diff --git a/pkg/virtual/replication/builder/unwrap.go b/pkg/virtual/replication/builder/unwrap.go
index 45f51156047..88d474b1a26 100644
--- a/pkg/virtual/replication/builder/unwrap.go
+++ b/pkg/virtual/replication/builder/unwrap.go
@@ -21,6 +21,7 @@ import (
 	"fmt"
 	"net/http"
 	"sync"
+	"sync/atomic"
 
 	apiextensionsv1 "k8s.io/apiextensions-apiserver/pkg/apis/apiextensions/v1"
 	apierrors "k8s.io/apimachinery/pkg/api/errors"
@@ -151,7 +152,13 @@ func withUnwrapping(apiResourceSchema *apisv1alpha1.APIResourceSchema, version s
 				return nil, err
 			}
 
-			return newUnwrappingWatch(ctx, innerGVR, options, namespaced, genericapirequest.NamespaceValue(ctx),
+			innerGVK := schema.GroupVersionKind{
+				Group:   wrappedGVR.Group,
+				Version: wrappedGVR.Version,
+				Kind:    apiResourceSchema.Spec.Names.Kind,
+			}
+
+			return newUnwrappingWatch(ctx, innerGVR, innerGVK, options, namespaced, genericapirequest.NamespaceValue(ctx),
 				globalKcpInformers.Cache().V1alpha1().CachedObjects().Cluster(parsedKey.CachedResourceCluster).Informer(), syntheticClustersProvider(
 					*genericapirequest.ClusterFrom(ctx),
 					cr.Status.IdentityHash,
@@ -258,6 +265,7 @@ type unwrappingWatch struct {
 func newUnwrappingWatch(
 	ctx context.Context,
 	innerObjGVR schema.GroupVersionResource,
+	innerObjGVK schema.GroupVersionKind,
 	innerListOpts *metainternalversion.ListOptions,
 	namespaced bool,
 	namespace string,
@@ -283,6 +291,11 @@ func newUnwrappingWatch(
 		}
 	}()
 
+	// Track the latest resource version seen during initial list replay.
+	// Used to set the resourceVersion on the initial-events-end bookmark.
+	var latestInitialRV atomic.Value
+	latestInitialRV.Store("0")
+
 	label := labels.Everything()
 	if innerListOpts != nil && innerListOpts.LabelSelector != nil {
 		label = innerListOpts.LabelSelector
@@ -345,6 +358,11 @@ func newUnwrappingWatch(
 				}
 
 				if isInInitialList {
+					// Track the latest resource version for the initial-events-end bookmark.
+					if rv := innerObj.GetResourceVersion(); rv > latestInitialRV.Load().(string) {
+						latestInitialRV.Store(rv)
+					}
+
 					if innerObj.GetResourceVersion() <= innerListOpts.ResourceVersion {
 						// This resource is older than the one we want to start from on isInInitial list replay.
 						return
@@ -422,6 +440,28 @@ func newUnwrappingWatch(
 	}
 	w.handler = handler
 
+	// Send the initial-events-end bookmark after the informer has replayed all
+	// existing items. Clients using WatchList (sendInitialEvents=true) expect a
+	// BOOKMARK with the k8s.io/initial-events-end annotation to signal that the
+	// initial state has been fully delivered.
+	if innerListOpts != nil && innerListOpts.SendInitialEvents != nil && *innerListOpts.SendInitialEvents && innerListOpts.AllowWatchBookmarks {
+		go func() {
+			if !clientgocache.WaitForCacheSync(ctx.Done(), handler.HasSynced) {
+				return
+			}
+			bookmark := &unstructured.Unstructured{}
+			bookmark.SetGroupVersionKind(innerObjGVK)
+			bookmark.SetResourceVersion(latestInitialRV.Load().(string))
+			bookmark.SetAnnotations(map[string]string{
+				metav1.InitialEventsAnnotationKey: "true",
+			})
+			w.safeWrite(watch.Event{
+				Type:   watch.Bookmark,
+				Object: bookmark,
+			})
+		}()
+	}
+
 	return w, nil
 }