diff --git a/changelogs/current.yaml b/changelogs/current.yaml
index e60a462af2da..bfc2be2fc518 100644
--- a/changelogs/current.yaml
+++ b/changelogs/current.yaml
@@ -128,6 +128,11 @@ bug_fixes:
     the number of requests per I/O cycle is configured and an HTTP decoder filter that pauses filter chain is present. This behavior
     can be reverted by setting the runtime guard ``envoy.reloadable_features.use_filter_manager_state_for_downstream_end_stream``
     to false.
+- area: upstream
+  change: |
+    Fixed a bug using hard coded drop category when reporting drop_overload stats to the load report service.
+    It is changed to use drop category that is set in
+    :ref:`category <envoy_v3_api_field_config.endpoint.v3.clusterloadassignment.policy.DropOverload.category>`.
 - area: proxy_filter
   change: |
     Fixed a bug in the ``CONNECT`` implementation that would cause the ``CONNECT`` request created to be invalid when the
diff --git a/envoy/upstream/thread_local_cluster.h b/envoy/upstream/thread_local_cluster.h
index cb97bc55efaf..69a42751c027 100644
--- a/envoy/upstream/thread_local_cluster.h
+++ b/envoy/upstream/thread_local_cluster.h
@@ -157,10 +157,20 @@ class ThreadLocalCluster {
    */
   virtual UnitFloat dropOverload() const PURE;
 
+  /**
+   * @return the thread local cluster drop_category configuration.
+   */
+  virtual const std::string& dropCategory() const PURE;
+
   /**
    * Set up the drop_overload value for the thread local cluster.
    */
   virtual void setDropOverload(UnitFloat drop_overload) PURE;
+
+  /**
+   * Set up the drop_category value for the thread local cluster.
+   */
+  virtual void setDropCategory(absl::string_view drop_category) PURE;
 };
 
 using ThreadLocalClusterOptRef = absl::optional<std::reference_wrapper<ThreadLocalCluster>>;
diff --git a/envoy/upstream/upstream.h b/envoy/upstream/upstream.h
index a4c6c2b889e0..e307de9471f7 100644
--- a/envoy/upstream/upstream.h
+++ b/envoy/upstream/upstream.h
@@ -1315,10 +1315,20 @@ class Cluster {
    */
   virtual UnitFloat dropOverload() const PURE;
 
+  /**
+   * @return the cluster drop_category_ configuration.
+   */
+  virtual const std::string& dropCategory() const PURE;
+
   /**
    * Set up the drop_overload value for the cluster.
    */
   virtual void setDropOverload(UnitFloat drop_overload) PURE;
+
+  /**
+   * Set up the drop_category value for the thread local cluster.
+   */
+  virtual void setDropCategory(absl::string_view drop_category) PURE;
 };
 
 using ClusterSharedPtr = std::shared_ptr<Cluster>;
diff --git a/source/common/upstream/cluster_manager_impl.cc b/source/common/upstream/cluster_manager_impl.cc
index fcdef2ad85cf..c65cdb5f1581 100644
--- a/source/common/upstream/cluster_manager_impl.cc
+++ b/source/common/upstream/cluster_manager_impl.cc
@@ -1236,15 +1236,18 @@ void ClusterManagerImpl::postThreadLocalClusterUpdate(ClusterManagerCluster& cm_
   pending_cluster_creations_.erase(cm_cluster.cluster().info()->name());
 
   const UnitFloat drop_overload = cm_cluster.cluster().dropOverload();
+  const std::string drop_category = cm_cluster.cluster().dropCategory();
   // Populate the cluster initialization object based on this update.
   ClusterInitializationObjectConstSharedPtr cluster_initialization_object =
-      addOrUpdateClusterInitializationObjectIfSupported(
-          params, cm_cluster.cluster().info(), load_balancer_factory, host_map, drop_overload);
+      addOrUpdateClusterInitializationObjectIfSupported(params, cm_cluster.cluster().info(),
+                                                        load_balancer_factory, host_map,
+                                                        drop_overload, drop_category);
 
   tls_.runOnAllThreads([info = cm_cluster.cluster().info(), params = std::move(params),
                         add_or_update_cluster, load_balancer_factory, map = std::move(host_map),
                         cluster_initialization_object = std::move(cluster_initialization_object),
-                        drop_overload](OptRef<ThreadLocalClusterManagerImpl> cluster_manager) {
+                        drop_overload, drop_category = std::move(drop_category)](
+                           OptRef<ThreadLocalClusterManagerImpl> cluster_manager) {
     ASSERT(cluster_manager.has_value(),
            "Expected the ThreadLocalClusterManager to be set during ClusterManagerImpl creation.");
 
@@ -1302,6 +1305,7 @@ void ClusterManagerImpl::postThreadLocalClusterUpdate(ClusterManagerCluster& cm_
 
       if (cluster_manager->thread_local_clusters_[info->name()]) {
         cluster_manager->thread_local_clusters_[info->name()]->setDropOverload(drop_overload);
+        cluster_manager->thread_local_clusters_[info->name()]->setDropCategory(drop_category);
       }
       for (const auto& per_priority : params.per_priority_update_params_) {
         cluster_manager->updateClusterMembership(
@@ -1338,7 +1342,7 @@ ClusterManagerImpl::ClusterInitializationObjectConstSharedPtr
 ClusterManagerImpl::addOrUpdateClusterInitializationObjectIfSupported(
     const ThreadLocalClusterUpdateParams& params, ClusterInfoConstSharedPtr cluster_info,
     LoadBalancerFactorySharedPtr load_balancer_factory, HostMapConstSharedPtr map,
-    UnitFloat drop_overload) {
+    UnitFloat drop_overload, absl::string_view drop_category) {
   if (!deferralIsSupportedForCluster(cluster_info)) {
     return nullptr;
   }
@@ -1369,13 +1373,13 @@ ClusterManagerImpl::addOrUpdateClusterInitializationObjectIfSupported(
         entry->second->per_priority_state_, params, std::move(cluster_info),
         load_balancer_factory == nullptr ? entry->second->load_balancer_factory_
                                          : load_balancer_factory,
-        map, drop_overload);
+        map, drop_overload, drop_category);
     cluster_initialization_map_[cluster_name] = new_initialization_object;
     return new_initialization_object;
   } else {
     // We need to create a fresh Cluster Initialization Object.
     auto new_initialization_object = std::make_shared<ClusterInitializationObject>(
-        params, std::move(cluster_info), load_balancer_factory, map, drop_overload);
+        params, std::move(cluster_info), load_balancer_factory, map, drop_overload, drop_category);
     cluster_initialization_map_[cluster_name] = new_initialization_object;
     return new_initialization_object;
   }
@@ -1409,6 +1413,7 @@ ClusterManagerImpl::ThreadLocalClusterManagerImpl::initializeClusterInlineIfExis
                             initialization_object->cross_priority_host_map_);
   }
   thread_local_clusters_[cluster]->setDropOverload(initialization_object->drop_overload_);
+  thread_local_clusters_[cluster]->setDropCategory(initialization_object->drop_category_);
 
   // Remove the CIO as we've initialized the cluster.
   thread_local_deferred_clusters_.erase(entry);
@@ -1419,9 +1424,9 @@ ClusterManagerImpl::ThreadLocalClusterManagerImpl::initializeClusterInlineIfExis
 ClusterManagerImpl::ClusterInitializationObject::ClusterInitializationObject(
     const ThreadLocalClusterUpdateParams& params, ClusterInfoConstSharedPtr cluster_info,
     LoadBalancerFactorySharedPtr load_balancer_factory, HostMapConstSharedPtr map,
-    UnitFloat drop_overload)
+    UnitFloat drop_overload, absl::string_view drop_category)
     : cluster_info_(std::move(cluster_info)), load_balancer_factory_(load_balancer_factory),
-      cross_priority_host_map_(map), drop_overload_(drop_overload) {
+      cross_priority_host_map_(map), drop_overload_(drop_overload), drop_category_(drop_category) {
   // Copy the update since the map is empty.
   for (const auto& update : params.per_priority_update_params_) {
     per_priority_state_.emplace(update.priority_, update);
@@ -1432,10 +1437,10 @@ ClusterManagerImpl::ClusterInitializationObject::ClusterInitializationObject(
     const absl::flat_hash_map<int, ThreadLocalClusterUpdateParams::PerPriority>& per_priority_state,
     const ThreadLocalClusterUpdateParams& update_params, ClusterInfoConstSharedPtr cluster_info,
     LoadBalancerFactorySharedPtr load_balancer_factory, HostMapConstSharedPtr map,
-    UnitFloat drop_overload)
+    UnitFloat drop_overload, absl::string_view drop_category)
     : per_priority_state_(per_priority_state), cluster_info_(std::move(cluster_info)),
       load_balancer_factory_(load_balancer_factory), cross_priority_host_map_(map),
-      drop_overload_(drop_overload) {
+      drop_overload_(drop_overload), drop_category_(drop_category) {
 
   // Because EDS Clusters receive the entire ClusterLoadAssignment but only
   // provides the delta we must process the hosts_added and hosts_removed and
diff --git a/source/common/upstream/cluster_manager_impl.h b/source/common/upstream/cluster_manager_impl.h
index da8e2eda753a..3d4bfa16560a 100644
--- a/source/common/upstream/cluster_manager_impl.h
+++ b/source/common/upstream/cluster_manager_impl.h
@@ -427,20 +427,22 @@ class ClusterManagerImpl : public ClusterManager,
     ClusterInitializationObject(const ThreadLocalClusterUpdateParams& params,
                                 ClusterInfoConstSharedPtr cluster_info,
                                 LoadBalancerFactorySharedPtr load_balancer_factory,
-                                HostMapConstSharedPtr map, UnitFloat drop_overload);
+                                HostMapConstSharedPtr map, UnitFloat drop_overload,
+                                absl::string_view drop_category);
 
     ClusterInitializationObject(
         const absl::flat_hash_map<int, ThreadLocalClusterUpdateParams::PerPriority>&
             per_priority_state,
         const ThreadLocalClusterUpdateParams& update_params, ClusterInfoConstSharedPtr cluster_info,
         LoadBalancerFactorySharedPtr load_balancer_factory, HostMapConstSharedPtr map,
-        UnitFloat drop_overload);
+        UnitFloat drop_overload, absl::string_view drop_category);
 
     absl::flat_hash_map<int, ThreadLocalClusterUpdateParams::PerPriority> per_priority_state_;
     const ClusterInfoConstSharedPtr cluster_info_;
     const LoadBalancerFactorySharedPtr load_balancer_factory_;
     const HostMapConstSharedPtr cross_priority_host_map_;
     UnitFloat drop_overload_{0};
+    const std::string drop_category_;
   };
 
   using ClusterInitializationObjectConstSharedPtr =
@@ -610,7 +612,11 @@ class ClusterManagerImpl : public ClusterManager,
       void drainConnPools(DrainConnectionsHostPredicate predicate,
                           ConnectionPool::DrainBehavior behavior);
       UnitFloat dropOverload() const override { return drop_overload_; }
+      const std::string& dropCategory() const override { return drop_category_; }
       void setDropOverload(UnitFloat drop_overload) override { drop_overload_ = drop_overload; }
+      void setDropCategory(absl::string_view drop_category) override {
+        drop_category_ = drop_category;
+      }
 
     private:
       Http::ConnectionPool::Instance*
@@ -627,6 +633,7 @@ class ClusterManagerImpl : public ClusterManager,
       ThreadLocalClusterManagerImpl& parent_;
       PrioritySetImpl priority_set_;
       UnitFloat drop_overload_{0};
+      std::string drop_category_;
 
       // Don't change the order of cluster_info_ and lb_factory_/lb_ as the the lb_factory_/lb_
       // may keep a reference to the cluster_info_.
@@ -889,7 +896,7 @@ class ClusterManagerImpl : public ClusterManager,
   ClusterInitializationObjectConstSharedPtr addOrUpdateClusterInitializationObjectIfSupported(
       const ThreadLocalClusterUpdateParams& params, ClusterInfoConstSharedPtr cluster_info,
       LoadBalancerFactorySharedPtr load_balancer_factory, HostMapConstSharedPtr map,
-      UnitFloat drop_overload);
+      UnitFloat drop_overload, absl::string_view drop_category);
 
   bool deferralIsSupportedForCluster(const ClusterInfoConstSharedPtr& info) const;
 
diff --git a/source/common/upstream/health_discovery_service.h b/source/common/upstream/health_discovery_service.h
index 2cd21b06da79..f2e1d539e49f 100644
--- a/source/common/upstream/health_discovery_service.h
+++ b/source/common/upstream/health_discovery_service.h
@@ -72,8 +72,10 @@ class HdsCluster : public Cluster, Logger::Loggable<Logger::Id::upstream> {
 
   std::vector<Upstream::HealthCheckerSharedPtr> healthCheckers() { return health_checkers_; };
   std::vector<HostSharedPtr> hosts() { return *hosts_; };
-  UnitFloat dropOverload() const override { return UnitFloat(0); }
+  UnitFloat dropOverload() const override { return drop_overload_; }
+  const std::string& dropCategory() const override { return drop_category_; }
   void setDropOverload(UnitFloat) override {}
+  void setDropCategory(absl::string_view) override {}
 
 protected:
   PrioritySetImpl priority_set_;
@@ -99,6 +101,8 @@ class HdsCluster : public Cluster, Logger::Loggable<Logger::Id::upstream> {
   std::vector<Upstream::HealthCheckerSharedPtr> health_checkers_;
   HealthCheckerMap health_checkers_map_;
   TimeSource& time_source_;
+  UnitFloat drop_overload_{0};
+  const std::string drop_category_;
 
   absl::Status updateHealthchecks(
       const Protobuf::RepeatedPtrField<envoy::config::core::v3::HealthCheck>& health_checks);
diff --git a/source/common/upstream/load_stats_reporter.cc b/source/common/upstream/load_stats_reporter.cc
index a06d85c40ded..0e64bf7e8897 100644
--- a/source/common/upstream/load_stats_reporter.cc
+++ b/source/common/upstream/load_stats_reporter.cc
@@ -127,7 +127,7 @@ void LoadStatsReporter::sendLoadStatsRequest() {
         cluster.info()->loadReportStats().upstream_rq_drop_overload_.latch();
     if (drop_overload_count > 0) {
       auto* dropped_request = cluster_stats->add_dropped_requests();
-      dropped_request->set_category("drop_overload");
+      dropped_request->set_category(cluster.dropCategory());
       dropped_request->set_dropped_count(drop_overload_count);
     }
 
diff --git a/source/common/upstream/upstream_impl.cc b/source/common/upstream/upstream_impl.cc
index a336aa268996..bfee8e6b2baa 100644
--- a/source/common/upstream/upstream_impl.cc
+++ b/source/common/upstream/upstream_impl.cc
@@ -1832,6 +1832,7 @@ absl::Status ClusterImplBase::parseDropOverloadConfig(
 
   drop_ratio = std::min(drop_ratio, float(drop_ratio_runtime) / float(MAX_DROP_OVERLOAD_RUNTIME));
   drop_overload_ = UnitFloat(drop_ratio);
+  drop_category_ = policy.drop_overloads(0).category();
   return absl::OkStatus();
 }
 
diff --git a/source/common/upstream/upstream_impl.h b/source/common/upstream/upstream_impl.h
index 4ce4791a01c5..47d32468571d 100644
--- a/source/common/upstream/upstream_impl.h
+++ b/source/common/upstream/upstream_impl.h
@@ -1200,7 +1200,9 @@ class ClusterImplBase : public Cluster, protected Logger::Loggable<Logger::Id::u
   const Outlier::Detector* outlierDetector() const override { return outlier_detector_.get(); }
   void initialize(std::function<void()> callback) override;
   UnitFloat dropOverload() const override { return drop_overload_; }
+  const std::string& dropCategory() const override { return drop_category_; }
   void setDropOverload(UnitFloat drop_overload) override { drop_overload_ = drop_overload; }
+  void setDropCategory(absl::string_view drop_category) override { drop_category_ = drop_category; }
 
 protected:
   ClusterImplBase(const envoy::config::cluster::v3::Cluster& cluster,
@@ -1271,6 +1273,7 @@ class ClusterImplBase : public Cluster, protected Logger::Loggable<Logger::Id::u
   Config::ConstMetadataSharedPoolSharedPtr const_metadata_shared_pool_;
   Common::CallbackHandlePtr priority_update_cb_;
   UnitFloat drop_overload_{0};
+  std::string drop_category_;
   static constexpr int kDropOverloadSize = 1;
 };
 
diff --git a/source/server/admin/config_dump_handler.cc b/source/server/admin/config_dump_handler.cc
index e807cdc8bbec..84688d59146f 100644
--- a/source/server/admin/config_dump_handler.cc
+++ b/source/server/admin/config_dump_handler.cc
@@ -309,7 +309,7 @@ ConfigDumpHandler::dumpEndpointConfigs(const Matchers::StringMatcher& name_match
     float value = cluster.dropOverload().value() * 1000000;
     if (value > 0) {
       auto* drop_overload = policy.add_drop_overloads();
-      drop_overload->set_category("drop_overload");
+      drop_overload->set_category(cluster.dropCategory());
       auto* percent = drop_overload->mutable_drop_percentage();
       percent->set_denominator(envoy::type::v3::FractionalPercent::MILLION);
       percent->set_numerator(uint32_t(value));
diff --git a/test/common/upstream/upstream_impl_test.cc b/test/common/upstream/upstream_impl_test.cc
index 3ef5cef66f7f..be63bcf58db9 100644
--- a/test/common/upstream/upstream_impl_test.cc
+++ b/test/common/upstream/upstream_impl_test.cc
@@ -275,6 +275,7 @@ TEST_P(StrictDnsParamTest, DropOverLoadConfigTestBasicMillion) {
       false);
   auto cluster = *StrictDnsClusterImpl::create(cluster_config, factory_context, dns_resolver);
   EXPECT_EQ(0.000035f, cluster->dropOverload().value());
+  EXPECT_EQ("test", cluster->dropCategory());
 }
 
 TEST_P(StrictDnsParamTest, DropOverLoadConfigTestBasicTenThousand) {
@@ -290,7 +291,7 @@ TEST_P(StrictDnsParamTest, DropOverLoadConfigTestBasicTenThousand) {
     load_assignment:
         policy:
           drop_overloads:
-            category: test
+            category: foo
             drop_percentage:
               numerator: 1000
               denominator: TEN_THOUSAND
@@ -301,6 +302,7 @@ TEST_P(StrictDnsParamTest, DropOverLoadConfigTestBasicTenThousand) {
       false);
   auto cluster = *StrictDnsClusterImpl::create(cluster_config, factory_context, dns_resolver);
   EXPECT_EQ(0.1f, cluster->dropOverload().value());
+  EXPECT_EQ("foo", cluster->dropCategory());
 }
 
 TEST_P(StrictDnsParamTest, DropOverLoadConfigTestBadDenominator) {
diff --git a/test/mocks/upstream/cluster.cc b/test/mocks/upstream/cluster.cc
index 39c2bd4e7759..e1cb719069da 100644
--- a/test/mocks/upstream/cluster.cc
+++ b/test/mocks/upstream/cluster.cc
@@ -8,6 +8,8 @@ namespace Upstream {
 using ::testing::_;
 using ::testing::Invoke;
 using ::testing::Return;
+using ::testing::ReturnRef;
+
 MockCluster::MockCluster() {
   ON_CALL(*this, info()).WillByDefault(Return(info_));
   ON_CALL(*this, initialize(_))
@@ -16,9 +18,13 @@ MockCluster::MockCluster() {
         initialize_callback_ = callback;
       }));
   ON_CALL(*this, dropOverload()).WillByDefault(Return(drop_overload_));
+  ON_CALL(*this, dropCategory()).WillByDefault(ReturnRef(drop_category_));
   ON_CALL(*this, setDropOverload(_)).WillByDefault(Invoke([this](UnitFloat drop_overload) -> void {
     drop_overload_ = drop_overload;
   }));
+  ON_CALL(*this, setDropCategory(_))
+      .WillByDefault(Invoke(
+          [this](absl::string_view drop_category) -> void { drop_category_ = drop_category; }));
 }
 
 MockCluster::~MockCluster() = default;
diff --git a/test/mocks/upstream/cluster.h b/test/mocks/upstream/cluster.h
index f2fe2bad9970..cb90626596b3 100644
--- a/test/mocks/upstream/cluster.h
+++ b/test/mocks/upstream/cluster.h
@@ -26,12 +26,15 @@ class MockCluster : public Cluster {
   MOCK_METHOD(PrioritySet&, prioritySet, ());
   MOCK_METHOD(const PrioritySet&, prioritySet, (), (const));
   MOCK_METHOD(UnitFloat, dropOverload, (), (const));
+  MOCK_METHOD(const std::string&, dropCategory, (), (const));
   MOCK_METHOD(void, setDropOverload, (UnitFloat));
+  MOCK_METHOD(void, setDropCategory, (absl::string_view));
 
   std::shared_ptr<MockClusterInfo> info_{new ::testing::NiceMock<MockClusterInfo>()};
   std::function<void()> initialize_callback_;
   Network::Address::InstanceConstSharedPtr source_address_;
   UnitFloat drop_overload_{0};
+  std::string drop_category_{"drop_overload"};
 };
 } // namespace Upstream
 } // namespace Envoy
diff --git a/test/mocks/upstream/thread_local_cluster.cc b/test/mocks/upstream/thread_local_cluster.cc
index 2e4951d46143..bc1024331b6d 100644
--- a/test/mocks/upstream/thread_local_cluster.cc
+++ b/test/mocks/upstream/thread_local_cluster.cc
@@ -19,9 +19,14 @@ MockThreadLocalCluster::MockThreadLocalCluster() {
       .WillByDefault(Return(Upstream::TcpPoolData([]() {}, &tcp_conn_pool_)));
   ON_CALL(*this, httpAsyncClient()).WillByDefault(ReturnRef(async_client_));
   ON_CALL(*this, dropOverload()).WillByDefault(Return(cluster_.drop_overload_));
+  ON_CALL(*this, dropCategory()).WillByDefault(ReturnRef(cluster_.drop_category_));
   ON_CALL(*this, setDropOverload(_)).WillByDefault(Invoke([this](UnitFloat drop_overload) -> void {
     cluster_.drop_overload_ = drop_overload;
   }));
+  ON_CALL(*this, setDropCategory(_))
+      .WillByDefault(Invoke([this](absl::string_view drop_category) -> void {
+        cluster_.drop_category_ = drop_category;
+      }));
 }
 
 MockThreadLocalCluster::~MockThreadLocalCluster() = default;
diff --git a/test/mocks/upstream/thread_local_cluster.h b/test/mocks/upstream/thread_local_cluster.h
index 0efb100c20bf..266aa94c991a 100644
--- a/test/mocks/upstream/thread_local_cluster.h
+++ b/test/mocks/upstream/thread_local_cluster.h
@@ -40,7 +40,9 @@ class MockThreadLocalCluster : public ThreadLocalCluster {
   MOCK_METHOD(Tcp::AsyncTcpClientPtr, tcpAsyncClient,
               (LoadBalancerContext * context, Tcp::AsyncTcpClientOptionsConstSharedPtr options));
   MOCK_METHOD(UnitFloat, dropOverload, (), (const));
+  MOCK_METHOD(const std::string&, dropCategory, (), (const));
   MOCK_METHOD(void, setDropOverload, (UnitFloat));
+  MOCK_METHOD(void, setDropCategory, (absl::string_view));
 
   NiceMock<MockClusterMockPrioritySet> cluster_;
   NiceMock<MockLoadBalancer> lb_;
diff --git a/test/server/admin/config_dump_handler_test.cc b/test/server/admin/config_dump_handler_test.cc
index eb2718e0c804..4606be607e28 100644
--- a/test/server/admin/config_dump_handler_test.cc
+++ b/test/server/admin/config_dump_handler_test.cc
@@ -151,7 +151,8 @@ TEST_P(AdminInstanceTest, ConfigDumpWithEndpoint) {
               hostname_for_healthcheck, "tcp://1.2.3.5:90", 5, 6);
   // Adding drop_overload config.
   ON_CALL(cluster, dropOverload()).WillByDefault(Return(UnitFloat(0.00035)));
-
+  const std::string drop_overload = "drop_overload";
+  ON_CALL(cluster, dropCategory()).WillByDefault(ReturnRef(drop_overload));
   Buffer::OwnedImpl response;
   Http::TestResponseHeaderMapImpl header_map;
   EXPECT_EQ(Http::Code::OK, getCallback("/config_dump?include_eds", header_map, response));