diff --git a/sdks/python/apache_beam/yaml/examples/transforms/sql/sql_calcite_connection_properties.yaml b/sdks/python/apache_beam/yaml/examples/transforms/sql/sql_calcite_connection_properties.yaml
new file mode 100644
index 000000000000..ea75af64eb2d
--- /dev/null
+++ b/sdks/python/apache_beam/yaml/examples/transforms/sql/sql_calcite_connection_properties.yaml
@@ -0,0 +1,51 @@
+# coding=utf-8
+#
+# Licensed to the Apache Software Foundation (ASF) under one or more
+# contributor license agreements.  See the NOTICE file distributed with
+# this work for additional information regarding copyright ownership.
+# The ASF licenses this file to You under the Apache License, Version 2.0
+# (the "License"); you may not use this file except in compliance with
+# the License.  You may obtain a copy of the License at
+#
+#    http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+# This example demonstrates using calcite_connection_properties to enable
+# dialect-specific SQL functions. By setting "fun" to "postgresql", you can
+# use PostgreSQL-specific functions like STRING_TO_ARRAY in your SQL queries.
+#
+# The calcite_connection_properties option is passed to the underlying Calcite
+# SQL engine to configure its behavior. Common properties include:
+#   - "fun": SQL function library to use ("standard", "postgresql", "bigquery", etc.)
+#   - "lex": Lexical policy for identifiers
+#
+# See Apache Calcite documentation for all available connection properties.
+pipeline:
+  transforms:
+    - type: Create
+      name: CreateSampleData
+      config:
+        elements:
+          - {id: 1, tags: "java python go"}
+          - {id: 2, tags: "rust cpp"}
+          - {id: 3, tags: "javascript typescript"}
+    - type: Sql
+      name: TransformWithPostgresFunction
+      input: CreateSampleData
+      config:
+        query: "SELECT id, STRING_TO_ARRAY(tags, ' ') as tag_list FROM PCOLLECTION"
+    - type: LogForTesting
+      input: TransformWithPostgresFunction
+
+options:
+  calcite_connection_properties: {"fun": "postgresql"}
+
+# Expected:
+#  Row(id=1, tag_list=['java', 'python', 'go'])
+#  Row(id=2, tag_list=['rust', 'cpp'])
+#  Row(id=3, tag_list=['javascript', 'typescript'])
diff --git a/sdks/python/apache_beam/yaml/tests/sql.yaml b/sdks/python/apache_beam/yaml/tests/sql.yaml
index 0040a2790c54..1f0ddeb1cd1d 100644
--- a/sdks/python/apache_beam/yaml/tests/sql.yaml
+++ b/sdks/python/apache_beam/yaml/tests/sql.yaml
@@ -93,3 +93,26 @@ pipelines:
         - type: PyTransform
           config:
             constructor: apache_beam.transforms.util.LogElements
+
+  # Test calcite_connection_properties option with PostgreSQL functions
+  - pipeline:
+      type: chain
+      transforms:
+        - type: Create
+          name: CreateData
+          config:
+            elements:
+              - {id: 1, text: "hello world"}
+              - {id: 2, text: "foo bar baz"}
+        - type: Sql
+          name: SqlWithPostgresFunction
+          config:
+            query: "SELECT id, INITCAP(text) as title_text FROM PCOLLECTION"
+        - type: AssertEqual
+          config:
+            elements:
+              - {id: 1, title_text: "Hello World"}
+              - {id: 2, title_text: "Foo Bar Baz"}
+    options:
+      calcite_connection_properties:
+        fun: "postgresql"