diff --git a/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/pom.xml b/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/pom.xml
index 515adc32a9..188b278c93 100644
--- a/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/pom.xml
+++ b/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/pom.xml
@@ -12,7 +12,7 @@
 
     <properties>
         <apm-agent-parent.base.dir>${project.basedir}/../../..</apm-agent-parent.base.dir>
-        <version.aws.sdk>1.12.215</version.aws.sdk>
+        <version.aws.sdk>1.12.740</version.aws.sdk>
         <version.aws.jms>1.1.0</version.aws.jms>
     </properties>
 
diff --git a/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/src/test/java/co/elastic/apm/agent/awssdk/v1/AbstractAws1ClientIT.java b/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/src/test/java/co/elastic/apm/agent/awssdk/v1/AbstractAws1ClientIT.java
index d7b30d82d2..b5e7db306d 100644
--- a/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/src/test/java/co/elastic/apm/agent/awssdk/v1/AbstractAws1ClientIT.java
+++ b/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-1-plugin/src/test/java/co/elastic/apm/agent/awssdk/v1/AbstractAws1ClientIT.java
@@ -22,7 +22,7 @@
 
 public abstract class AbstractAws1ClientIT extends AbstractAwsClientIT {
 
-    public static final String LOCALSTACK_VERSION = "0.14.2";
+    public static final String LOCALSTACK_VERSION = "3.5.0";
 
     public AbstractAws1ClientIT() {
         super(LOCALSTACK_VERSION);
diff --git a/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-common/src/test/java/co/elastic/apm/agent/awssdk/common/AbstractAwsClientIT.java b/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-common/src/test/java/co/elastic/apm/agent/awssdk/common/AbstractAwsClientIT.java
index 91f632f562..41fe65546e 100644
--- a/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-common/src/test/java/co/elastic/apm/agent/awssdk/common/AbstractAwsClientIT.java
+++ b/apm-agent-plugins/apm-aws-sdk/apm-aws-sdk-common/src/test/java/co/elastic/apm/agent/awssdk/common/AbstractAwsClientIT.java
@@ -55,7 +55,7 @@ public abstract class AbstractAwsClientIT extends AbstractInstrumentationTest {
 
     public AbstractAwsClientIT(String localstackVersion) {
         DockerImageName localstackImage = DockerImageName.parse("localstack/localstack:" + localstackVersion);
-        localstack = new LocalStackContainer(localstackImage).withServices(localstackService());
+        localstack = new LocalStackContainer(localstackImage).withServices(localstackService()).withEnv("SQS_ENDPOINT_STRATEGY", "dynamic");
     }
 
     protected abstract String awsService();