diff --git a/test/e2e/config/azure-dev.yaml b/test/e2e/config/azure-dev.yaml
index bb25351730c..9eabe88c06d 100644
--- a/test/e2e/config/azure-dev.yaml
+++ b/test/e2e/config/azure-dev.yaml
@@ -94,13 +94,13 @@ providers:
       replacements:
       - old: "imagePullPolicy: Always"
         new: "imagePullPolicy: IfNotPresent"
-    - name: v1.16.0 # latest patch of latest minor in supported v1beta1 releases; this is used for v1beta1 latest --> v1beta1 current clusterctl upgrades test only.
-      value: https://github.com/kubernetes-sigs/cluster-api-provider-azure/releases/download/v1.16.0/infrastructure-components.yaml
+    - name: v1.16.1 # latest patch of latest minor in supported v1beta1 releases; this is used for v1beta1 latest --> v1beta1 current clusterctl upgrades test only.
+      value: https://github.com/kubernetes-sigs/cluster-api-provider-azure/releases/download/v1.16.1/infrastructure-components.yaml
       type: url
       contract: v1beta1
       files:
       - sourcePath: "../data/shared/v1beta1_provider/metadata.yaml"
-      - sourcePath: "../data/infrastructure-azure/v1.16.0/cluster-template-prow.yaml"
+      - sourcePath: "../data/infrastructure-azure/v1.16.1/cluster-template-prow.yaml"
         targetName: "cluster-template.yaml"
       replacements:
       - old: "imagePullPolicy: Always"
@@ -230,7 +230,7 @@ variables:
   OLD_CAPI_UPGRADE_VERSION: "v1.7.5"
   LATEST_CAPI_UPGRADE_VERSION: "v1.8.1"
   OLD_PROVIDER_UPGRADE_VERSION: "v1.15.3"
-  LATEST_PROVIDER_UPGRADE_VERSION: "v1.16.0"
+  LATEST_PROVIDER_UPGRADE_VERSION: "v1.16.1"
   OLD_CAAPH_UPGRADE_VERSION: "v0.1.0-alpha.10"
   LATEST_CAAPH_UPGRADE_VERSION: "v0.2.5"
   CI_RG: capz-ci
diff --git a/test/e2e/data/infrastructure-azure/v1.16.0/cluster-template-prow.yaml b/test/e2e/data/infrastructure-azure/v1.16.1/cluster-template-prow.yaml
similarity index 100%
rename from test/e2e/data/infrastructure-azure/v1.16.0/cluster-template-prow.yaml
rename to test/e2e/data/infrastructure-azure/v1.16.1/cluster-template-prow.yaml