diff --git a/.gitignore b/.gitignore
index d04e6cf999cd..cea23eb5611d 100644
--- a/.gitignore
+++ b/.gitignore
@@ -80,3 +80,10 @@ _releasenotes
 
 # Helm
 .helm
+
+# Used during parts of the build process. Files _should_ get cleaned up automatically.
+# This is also a good location for any temporary manfiests used during development
+tmp
+
+# asdf (not a typo! ;) used to manage multiple versions of tools
+.tool-versions
diff --git a/docs/book/src/user/quick-start.md b/docs/book/src/user/quick-start.md
index 1addbc307291..7cb6309ecbe0 100644
--- a/docs/book/src/user/quick-start.md
+++ b/docs/book/src/user/quick-start.md
@@ -948,7 +948,7 @@ The Docker provider is not designed for production use and is intended for devel
 
 ```bash
 clusterctl generate cluster capi-quickstart --flavor development \
-  --kubernetes-version v1.24.0 \
+  --kubernetes-version v1.25.0 \
   --control-plane-machine-count=3 \
   --worker-machine-count=3 \
   > capi-quickstart.yaml
@@ -960,7 +960,7 @@ clusterctl generate cluster capi-quickstart --flavor development \
 ```bash
 export CLUSTER_NAME=kind
 export CLUSTER_NAMESPACE=vcluster
-export KUBERNETES_VERSION=1.23.4
+export KUBERNETES_VERSION=1.25.0
 export HELM_VALUES="service:\n  type: NodePort"
 
 kubectl create namespace ${CLUSTER_NAMESPACE}
@@ -975,7 +975,7 @@ clusterctl generate cluster ${CLUSTER_NAME} \
 
 ```bash
 clusterctl generate cluster capi-quickstart \
-  --kubernetes-version v1.24.0 \
+  --kubernetes-version v1.25.0 \
   --control-plane-machine-count=3 \
   --worker-machine-count=3 \
   > capi-quickstart.yaml
@@ -1034,8 +1034,8 @@ kubectl get kubeadmcontrolplane
 You should see an output is similar to this:
 
 ```bash
-NAME                            INITIALIZED   API SERVER AVAILABLE   VERSION   REPLICAS   READY   UPDATED   UNAVAILABLE
-capi-quickstart-control-plane   true                                 v1.24.0   3                  3         3
+NAME                    CLUSTER           INITIALIZED   API SERVER AVAILABLE   REPLICAS   READY   UPDATED   UNAVAILABLE   AGE    VERSION
+capi-quickstart-g2trk   capi-quickstart   true                                 3                  3         3             4m7s   v1.25.0
 ```
 
 <aside class="note warning">
@@ -1091,7 +1091,7 @@ Calico not required for vcluster.
 
 ```bash
 kubectl --kubeconfig=./capi-quickstart.kubeconfig \
-  apply -f https://docs.projectcalico.org/v3.21/manifests/calico.yaml
+  apply -f https://raw.githubusercontent.com/projectcalico/calico/v3.24.1/manifests/calico.yaml
 ```
 
 After a short while, our nodes should be running and in `Ready` state,
@@ -1100,6 +1100,15 @@ let's check the status using `kubectl get nodes`:
 ```bash
 kubectl --kubeconfig=./capi-quickstart.kubeconfig get nodes
 ```
+```bash
+NAME                                          STATUS   ROLES           AGE   VERSION
+capi-quickstart-g2trk-9xrjv                   Ready    control-plane   12m   v1.25.0
+capi-quickstart-g2trk-bmm9v                   Ready    control-plane   11m   v1.25.0
+capi-quickstart-g2trk-hvs9q                   Ready    control-plane   13m   v1.25.0
+capi-quickstart-md-0-55x6t-5649968bd7-8tq9v   Ready    <none>          12m   v1.25.0
+capi-quickstart-md-0-55x6t-5649968bd7-glnjd   Ready    <none>          12m   v1.25.0
+capi-quickstart-md-0-55x6t-5649968bd7-sfzp6   Ready    <none>          12m   v1.25.0
+```
 
 {{#/tab }}
 {{#/tabs }}
diff --git a/test/e2e/config/docker.yaml b/test/e2e/config/docker.yaml
index 854fad806d60..d94a90bf086d 100644
--- a/test/e2e/config/docker.yaml
+++ b/test/e2e/config/docker.yaml
@@ -206,12 +206,12 @@ variables:
   # allowing the same e2e config file to be re-used in different Prow jobs e.g. each one with a K8s version permutation.
   # The following Kubernetes versions should be the latest versions with already published kindest/node images.
   # This avoids building node images in the default case which improves the test duration significantly.
-  KUBERNETES_VERSION_MANAGEMENT: "v1.24.0"
-  KUBERNETES_VERSION: "v1.24.0"
-  KUBERNETES_VERSION_UPGRADE_FROM: "v1.23.6"
-  KUBERNETES_VERSION_UPGRADE_TO: "v1.24.0"
-  ETCD_VERSION_UPGRADE_TO: "3.5.3-0"
-  COREDNS_VERSION_UPGRADE_TO: "v1.8.6"
+  KUBERNETES_VERSION_MANAGEMENT: "v1.25.0"
+  KUBERNETES_VERSION: "v1.25.0"
+  KUBERNETES_VERSION_UPGRADE_FROM: "1.24.4"
+  KUBERNETES_VERSION_UPGRADE_TO: "v1.25.0"
+  ETCD_VERSION_UPGRADE_TO: "3.5.4-0"
+  COREDNS_VERSION_UPGRADE_TO: "v1.9.3"
   DOCKER_SERVICE_DOMAIN: "cluster.local"
   IP_FAMILY: "IPv4"
   DOCKER_SERVICE_CIDRS: "10.128.0.0/12"
@@ -233,7 +233,7 @@ variables:
   # NOTE: We test the latest release with a previous contract.
   INIT_WITH_BINARY: "https://github.com/kubernetes-sigs/cluster-api/releases/download/v0.4.7/clusterctl-{OS}-{ARCH}"
   INIT_WITH_PROVIDERS_CONTRACT: "v1alpha4"
-  INIT_WITH_KUBERNETES_VERSION: "v1.24.0"
+  INIT_WITH_KUBERNETES_VERSION: "v1.25.0"
 
 intervals:
   default/wait-controllers: ["3m", "10s"]
diff --git a/test/framework/bootstrap/kind_provider.go b/test/framework/bootstrap/kind_provider.go
index 8f5b7722cae2..f1a9ead9b4bb 100644
--- a/test/framework/bootstrap/kind_provider.go
+++ b/test/framework/bootstrap/kind_provider.go
@@ -37,7 +37,7 @@ const (
 	DefaultNodeImageRepository = "kindest/node"
 
 	// DefaultNodeImageVersion is the default Kubernetes version to be used for creating a kind cluster.
-	DefaultNodeImageVersion = "v1.24.0"
+	DefaultNodeImageVersion = "v1.25.0"
 )
 
 // KindClusterOption is a NewKindClusterProvider option.
diff --git a/test/framework/deployment_helpers.go b/test/framework/deployment_helpers.go
index 1055e03c0ce6..6511049289c9 100644
--- a/test/framework/deployment_helpers.go
+++ b/test/framework/deployment_helpers.go
@@ -32,6 +32,7 @@ import (
 	. "github.com/onsi/gomega"
 	appsv1 "k8s.io/api/apps/v1"
 	corev1 "k8s.io/api/core/v1"
+	policyv1 "k8s.io/api/policy/v1"
 	"k8s.io/api/policy/v1beta1"
 	apierrors "k8s.io/apimachinery/pkg/api/errors"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
@@ -365,6 +366,7 @@ func DeployUnevictablePod(ctx context.Context, input DeployUnevictablePodInput)
 			},
 		},
 	}
+
 	if input.ControlPlane != nil {
 		var serverVersion *version.Info
 		Eventually(func() error {
@@ -397,33 +399,72 @@ func DeployUnevictablePod(ctx context.Context, input DeployUnevictablePodInput)
 		Deployment: workloadDeployment,
 	})
 
-	budget := &v1beta1.PodDisruptionBudget{
-		TypeMeta: metav1.TypeMeta{
-			Kind:       "PodDisruptionBudget",
-			APIVersion: "policy/v1beta1",
-		},
-		ObjectMeta: metav1.ObjectMeta{
-			Name:      input.DeploymentName,
-			Namespace: input.Namespace,
-		},
-		Spec: v1beta1.PodDisruptionBudgetSpec{
-			Selector: &metav1.LabelSelector{
-				MatchLabels: map[string]string{
-					"app": "nonstop",
+	// TODO(oscr): Remove when Kubernetes 1.20 support is dropped.
+	serverVersion, err := workloadClient.ServerVersion()
+	Expect(err).ToNot(HaveOccurred(), "Failed to get Kubernetes version for workload")
+
+	// If Kubernetes < 1.21.0 we need to use PDB from v1beta1
+	if utilversion.MustParseGeneric(serverVersion.String()).LessThan(utilversion.MustParseGeneric("v1.21.0")) {
+		budgetV1Beta1 := &v1beta1.PodDisruptionBudget{
+			TypeMeta: metav1.TypeMeta{
+				Kind:       "PodDisruptionBudget",
+				APIVersion: "policy/v1beta1",
+			},
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      input.DeploymentName,
+				Namespace: input.Namespace,
+			},
+			Spec: v1beta1.PodDisruptionBudgetSpec{
+				Selector: &metav1.LabelSelector{
+					MatchLabels: map[string]string{
+						"app": "nonstop",
+					},
+				},
+				MaxUnavailable: &intstr.IntOrString{
+					Type:   intstr.Int,
+					IntVal: 1,
+					StrVal: "1",
 				},
 			},
-			MaxUnavailable: &intstr.IntOrString{
-				Type:   intstr.Int,
-				IntVal: 1,
-				StrVal: "1",
+		}
+
+		AddPodDisruptionBudgetV1Beta1(ctx, AddPodDisruptionBudgetInputV1Beta1{
+			Namespace: input.Namespace,
+			ClientSet: workloadClient,
+			Budget:    budgetV1Beta1,
+		})
+
+		// If Kubernetes >= 1.21.0 then we need to use PDB from v1
+	} else {
+		budget := &policyv1.PodDisruptionBudget{
+			TypeMeta: metav1.TypeMeta{
+				Kind:       "PodDisruptionBudget",
+				APIVersion: "policy/v1",
 			},
-		},
+			ObjectMeta: metav1.ObjectMeta{
+				Name:      input.DeploymentName,
+				Namespace: input.Namespace,
+			},
+			Spec: policyv1.PodDisruptionBudgetSpec{
+				Selector: &metav1.LabelSelector{
+					MatchLabels: map[string]string{
+						"app": "nonstop",
+					},
+				},
+				MaxUnavailable: &intstr.IntOrString{
+					Type:   intstr.Int,
+					IntVal: 1,
+					StrVal: "1",
+				},
+			},
+		}
+
+		AddPodDisruptionBudget(ctx, AddPodDisruptionBudgetInput{
+			Namespace: input.Namespace,
+			ClientSet: workloadClient,
+			Budget:    budget,
+		})
 	}
-	AddPodDisruptionBudget(ctx, AddPodDisruptionBudgetInput{
-		Namespace: input.Namespace,
-		ClientSet: workloadClient,
-		Budget:    budget,
-	})
 
 	WaitForDeploymentsAvailable(ctx, WaitForDeploymentsAvailableInput{
 		Getter:     input.WorkloadClusterProxy.GetClient(),
@@ -449,11 +490,29 @@ func AddDeploymentToWorkloadCluster(ctx context.Context, input AddDeploymentToWo
 
 type AddPodDisruptionBudgetInput struct {
 	ClientSet *kubernetes.Clientset
-	Budget    *v1beta1.PodDisruptionBudget
+	Budget    *policyv1.PodDisruptionBudget
 	Namespace string
 }
 
 func AddPodDisruptionBudget(ctx context.Context, input AddPodDisruptionBudgetInput) {
+	Eventually(func() error {
+		budget, err := input.ClientSet.PolicyV1().PodDisruptionBudgets(input.Namespace).Create(ctx, input.Budget, metav1.CreateOptions{})
+		if budget != nil && err == nil {
+			return nil
+		}
+		return fmt.Errorf("podDisruptionBudget needs to be successfully deployed: %v", err)
+	}, retryableOperationTimeout, retryableOperationInterval).Should(Succeed(), "podDisruptionBudget needs to be successfully deployed")
+}
+
+// TODO(oscr): Delete below when Kubernetes 1.20 support is dropped.
+
+type AddPodDisruptionBudgetInputV1Beta1 struct {
+	ClientSet *kubernetes.Clientset
+	Budget    *v1beta1.PodDisruptionBudget
+	Namespace string
+}
+
+func AddPodDisruptionBudgetV1Beta1(ctx context.Context, input AddPodDisruptionBudgetInputV1Beta1) {
 	Eventually(func() error {
 		budget, err := input.ClientSet.PolicyV1beta1().PodDisruptionBudgets(input.Namespace).Create(ctx, input.Budget, metav1.CreateOptions{})
 		if budget != nil && err == nil {
diff --git a/test/infrastructure/docker/Dockerfile b/test/infrastructure/docker/Dockerfile
index 322019307d2a..37787496c406 100644
--- a/test/infrastructure/docker/Dockerfile
+++ b/test/infrastructure/docker/Dockerfile
@@ -29,7 +29,7 @@ ENV GOPROXY=$goproxy
 # Gets additional CAPD dependencies
 WORKDIR /tmp
 
-RUN curl -LO https://dl.k8s.io/release/v1.24.0/bin/linux/${ARCH}/kubectl && \
+RUN curl -LO https://dl.k8s.io/release/v1.25.0/bin/linux/${ARCH}/kubectl && \
     chmod +x ./kubectl && \
     mv ./kubectl /usr/bin/kubectl
 
diff --git a/test/infrastructure/docker/examples/machine-pool.yaml b/test/infrastructure/docker/examples/machine-pool.yaml
index bd727ec80ace..764466854d0a 100644
--- a/test/infrastructure/docker/examples/machine-pool.yaml
+++ b/test/infrastructure/docker/examples/machine-pool.yaml
@@ -35,7 +35,7 @@ metadata:
   namespace: default
 spec:
   replicas: 1
-  version: v1.24.0
+  version: v1.25.0
   machineTemplate:
     infrastructureRef:
       apiVersion: infrastructure.cluster.x-k8s.io/v1beta1
@@ -80,7 +80,7 @@ spec:
   replicas: 2
   template:
     spec:
-      version: v1.24.0
+      version: v1.25.0
       clusterName: my-cluster
       bootstrap:
         configRef:
diff --git a/test/infrastructure/docker/examples/simple-cluster-ipv6.yaml b/test/infrastructure/docker/examples/simple-cluster-ipv6.yaml
index 97ed9d729eb7..4775bfde98cf 100644
--- a/test/infrastructure/docker/examples/simple-cluster-ipv6.yaml
+++ b/test/infrastructure/docker/examples/simple-cluster-ipv6.yaml
@@ -35,7 +35,7 @@ metadata:
   namespace: default
 spec:
   replicas: 1
-  version: v1.24.0
+  version: v1.25.0
   machineTemplate:
     infrastructureRef:
       apiVersion: infrastructure.cluster.x-k8s.io/v1beta1
@@ -90,7 +90,7 @@ spec:
       cluster.x-k8s.io/cluster-name: my-cluster
   template:
     spec:
-      version: v1.24.0
+      version: v1.25.0
       clusterName: my-cluster
       bootstrap:
         configRef:
diff --git a/test/infrastructure/docker/examples/simple-cluster-without-kcp.yaml b/test/infrastructure/docker/examples/simple-cluster-without-kcp.yaml
index 6988154ae5c1..165ce2bc36b7 100644
--- a/test/infrastructure/docker/examples/simple-cluster-without-kcp.yaml
+++ b/test/infrastructure/docker/examples/simple-cluster-without-kcp.yaml
@@ -32,7 +32,7 @@ metadata:
   name: controlplane-0
   namespace: default
 spec:
-  version: v1.24.0
+  version: v1.25.0
   clusterName: my-cluster
   bootstrap:
     configRef:
@@ -80,7 +80,7 @@ spec:
       cluster.x-k8s.io/cluster-name: my-cluster
   template:
     spec:
-      version: v1.24.0
+      version: v1.25.0
       clusterName: my-cluster
       bootstrap:
         configRef:
diff --git a/test/infrastructure/docker/examples/simple-cluster.yaml b/test/infrastructure/docker/examples/simple-cluster.yaml
index e583e94a4833..196202278556 100644
--- a/test/infrastructure/docker/examples/simple-cluster.yaml
+++ b/test/infrastructure/docker/examples/simple-cluster.yaml
@@ -35,7 +35,7 @@ metadata:
   namespace: default
 spec:
   replicas: 1
-  version: v1.24.0
+  version: v1.25.0
   machineTemplate:
     infrastructureRef:
       apiVersion: infrastructure.cluster.x-k8s.io/v1beta1
@@ -83,7 +83,7 @@ spec:
       cluster.x-k8s.io/cluster-name: my-cluster
   template:
     spec:
-      version: v1.24.0
+      version: v1.25.0
       clusterName: my-cluster
       bootstrap:
         configRef:
diff --git a/test/infrastructure/docker/internal/docker/machine.go b/test/infrastructure/docker/internal/docker/machine.go
index e5805ae03965..3469cf9851e7 100644
--- a/test/infrastructure/docker/internal/docker/machine.go
+++ b/test/infrastructure/docker/internal/docker/machine.go
@@ -46,7 +46,7 @@ import (
 
 const (
 	defaultImageName = "kindest/node"
-	defaultImageTag  = "v1.24.0"
+	defaultImageTag  = "v1.25.0"
 )
 
 type nodeCreator interface {