diff --git a/internal/pkg/batch/concurrent_chan_worker.go b/internal/pkg/batch/concurrent_chan_worker.go
index 5126501df..61f03dc3f 100644
--- a/internal/pkg/batch/concurrent_chan_worker.go
+++ b/internal/pkg/batch/concurrent_chan_worker.go
@@ -141,6 +141,7 @@ func (o *ChannelConcurrentBatch) Worker(ctx context.Context, collectorSchema v2a
 							options := opts
 							if img.Type.IsOperatorCatalog() && img.RebuiltTag != "" {
 								options.RemoveSignatures = true
+								options.PreserveDigests = false
 							}
 
 							err = o.Mirror.Run(timeoutCtx, img.Source, img.Destination, mirror.Mode(opts.Function), &options) //nolint:contextcheck
diff --git a/internal/pkg/batch/concurrent_chan_worker_test.go b/internal/pkg/batch/concurrent_chan_worker_test.go
new file mode 100644
index 000000000..a23e36789
--- /dev/null
+++ b/internal/pkg/batch/concurrent_chan_worker_test.go
@@ -0,0 +1,144 @@
+package batch
+
+import (
+	"context"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/mock"
+
+	"github.com/openshift/oc-mirror/v2/internal/pkg/api/v2alpha1"
+	clog "github.com/openshift/oc-mirror/v2/internal/pkg/log"
+	"github.com/openshift/oc-mirror/v2/internal/pkg/mirror"
+)
+
+// TestOCPBUGS53455_RebuiltCatalogPreserveDigests tests that rebuilt operator catalogs
+// have PreserveDigests set to false to allow manifest format conversions.
+// This prevents the error: "Manifest list must be converted to type ... but we cannot modify it: Instructed to preserve digests"
+func TestOCPBUGS53455_RebuiltCatalogPreserveDigests(t *testing.T) {
+	log := clog.New("trace")
+
+	global := &mirror.GlobalOptions{SecurePolicy: false, Quiet: false}
+	_, sharedOpts := mirror.SharedImageFlags()
+	_, deprecatedTLSVerifyOpt := mirror.DeprecatedTLSVerifyFlags()
+	_, srcOpts := mirror.ImageSrcFlags(global, sharedOpts, deprecatedTLSVerifyOpt, "src-", "screds")
+	_, destOpts := mirror.ImageDestFlags(global, sharedOpts, deprecatedTLSVerifyOpt, "dest-", "dcreds")
+	_, retryOpts := mirror.RetryFlags()
+
+	tempDir := t.TempDir()
+	timestampStr := time.Now().Format("20060102_150405")
+
+	tests := []struct {
+		name                     string
+		catalogImage             v2alpha1.CopyImageSchema
+		expectedPreserveDigests  bool
+		expectedRemoveSignatures bool
+		description              string
+	}{
+		{
+			name: "Rebuilt catalog should have PreserveDigests=false",
+			catalogImage: v2alpha1.CopyImageSchema{
+				Source:      "docker://localhost:55000/redhat/redhat-operator-index@sha256:rebuilthash",
+				Origin:      "docker://registry.redhat.io/redhat/redhat-operator-index:v4.17",
+				Destination: "docker://nexus:8082/redhat/redhat-operator-index:v4.17",
+				Type:        v2alpha1.TypeOperatorCatalog,
+				RebuiltTag:  "sha256-rebuilthash.tag", // This indicates a rebuilt catalog
+			},
+			expectedPreserveDigests:  false, // CRITICAL: Must be false to allow format conversion
+			expectedRemoveSignatures: true,
+			description:              "Rebuilt catalogs need format conversion support for registries like Nexus",
+		},
+		{
+			name: "Non-rebuilt catalog should have PreserveDigests=true (default)",
+			catalogImage: v2alpha1.CopyImageSchema{
+				Source:      "docker://registry.redhat.io/redhat/redhat-operator-index:v4.17",
+				Origin:      "docker://registry.redhat.io/redhat/redhat-operator-index:v4.17",
+				Destination: "docker://nexus:8082/redhat/redhat-operator-index:v4.17",
+				Type:        v2alpha1.TypeOperatorCatalog,
+				RebuiltTag:  "", // Empty RebuiltTag means it's not rebuilt
+			},
+			expectedPreserveDigests:  true, // Default behavior
+			expectedRemoveSignatures: false,
+			description:              "Non-rebuilt catalogs should preserve digests",
+		},
+		{
+			name: "Operator bundle should always have PreserveDigests=true",
+			catalogImage: v2alpha1.CopyImageSchema{
+				Source:      "docker://registry.redhat.io/rhbk/keycloak-operator-bundle@sha256:somehash",
+				Origin:      "docker://registry.redhat.io/rhbk/keycloak-operator-bundle@sha256:somehash",
+				Destination: "docker://nexus:8082/rhbk/keycloak-operator-bundle@sha256:somehash",
+				Type:        v2alpha1.TypeOperatorBundle,
+				RebuiltTag:  "",
+			},
+			expectedPreserveDigests:  true,
+			expectedRemoveSignatures: false,
+			description:              "Operator bundles must preserve digests for signature verification",
+		},
+		{
+			name: "Operator related image should always have PreserveDigests=true",
+			catalogImage: v2alpha1.CopyImageSchema{
+				Source:      "docker://registry.redhat.io/rhbk/keycloak@sha256:imagehash",
+				Origin:      "docker://registry.redhat.io/rhbk/keycloak@sha256:imagehash",
+				Destination: "docker://nexus:8082/rhbk/keycloak@sha256:imagehash",
+				Type:        v2alpha1.TypeOperatorRelatedImage,
+				RebuiltTag:  "",
+			},
+			expectedPreserveDigests:  true,
+			expectedRemoveSignatures: false,
+			description:              "Related images must preserve digests",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			// Create mock that captures the CopyOptions passed to Mirror.Run
+			mirrorMock := new(MirrorMock)
+			var capturedOpts *mirror.CopyOptions
+
+			// Setup mock to capture the options passed to Run
+			mirrorMock.On("Run", mock.Anything, mock.Anything, mock.Anything, mock.Anything, mock.MatchedBy(func(opts *mirror.CopyOptions) bool {
+				capturedOpts = opts
+				return true
+			})).Return(nil)
+
+			opts := mirror.CopyOptions{
+				Global:              global,
+				DeprecatedTLSVerify: deprecatedTLSVerifyOpt,
+				SrcImage:            srcOpts,
+				DestImage:           destOpts,
+				RetryOpts:           retryOpts,
+				Destination:         "docker://nexus:8082",
+				Dev:                 false,
+				Mode:                mirror.MirrorToMirror,
+				Function:            "copy",
+			}
+
+			collectorSchema := v2alpha1.CollectorSchema{
+				AllImages: []v2alpha1.CopyImageSchema{tt.catalogImage},
+			}
+
+			w := &ChannelConcurrentBatch{
+				Log:              log,
+				LogsDir:          tempDir,
+				Mirror:           mirrorMock,
+				MaxGoroutines:    1,
+				SynchedTimeStamp: timestampStr,
+			}
+
+			// Execute the worker
+			_, err := w.Worker(context.Background(), collectorSchema, opts)
+			assert.NoError(t, err, tt.description)
+
+			// Verify Mock was called
+			mirrorMock.AssertExpectations(t)
+
+			// CRITICAL ASSERTIONS: Verify PreserveDigests and RemoveSignatures flags
+			assert.NotNil(t, capturedOpts, "CopyOptions should have been captured")
+			assert.Equal(t, tt.expectedPreserveDigests, capturedOpts.PreserveDigests,
+				"PreserveDigests flag mismatch for %s: %s", tt.catalogImage.Type, tt.description)
+			assert.Equal(t, tt.expectedRemoveSignatures, capturedOpts.RemoveSignatures,
+				"RemoveSignatures flag mismatch for %s: %s", tt.catalogImage.Type, tt.description)
+		})
+	}
+}