diff --git a/pkg/cfn/builder/managed_nodegroup.go b/pkg/cfn/builder/managed_nodegroup.go
index f55028c0b3..7e2fe14f67 100644
--- a/pkg/cfn/builder/managed_nodegroup.go
+++ b/pkg/cfn/builder/managed_nodegroup.go
@@ -130,9 +130,11 @@ func (m *ManagedNodeGroupResourceSet) AddAllResources(ctx context.Context) error
 		managedResource.CapacityType = gfnt.NewString("SPOT")
 	}
 
+	isCapacityBlockEnabled := false
 	if m.nodeGroup.InstanceMarketOptions != nil &&
 		m.nodeGroup.InstanceMarketOptions.MarketType != nil &&
 		*m.nodeGroup.InstanceMarketOptions.MarketType == "capacity-block" {
+		isCapacityBlockEnabled = true
 		managedResource.CapacityType = gfnt.NewString("CAPACITY_BLOCK")
 	}
 
@@ -173,7 +175,15 @@ func (m *ManagedNodeGroupResourceSet) AddAllResources(ctx context.Context) error
 		}
 
 		if launchTemplateData.InstanceType == "" {
-			managedResource.InstanceTypes = gfnt.NewStringSlice(instanceTypes...)
+			if isCapacityBlockEnabled {
+				if len(instanceTypes) > 1 {
+					return errors.New("when using capacity type CAPACITY_BLOCK please specify only one instance type")
+				} else {
+					launchTemplateData.InstanceType = ec2types.InstanceType(instanceTypes[0])
+				}
+			} else {
+				managedResource.InstanceTypes = gfnt.NewStringSlice(instanceTypes...)
+			}
 		}
 	} else {
 		launchTemplateData, err := m.makeLaunchTemplateData(ctx)
@@ -183,7 +193,15 @@ func (m *ManagedNodeGroupResourceSet) AddAllResources(ctx context.Context) error
 		if launchTemplateData.ImageId == nil {
 			managedResource.AmiType = makeAMIType()
 		}
-		managedResource.InstanceTypes = gfnt.NewStringSlice(instanceTypes...)
+
+		if isCapacityBlockEnabled {
+			if len(instanceTypes) > 1 {
+				return errors.New("cannot specify multiple instance types when using capacity block")
+			}
+			launchTemplateData.InstanceType = gfnt.NewString(instanceTypes[0])
+		} else {
+			managedResource.InstanceTypes = gfnt.NewStringSlice(instanceTypes...)
+		}
 
 		ltRef := m.newResource("LaunchTemplate", &gfnec2.LaunchTemplate{
 			LaunchTemplateName: gfnt.MakeFnSubString(fmt.Sprintf("${%s}", gfnt.StackName)),
diff --git a/pkg/cfn/builder/testdata/launch_template/capacity_block.json b/pkg/cfn/builder/testdata/launch_template/capacity_block.json
index d5ed4d783c..088a2c521e 100644
--- a/pkg/cfn/builder/testdata/launch_template/capacity_block.json
+++ b/pkg/cfn/builder/testdata/launch_template/capacity_block.json
@@ -22,6 +22,7 @@
                 "InstanceMarketOptions": {
                     "MarketType": "capacity-block"
                 },
+                "InstanceType": "p5en.48xlarge",
                 "MetadataOptions": {
                     "HttpPutResponseHopLimit": 2,
                     "HttpTokens": "required"
@@ -96,9 +97,6 @@
             "AmiType": "AL2023_x86_64_NVIDIA",
             "CapacityType": "CAPACITY_BLOCK",
             "ClusterName": "lt",
-            "InstanceTypes": [
-                "p5en.48xlarge"
-            ],
             "Labels": {
                 "alpha.eksctl.io/cluster-name": "lt",
                 "alpha.eksctl.io/nodegroup-name": "cb-test"