diff --git a/sdk/data/azcosmos/CHANGELOG.md b/sdk/data/azcosmos/CHANGELOG.md
index 4ccf5eabf2fa..dda571b2163d 100644
--- a/sdk/data/azcosmos/CHANGELOG.md
+++ b/sdk/data/azcosmos/CHANGELOG.md
@@ -4,6 +4,8 @@
 
 ### Features Added
 
+* Adds support for float 16 datatype for vector embedding policy. See [PR 25707](https://github.com/Azure/azure-sdk-for-go/pull/25707)
+
 ### Breaking Changes
 
 ### Bugs Fixed
diff --git a/sdk/data/azcosmos/emulator_cosmos_container_test.go b/sdk/data/azcosmos/emulator_cosmos_container_test.go
index e76480d5e7c6..344db1e60fff 100644
--- a/sdk/data/azcosmos/emulator_cosmos_container_test.go
+++ b/sdk/data/azcosmos/emulator_cosmos_container_test.go
@@ -354,6 +354,95 @@ func TestContainerVectorSearch(t *testing.T) {
 	}
 }
 
+func TestCreateValidVectorEmbeddingPolicy(t *testing.T) {
+	emulatorTests := newEmulatorTests(t)
+	client := emulatorTests.getClient(t, newSpanValidator(t, &spanMatcher{
+		ExpectedSpans: []string{},
+	}))
+
+	database := emulatorTests.createDatabase(t, context.TODO(), client, "vectorDataTypes")
+	defer emulatorTests.deleteDatabase(t, context.TODO(), database)
+
+	// Using valid data types
+	dataTypes := []struct {
+		name     string
+		dataType VectorDataType
+	}{
+		{"float32", VectorDataTypeFloat32},
+		{"float16", VectorDataTypeFloat16},
+		{"int8", VectorDataTypeInt8},
+		{"uint8", VectorDataTypeUint8},
+	}
+
+	for _, dt := range dataTypes {
+		t.Run(dt.name, func(t *testing.T) {
+			containerID := "vector_container_" + dt.name
+
+			properties := ContainerProperties{
+				ID: containerID,
+				PartitionKeyDefinition: PartitionKeyDefinition{
+					Paths: []string{"/id"},
+				},
+				VectorEmbeddingPolicy: &VectorEmbeddingPolicy{
+					VectorEmbeddings: []VectorEmbedding{
+						{
+							Path:             "/vector1",
+							DataType:         dt.dataType,
+							Dimensions:       256,
+							DistanceFunction: VectorDistanceFunctionEuclidean,
+						},
+					},
+				},
+			}
+
+			createdResp, err := database.CreateContainer(context.TODO(), properties, nil)
+			if err != nil {
+				t.Fatalf("Failed to create container with %s data type: %v", dt.name, err)
+			}
+
+			container, _ := database.NewContainer(containerID)
+			readResp, err := container.Read(context.TODO(), nil)
+			if err != nil {
+				t.Fatalf("Failed to read container: %v", err)
+			}
+
+			readProperties := readResp.ContainerProperties
+			if readProperties.VectorEmbeddingPolicy == nil {
+				t.Fatalf("Expected VectorEmbeddingPolicy to be set")
+			}
+
+			if len(readProperties.VectorEmbeddingPolicy.VectorEmbeddings) != 1 {
+				t.Fatalf("Expected 1 vector embedding, got %d", len(readProperties.VectorEmbeddingPolicy.VectorEmbeddings))
+			}
+
+			embedding := readProperties.VectorEmbeddingPolicy.VectorEmbeddings[0]
+			if embedding.DataType != dt.dataType {
+				t.Errorf("Expected data type %s, got %s", dt.dataType, embedding.DataType)
+			}
+
+			if embedding.Path != "/vector1" {
+				t.Errorf("Expected path /vector1, got %s", embedding.Path)
+			}
+
+			if embedding.Dimensions != 256 {
+				t.Errorf("Expected dimensions 256, got %d", embedding.Dimensions)
+			}
+
+			if embedding.DistanceFunction != VectorDistanceFunctionEuclidean {
+				t.Errorf("Expected distance function euclidean, got %s", embedding.DistanceFunction)
+			}
+
+			// Clean up
+			_, err = container.Delete(context.TODO(), nil)
+			if err != nil {
+				t.Fatalf("Failed to delete container %s: %v", containerID, err)
+			}
+
+			_ = createdResp // Avoid unused variable warning
+		})
+	}
+}
+
 func TestContainerFullTextSearch(t *testing.T) {
 	emulatorTests := newEmulatorTests(t)
 	client := emulatorTests.getClient(t, newSpanValidator(t, &spanMatcher{
diff --git a/sdk/data/azcosmos/vector_embedding_policy.go b/sdk/data/azcosmos/vector_embedding_policy.go
index 3ff109426620..18356f807943 100644
--- a/sdk/data/azcosmos/vector_embedding_policy.go
+++ b/sdk/data/azcosmos/vector_embedding_policy.go
@@ -38,6 +38,9 @@ const (
 	// VectorDataTypeFloat32 represents 32-bit floating point numbers (default).
 	VectorDataTypeFloat32 VectorDataType = "float32"
 
+	// VectorDataTypeFloat16 represents 16-bit floating point numbers.
+	VectorDataTypeFloat16 VectorDataType = "float16"
+
 	// VectorDataTypeInt8 represents 8-bit signed integers.
 	VectorDataTypeInt8 VectorDataType = "int8"