diff --git a/src/transformers/training_args.py b/src/transformers/training_args.py
index cdf6325c4b4ae6..4dd69ca72ef908 100644
--- a/src/transformers/training_args.py
+++ b/src/transformers/training_args.py
@@ -482,6 +482,11 @@ class TrainingArguments:
                 - sync_module_states (`bool`, *optional*, defaults to `True`)
                     If `"True"`, each individually wrapped FSDP unit will broadcast module parameters from rank 0 to
                     ensure they are the same across all ranks after initialization
+                - cpu_ram_efficient_loading (`bool`, *optional*, defaults to `False`)
+                    If `"True"`, only the first process loads the pretrained model checkpoint while all other processes
+                    have empty weights.  When this setting is True, `sync_module_states` also must to be True,
+                    otherwise all the processes except the main process would have random weights leading to unexpected
+                    behaviour during training.
                 - activation_checkpointing (`bool`, *optional*, defaults to `False`):
                     If `"True"`, activation checkpointing is a technique to reduce memory usage by clearing activations of
                     certain layers and recomputing them during a backward pass. Effectively, this trades extra
@@ -1768,6 +1773,7 @@ def __post_init__(self):
             os.environ[f"{prefix}BACKWARD_PREFETCH"] = prefetch_policy.upper()
             os.environ[f"{prefix}FORWARD_PREFETCH"] = self.fsdp_config.get("forward_prefetch", "false")
             os.environ[f"{prefix}SYNC_MODULE_STATES"] = self.fsdp_config.get("sync_module_states", "true")
+            os.environ[f"{prefix}CPU_RAM_EFFICIENT_LOADING"] = self.fsdp_config.get("cpu_ram_efficient_loading", "false")
             os.environ[f"{prefix}USE_ORIG_PARAMS"] = self.fsdp_config.get("use_orig_params", "true")
 
         if is_accelerate_available():
diff --git a/tests/fsdp/test_fsdp.py b/tests/fsdp/test_fsdp.py
index aeb232fd9e8e0b..d9dea012f13bf8 100644
--- a/tests/fsdp/test_fsdp.py
+++ b/tests/fsdp/test_fsdp.py
@@ -144,6 +144,7 @@ def setUp(self):
             "limit_all_gathers": "False",
             "use_orig_params": "True",
             "sync_module_states": "True",
+            "cpu_ram_efficient_loading": "True",
             "activation_checkpointing": "False",
             "min_num_params": 1,
         }
@@ -208,6 +209,7 @@ def test_fsdp_config_transformers_auto_wrap(self, sharding_strategy, dtype):
             self.assertEqual(os.environ[f"{prefix}FORWARD_PREFETCH"], fsdp_config["forward_prefetch"])
             self.assertEqual(os.environ[f"{prefix}USE_ORIG_PARAMS"], fsdp_config["use_orig_params"])
             self.assertEqual(os.environ[f"{prefix}SYNC_MODULE_STATES"], fsdp_config["sync_module_states"])
+            self.assertEqual(os.environ[f"{prefix}CPU_RAM_EFFICIENT_LOADING"], fsdp_config["cpu_ram_efficient_loading"])
             self.assertEqual(os.environ.get("ACCELERATE_USE_FSDP", "false"), "true")
 
     @parameterized.expand(params, name_func=_parameterized_custom_name_func)