Envoy Gateway can be integrated with Istio's Ambient Mesh to enhance traffic management and policy enforcement through its advanced Layer 7 capabilities, despite Ambient Mesh's limitations. By deploying Envoy Gateway as both the Ingress Gateway and Waypoint Proxy, users can simplify configurations while leveraging powerful features like global rate limiting and enhanced security policies. The article provides a step-by-step guide on setting up Envoy Gateway within an Ambient Mesh environment.