diff --git a/oauthenticator/generic.py b/oauthenticator/generic.py
index 31945d6a..4dd88bb6 100644
--- a/oauthenticator/generic.py
+++ b/oauthenticator/generic.py
@@ -27,8 +27,8 @@ def _login_service_default(self):
         that accepts the returned json (as a dict) and returns the groups list.
 
         This configures how group membership in the upstream provider is determined
-        for use by `allowed_groups`, `admin_groups`, etc.
-        It has no effect on its own, and is not related to users' _JupyterHub_ group membership.
+        for use by `allowed_groups`, `admin_groups`, etc. If `manage_groups` is True,
+        this will also determine users' _JupyterHub_ group membership.
         """,
     )
 
@@ -154,15 +154,22 @@ async def update_auth_model(self, auth_model):
         the user isn't part of `admin_users` or `admin_groups`. Note that
         leaving it at None makes users able to retain an admin status while
         setting it to False makes it be revoked.
+
+        Also populates groups if `manage_groups` is set.
         """
+        if self.manage_groups or self.admin_groups:
+            user_info = auth_model["auth_state"][self.user_auth_state_key]
+            user_groups = self.get_user_groups(user_info)
+
+        if self.manage_groups:
+            auth_model["groups"] = sorted(user_groups)
+
         if auth_model["admin"]:
             # auth_model["admin"] being True means the user was in admin_users
             return auth_model
 
         if self.admin_groups:
             # admin status should in this case be True or False, not None
-            user_info = auth_model["auth_state"][self.user_auth_state_key]
-            user_groups = self.get_user_groups(user_info)
             auth_model["admin"] = bool(user_groups & self.admin_groups)
 
         return auth_model
diff --git a/oauthenticator/tests/test_generic.py b/oauthenticator/tests/test_generic.py
index 42dc7781..fcc96652 100644
--- a/oauthenticator/tests/test_generic.py
+++ b/oauthenticator/tests/test_generic.py
@@ -151,6 +151,15 @@ def get_authenticator(generic_client):
             False,
             False,
         ),
+        (
+            "20",
+            {
+                "manage_groups": True,
+                "allow_all": True,
+            },
+            True,
+            None,
+        ),
     ],
 )
 async def test_generic(
@@ -166,6 +175,9 @@ async def test_generic(
     c.GenericOAuthenticator = Config(class_config)
     c.GenericOAuthenticator.username_claim = "username"
     authenticator = get_authenticator(config=c)
+    manage_groups = False
+    if "manage_groups" in class_config:
+        manage_groups = authenticator.manage_groups
 
     handled_user_model = user_model("user1")
     handler = generic_client.handler_for_user(handled_user_model)
@@ -173,7 +185,10 @@ async def test_generic(
 
     if expect_allowed:
         assert auth_model
-        assert set(auth_model) == {"name", "admin", "auth_state"}
+        expected_keys = {"name", "admin", "auth_state"}
+        if manage_groups:
+            expected_keys.add("groups")
+        assert set(auth_model) == expected_keys
         assert auth_model["admin"] == expect_admin
         auth_state = auth_model["auth_state"]
         assert json.dumps(auth_state)
@@ -183,6 +198,9 @@ async def test_generic(
         assert "scope" in auth_state
         user_info = auth_state[authenticator.user_auth_state_key]
         assert auth_model["name"] == user_info[authenticator.username_claim]
+        if manage_groups:
+            assert auth_model["groups"] == user_info[authenticator.claim_groups_key]
+
     else:
         assert auth_model == None