diff --git a/vllm/plugins/__init__.py b/vllm/plugins/__init__.py
index 81ee9975cdc4a..ae6e5c0a3481f 100644
--- a/vllm/plugins/__init__.py
+++ b/vllm/plugins/__init__.py
@@ -29,6 +29,20 @@ def load_general_plugins():
     if current_platform.is_xpu():
         # see https://github.com/pytorch/pytorch/blob/8cada5cbe5450e17c26fb8b358116785324537b2/torch/_dynamo/config.py#L158  # noqa
         os.environ['TORCH_COMPILE_DISABLE'] = 'True'
+    if current_platform.is_hpu():
+        # NOTE(kzawora): PT HPU lazy backend (PT_HPU_LAZY_MODE = 1)
+        # does not support torch.compile
+        # Eager backend (PT_HPU_LAZY_MODE = 0) must be selected for
+        # torch.compile support
+        is_lazy = os.environ.get('PT_HPU_LAZY_MODE', '1') == '1'
+        if is_lazy:
+            # see https://github.com/pytorch/pytorch/blob/43c5f59/torch/_dynamo/config.py#L158
+            torch._dynamo.config.disable = True
+            # NOTE(kzawora) multi-HPU inference with HPUGraphs (lazy-only)
+            # requires enabling lazy collectives
+            # see https://docs.habana.ai/en/latest/PyTorch/Inference_on_PyTorch/Inference_Using_HPU_Graphs.html # noqa: E501
+            os.environ['PT_HPU_ENABLE_LAZY_COLLECTIVES'] = 'true'
+
     global plugins_loaded
     if plugins_loaded:
         return