&bytes::Bytes::from_static(b"second"))
+        );
+
+        // mimic again by trying to flip it from V2 to V1 (not switched to while ingesting a file)
+        tenant.set_new_location_config(
+            AttachedTenantConf::try_from(LocationConf::attached_single(
+                TenantConfOpt {
+                    switch_aux_file_policy: Some(AuxFilePolicy::V1),
+                    ..Default::default()
+                },
+                tenant.generation,
+                &pageserver_api::models::ShardParameters::default(),
+            ))
+            .unwrap(),
+        );
+
+        {
+            lsn += 8;
+            let mut modification = tline.begin_modification(lsn);
+            modification
+                .put_file("pg_logical/mappings/test2", b"third", &ctx)
+                .await
+                .unwrap();
+            modification.commit(&ctx).await.unwrap();
+        }
+
+        assert_eq!(
+            tline.get_switch_aux_file_policy(),
+            AuxFilePolicy::V1,
+            "wanted state has been updated again, even if invalid request"
+        );
+
+        assert_eq!(
+            tline.last_aux_file_policy.load(),
+            Some(AuxFilePolicy::V2),
+            "ingesting a file should apply the wanted switch state when applicable"
+        );
+
+        let files = tline.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(
+            files.get("pg_logical/mappings/test1"),
+            Some(&bytes::Bytes::from_static(b"first"))
+        );
+        assert_eq!(
+            files.get("pg_logical/mappings/test2"),
+            Some(&bytes::Bytes::from_static(b"third"))
+        );
+
+        // mimic again by trying to flip it from from V1 to V2 (not switched to while ingesting a file)
+        tenant.set_new_location_config(
+            AttachedTenantConf::try_from(LocationConf::attached_single(
+                TenantConfOpt {
+                    switch_aux_file_policy: Some(AuxFilePolicy::V2),
+                    ..Default::default()
+                },
+                tenant.generation,
+                &pageserver_api::models::ShardParameters::default(),
+            ))
+            .unwrap(),
+        );
+
+        {
+            lsn += 8;
+            let mut modification = tline.begin_modification(lsn);
+            modification
+                .put_file("pg_logical/mappings/test3", b"last", &ctx)
+                .await
+                .unwrap();
+            modification.commit(&ctx).await.unwrap();
+        }
+
+        assert_eq!(tline.get_switch_aux_file_policy(), AuxFilePolicy::V2);
+
+        assert_eq!(tline.last_aux_file_policy.load(), Some(AuxFilePolicy::V2));
+
+        let files = tline.list_aux_files(lsn, &ctx).await.unwrap();
+        assert_eq!(
+            files.get("pg_logical/mappings/test1"),
+            Some(&bytes::Bytes::from_static(b"first"))
+        );
+        assert_eq!(
+            files.get("pg_logical/mappings/test2"),
+            Some(&bytes::Bytes::from_static(b"third"))
+        );
+        assert_eq!(
+            files.get("pg_logical/mappings/test3"),
+            Some(&bytes::Bytes::from_static(b"last"))
+        );
+    }
 }
diff --git a/pageserver/src/tenant/config.rs b/pageserver/src/tenant/config.rs
index a743ce3c16a3..a695363cdced 100644
--- a/pageserver/src/tenant/config.rs
+++ b/pageserver/src/tenant/config.rs
@@ -373,6 +373,8 @@ pub struct TenantConf {
 
     /// Switch to a new aux file policy. Switching this flag requires the user has not written any aux file into
     /// the storage before, and this flag cannot be switched back. Otherwise there will be data corruptions.
+    /// There is a `last_aux_file_policy` flag which gets persisted in `index_part.json` once the first aux
+    /// file is written.
     pub switch_aux_file_policy: AuxFilePolicy,
 }
 
@@ -574,7 +576,7 @@ impl Default for TenantConf {
             lazy_slru_download: false,
             timeline_get_throttle: crate::tenant::throttle::Config::disabled(),
             image_layer_creation_check_threshold: DEFAULT_IMAGE_LAYER_CREATION_CHECK_THRESHOLD,
-            switch_aux_file_policy: AuxFilePolicy::V1,
+            switch_aux_file_policy: AuxFilePolicy::default_tenant_config(),
         }
     }
 }
diff --git a/pageserver/src/tenant/remote_timeline_client.rs b/pageserver/src/tenant/remote_timeline_client.rs
index 3a1113cf0108..d3adae684159 100644
--- a/pageserver/src/tenant/remote_timeline_client.rs
+++ b/pageserver/src/tenant/remote_timeline_client.rs
@@ -189,6 +189,7 @@ use camino::Utf8Path;
 use chrono::{NaiveDateTime, Utc};
 
 pub(crate) use download::download_initdb_tar_zst;
+use pageserver_api::models::AuxFilePolicy;
 use pageserver_api::shard::{ShardIndex, TenantShardId};
 use scopeguard::ScopeGuard;
 use tokio_util::sync::CancellationToken;
@@ -611,6 +612,17 @@ impl RemoteTimelineClient {
         Ok(())
     }
 
+    /// Launch an index-file upload operation in the background, with only aux_file_policy flag updated.
+    pub(crate) fn schedule_index_upload_for_aux_file_policy_update(
+        self: &Arc<Self>,
+        last_aux_file_policy: Option<AuxFilePolicy>,
+    ) -> anyhow::Result<()> {
+        let mut guard = self.upload_queue.lock().unwrap();
+        let upload_queue = guard.initialized_mut()?;
+        upload_queue.last_aux_file_policy = last_aux_file_policy;
+        self.schedule_index_upload(upload_queue);
+        Ok(())
+    }
     ///
     /// Launch an index-file upload operation in the background, if necessary.
     ///
@@ -1851,6 +1863,7 @@ impl RemoteTimelineClient {
                         dangling_files: HashMap::default(),
                         shutting_down: false,
                         shutdown_ready: Arc::new(tokio::sync::Semaphore::new(0)),
+                        last_aux_file_policy: initialized.last_aux_file_policy,
                     };
 
                     let upload_queue = std::mem::replace(
diff --git a/pageserver/src/tenant/remote_timeline_client/index.rs b/pageserver/src/tenant/remote_timeline_client/index.rs
index b114d6aa1047..032dda7ff395 100644
--- a/pageserver/src/tenant/remote_timeline_client/index.rs
+++ b/pageserver/src/tenant/remote_timeline_client/index.rs
@@ -5,6 +5,7 @@
 use std::collections::HashMap;
 
 use chrono::NaiveDateTime;
+use pageserver_api::models::AuxFilePolicy;
 use serde::{Deserialize, Serialize};
 use utils::id::TimelineId;
 
@@ -88,6 +89,16 @@ pub struct IndexPart {
 
     #[serde(default)]
     pub(crate) lineage: Lineage,
+
+    /// Describes the kind of aux files stored in the timeline.
+    ///
+    /// The value is modified during file ingestion when the latest wanted value communicated via tenant config is applied if it is acceptable.
+    /// A V1 setting after V2 files have been committed is not accepted.
+    ///
+    /// None means no aux files have been written to the storage before the point
+    /// when this flag is introduced.
+    #[serde(skip_serializing_if = "Option::is_none", default)]
+    pub(crate) last_aux_file_policy: Option<AuxFilePolicy>,
 }
 
 impl IndexPart {
@@ -101,10 +112,11 @@ impl IndexPart {
     ///      is always generated from the keys of `layer_metadata`)
     /// - 4: timeline_layers is fully removed.
     /// - 5: lineage was added
-    const LATEST_VERSION: usize = 5;
+    /// - 6: last_aux_file_policy is added.
+    const LATEST_VERSION: usize = 6;
 
     // Versions we may see when reading from a bucket.
-    pub const KNOWN_VERSIONS: &'static [usize] = &[1, 2, 3, 4, 5];
+    pub const KNOWN_VERSIONS: &'static [usize] = &[1, 2, 3, 4, 5, 6];
 
     pub const FILE_NAME: &'static str = "index_part.json";
 
@@ -113,6 +125,7 @@ impl IndexPart {
         disk_consistent_lsn: Lsn,
         metadata: TimelineMetadata,
         lineage: Lineage,
+        last_aux_file_policy: Option<AuxFilePolicy>,
     ) -> Self {
         let layer_metadata = layers_and_metadata
             .iter()
@@ -126,6 +139,7 @@ impl IndexPart {
             metadata,
             deleted_at: None,
             lineage,
+            last_aux_file_policy,
         }
     }
 
@@ -155,8 +169,13 @@ impl IndexPart {
             example_metadata.disk_consistent_lsn(),
             example_metadata,
             Default::default(),
+            Some(AuxFilePolicy::V1),
         )
     }
+
+    pub(crate) fn last_aux_file_policy(&self) -> Option<AuxFilePolicy> {
+        self.last_aux_file_policy
+    }
 }
 
 impl From<&UploadQueueInitialized> for IndexPart {
@@ -165,7 +184,13 @@ impl From<&UploadQueueInitialized> for IndexPart {
         let metadata = uq.latest_metadata.clone();
         let lineage = uq.latest_lineage.clone();
 
-        Self::new(&uq.latest_files, disk_consistent_lsn, metadata, lineage)
+        Self::new(
+            &uq.latest_files,
+            disk_consistent_lsn,
+            metadata,
+            lineage,
+            uq.last_aux_file_policy,
+        )
     }
 }
 
@@ -299,6 +324,7 @@ mod tests {
             metadata: TimelineMetadata::from_bytes(&[113,11,159,210,0,54,0,4,0,0,0,0,1,105,96,232,1,0,0,0,0,1,105,96,112,0,0,0,0,0,0,0,0,0,0,0,0,0,1,105,96,112,0,0,0,0,1,105,96,112,0,0,0,14,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0]).unwrap(),
             deleted_at: None,
             lineage: Lineage::default(),
+            last_aux_file_policy: None,
         };
 
         let part = IndexPart::from_s3_bytes(example.as_bytes()).unwrap();
@@ -340,6 +366,7 @@ mod tests {
             metadata: TimelineMetadata::from_bytes(&[113,11,159,210,0,54,0,4,0,0,0,0,1,105,96,232,1,0,0,0,0,1,105,96,112,0,0,0,0,0,0,0,0,0,0,0,0,0,1,105,96,112,0,0,0,0,1,105,96,112,0,0,0,14,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0]).unwrap(),
             deleted_at: None,
             lineage: Lineage::default(),
+            last_aux_file_policy: None,
         };
 
         let part = IndexPart::from_s3_bytes(example.as_bytes()).unwrap();
@@ -383,6 +410,7 @@ mod tests {
             deleted_at: Some(chrono::NaiveDateTime::parse_from_str(
                 "2023-07-31T09:00:00.123000000", "%Y-%m-%dT%H:%M:%S.%f").unwrap()),
             lineage: Lineage::default(),
+            last_aux_file_policy: None,
         };
 
         let part = IndexPart::from_s3_bytes(example.as_bytes()).unwrap();
@@ -428,6 +456,7 @@ mod tests {
             .unwrap(),
             deleted_at: None,
             lineage: Lineage::default(),
+            last_aux_file_policy: None,
         };
 
         let empty_layers_parsed = IndexPart::from_s3_bytes(empty_layers_json.as_bytes()).unwrap();
@@ -468,6 +497,7 @@ mod tests {
             metadata: TimelineMetadata::from_bytes(&[113,11,159,210,0,54,0,4,0,0,0,0,1,105,96,232,1,0,0,0,0,1,105,96,112,0,0,0,0,0,0,0,0,0,0,0,0,0,1,105,96,112,0,0,0,0,1,105,96,112,0,0,0,14,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0]).unwrap(),
             deleted_at: Some(parse_naive_datetime("2023-07-31T09:00:00.123000000")),
             lineage: Lineage::default(),
+            last_aux_file_policy: None,
         };
 
         let part = IndexPart::from_s3_bytes(example.as_bytes()).unwrap();
@@ -511,6 +541,57 @@ mod tests {
                 reparenting_history: vec![TimelineId::from_str("e1bfd8c633d713d279e6fcd2bcc15b6d").unwrap()],
                 original_ancestor: Some((TimelineId::from_str("e2bfd8c633d713d279e6fcd2bcc15b6d").unwrap(), Lsn::from_str("0/15A7618").unwrap(), parse_naive_datetime("2024-05-07T18:52:36.322426563"))),
             },
+            last_aux_file_policy: None,
+        };
+
+        let part = IndexPart::from_s3_bytes(example.as_bytes()).unwrap();
+        assert_eq!(part, expected);
+    }
+
+    #[test]
+    fn v6_indexpart_is_parsed() {
+        let example = r#"{
+            "version":6,
+            "layer_metadata":{
+                "000000000000000000000000000000000000-FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF__0000000001696070-00000000016960E9": { "file_size": 25600000 },
+                "000000000000000000000000000000000000-FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF__00000000016B59D8-00000000016B5A51": { "file_size": 9007199254741001 }
+            },
+            "disk_consistent_lsn":"0/16960E8",
+            "metadata_bytes":[113,11,159,210,0,54,0,4,0,0,0,0,1,105,96,232,1,0,0,0,0,1,105,96,112,0,0,0,0,0,0,0,0,0,0,0,0,0,1,105,96,112,0,0,0,0,1,105,96,112,0,0,0,14,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0],
+            "deleted_at": "2023-07-31T09:00:00.123",
+            "lineage":{
+                "original_ancestor":["e2bfd8c633d713d279e6fcd2bcc15b6d","0/15A7618","2024-05-07T18:52:36.322426563"],
+                "reparenting_history":["e1bfd8c633d713d279e6fcd2bcc15b6d"]
+            },
+            "last_aux_file_policy": "V2"
+        }"#;
+
+        let expected = IndexPart {
+            version: 6,
+            layer_metadata: HashMap::from([
+                ("000000000000000000000000000000000000-FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF__0000000001696070-00000000016960E9".parse().unwrap(), IndexLayerMetadata {
+                    file_size: 25600000,
+                    generation: Generation::none(),
+                    shard: ShardIndex::unsharded()
+                }),
+                ("000000000000000000000000000000000000-FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF__00000000016B59D8-00000000016B5A51".parse().unwrap(), IndexLayerMetadata {
+                    // serde_json should always parse this but this might be a double with jq for
+                    // example.
+                    file_size: 9007199254741001,
+                    generation: Generation::none(),
+                    shard: ShardIndex::unsharded()
+                })
+            ]),
+            disk_consistent_lsn: "0/16960E8".parse::<Lsn>().unwrap(),
+            metadata: TimelineMetadata::from_bytes(&[113,11,159,210,0,54,0,4,0,0,0,0,1,105,96,232,1,0,0,0,0,1,105,96,112,0,0,0,0,0,0,0,0,0,0,0,0,0,1,105,96,112,0,0,0,0,1,105,96,112,0,0,0,14,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0]).unwrap(),
+            deleted_at: Some(chrono::NaiveDateTime::parse_from_str(
+                "2023-07-31T09:00:00.123000000", "%Y-%m-%dT%H:%M:%S.%f").unwrap()),
+            lineage: Lineage {
+                reparenting_history_truncated: false,
+                reparenting_history: vec![TimelineId::from_str("e1bfd8c633d713d279e6fcd2bcc15b6d").unwrap()],
+                original_ancestor: Some((TimelineId::from_str("e2bfd8c633d713d279e6fcd2bcc15b6d").unwrap(), Lsn::from_str("0/15A7618").unwrap(), parse_naive_datetime("2024-05-07T18:52:36.322426563"))),
+            },
+            last_aux_file_policy: Some(AuxFilePolicy::V2),
         };
 
         let part = IndexPart::from_s3_bytes(example.as_bytes()).unwrap();
diff --git a/pageserver/src/tenant/timeline.rs b/pageserver/src/tenant/timeline.rs
index df9bc9b35b85..1fb1928079b1 100644
--- a/pageserver/src/tenant/timeline.rs
+++ b/pageserver/src/tenant/timeline.rs
@@ -23,7 +23,7 @@ use pageserver_api::{
     },
     keyspace::{KeySpaceAccum, SparseKeyPartitioning},
     models::{
-        AuxFilePolicy, CompactionAlgorithm, DownloadRemoteLayersTaskInfo,
+        AtomicAuxFilePolicy, AuxFilePolicy, CompactionAlgorithm, DownloadRemoteLayersTaskInfo,
         DownloadRemoteLayersTaskSpawnRequest, EvictionPolicy, InMemoryLayerInfo, LayerMapInfo,
         TimelineState,
     },
@@ -413,7 +413,11 @@ pub struct Timeline {
     /// Keep aux directory cache to avoid it's reconstruction on each update
     pub(crate) aux_files: tokio::sync::Mutex<AuxFilesState>,
 
+    /// Size estimator for aux file v2
     pub(crate) aux_file_size_estimator: AuxFileSizeEstimator,
+
+    /// Indicate whether aux file v2 storage is enabled.
+    pub(crate) last_aux_file_policy: AtomicAuxFilePolicy,
 }
 
 pub struct WalReceiverInfo {
@@ -2133,6 +2137,7 @@ impl Timeline {
         resources: TimelineResources,
         pg_version: u32,
         state: TimelineState,
+        aux_file_policy: Option<AuxFilePolicy>,
         cancel: CancellationToken,
     ) -> Arc<Self> {
         let disk_consistent_lsn = metadata.disk_consistent_lsn();
@@ -2257,6 +2262,8 @@ impl Timeline {
                 }),
 
                 aux_file_size_estimator: AuxFileSizeEstimator::new(aux_file_metrics),
+
+                last_aux_file_policy: AtomicAuxFilePolicy::new(aux_file_policy),
             };
             result.repartition_threshold =
                 result.get_checkpoint_distance() / REPARTITION_FREQ_IN_CHECKPOINT_DISTANCE;
diff --git a/pageserver/src/tenant/timeline/delete.rs b/pageserver/src/tenant/timeline/delete.rs
index 901f5149b37f..b5dfc86e77a1 100644
--- a/pageserver/src/tenant/timeline/delete.rs
+++ b/pageserver/src/tenant/timeline/delete.rs
@@ -280,6 +280,8 @@ impl DeleteTimelineFlow {
                 // Important. We dont pass ancestor above because it can be missing.
                 // Thus we need to skip the validation here.
                 CreateTimelineCause::Delete,
+                // Aux file policy is not needed for deletion, assuming deletion does not read aux keyspace
+                None,
             )
             .context("create_timeline_struct")?;
 
diff --git a/pageserver/src/tenant/upload_queue.rs b/pageserver/src/tenant/upload_queue.rs
index a2f761fa949a..c0cc8f3124de 100644
--- a/pageserver/src/tenant/upload_queue.rs
+++ b/pageserver/src/tenant/upload_queue.rs
@@ -8,6 +8,7 @@ use std::collections::{HashMap, VecDeque};
 use std::fmt::Debug;
 
 use chrono::NaiveDateTime;
+use pageserver_api::models::AuxFilePolicy;
 use std::sync::Arc;
 use tracing::info;
 use utils::lsn::AtomicLsn;
@@ -60,6 +61,9 @@ pub(crate) struct UploadQueueInitialized {
     /// Part of the flattened "next" `index_part.json`.
     pub(crate) latest_lineage: Lineage,
 
+    /// The last aux file policy used on this timeline.
+    pub(crate) last_aux_file_policy: Option<AuxFilePolicy>,
+
     /// `disk_consistent_lsn` from the last metadata file that was successfully
     /// uploaded. `Lsn(0)` if nothing was uploaded yet.
     /// Unlike `latest_files` or `latest_metadata`, this value is never ahead.
@@ -189,6 +193,7 @@ impl UploadQueue {
             dangling_files: HashMap::new(),
             shutting_down: false,
             shutdown_ready: Arc::new(tokio::sync::Semaphore::new(0)),
+            last_aux_file_policy: Default::default(),
         };
 
         *self = UploadQueue::Initialized(state);
@@ -239,6 +244,7 @@ impl UploadQueue {
             dangling_files: HashMap::new(),
             shutting_down: false,
             shutdown_ready: Arc::new(tokio::sync::Semaphore::new(0)),
+            last_aux_file_policy: index_part.last_aux_file_policy(),
         };
 
         *self = UploadQueue::Initialized(state);
diff --git a/test_runner/regress/test_aux_files.py b/test_runner/regress/test_aux_files.py
new file mode 100644
index 000000000000..be9c41a8679b
--- /dev/null
+++ b/test_runner/regress/test_aux_files.py
@@ -0,0 +1,72 @@
+from fixtures.log_helper import log
+from fixtures.neon_fixtures import (
+    NeonEnvBuilder,
+    logical_replication_sync,
+)
+
+
+def test_aux_v2_config_switch(neon_env_builder: NeonEnvBuilder, vanilla_pg):
+    env = neon_env_builder.init_start()
+    endpoint = env.endpoints.create_start("main")
+    client = env.pageserver.http_client()
+
+    tenant_id = env.initial_tenant
+    timeline_id = env.initial_timeline
+
+    tenant_config = client.tenant_config(tenant_id).effective_config
+    tenant_config["switch_aux_file_policy"] = "V2"
+    client.set_tenant_config(tenant_id, tenant_config)
+    # aux file v2 is enabled on the write path, so for now, it should be unset (or null)
+    assert (
+        client.timeline_detail(tenant_id=tenant_id, timeline_id=timeline_id)["last_aux_file_policy"]
+        is None
+    )
+
+    pg_conn = endpoint.connect()
+    cur = pg_conn.cursor()
+
+    cur.execute("create table t(pk integer primary key, payload integer)")
+    cur.execute(
+        "CREATE TABLE replication_example(id SERIAL PRIMARY KEY, somedata int, text varchar(120));"
+    )
+    cur.execute("create publication pub1 for table t, replication_example")
+
+    # now start subscriber, aux files will be created at this point. TODO: find better ways of testing aux files (i.e., neon_test_utils)
+    # instead of going through the full logical replication process.
+    vanilla_pg.start()
+    vanilla_pg.safe_psql("create table t(pk integer primary key, payload integer)")
+    vanilla_pg.safe_psql(
+        "CREATE TABLE replication_example(id SERIAL PRIMARY KEY, somedata int, text varchar(120), testcolumn1 int, testcolumn2 int, testcolumn3 int);"
+    )
+    connstr = endpoint.connstr().replace("'", "''")
+    log.info(f"ep connstr is {endpoint.connstr()}, subscriber connstr {vanilla_pg.connstr()}")
+    vanilla_pg.safe_psql(f"create subscription sub1 connection '{connstr}' publication pub1")
+
+    # Wait logical replication channel to be established
+    logical_replication_sync(vanilla_pg, endpoint)
+    vanilla_pg.stop()
+    endpoint.stop()
+
+    with env.pageserver.http_client() as client:
+        # aux file v2 flag should be enabled at this point
+        assert client.timeline_detail(tenant_id, timeline_id)["last_aux_file_policy"] == "V2"
+    with env.pageserver.http_client() as client:
+        tenant_config = client.tenant_config(tenant_id).effective_config
+        tenant_config["switch_aux_file_policy"] = "V1"
+        client.set_tenant_config(tenant_id, tenant_config)
+        # the flag should still be enabled
+        assert (
+            client.timeline_detail(tenant_id=tenant_id, timeline_id=timeline_id)[
+                "last_aux_file_policy"
+            ]
+            == "V2"
+        )
+    env.pageserver.restart()
+    with env.pageserver.http_client() as client:
+        # aux file v2 flag should be persisted
+        assert (
+            client.timeline_detail(tenant_id=tenant_id, timeline_id=timeline_id)[
+                "last_aux_file_policy"
+            ]
+            == "V2"
+        )