diff --git a/pkg/types/clusterconfig/cluster_config.go b/pkg/types/clusterconfig/cluster_config.go
index b86e5fe474..59ed9d72e5 100644
--- a/pkg/types/clusterconfig/cluster_config.go
+++ b/pkg/types/clusterconfig/cluster_config.go
@@ -462,8 +462,8 @@ var ManagedConfigStructFieldValidations = []*cr.StructFieldValidation{
 					{
 						StructField: "MaxInstances",
 						Int64Validation: &cr.Int64Validation{
-							Default:     int64(5),
-							GreaterThan: pointer.Int64(0),
+							Default:              int64(5),
+							GreaterThanOrEqualTo: pointer.Int64(0), // this will be validated to be > 0 during cluster up (can be scaled down later)
 						},
 					},
 					{
@@ -795,6 +795,10 @@ func (cc *Config) Validate(awsClient *aws.Client, skipQuotaVerification bool) er
 	ngNames := []string{}
 	instances := []aws.InstanceTypeRequests{}
 	for _, nodeGroup := range cc.NodeGroups {
+		// setting max_instances to 0 during cluster creation is not permitted (but scaling max_instances to 0 afterwards is allowed)
+		if nodeGroup.MaxInstances == 0 {
+			return errors.Wrap(ErrorNodeGroupMaxInstancesIsZero(), NodeGroupsKey, nodeGroup.Name)
+		}
 		if !slices.HasString(ngNames, nodeGroup.Name) {
 			ngNames = append(ngNames, nodeGroup.Name)
 		} else {
diff --git a/pkg/types/clusterconfig/errors.go b/pkg/types/clusterconfig/errors.go
index 5ac429f01a..414e6fd81b 100644
--- a/pkg/types/clusterconfig/errors.go
+++ b/pkg/types/clusterconfig/errors.go
@@ -32,6 +32,7 @@ const (
 	ErrInvalidLegacyProvider                  = "cli.invalid_legacy_provider"
 	ErrInvalidRegion                          = "clusterconfig.invalid_region"
 	ErrNoNodeGroupSpecified                   = "clusterconfig.no_nodegroup_specified"
+	ErrNodeGroupMaxInstancesIsZero            = "clusterconfig.node_group_max_instances_is_zero"
 	ErrMaxNumOfNodeGroupsReached              = "clusterconfig.max_num_of_nodegroups_reached"
 	ErrDuplicateNodeGroupName                 = "clusterconfig.duplicate_nodegroup_name"
 	ErrInstanceTypeTooSmall                   = "clusterconfig.instance_type_too_small"
@@ -96,6 +97,13 @@ func ErrorNoNodeGroupSpecified() error {
 	})
 }
 
+func ErrorNodeGroupMaxInstancesIsZero() error {
+	return errors.WithStack(&errors.Error{
+		Kind:    ErrNodeGroupMaxInstancesIsZero,
+		Message: fmt.Sprintf("nodegroups cannot be created with `%s` set to 0 (but `%s` can be scaled to 0 after the cluster has been created)", MaxInstancesKey, MaxInstancesKey),
+	})
+}
+
 func ErrorMaxNumOfNodeGroupsReached(maxNodeGroups int64) error {
 	return errors.WithStack(&errors.Error{
 		Kind:    ErrMaxNumOfNodeGroupsReached,