diff --git a/gax-grpc/src/main/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProvider.java b/gax-grpc/src/main/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProvider.java
index 963830494..3451609a4 100644
--- a/gax-grpc/src/main/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProvider.java
+++ b/gax-grpc/src/main/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProvider.java
@@ -109,6 +109,7 @@ public final class InstantiatingGrpcChannelProvider implements TransportChannelP
   @Nullable private final Boolean allowNonDefaultServiceAccount;
   @VisibleForTesting final ImmutableMap<String, ?> directPathServiceConfig;
   @Nullable private final MtlsProvider mtlsProvider;
+  @Nullable @VisibleForTesting private String activeEndpoint;
 
   @Nullable
   private final ApiFunction<ManagedChannelBuilder, ManagedChannelBuilder> channelConfigurator;
@@ -136,6 +137,7 @@ private InstantiatingGrpcChannelProvider(Builder builder) {
         builder.directPathServiceConfig == null
             ? getDefaultDirectPathServiceConfig()
             : builder.directPathServiceConfig;
+    this.activeEndpoint = builder.endpoint;
   }
 
   /**
@@ -339,15 +341,16 @@ && isOnComputeEngine()) {
       isDirectPathXdsEnabled = Boolean.parseBoolean(envProvider.getenv(DIRECT_PATH_ENV_ENABLE_XDS));
       if (isDirectPathXdsEnabled) {
         // google-c2p resolver target must not have a port number
-        builder = ComputeEngineChannelBuilder.forTarget("google-c2p:///" + serviceAddress);
+        activeEndpoint = "google-c2p:///" + serviceAddress;
+        builder = ComputeEngineChannelBuilder.forTarget(activeEndpoint);
       } else {
         builder = ComputeEngineChannelBuilder.forAddress(serviceAddress, port);
-        // Set default keepAliveTime and keepAliveTimeout when directpath environment is enabled.
-        // Will be overridden by user defined values if any.
-        builder.keepAliveTime(DIRECT_PATH_KEEP_ALIVE_TIME_SECONDS, TimeUnit.SECONDS);
-        builder.keepAliveTimeout(DIRECT_PATH_KEEP_ALIVE_TIMEOUT_SECONDS, TimeUnit.SECONDS);
         builder.defaultServiceConfig(directPathServiceConfig);
       }
+      // Set default keepAliveTime and keepAliveTimeout when directpath environment is enabled.
+      // Will be overridden by user defined values if any.
+      builder.keepAliveTime(DIRECT_PATH_KEEP_ALIVE_TIME_SECONDS, TimeUnit.SECONDS);
+      builder.keepAliveTimeout(DIRECT_PATH_KEEP_ALIVE_TIMEOUT_SECONDS, TimeUnit.SECONDS);
     } else {
       ChannelCredentials channelCredentials = createMtlsChannelCredentials();
       if (channelCredentials != null) {
@@ -398,11 +401,16 @@ && isOnComputeEngine()) {
     return managedChannel;
   }
 
-  /** The endpoint to be used for the channel. */
+  /** The endpoint passed to the builder. It must have a pot, and must not have a URI scheme. */
   public String getEndpoint() {
     return endpoint;
   }
 
+  /** The actual endpoint to be used for building a channel. */
+  public String getActiveEndpoint() {
+    return activeEndpoint;
+  }
+
   /** The time without read activity before sending a keepalive ping. */
   public Duration getKeepAliveTime() {
     return keepAliveTime;
@@ -535,6 +543,12 @@ Builder setMtlsProvider(MtlsProvider mtlsProvider) {
       return this;
     }
 
+    @VisibleForTesting
+    Builder setEnvProvider(EnvironmentProvider envProvider) {
+      this.envProvider = envProvider;
+      return this;
+    }
+
     /**
      * Sets the GrpcInterceptorProvider for this TransportChannelProvider.
      *
diff --git a/gax-grpc/src/test/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProviderTest.java b/gax-grpc/src/test/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProviderTest.java
index 72f3cc464..8476df890 100644
--- a/gax-grpc/src/test/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProviderTest.java
+++ b/gax-grpc/src/test/java/com/google/api/gax/grpc/InstantiatingGrpcChannelProviderTest.java
@@ -67,6 +67,23 @@
 
 @RunWith(JUnit4.class)
 public class InstantiatingGrpcChannelProviderTest extends AbstractMtlsTransportChannelTest {
+  static class TestEnvironmentProvider
+      implements InstantiatingGrpcChannelProvider.EnvironmentProvider {
+    private final String isDirectPathXdsEnabled;
+
+    TestEnvironmentProvider(String isDirectPathXdsEnabled) {
+      this.isDirectPathXdsEnabled = isDirectPathXdsEnabled;
+    }
+
+    @Override
+    public String getenv(String env) {
+      if (env.equals("GOOGLE_CLOUD_ENABLE_DIRECT_PATH_XDS")) {
+        return isDirectPathXdsEnabled;
+      }
+      return System.getenv(env);
+    }
+  }
+
   @Test
   public void testEndpoint() {
     String endpoint = "localhost:8080";
@@ -386,6 +403,30 @@ public ManagedChannelBuilder apply(ManagedChannelBuilder channelBuilder) {
     provider.getTransportChannel().shutdownNow();
   }
 
+  @Test
+  public void testWithDirectPathXds() throws IOException {
+    ScheduledExecutorService executor = new ScheduledThreadPoolExecutor(1);
+    executor.shutdown();
+
+    InstantiatingGrpcChannelProvider iProvider =
+        InstantiatingGrpcChannelProvider.newBuilder()
+            .setAttemptDirectPath(true)
+            .setEnvProvider(new TestEnvironmentProvider(/*isDirectPathXdsEnabled = */ "true"))
+            .build();
+
+    TransportChannelProvider provider =
+        iProvider
+            .withHeaders(Collections.<String, String>emptyMap())
+            .withExecutor((Executor) executor)
+            .withEndpoint("localhost:8080")
+            .withCredentials(ComputeEngineCredentials.create());
+    ;
+
+    provider.getTransportChannel().shutdownNow();
+
+    assertEquals(iProvider.getActiveEndpoint(), "google-c2p:///localhost");
+  }
+
   @Test
   public void testWithIPv6Address() throws IOException {
     ScheduledExecutorService executor = new ScheduledThreadPoolExecutor(1);