diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7c623078..818bff97 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,21 @@
 
 All notable changes to this project are documented in this file.
 
+## 1.0.0-rc.2
+
+**Release date:** 2023-05-09
+
+This release candidate fixes secrets decryption when using Azure Key Vault.
+
+In addition, the controller dependencies have been updated to their latest
+versions.
+
+Improvements:
+- Fix SOPS azkv envCred
+  [#838](https://github.com/fluxcd/kustomize-controller/pull/838)
+- Update dependencies
+  [#853](https://github.com/fluxcd/kustomize-controller/pull/853)
+
 ## 1.0.0-rc.1
 
 **Release date:** 2023-04-03
diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index e756b4aa..d929c2de 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -5,4 +5,4 @@ resources:
 images:
   - name: fluxcd/kustomize-controller
     newName: fluxcd/kustomize-controller
-    newTag: v1.0.0-rc.1
+    newTag: v1.0.0-rc.2
diff --git a/go.mod b/go.mod
index 87fd3397..cc7fd686 100644
--- a/go.mod
+++ b/go.mod
@@ -23,7 +23,7 @@ require (
 	github.com/aws/aws-sdk-go-v2/service/sts v1.19.0
 	github.com/cyphar/filepath-securejoin v0.2.3
 	github.com/dimchansky/utfbom v1.1.1
-	github.com/fluxcd/kustomize-controller/api v1.0.0-rc.1
+	github.com/fluxcd/kustomize-controller/api v1.0.0-rc.2
 	github.com/fluxcd/pkg/apis/acl v0.1.0
 	github.com/fluxcd/pkg/apis/event v0.4.1
 	github.com/fluxcd/pkg/apis/kustomize v1.0.0