diff --git a/README.md b/README.md
index 79a16a8fb2..053f80cbd4 100644
--- a/README.md
+++ b/README.md
@@ -412,7 +412,6 @@ Default: `""`
 
 Specifies the cluster name to tag allocated ENIs with. See the "Cluster Name tag" section below.
 
-
 ---
 
 `ENABLE_POD_ENI` (Since v1.7.0)
@@ -422,7 +421,7 @@ Type: Boolean as a String
 Default: `false`
 
 To enable security groups for pods you need to have at least an EKS 1.17 eks.3 cluster. Setting `ENABLE_POD_ENI` to `true`
-will add the `vpc.amazonaws.com/has-trunk-attached` label to the node, signifying that the feature is enabled. 
+will add the `vpc.amazonaws.com/has-trunk-attached` label to the node if it is possible to attach an additional ENI.
 
 ---
 
diff --git a/pkg/ipamd/ipamd.go b/pkg/ipamd/ipamd.go
index d164cdb4db..81f41a6bb7 100644
--- a/pkg/ipamd/ipamd.go
+++ b/pkg/ipamd/ipamd.go
@@ -827,13 +827,17 @@ func logPoolStats(total, used, maxAddrsPerENI int) {
 
 func (c *IPAMContext) askForTrunkENIIfNeeded() {
 	if c.enablePodENI && c.dataStore.GetTrunkENI() == "" {
+		// Check that there is room for a trunk ENI to be attached:
+		if c.dataStore.GetENIs() >= (c.maxENI - c.unmanagedENI) {
+			log.Debug("No slot available for a trunk ENI to be attached. Not labeling the node")
+			return
+		}
 		// We need to signal that VPC Resource Controller needs to attach a trunk ENI
 		err := c.SetNodeLabel("vpc.amazonaws.com/has-trunk-attached", "false")
 		if err != nil {
 			podENIErrInc("askForTrunkENIIfNeeded")
 			log.Errorf("Failed to set node label", err)
 		}
-		return
 	}
 }
 
diff --git a/pkg/ipamd/ipamd_test.go b/pkg/ipamd/ipamd_test.go
index 7cc91fbb4f..eb830ecf66 100644
--- a/pkg/ipamd/ipamd_test.go
+++ b/pkg/ipamd/ipamd_test.go
@@ -814,5 +814,50 @@ func TestIPAMContext_setupENI(t *testing.T) {
 	err = mockContext.setupENI(newENIMetadata.ENIID, newENIMetadata, "")
 	assert.Error(t, err)
 	assert.Equal(t, 1, len(mockContext.primaryIP))
+}
+
+func TestIPAMContext_askForTrunkENIIfNeeded(t *testing.T) {
+	m := setup(t)
+	defer m.ctrl.Finish()
+
+	mockContext := &IPAMContext{
+		k8sClient:     m.clientset,
+		dataStore:     datastore.NewDataStore(log, datastore.NewTestCheckpoint(datastore.CheckpointData{Version: datastore.CheckpointFormatVersion})),
+		awsClient:     m.awsutils,
+		networkClient: m.network,
+		primaryIP:     make(map[string]string),
+		terminating:   int32(0),
+		maxENI:        1,
+		myNodeName:    myNodeName,
+	}
 
+	labels := make(map[string]string)
+	fakeNode := v1.Node{
+		TypeMeta:   metav1.TypeMeta{Kind: "Node"},
+		ObjectMeta: metav1.ObjectMeta{Name: myNodeName, Labels: labels},
+		Spec:       v1.NodeSpec{},
+		Status:     v1.NodeStatus{},
+	}
+	_, _ = m.clientset.CoreV1().Nodes().Create(&fakeNode)
+
+	_ = mockContext.dataStore.AddENI("eni-1", 1, true, false)
+	// If ENABLE_POD_ENI is not set, nothing happens
+	mockContext.askForTrunkENIIfNeeded()
+
+	mockContext.enablePodENI = true
+	// Enabled, we should try to set the label if there is room
+	mockContext.askForTrunkENIIfNeeded()
+	notUpdatedNode, err := m.clientset.CoreV1().Nodes().Get(myNodeName, metav1.GetOptions{})
+	// Since there was no room, no label should be added
+	assert.NoError(t, err)
+	assert.Equal(t, 0, len(notUpdatedNode.Labels))
+
+	mockContext.maxENI = 4
+	// Now there is room!
+	mockContext.askForTrunkENIIfNeeded()
+
+	// Fetch the updated node and verify that the label is set
+	updatedNode, err := m.clientset.CoreV1().Nodes().Get(myNodeName, metav1.GetOptions{})
+	assert.NoError(t, err)
+	assert.Equal(t, "false", updatedNode.Labels["vpc.amazonaws.com/has-trunk-attached"])
 }