diff --git a/apis/v1alpha1/upstreamsettingspolicy_types.go b/apis/v1alpha1/upstreamsettingspolicy_types.go
index 8504c9717d..a8f6c09a29 100644
--- a/apis/v1alpha1/upstreamsettingspolicy_types.go
+++ b/apis/v1alpha1/upstreamsettingspolicy_types.go
@@ -51,6 +51,13 @@ type UpstreamSettingsPolicySpec struct {
 	// +optional
 	KeepAlive *UpstreamKeepAlive `json:"keepAlive,omitempty"`
 
+	// LoadBalancingMethod specifies the load balancing algorithm to be used for the upstream.
+	// If not specified, NGINX Gateway Fabric defaults to `random two least_conn`,
+	// which differs from the standard NGINX default `round-robin`.
+	//
+	// +optional
+	LoadBalancingMethod *LoadBalancingType `json:"loadBalancingMethod,omitempty"`
+
 	// TargetRefs identifies API object(s) to apply the policy to.
 	// Objects must be in the same namespace as the policy.
 	// Support: Service
@@ -98,3 +105,22 @@ type UpstreamKeepAlive struct {
 	// +optional
 	Timeout *Duration `json:"timeout,omitempty"`
 }
+
+// LoadBalancingType defines the supported load balancing methods.
+//
+// +kubebuilder:validation:Enum=ip_hash;random two least_conn
+type LoadBalancingType string
+
+const (
+	// LoadBalancingTypeIPHash enables IP hash-based load balancing,
+	// ensuring requests from the same client IP are routed to the same upstream server.
+	// NGINX directive: https://nginx.org/en/docs/http/ngx_http_upstream_module.html#ip_hash
+	LoadBalancingTypeIPHash LoadBalancingType = "ip_hash"
+
+	// LoadBalancingTypeRandomTwoLeastConnection enables a variation of least-connections
+	// balancing that randomly selects two servers and forwards traffic to the one with
+	// fewer active connections.
+	// NGINX directive least_conn: https://nginx.org/en/docs/http/ngx_http_upstream_module.html#least_conn
+	// NGINX directive random: https://nginx.org/en/docs/http/ngx_http_upstream_module.html#random
+	LoadBalancingTypeRandomTwoLeastConnection LoadBalancingType = "random two least_conn"
+)
diff --git a/apis/v1alpha1/zz_generated.deepcopy.go b/apis/v1alpha1/zz_generated.deepcopy.go
index d07825de2d..4f0c2bebc4 100644
--- a/apis/v1alpha1/zz_generated.deepcopy.go
+++ b/apis/v1alpha1/zz_generated.deepcopy.go
@@ -556,6 +556,11 @@ func (in *UpstreamSettingsPolicySpec) DeepCopyInto(out *UpstreamSettingsPolicySp
 		*out = new(UpstreamKeepAlive)
 		(*in).DeepCopyInto(*out)
 	}
+	if in.LoadBalancingMethod != nil {
+		in, out := &in.LoadBalancingMethod, &out.LoadBalancingMethod
+		*out = new(LoadBalancingType)
+		**out = **in
+	}
 	if in.TargetRefs != nil {
 		in, out := &in.TargetRefs, &out.TargetRefs
 		*out = make([]apisv1.LocalPolicyTargetReference, len(*in))
diff --git a/config/crd/bases/gateway.nginx.org_upstreamsettingspolicies.yaml b/config/crd/bases/gateway.nginx.org_upstreamsettingspolicies.yaml
index ce6b9603ed..6fa9de4104 100644
--- a/config/crd/bases/gateway.nginx.org_upstreamsettingspolicies.yaml
+++ b/config/crd/bases/gateway.nginx.org_upstreamsettingspolicies.yaml
@@ -85,6 +85,15 @@ spec:
                     pattern: ^[0-9]{1,4}(ms|s|m|h)?$
                     type: string
                 type: object
+              loadBalancingMethod:
+                description: |-
+                  LoadBalancingMethod specifies the load balancing algorithm to be used for the upstream.
+                  If not specified, NGINX Gateway Fabric defaults to `random two least_conn`,
+                  which differs from the standard NGINX default `round-robin`.
+                enum:
+                - ip_hash
+                - random two least_conn
+                type: string
               targetRefs:
                 description: |-
                   TargetRefs identifies API object(s) to apply the policy to.
diff --git a/deploy/crds.yaml b/deploy/crds.yaml
index 2a526a961f..ce16d35823 100644
--- a/deploy/crds.yaml
+++ b/deploy/crds.yaml
@@ -9612,6 +9612,15 @@ spec:
                     pattern: ^[0-9]{1,4}(ms|s|m|h)?$
                     type: string
                 type: object
+              loadBalancingMethod:
+                description: |-
+                  LoadBalancingMethod specifies the load balancing algorithm to be used for the upstream.
+                  If not specified, NGINX Gateway Fabric defaults to `random two least_conn`,
+                  which differs from the standard NGINX default `round-robin`.
+                enum:
+                - ip_hash
+                - random two least_conn
+                type: string
               targetRefs:
                 description: |-
                   TargetRefs identifies API object(s) to apply the policy to.