diff --git a/clientconn.go b/clientconn.go
index 6a44343aea00..346fc0e14512 100644
--- a/clientconn.go
+++ b/clientconn.go
@@ -117,12 +117,11 @@ func (dcs *defaultConfigSelector) SelectConfig(rpcInfo iresolver.RPCInfo) (*ires
 	}, nil
 }
 
-// newClient returns a new client in idle mode.
-func newClient(target string, opts ...DialOption) (conn *ClientConn, err error) {
+func newClient(target, defaultScheme string, opts ...DialOption) (conn *ClientConn, err error) {
 	cc := &ClientConn{
 		target: target,
 		conns:  make(map[*addrConn]struct{}),
-		dopts:  defaultDialOptions(),
+		dopts:  defaultDialOptions(defaultScheme),
 		czData: new(channelzData),
 	}
 
@@ -191,6 +190,11 @@ func newClient(target string, opts ...DialOption) (conn *ClientConn, err error)
 	return cc, nil
 }
 
+// NewClient returns a new client in idle mode.
+func NewClient(target string, opts ...DialOption) (conn *ClientConn, err error) {
+	return newClient(target, "dns", opts...)
+}
+
 // DialContext creates a client connection to the given target. By default, it's
 // a non-blocking dial (the function won't wait for connections to be
 // established, and connecting happens in the background). To make it a blocking
@@ -208,7 +212,8 @@ func newClient(target string, opts ...DialOption) (conn *ClientConn, err error)
 // https://github.com/grpc/grpc/blob/master/doc/naming.md.
 // e.g. to use dns resolver, a "dns:///" prefix should be applied to the target.
 func DialContext(ctx context.Context, target string, opts ...DialOption) (conn *ClientConn, err error) {
-	cc, err := newClient(target, opts...)
+	// At the end of this method, we kick the channel out of idle, rather than waiting for the first rpc.
+	cc, err := newClient(target, "passthrough", opts...)
 	if err != nil {
 		return nil, err
 	}
@@ -1740,8 +1745,13 @@ func (cc *ClientConn) parseTargetAndFindResolver() error {
 	// We are here because the user's dial target did not contain a scheme or
 	// specified an unregistered scheme. We should fallback to the default
 	// scheme, except when a custom dialer is specified in which case, we should
-	// always use passthrough scheme.
-	defScheme := resolver.GetDefaultScheme()
+	// always use passthrough scheme. For either case, we need to respect any overridden
+	// global defaults set by the user.
+	defScheme := cc.dopts.defScheme
+	if internal.UserSetDefaultScheme {
+		defScheme = resolver.GetDefaultScheme()
+	}
+
 	channelz.Infof(logger, cc.channelzID, "fallback to scheme %q", defScheme)
 	canonicalTarget := defScheme + ":///" + cc.target
 
diff --git a/clientconn_parsed_target_test.go b/clientconn_parsed_target_test.go
index 1ff46aaf08c7..abb80611eae4 100644
--- a/clientconn_parsed_target_test.go
+++ b/clientconn_parsed_target_test.go
@@ -28,34 +28,87 @@ import (
 
 	"github.com/google/go-cmp/cmp"
 	"google.golang.org/grpc/credentials/insecure"
+	"google.golang.org/grpc/internal"
 	"google.golang.org/grpc/internal/testutils"
-
 	"google.golang.org/grpc/resolver"
 )
 
+func generateTarget(scheme string, target string) resolver.Target {
+	return resolver.Target{URL: *testutils.MustParseURL(fmt.Sprintf("%s:///%s", scheme, target))}
+}
+
+// This is here just in case another test calls the SetDefaultScheme method.
+func resetInitialResolverState() {
+	resolver.SetDefaultScheme("passthrough")
+	internal.UserSetDefaultScheme = false
+}
+
 func (s) TestParsedTarget_Success_WithoutCustomDialer(t *testing.T) {
-	defScheme := resolver.GetDefaultScheme()
+	resetInitialResolverState()
+	dialScheme := resolver.GetDefaultScheme()
+	newClientScheme := "dns"
 	tests := []struct {
-		target     string
-		wantParsed resolver.Target
+		target             string
+		wantDialParse      resolver.Target
+		wantNewClientParse resolver.Target
 	}{
 		// No scheme is specified.
-		{target: "://a/b", wantParsed: resolver.Target{URL: *testutils.MustParseURL(fmt.Sprintf("%s:///%s", defScheme, "://a/b"))}},
-		{target: "a//b", wantParsed: resolver.Target{URL: *testutils.MustParseURL(fmt.Sprintf("%s:///%s", defScheme, "a//b"))}},
+		{
+			target:             "://a/b",
+			wantDialParse:      generateTarget(dialScheme, "://a/b"),
+			wantNewClientParse: generateTarget(newClientScheme, "://a/b"),
+		},
+		{
+			target:             "a//b",
+			wantDialParse:      generateTarget(dialScheme, "a//b"),
+			wantNewClientParse: generateTarget(newClientScheme, "a//b"),
+		},
 
 		// An unregistered scheme is specified.
-		{target: "a:///", wantParsed: resolver.Target{URL: *testutils.MustParseURL(fmt.Sprintf("%s:///%s", defScheme, "a:///"))}},
-		{target: "a:b", wantParsed: resolver.Target{URL: *testutils.MustParseURL(fmt.Sprintf("%s:///%s", defScheme, "a:b"))}},
+		{
+			target:             "a:///",
+			wantDialParse:      generateTarget(dialScheme, "a:///"),
+			wantNewClientParse: generateTarget(newClientScheme, "a:///"),
+		},
+		{
+			target:             "a:b",
+			wantDialParse:      generateTarget(dialScheme, "a:b"),
+			wantNewClientParse: generateTarget(newClientScheme, "a:b"),
+		},
 
 		// A registered scheme is specified.
-		{target: "dns://a.server.com/google.com", wantParsed: resolver.Target{URL: *testutils.MustParseURL("dns://a.server.com/google.com")}},
-		{target: "unix-abstract:/ a///://::!@#$%25^&*()b", wantParsed: resolver.Target{URL: *testutils.MustParseURL("unix-abstract:/ a///://::!@#$%25^&*()b")}},
-		{target: "unix-abstract:passthrough:abc", wantParsed: resolver.Target{URL: *testutils.MustParseURL("unix-abstract:passthrough:abc")}},
-		{target: "passthrough:///unix:///a/b/c", wantParsed: resolver.Target{URL: *testutils.MustParseURL("passthrough:///unix:///a/b/c")}},
+		{
+			target:             "dns://a.server.com/google.com",
+			wantDialParse:      resolver.Target{URL: *testutils.MustParseURL("dns://a.server.com/google.com")},
+			wantNewClientParse: resolver.Target{URL: *testutils.MustParseURL("dns://a.server.com/google.com")},
+		},
+		{
+			target:             "unix-abstract:/ a///://::!@#$%25^&*()b",
+			wantDialParse:      resolver.Target{URL: *testutils.MustParseURL("unix-abstract:/ a///://::!@#$%25^&*()b")},
+			wantNewClientParse: resolver.Target{URL: *testutils.MustParseURL("unix-abstract:/ a///://::!@#$%25^&*()b")},
+		},
+		{
+			target:             "unix-abstract:passthrough:abc",
+			wantDialParse:      resolver.Target{URL: *testutils.MustParseURL("unix-abstract:passthrough:abc")},
+			wantNewClientParse: resolver.Target{URL: *testutils.MustParseURL("unix-abstract:passthrough:abc")},
+		},
+		{
+			target:             "passthrough:///unix:///a/b/c",
+			wantDialParse:      resolver.Target{URL: *testutils.MustParseURL("passthrough:///unix:///a/b/c")},
+			wantNewClientParse: resolver.Target{URL: *testutils.MustParseURL("passthrough:///unix:///a/b/c")},
+		},
 
 		// Cases for `scheme:absolute-path`.
-		{target: "dns:/a/b/c", wantParsed: resolver.Target{URL: *testutils.MustParseURL("dns:/a/b/c")}},
-		{target: "unregistered:/a/b/c", wantParsed: resolver.Target{URL: *testutils.MustParseURL(fmt.Sprintf("%s:///%s", defScheme, "unregistered:/a/b/c"))}},
+		{
+			target:             "dns:/a/b/c",
+			wantDialParse:      resolver.Target{URL: *testutils.MustParseURL("dns:/a/b/c")},
+			wantNewClientParse: resolver.Target{URL: *testutils.MustParseURL("dns:/a/b/c")},
+		},
+		{
+			target:             "unregistered:/a/b/c",
+			wantDialParse:      generateTarget(dialScheme, "unregistered:/a/b/c"),
+			wantNewClientParse: generateTarget(newClientScheme, "unregistered:/a/b/c"),
+		},
 	}
 
 	for _, test := range tests {
@@ -66,8 +119,18 @@ func (s) TestParsedTarget_Success_WithoutCustomDialer(t *testing.T) {
 			}
 			defer cc.Close()
 
-			if !cmp.Equal(cc.parsedTarget, test.wantParsed) {
-				t.Errorf("cc.parsedTarget for dial target %q = %+v, want %+v", test.target, cc.parsedTarget, test.wantParsed)
+			if !cmp.Equal(cc.parsedTarget, test.wantDialParse) {
+				t.Errorf("cc.parsedTarget for dial target %q = %+v, want %+v", test.target, cc.parsedTarget, test.wantDialParse)
+			}
+
+			cc, err = NewClient(test.target, WithTransportCredentials(insecure.NewCredentials()))
+			if err != nil {
+				t.Fatalf("NewClient(%q) failed: %v", test.target, err)
+			}
+			defer cc.Close()
+
+			if !cmp.Equal(cc.parsedTarget, test.wantNewClientParse) {
+				t.Errorf("cc.parsedTarget for newClient target %q = %+v, want %+v", test.target, cc.parsedTarget, test.wantNewClientParse)
 			}
 		})
 	}
@@ -93,6 +156,7 @@ func (s) TestParsedTarget_Failure_WithoutCustomDialer(t *testing.T) {
 }
 
 func (s) TestParsedTarget_WithCustomDialer(t *testing.T) {
+	resetInitialResolverState()
 	defScheme := resolver.GetDefaultScheme()
 	tests := []struct {
 		target            string
diff --git a/credentials/google/google_test.go b/credentials/google/google_test.go
index 1809d545d0ec..12c151ba5428 100644
--- a/credentials/google/google_test.go
+++ b/credentials/google/google_test.go
@@ -24,9 +24,9 @@ import (
 	"testing"
 
 	"google.golang.org/grpc/credentials"
-	"google.golang.org/grpc/internal"
 	icredentials "google.golang.org/grpc/internal/credentials"
 	"google.golang.org/grpc/internal/grpctest"
+	"google.golang.org/grpc/internal/xds"
 	"google.golang.org/grpc/resolver"
 )
 
@@ -109,7 +109,7 @@ func (s) TestClientHandshakeBasedOnClusterName(t *testing.T) {
 			{
 				name: "with non-CFE cluster name",
 				ctx: icredentials.NewClientHandshakeInfoContext(context.Background(), credentials.ClientHandshakeInfo{
-					Attributes: internal.SetXDSHandshakeClusterName(resolver.Address{}, "lalala").Attributes,
+					Attributes: xds.SetXDSHandshakeClusterName(resolver.Address{}, "lalala").Attributes,
 				}),
 				// non-CFE backends should use alts.
 				wantTyp: "alts",
@@ -117,7 +117,7 @@ func (s) TestClientHandshakeBasedOnClusterName(t *testing.T) {
 			{
 				name: "with CFE cluster name",
 				ctx: icredentials.NewClientHandshakeInfoContext(context.Background(), credentials.ClientHandshakeInfo{
-					Attributes: internal.SetXDSHandshakeClusterName(resolver.Address{}, "google_cfe_bigtable.googleapis.com").Attributes,
+					Attributes: xds.SetXDSHandshakeClusterName(resolver.Address{}, "google_cfe_bigtable.googleapis.com").Attributes,
 				}),
 				// CFE should use tls.
 				wantTyp: "tls",
@@ -125,7 +125,7 @@ func (s) TestClientHandshakeBasedOnClusterName(t *testing.T) {
 			{
 				name: "with xdstp CFE cluster name",
 				ctx: icredentials.NewClientHandshakeInfoContext(context.Background(), credentials.ClientHandshakeInfo{
-					Attributes: internal.SetXDSHandshakeClusterName(resolver.Address{}, "xdstp://traffic-director-c2p.xds.googleapis.com/envoy.config.cluster.v3.Cluster/google_cfe_bigtable.googleapis.com").Attributes,
+					Attributes: xds.SetXDSHandshakeClusterName(resolver.Address{}, "xdstp://traffic-director-c2p.xds.googleapis.com/envoy.config.cluster.v3.Cluster/google_cfe_bigtable.googleapis.com").Attributes,
 				}),
 				// CFE should use tls.
 				wantTyp: "tls",
@@ -133,7 +133,7 @@ func (s) TestClientHandshakeBasedOnClusterName(t *testing.T) {
 			{
 				name: "with xdstp non-CFE cluster name",
 				ctx: icredentials.NewClientHandshakeInfoContext(context.Background(), credentials.ClientHandshakeInfo{
-					Attributes: internal.SetXDSHandshakeClusterName(resolver.Address{}, "xdstp://other.com/envoy.config.cluster.v3.Cluster/google_cfe_bigtable.googleapis.com").Attributes,
+					Attributes: xds.SetXDSHandshakeClusterName(resolver.Address{}, "xdstp://other.com/envoy.config.cluster.v3.Cluster/google_cfe_bigtable.googleapis.com").Attributes,
 				}),
 				// non-CFE should use atls.
 				wantTyp: "alts",
diff --git a/credentials/google/xds.go b/credentials/google/xds.go
index 2c5c8b9eee13..cccb22271ee5 100644
--- a/credentials/google/xds.go
+++ b/credentials/google/xds.go
@@ -25,7 +25,7 @@ import (
 	"strings"
 
 	"google.golang.org/grpc/credentials"
-	"google.golang.org/grpc/internal"
+	"google.golang.org/grpc/internal/xds"
 )
 
 const cfeClusterNamePrefix = "google_cfe_"
@@ -63,7 +63,7 @@ func clusterName(ctx context.Context) string {
 	if chi.Attributes == nil {
 		return ""
 	}
-	cluster, _ := internal.GetXDSHandshakeClusterName(chi.Attributes)
+	cluster, _ := xds.GetXDSHandshakeClusterName(chi.Attributes)
 	return cluster
 }
 
diff --git a/credentials/google/xds_test.go b/credentials/google/xds_test.go
index 8aeba396a518..b62e7a73bc1d 100644
--- a/credentials/google/xds_test.go
+++ b/credentials/google/xds_test.go
@@ -23,15 +23,15 @@ import (
 	"testing"
 
 	"google.golang.org/grpc/credentials"
-	"google.golang.org/grpc/internal"
 	icredentials "google.golang.org/grpc/internal/credentials"
+	"google.golang.org/grpc/internal/xds"
 	"google.golang.org/grpc/resolver"
 )
 
 func (s) TestIsDirectPathCluster(t *testing.T) {
 	c := func(cluster string) context.Context {
 		return icredentials.NewClientHandshakeInfoContext(context.Background(), credentials.ClientHandshakeInfo{
-			Attributes: internal.SetXDSHandshakeClusterName(resolver.Address{}, cluster).Attributes,
+			Attributes: xds.SetXDSHandshakeClusterName(resolver.Address{}, cluster).Attributes,
 		})
 	}
 
diff --git a/dialoptions.go b/dialoptions.go
index a95f86a1f4bf..19e3de6d4398 100644
--- a/dialoptions.go
+++ b/dialoptions.go
@@ -79,6 +79,7 @@ type dialOptions struct {
 	resolvers                   []resolver.Builder
 	idleTimeout                 time.Duration
 	recvBufferPool              SharedBufferPool
+	defScheme                   string
 }
 
 // DialOption configures how we set up the connection.
@@ -631,7 +632,7 @@ func withHealthCheckFunc(f internal.HealthChecker) DialOption {
 	})
 }
 
-func defaultDialOptions() dialOptions {
+func defaultDialOptions(defScheme string) dialOptions {
 	return dialOptions{
 		copts: transport.ConnectOptions{
 			ReadBufferSize:  defaultReadBufSize,
@@ -643,6 +644,7 @@ func defaultDialOptions() dialOptions {
 		healthCheckFunc: internal.HealthCheckFunc,
 		idleTimeout:     30 * time.Minute,
 		recvBufferPool:  nopBufferPool{},
+		defScheme:       defScheme,
 	}
 }
 
diff --git a/internal/internal.go b/internal/internal.go
index 5082fdaba961..48d24bdb4e69 100644
--- a/internal/internal.go
+++ b/internal/internal.go
@@ -197,6 +197,9 @@ var (
 
 	// FromOutgoingContextRaw returns the un-merged, intermediary contents of metadata.rawMD.
 	FromOutgoingContextRaw any // func(context.Context) (metadata.MD, [][]string, bool)
+
+	// UserSetDefaultScheme is set to true if the user has overridden the default resolver scheme.
+	UserSetDefaultScheme bool = false
 )
 
 // HealthChecker defines the signature of the client-side LB channel health checking function.
diff --git a/internal/xds_handshake_cluster.go b/internal/xds/xds.go
similarity index 89%
rename from internal/xds_handshake_cluster.go
rename to internal/xds/xds.go
index e8b492774d1a..024c388b7aa7 100644
--- a/internal/xds_handshake_cluster.go
+++ b/internal/xds/xds.go
@@ -14,7 +14,9 @@
  * limitations under the License.
  */
 
-package internal
+// Package xds contains methods to Get/Set handshake cluster names. It is separated
+// out from the top level /internal package to avoid circular dependencies.
+package xds
 
 import (
 	"google.golang.org/grpc/attributes"
diff --git a/resolver/resolver.go b/resolver/resolver.go
index 95c46452464e..202854511b81 100644
--- a/resolver/resolver.go
+++ b/resolver/resolver.go
@@ -29,6 +29,7 @@ import (
 
 	"google.golang.org/grpc/attributes"
 	"google.golang.org/grpc/credentials"
+	"google.golang.org/grpc/internal"
 	"google.golang.org/grpc/serviceconfig"
 )
 
@@ -63,16 +64,18 @@ func Get(scheme string) Builder {
 }
 
 // SetDefaultScheme sets the default scheme that will be used. The default
-// default scheme is "passthrough".
+// scheme is initially set to "passthrough".
 //
 // NOTE: this function must only be called during initialization time (i.e. in
 // an init() function), and is not thread-safe. The scheme set last overrides
 // previously set values.
 func SetDefaultScheme(scheme string) {
 	defaultScheme = scheme
+	internal.UserSetDefaultScheme = true
 }
 
-// GetDefaultScheme gets the default scheme that will be used.
+// GetDefaultScheme gets the default scheme that will be used by grpc.Dial.  If
+// SetDefaultScheme is never called, the default scheme used by grpc.NewClient is "dns" instead.
 func GetDefaultScheme() string {
 	return defaultScheme
 }
diff --git a/xds/internal/balancer/clusterimpl/balancer_test.go b/xds/internal/balancer/clusterimpl/balancer_test.go
index 1edf3b8b857a..d7221c32a81a 100644
--- a/xds/internal/balancer/clusterimpl/balancer_test.go
+++ b/xds/internal/balancer/clusterimpl/balancer_test.go
@@ -32,11 +32,11 @@ import (
 	"google.golang.org/grpc/balancer/base"
 	"google.golang.org/grpc/balancer/roundrobin"
 	"google.golang.org/grpc/connectivity"
-	"google.golang.org/grpc/internal"
 	"google.golang.org/grpc/internal/balancer/stub"
 	"google.golang.org/grpc/internal/grpctest"
 	internalserviceconfig "google.golang.org/grpc/internal/serviceconfig"
 	"google.golang.org/grpc/internal/testutils"
+	"google.golang.org/grpc/internal/xds"
 	"google.golang.org/grpc/resolver"
 	xdsinternal "google.golang.org/grpc/xds/internal"
 	"google.golang.org/grpc/xds/internal/testutils/fakeclient"
@@ -464,7 +464,7 @@ func (s) TestClusterNameInAddressAttributes(t *testing.T) {
 	if got, want := addrs1[0].Addr, testBackendAddrs[0].Addr; got != want {
 		t.Fatalf("sc is created with addr %v, want %v", got, want)
 	}
-	cn, ok := internal.GetXDSHandshakeClusterName(addrs1[0].Attributes)
+	cn, ok := xds.GetXDSHandshakeClusterName(addrs1[0].Attributes)
 	if !ok || cn != testClusterName {
 		t.Fatalf("sc is created with addr with cluster name %v, %v, want cluster name %v", cn, ok, testClusterName)
 	}
@@ -495,7 +495,7 @@ func (s) TestClusterNameInAddressAttributes(t *testing.T) {
 		t.Fatalf("sc is created with addr %v, want %v", got, want)
 	}
 	// New addresses should have the new cluster name.
-	cn2, ok := internal.GetXDSHandshakeClusterName(addrs2[0].Attributes)
+	cn2, ok := xds.GetXDSHandshakeClusterName(addrs2[0].Attributes)
 	if !ok || cn2 != testClusterName2 {
 		t.Fatalf("sc is created with addr with cluster name %v, %v, want cluster name %v", cn2, ok, testClusterName2)
 	}
diff --git a/xds/internal/balancer/clusterimpl/clusterimpl.go b/xds/internal/balancer/clusterimpl/clusterimpl.go
index 407d2deff7d6..bee5d2c97a33 100644
--- a/xds/internal/balancer/clusterimpl/clusterimpl.go
+++ b/xds/internal/balancer/clusterimpl/clusterimpl.go
@@ -31,12 +31,12 @@ import (
 
 	"google.golang.org/grpc/balancer"
 	"google.golang.org/grpc/connectivity"
-	"google.golang.org/grpc/internal"
 	"google.golang.org/grpc/internal/balancer/gracefulswitch"
 	"google.golang.org/grpc/internal/buffer"
 	"google.golang.org/grpc/internal/grpclog"
 	"google.golang.org/grpc/internal/grpcsync"
 	"google.golang.org/grpc/internal/pretty"
+	"google.golang.org/grpc/internal/xds"
 	"google.golang.org/grpc/resolver"
 	"google.golang.org/grpc/serviceconfig"
 	xdsinternal "google.golang.org/grpc/xds/internal"
@@ -359,7 +359,7 @@ func (b *clusterImplBalancer) NewSubConn(addrs []resolver.Address, opts balancer
 	newAddrs := make([]resolver.Address, len(addrs))
 	var lID xdsinternal.LocalityID
 	for i, addr := range addrs {
-		newAddrs[i] = internal.SetXDSHandshakeClusterName(addr, clusterName)
+		newAddrs[i] = xds.SetXDSHandshakeClusterName(addr, clusterName)
 		lID = xdsinternal.GetLocalityID(newAddrs[i])
 	}
 	var sc balancer.SubConn
@@ -384,7 +384,7 @@ func (b *clusterImplBalancer) UpdateAddresses(sc balancer.SubConn, addrs []resol
 	newAddrs := make([]resolver.Address, len(addrs))
 	var lID xdsinternal.LocalityID
 	for i, addr := range addrs {
-		newAddrs[i] = internal.SetXDSHandshakeClusterName(addr, clusterName)
+		newAddrs[i] = xds.SetXDSHandshakeClusterName(addr, clusterName)
 		lID = xdsinternal.GetLocalityID(newAddrs[i])
 	}
 	if scw, ok := sc.(*scWrapper); ok {