diff --git a/flytekit/core/node_creation.py b/flytekit/core/node_creation.py
index 58a72f357a..791480435f 100644
--- a/flytekit/core/node_creation.py
+++ b/flytekit/core/node_creation.py
@@ -3,7 +3,7 @@
 from typing import TYPE_CHECKING, Union
 
 from flytekit.core.base_task import PythonTask
-from flytekit.core.context_manager import BranchEvalMode, FlyteContext
+from flytekit.core.context_manager import BranchEvalMode, ExecutionState, FlyteContext
 from flytekit.core.launch_plan import LaunchPlan
 from flytekit.core.node import Node
 from flytekit.core.promise import VoidPromise
@@ -129,9 +129,12 @@ def create_node(
         return node
 
     # Handling local execution
-    # Note: execution state is set to TASK_EXECUTION when running dynamic task locally
+    # Note: execution state is set to DYNAMIC_TASK_EXECUTION when running a dynamic task locally
     # https://github.com/flyteorg/flytekit/blob/0815345faf0fae5dc26746a43d4bda4cc2cdf830/flytekit/core/python_function_task.py#L262
-    elif ctx.execution_state and ctx.execution_state.is_local_execution():
+    elif ctx.execution_state and (
+        ctx.execution_state.is_local_execution()
+        or ctx.execution_state.mode == ExecutionState.Mode.DYNAMIC_TASK_EXECUTION
+    ):
         if isinstance(entity, RemoteEntity):
             raise AssertionError(f"Remote entities are not yet runnable locally {entity.name}")
 
diff --git a/flytekit/core/promise.py b/flytekit/core/promise.py
index 6bb07fee3e..847d727948 100644
--- a/flytekit/core/promise.py
+++ b/flytekit/core/promise.py
@@ -1270,6 +1270,9 @@ def flyte_entity_call_handler(
         if inspect.iscoroutine(result):
             return result
 
+        if ctx.execution_state and ctx.execution_state.mode == ExecutionState.Mode.DYNAMIC_TASK_EXECUTION:
+            return result
+
         if (1 < expected_outputs == len(cast(Tuple[Promise], result))) or (
             result is not None and expected_outputs == 1
         ):
diff --git a/flytekit/core/python_function_task.py b/flytekit/core/python_function_task.py
index 2c01723bdd..a1b863a092 100644
--- a/flytekit/core/python_function_task.py
+++ b/flytekit/core/python_function_task.py
@@ -308,7 +308,12 @@ def dynamic_execute(self, task_function: Callable, **kwargs) -> Any:
             # local_execute directly though since that converts inputs into Promises.
             logger.debug(f"Executing Dynamic workflow, using raw inputs {kwargs}")
             self._create_and_cache_dynamic_workflow()
-            function_outputs = cast(PythonFunctionWorkflow, self._wf).execute(**kwargs)
+            if self.execution_mode == self.ExecutionBehavior.DYNAMIC:
+                es = ctx.new_execution_state().with_params(mode=ExecutionState.Mode.DYNAMIC_TASK_EXECUTION)
+            else:
+                es = cast(ExecutionState, ctx.execution_state)
+            with FlyteContextManager.with_context(ctx.with_execution_state(es)):
+                function_outputs = cast(PythonFunctionWorkflow, self._wf).execute(**kwargs)
 
             if isinstance(function_outputs, VoidPromise) or function_outputs is None:
                 return VoidPromise(self.name)