The administrator must change the custom group object type to Edge Transport Node . The tag criteria are already expressed correctly: nsx is the tag category and edge is the tag value. In VCF Operations custom groups, dynamic membership is calculated by matching the selected Object Type and the defined membership criteria. The documentation states that custom group membership criteria require selecting the object type first, then applying criteria such as metrics, relationships, properties, object name, or tag; VCF Operations then keeps dynamic group membership current based on those rules . The failure occurs because the objects that were tagged are NSX Edge nodes, while the group is filtering for Edge Cluster objects. NSX documentation identifies NSX Edge nodes as Edge Transport Nodes , and Edge nodes are configured and managed under System > Fabric > Nodes > Edge Transport Nodes . An Edge Cluster is a grouping construct and does not match the tagged edge-node objects. Changing the tag value to nsx:edge would incorrectly collapse category and value into one field. Reference topic: Objective 4.5 – VCF Policy / Custom Groups / Dynamic Tag-Based Membership .