diff --git a/parts/common/components.json b/parts/common/components.json
index e6cd79b0fb5..65de8e6f7ef 100644
--- a/parts/common/components.json
+++ b/parts/common/components.json
@@ -2219,7 +2219,7 @@
             "versionsV2": [
               {
                 "renovateTag": "<DO_NOT_UPDATE>",
-                "latestVersion": "0.3.1"
+                "latestVersion": "1.0.0"
               }
             ],
             "downloadURL": "https://acrstreamingpackage.z5.web.core.windows.net/${version}/acr-mirror-2004.deb"
@@ -2228,7 +2228,7 @@
             "versionsV2": [
               {
                 "renovateTag": "<DO_NOT_UPDATE>",
-                "latestVersion": "0.3.1"
+                "latestVersion": "1.0.0"
               }
             ],
             "downloadURL": "https://acrstreamingpackage.z5.web.core.windows.net/${version}/acr-mirror-2204.deb"
@@ -2237,7 +2237,7 @@
             "versionsV2": [
               {
                 "renovateTag": "<DO_NOT_UPDATE>",
-                "latestVersion": "0.3.1"
+                "latestVersion": "1.0.0"
               }
             ],
             "downloadURL": "https://acrstreamingpackage.z5.web.core.windows.net/${version}/acr-mirror-2404.deb"
@@ -2248,7 +2248,7 @@
             "versionsV2": [
               {
                 "renovateTag": "<DO_NOT_UPDATE>",
-                "latestVersion": "0.3.1"
+                "latestVersion": "1.0.0"
               }
             ],
             "downloadURL": "https://acrstreamingpackage.z5.web.core.windows.net/${version}/acr-mirror-azurelinux3.rpm"
diff --git a/parts/linux/cloud-init/artifacts/cse_config.sh b/parts/linux/cloud-init/artifacts/cse_config.sh
index e73c6919d1a..025292aefe4 100755
--- a/parts/linux/cloud-init/artifacts/cse_config.sh
+++ b/parts/linux/cloud-init/artifacts/cse_config.sh
@@ -427,8 +427,16 @@ ensureNoDupOnPromiscuBridge() {
 
 ensureArtifactStreaming() {
   waitForContainerdReady || exit $ERR_ARTIFACT_STREAMING_INSTALL
-  retrycmd_if_failure 120 5 25 systemctl --quiet enable --now acr-mirror overlaybd-tcmu overlaybd-snapshotter
-  /opt/acr/bin/acr-config --enable-containerd 'azurecr.io'
+  retrycmd_if_failure 120 5 25 systemctl --quiet enable --now acr-mirror overlaybd-tcmu overlaybd-snapshotter || exit $ERR_ARTIFACT_STREAMING_INSTALL
+
+  local acr_mirror_setup="${ACR_MIRROR_SETUP_SCRIPT:-/opt/acr/tools/mirror/setup.sh}"
+  if [ -x "$acr_mirror_setup" ]; then
+    "$acr_mirror_setup" aks
+  else
+    echo "Older acr-mirror package is detected, using old acr-config enablement"
+    # setup.sh is only available in acr-mirror 1.0.0 and above
+    "${ACR_CONFIG_BIN:-/opt/acr/bin/acr-config}" --enable-containerd 'azurecr.io'
+  fi
 }
 
 ensureDHCPv6() {
diff --git a/spec/parts/linux/cloud-init/artifacts/cse_config_spec.sh b/spec/parts/linux/cloud-init/artifacts/cse_config_spec.sh
index 6d8ee01e50a..b10d778fd94 100755
--- a/spec/parts/linux/cloud-init/artifacts/cse_config_spec.sh
+++ b/spec/parts/linux/cloud-init/artifacts/cse_config_spec.sh
@@ -74,6 +74,70 @@ Describe 'cse_config.sh'
         End
     End
 
+    Describe 'ensureArtifactStreaming'
+        # ensureArtifactStreaming enables the acr-mirror/overlaybd services and then
+        # runs the version-appropriate enablement path:
+        #   - acr-mirror 1.0.0+ -> setup.sh aks
+        #   - older packages    -> acr-config --enable-containerd
+        # The enablement binary paths are overridable (ACR_MIRROR_SETUP_SCRIPT /
+        # ACR_CONFIG_BIN), so the stubs live in a temp dir instead of mutating /opt.
+        setup_streaming() {
+            TEST_ACR_DIR="$(mktemp -d)"
+            ACR_MIRROR_SETUP_SCRIPT="${TEST_ACR_DIR}/setup.sh"
+            ACR_CONFIG_BIN="${TEST_ACR_DIR}/acr-config"
+        }
+        cleanup_streaming() {
+            rm -rf "${TEST_ACR_DIR}"
+        }
+        BeforeEach 'setup_streaming'
+        AfterEach 'cleanup_streaming'
+
+        waitForContainerdReady() {
+            return 0
+        }
+        systemctl() {
+            echo "systemctl $@"
+        }
+        retrycmd_if_failure() {
+            echo "retrycmd_if_failure $@"
+            return "${RETRYCMD_RC:-0}"
+        }
+
+        install_setup_sh() {
+            printf '#!/bin/sh\necho "setup.sh $@"\n' > "${ACR_MIRROR_SETUP_SCRIPT}"
+            chmod +x "${ACR_MIRROR_SETUP_SCRIPT}"
+        }
+        install_acr_config() {
+            printf '#!/bin/sh\necho "acr-config $@"\n' > "${ACR_CONFIG_BIN}"
+            chmod +x "${ACR_CONFIG_BIN}"
+        }
+
+        It 'uses setup.sh aks when acr-mirror 1.0.0+ is installed'
+            install_setup_sh
+            When run ensureArtifactStreaming
+            The output should include "setup.sh aks"
+            The output should not include "Older acr-mirror package"
+            The status should be success
+        End
+
+        It 'falls back to acr-config enablement when setup.sh is absent (older package)'
+            install_acr_config
+            When run ensureArtifactStreaming
+            The output should include "Older acr-mirror package is detected"
+            The output should include "acr-config --enable-containerd azurecr.io"
+            The status should be success
+        End
+
+        It 'fails fast when enabling the streaming services fails'
+            RETRYCMD_RC=1
+            install_setup_sh
+            When run ensureArtifactStreaming
+            The output should include "retrycmd_if_failure"
+            The output should not include "setup.sh aks"
+            The status should equal "$ERR_ARTIFACT_STREAMING_INSTALL"
+        End
+    End
+
     Describe 'configureAzureJson'
         AZURE_JSON_PATH="azure.json"
         AKS_CUSTOM_CLOUD_JSON_PATH="customcloud.json"
diff --git a/vhdbuilder/packer/install-dependencies.sh b/vhdbuilder/packer/install-dependencies.sh
index 3762d1141c5..d286d2286fd 100644
--- a/vhdbuilder/packer/install-dependencies.sh
+++ b/vhdbuilder/packer/install-dependencies.sh
@@ -656,13 +656,6 @@ installAndConfigureArtifactStreaming() {
   rm "$MIRROR_DOWNLOAD_PATH"
 
   /opt/acr/tools/overlaybd/install.sh
-  /opt/acr/tools/overlaybd/config-user-agent.sh azure
-  /opt/acr/tools/overlaybd/enable-http-auth.sh
-  /opt/acr/tools/overlaybd/config.sh download.enable false
-  /opt/acr/tools/overlaybd/config.sh cacheConfig.cacheSizeGB 32
-  /opt/acr/tools/overlaybd/config.sh exporterConfig.enable true
-  /opt/acr/tools/overlaybd/config.sh exporterConfig.port 9863
-  systemctl link /opt/overlaybd/overlaybd-tcmu.service /opt/overlaybd/snapshotter/overlaybd-snapshotter.service
   # Remove the bundled overlaybd installer packages (~55-58 MB); install.sh already installed them and they're unused at runtime.
   rm -f /opt/acr/tools/overlaybd/bin/*.deb /opt/acr/tools/overlaybd/bin/*.rpm
   echo "  - acr-mirror version ${version}" >> ${VHD_LOGS_FILEPATH}