diff --git a/applicationset/controllers/applicationset_controller.go b/applicationset/controllers/applicationset_controller.go
index e90de1ee70a38..902b8c31a364f 100644
--- a/applicationset/controllers/applicationset_controller.go
+++ b/applicationset/controllers/applicationset_controller.go
@@ -669,8 +669,9 @@ func (r *ApplicationSetReconciler) SetupWithManager(mgr ctrl.Manager, enableProg
 		Watches(
 			&corev1.Secret{},
 			&clusterSecretEventHandler{
-				Client: mgr.GetClient(),
-				Log:    log.WithField("type", "createSecretEventHandler"),
+				Client:                   mgr.GetClient(),
+				Log:                      log.WithField("type", "createSecretEventHandler"),
+				ApplicationSetNamespaces: r.ApplicationSetNamespaces,
 			}).
 		Complete(r)
 }
diff --git a/applicationset/controllers/clustereventhandler.go b/applicationset/controllers/clustereventhandler.go
index dd71e9b8c79bc..2cf45bc7a6066 100644
--- a/applicationset/controllers/clustereventhandler.go
+++ b/applicationset/controllers/clustereventhandler.go
@@ -14,6 +14,7 @@ import (
 	"sigs.k8s.io/controller-runtime/pkg/client"
 	"sigs.k8s.io/controller-runtime/pkg/event"
 
+	"github.com/argoproj/argo-cd/v3/applicationset/utils"
 	"github.com/argoproj/argo-cd/v3/common"
 	argoprojiov1alpha1 "github.com/argoproj/argo-cd/v3/pkg/apis/application/v1alpha1"
 )
@@ -22,8 +23,9 @@ import (
 // requeue any related ApplicationSets.
 type clusterSecretEventHandler struct {
 	// handler.EnqueueRequestForOwner
-	Log    log.FieldLogger
-	Client client.Client
+	Log                      log.FieldLogger
+	Client                   client.Client
+	ApplicationSetNamespaces []string
 }
 
 func (h *clusterSecretEventHandler) Create(ctx context.Context, e event.CreateEvent, q workqueue.TypedRateLimitingInterface[reconcile.Request]) {
@@ -68,6 +70,10 @@ func (h *clusterSecretEventHandler) queueRelatedAppGenerators(ctx context.Contex
 
 	h.Log.WithField("count", len(appSetList.Items)).Info("listed ApplicationSets")
 	for _, appSet := range appSetList.Items {
+		if !utils.IsNamespaceAllowed(h.ApplicationSetNamespaces, appSet.GetNamespace()) {
+			// Ignore it as not part of the allowed list of namespaces in which to watch Appsets
+			continue
+		}
 		foundClusterGenerator := false
 		for _, generator := range appSet.Spec.Generators {
 			if generator.Clusters != nil {
diff --git a/applicationset/controllers/clustereventhandler_test.go b/applicationset/controllers/clustereventhandler_test.go
index b87bfc1a39cf0..19e7ee057731d 100644
--- a/applicationset/controllers/clustereventhandler_test.go
+++ b/applicationset/controllers/clustereventhandler_test.go
@@ -137,7 +137,7 @@ func TestClusterEventHandler(t *testing.T) {
 				{
 					ObjectMeta: metav1.ObjectMeta{
 						Name:      "my-app-set",
-						Namespace: "another-namespace",
+						Namespace: "argocd",
 					},
 					Spec: argov1alpha1.ApplicationSetSpec{
 						Generators: []argov1alpha1.ApplicationSetGenerator{
@@ -171,9 +171,37 @@ func TestClusterEventHandler(t *testing.T) {
 				},
 			},
 			expectedRequests: []reconcile.Request{
-				{NamespacedName: types.NamespacedName{Namespace: "another-namespace", Name: "my-app-set"}},
+				{NamespacedName: types.NamespacedName{Namespace: "argocd", Name: "my-app-set"}},
 			},
 		},
+		{
+			name: "cluster generators in other namespaces should not match",
+			items: []argov1alpha1.ApplicationSet{
+				{
+					ObjectMeta: metav1.ObjectMeta{
+						Name:      "my-app-set",
+						Namespace: "my-namespace-not-allowed",
+					},
+					Spec: argov1alpha1.ApplicationSetSpec{
+						Generators: []argov1alpha1.ApplicationSetGenerator{
+							{
+								Clusters: &argov1alpha1.ClusterGenerator{},
+							},
+						},
+					},
+				},
+			},
+			secret: corev1.Secret{
+				ObjectMeta: metav1.ObjectMeta{
+					Namespace: "argocd",
+					Name:      "my-secret",
+					Labels: map[string]string{
+						argocommon.LabelKeySecretType: argocommon.LabelValueSecretTypeCluster,
+					},
+				},
+			},
+			expectedRequests: []reconcile.Request{},
+		},
 		{
 			name: "non-argo cd secret should not match",
 			items: []argov1alpha1.ApplicationSet{
@@ -552,8 +580,9 @@ func TestClusterEventHandler(t *testing.T) {
 			fakeClient := fake.NewClientBuilder().WithScheme(scheme).WithLists(&appSetList).Build()
 
 			handler := &clusterSecretEventHandler{
-				Client: fakeClient,
-				Log:    log.WithField("type", "createSecretEventHandler"),
+				Client:                   fakeClient,
+				Log:                      log.WithField("type", "createSecretEventHandler"),
+				ApplicationSetNamespaces: []string{"argocd"},
 			}
 
 			mockAddRateLimitingInterface := mockAddRateLimitingInterface{}