diff --git a/common/changes/@microsoft/rush/chore-support-users-to-provide-their-own-assets-file-for-init-subspace_2025-02-25-07-23.json b/common/changes/@microsoft/rush/chore-support-users-to-provide-their-own-assets-file-for-init-subspace_2025-02-25-07-23.json
new file mode 100644
index 00000000000..18ec6c85231
--- /dev/null
+++ b/common/changes/@microsoft/rush/chore-support-users-to-provide-their-own-assets-file-for-init-subspace_2025-02-25-07-23.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@microsoft/rush",
+      "comment": "Allow a monorepo to provide custom config file templates for the `rush init-subspace` command",
+      "type": "none"
+    }
+  ],
+  "packageName": "@microsoft/rush"
+}
\ No newline at end of file
diff --git a/common/reviews/api/rush-lib.api.md b/common/reviews/api/rush-lib.api.md
index 132c5a307bc..244080e4b0d 100644
--- a/common/reviews/api/rush-lib.api.md
+++ b/common/reviews/api/rush-lib.api.md
@@ -1544,6 +1544,7 @@ export class SubspacesConfiguration {
     readonly preventSelectingAllSubspaces: boolean;
     static requireValidSubspaceName(subspaceName: string, splitWorkspaceCompatibility?: boolean): void;
     readonly splitWorkspaceCompatibility: boolean;
+    readonly subspaceInitAssetsFolder?: string;
     readonly subspaceJsonFilePath: string;
     readonly subspaceNames: ReadonlySet<string>;
     // (undocumented)
diff --git a/libraries/rush-lib/assets/rush-init/common/config/rush/subspaces.json b/libraries/rush-lib/assets/rush-init/common/config/rush/subspaces.json
index d3c3ae8c516..0f7e4816b10 100644
--- a/libraries/rush-lib/assets/rush-init/common/config/rush/subspaces.json
+++ b/libraries/rush-lib/assets/rush-init/common/config/rush/subspaces.json
@@ -11,6 +11,11 @@
    */
   "subspacesEnabled": false,
 
+  /**
+   * the starting assets folder relative to rush.json location you want to use when init a subspace
+   */
+  // "subspaceInitAssetsFolder": "",
+
   /**
    * (DEPRECATED) This is a temporary workaround for migrating from an earlier prototype
    * of this feature: https://github.com/microsoft/rushstack/pull/3481
diff --git a/libraries/rush-lib/src/api/SubspacesConfiguration.ts b/libraries/rush-lib/src/api/SubspacesConfiguration.ts
index 91dbe477be3..a116f642116 100644
--- a/libraries/rush-lib/src/api/SubspacesConfiguration.ts
+++ b/libraries/rush-lib/src/api/SubspacesConfiguration.ts
@@ -25,6 +25,7 @@ export interface ISubspacesConfigurationJson {
   splitWorkspaceCompatibility?: boolean;
   preventSelectingAllSubspaces?: boolean;
   subspaceNames: string[];
+  subspaceInitAssetsFolder?: string;
 }
 
 /**
@@ -60,11 +61,17 @@ export class SubspacesConfiguration {
    */
   public readonly subspaceNames: ReadonlySet<string>;
 
+  /**
+   * rush-init Subspace assets location used during `rush init-subspace`
+   */
+  public readonly subspaceInitAssetsFolder?: string;
+
   private constructor(configuration: Readonly<ISubspacesConfigurationJson>, subspaceJsonFilePath: string) {
     this.subspaceJsonFilePath = subspaceJsonFilePath;
     this.subspacesEnabled = configuration.subspacesEnabled;
     this.splitWorkspaceCompatibility = !!configuration.splitWorkspaceCompatibility;
     this.preventSelectingAllSubspaces = !!configuration.preventSelectingAllSubspaces;
+    this.subspaceInitAssetsFolder = configuration.subspaceInitAssetsFolder;
     const subspaceNames: Set<string> = new Set();
     for (const subspaceName of configuration.subspaceNames) {
       SubspacesConfiguration.requireValidSubspaceName(subspaceName, this.splitWorkspaceCompatibility);
diff --git a/libraries/rush-lib/src/cli/actions/InitSubspaceAction.ts b/libraries/rush-lib/src/cli/actions/InitSubspaceAction.ts
index 445e2f91860..4ec0780fbaa 100644
--- a/libraries/rush-lib/src/cli/actions/InitSubspaceAction.ts
+++ b/libraries/rush-lib/src/cli/actions/InitSubspaceAction.ts
@@ -9,6 +9,7 @@ import { type ISubspacesConfigurationJson, SubspacesConfiguration } from '../../
 import { Async, FileSystem, JsonFile } from '@rushstack/node-core-library';
 import { ConsoleTerminalProvider, Terminal } from '@rushstack/terminal';
 import { copyTemplateFileAsync } from '../../utilities/templateUtilities';
+import * as path from 'path';
 
 export class InitSubspaceAction extends BaseRushAction {
   private readonly _subspaceNameParameter: IRequiredCommandLineStringParameter;
@@ -58,7 +59,10 @@ export class InitSubspaceAction extends BaseRushAction {
     }
 
     const subspaceConfigPath: string = `${this.rushConfiguration.commonFolder}/config/subspaces/${newSubspaceName}`;
-    const assetsSubfolder: string = `${assetsFolderPath}/rush-init`;
+    const defaultAssetsSubfolder: string = `${assetsFolderPath}/rush-init`;
+    const userDefinedAssetsFolder: string | undefined = subspacesConfiguration.subspaceInitAssetsFolder
+      ? `${this.rushConfiguration.rushJsonFolder}/${subspacesConfiguration.subspaceInitAssetsFolder}`
+      : undefined;
     const templateFilePaths: string[] = [
       '[dot]npmrc',
       '.pnpmfile.cjs',
@@ -70,9 +74,14 @@ export class InitSubspaceAction extends BaseRushAction {
     await Async.forEachAsync(
       templateFilePaths,
       async (templateFilePath) => {
-        const sourcePath: string = `${assetsSubfolder}/common/config/rush/${templateFilePath}`;
+        const defaultAssetSourcePath: string = `${defaultAssetsSubfolder}/common/config/rush/${templateFilePath}`;
         const destinationPath: string = `${subspaceConfigPath}/${templateFilePath.replace('[dot]', '.')}`;
-        await copyTemplateFileAsync(sourcePath, destinationPath, true);
+        await copyTemplateFileAsync(defaultAssetSourcePath, destinationPath, true);
+        if (userDefinedAssetsFolder) {
+          // if user provided their own assets file for subspace initiation
+          // we just copy and overwrite the default files
+          await copyTemplateFileAsync(userDefinedAssetsFolder, destinationPath, true);
+        }
       },
       { concurrency: 10 }
     );
diff --git a/libraries/rush-lib/src/schemas/subspaces.schema.json b/libraries/rush-lib/src/schemas/subspaces.schema.json
index 5322a806a7b..e5cb6031c3e 100644
--- a/libraries/rush-lib/src/schemas/subspaces.schema.json
+++ b/libraries/rush-lib/src/schemas/subspaces.schema.json
@@ -27,6 +27,10 @@
       "items": {
         "type": "string"
       }
+    },
+    "subspaceInitAssetsFolder": {
+      "description": "Where assets located for init a new subspace",
+      "type": "string"
     }
   }
 }