diff --git a/integration/combination/test_function_with_capacity_provider.py b/integration/combination/test_function_with_capacity_provider.py
new file mode 100644
index 0000000000..a559b5c9d0
--- /dev/null
+++ b/integration/combination/test_function_with_capacity_provider.py
@@ -0,0 +1,61 @@
+from unittest.case import skipIf
+
+import pytest
+
+from integration.config.service_names import LAMBDA_MANAGED_INSTANCES
+from integration.helpers.base_test import BaseTest
+from integration.helpers.resource import current_region_does_not_support
+
+
+@skipIf(
+    current_region_does_not_support([LAMBDA_MANAGED_INSTANCES]),
+    "LambdaManagedInstance is not supported in this testing region",
+)
+class TestFunctionWithCapacityProvider(BaseTest):
+    @pytest.fixture(autouse=True)
+    def companion_stack_outputs(self, get_companion_stack_outputs):
+        self.companion_stack_outputs = get_companion_stack_outputs
+
+    def test_function_with_capacity_provider_custom_role(self):
+        """Test Lambda function with CapacityProviderConfig using custom operator role."""
+        # Phase 1: Prepare parameters from companion stack
+        parameters = [
+            self.generate_parameter("SubnetId", self.companion_stack_outputs["LMISubnetId"]),
+            self.generate_parameter("SecurityGroup", self.companion_stack_outputs["LMISecurityGroupId"]),
+            self.generate_parameter("KMSKeyArn", self.companion_stack_outputs["LMIKMSKeyArn"]),
+        ]
+
+        # Phase 2: Deploy and verify against expected JSON
+        self.create_and_verify_stack("combination/function_lmi_custom", parameters)
+
+        # Phase 3: Verify resource counts
+        lambda_resources = self.get_stack_resources("AWS::Lambda::Function")
+        self.assertEqual(len(lambda_resources), 1, "Should create exactly one Lambda function")
+
+        capacity_provider_resources = self.get_stack_resources("AWS::Lambda::CapacityProvider")
+        self.assertEqual(len(capacity_provider_resources), 1, "Should create exactly one CapacityProvider")
+
+        iam_role_resources = self.get_stack_resources("AWS::IAM::Role")
+        self.assertEqual(len(iam_role_resources), 2, "Should create exactly two IAM roles")
+
+    def test_function_with_capacity_provider_default_role(self):
+        """Test Lambda function with CapacityProviderConfig using default operator role."""
+        # Phase 1: Prepare parameters from companion stack
+        parameters = [
+            self.generate_parameter("SubnetId", self.companion_stack_outputs["LMISubnetId"]),
+            self.generate_parameter("SecurityGroup", self.companion_stack_outputs["LMISecurityGroupId"]),
+            self.generate_parameter("KMSKeyArn", self.companion_stack_outputs["LMIKMSKeyArn"]),
+        ]
+
+        # Phase 2: Deploy and verify against expected JSON
+        self.create_and_verify_stack("combination/function_lmi_default", parameters)
+
+        # Phase 3: Verify resource counts
+        lambda_resources = self.get_stack_resources("AWS::Lambda::Function")
+        self.assertEqual(len(lambda_resources), 1, "Should create exactly one Lambda function")
+
+        capacity_provider_resources = self.get_stack_resources("AWS::Lambda::CapacityProvider")
+        self.assertEqual(len(capacity_provider_resources), 2, "Should create exactly two CapacityProviders")
+
+        iam_role_resources = self.get_stack_resources("AWS::IAM::Role")
+        self.assertEqual(len(iam_role_resources), 3, "Should create exactly three IAM roles")
diff --git a/integration/config/service_names.py b/integration/config/service_names.py
index b4a2c26261..4de385e0ea 100644
--- a/integration/config/service_names.py
+++ b/integration/config/service_names.py
@@ -30,6 +30,7 @@
 STATE_MACHINE_CWE_CWS = "StateMachineCweCws"
 STATE_MACHINE_WITH_APIS = "StateMachineWithApis"
 LAMBDA_URL = "LambdaUrl"
+LAMBDA_MANAGED_INSTANCES = "LambdaManagedInstances"
 LAMBDA_ENV_VARS = "LambdaEnvVars"
 EVENT_INVOKE_CONFIG = "EventInvokeConfig"
 API_KEY = "ApiKey"
diff --git a/integration/resources/expected/combination/function_lmi_custom.json b/integration/resources/expected/combination/function_lmi_custom.json
new file mode 100644
index 0000000000..52c2c0979f
--- /dev/null
+++ b/integration/resources/expected/combination/function_lmi_custom.json
@@ -0,0 +1,18 @@
+[
+  {
+    "LogicalResourceId": "MyCapacityProvider",
+    "ResourceType": "AWS::Lambda::CapacityProvider"
+  },
+  {
+    "LogicalResourceId": "MyCapacityProviderCustomRole",
+    "ResourceType": "AWS::IAM::Role"
+  },
+  {
+    "LogicalResourceId": "MyFunction",
+    "ResourceType": "AWS::Lambda::Function"
+  },
+  {
+    "LogicalResourceId": "MyFunctionRole",
+    "ResourceType": "AWS::IAM::Role"
+  }
+]
diff --git a/integration/resources/expected/combination/function_lmi_default.json b/integration/resources/expected/combination/function_lmi_default.json
new file mode 100644
index 0000000000..b39c5e9422
--- /dev/null
+++ b/integration/resources/expected/combination/function_lmi_default.json
@@ -0,0 +1,26 @@
+[
+  {
+    "LogicalResourceId": "SimpleCapacityProvider",
+    "ResourceType": "AWS::Lambda::CapacityProvider"
+  },
+  {
+    "LogicalResourceId": "SimpleCapacityProviderOperatorRole",
+    "ResourceType": "AWS::IAM::Role"
+  },
+  {
+    "LogicalResourceId": "AdvancedCapacityProvider",
+    "ResourceType": "AWS::Lambda::CapacityProvider"
+  },
+  {
+    "LogicalResourceId": "AdvancedCapacityProviderOperatorRole",
+    "ResourceType": "AWS::IAM::Role"
+  },
+  {
+    "LogicalResourceId": "MyFunction",
+    "ResourceType": "AWS::Lambda::Function"
+  },
+  {
+    "LogicalResourceId": "MyFunctionRole",
+    "ResourceType": "AWS::IAM::Role"
+  }
+]
diff --git a/integration/resources/templates/combination/function_lmi_custom.yaml b/integration/resources/templates/combination/function_lmi_custom.yaml
new file mode 100644
index 0000000000..1f72cacfc4
--- /dev/null
+++ b/integration/resources/templates/combination/function_lmi_custom.yaml
@@ -0,0 +1,85 @@
+Parameters:
+  SubnetId:
+    Type: String
+  SecurityGroup:
+    Type: String
+  KMSKeyArn:
+    Type: String
+
+Resources:
+  MyCapacityProviderCustomRole:
+    Type: AWS::IAM::Role
+    Properties:
+      AssumeRolePolicyDocument:
+        Version: '2012-10-17'
+        Statement:
+        - Effect: Allow
+          Principal:
+            Service: lambda.amazonaws.com
+          Action: sts:AssumeRole
+      Policies:
+      - PolicyName: CapacityProviderOperatorRolePolicy
+        PolicyDocument:
+          Version: '2012-10-17'
+          Statement:
+          - Effect: Allow
+            Action:
+            - ec2:AttachNetworkInterface
+            - ec2:CreateTags
+            - ec2:RunInstances
+            Resource:
+            - !Sub arn:${AWS::Partition}:ec2:*:*:instance/*
+            - !Sub arn:${AWS::Partition}:ec2:*:*:network-interface/*
+            - !Sub arn:${AWS::Partition}:ec2:*:*:volume/*
+            Condition:
+              StringEquals:
+                ec2:ManagedResourceOperator: scaler.lambda.amazonaws.com
+          - Effect: Allow
+            Action:
+            - ec2:DescribeAvailabilityZones
+            - ec2:DescribeCapacityReservations
+            - ec2:DescribeInstances
+            - ec2:DescribeInstanceStatus
+            - ec2:DescribeInstanceTypeOfferings
+            - ec2:DescribeInstanceTypes
+            - ec2:DescribeSecurityGroups
+            - ec2:DescribeSubnets
+            Resource: '*'
+          - Effect: Allow
+            Action:
+            - ec2:RunInstances
+            - ec2:CreateNetworkInterface
+            Resource:
+            - !Sub arn:${AWS::Partition}:ec2:*:*:subnet/*
+            - !Sub arn:${AWS::Partition}:ec2:*:*:security-group/*
+          - Effect: Allow
+            Action:
+            - ec2:RunInstances
+            Resource:
+            - !Sub arn:${AWS::Partition}:ec2:*:*:image/*
+            Condition:
+              Bool:
+                ec2:Public: 'true'
+
+  MyCapacityProvider:
+    Type: AWS::Serverless::CapacityProvider
+    Properties:
+      CapacityProviderName: !Sub "${AWS::StackName}-cp"
+      VpcConfig:
+        SubnetIds:
+        - !Ref SubnetId
+        SecurityGroupIds:
+        - !Ref SecurityGroup
+      OperatorRole: !GetAtt MyCapacityProviderCustomRole.Arn
+
+  MyFunction:
+    Type: AWS::Serverless::Function
+    Properties:
+      Runtime: nodejs22.x
+      Handler: index.handler
+      CodeUri: ${codeuri}
+      CapacityProviderConfig:
+        Arn: !GetAtt MyCapacityProvider.Arn
+
+Metadata:
+  SamTransformTest: true
diff --git a/integration/resources/templates/combination/function_lmi_default.yaml b/integration/resources/templates/combination/function_lmi_default.yaml
new file mode 100644
index 0000000000..8137a51b21
--- /dev/null
+++ b/integration/resources/templates/combination/function_lmi_default.yaml
@@ -0,0 +1,52 @@
+Parameters:
+  SubnetId:
+    Type: String
+  SecurityGroup:
+    Type: String
+  KMSKeyArn:
+    Type: String
+
+Resources:
+  SimpleCapacityProvider:
+    Type: AWS::Serverless::CapacityProvider
+    Properties:
+      VpcConfig:
+        SubnetIds:
+        - !Ref SubnetId
+        SecurityGroupIds:
+        - !Ref SecurityGroup
+
+  MyFunction:
+    Type: AWS::Serverless::Function
+    Properties:
+      Runtime: nodejs22.x
+      Handler: index.handler
+      CodeUri: ${codeuri}
+      CapacityProviderConfig:
+        Arn: !GetAtt SimpleCapacityProvider.Arn
+
+  AdvancedCapacityProvider:
+    Type: AWS::Serverless::CapacityProvider
+    Properties:
+      CapacityProviderName: !Sub "${AWS::StackName}-cp"
+      VpcConfig:
+        SubnetIds:
+        - !Ref SubnetId
+        SecurityGroupIds:
+        - !Ref SecurityGroup
+      InstanceRequirements:
+        Architectures:
+        - x86_64
+        AllowedTypes:
+        - m5.large
+        - m5.xlarge
+        - m5.2xlarge
+      ScalingConfig:
+        MaxVCpuCount: 64
+        AverageCPUUtilization: 70
+      KmsKeyArn: !Ref KMSKeyArn
+      Tags:
+        Environment: Test
+
+Metadata:
+  SamTransformTest: true
diff --git a/integration/setup/companion-stack.yaml b/integration/setup/companion-stack.yaml
index 72a1232673..9f67bd3ffd 100644
--- a/integration/setup/companion-stack.yaml
+++ b/integration/setup/companion-stack.yaml
@@ -41,6 +41,106 @@ Resources:
     Type: AWS::S3::Bucket
     DeletionPolicy: Delete
 
+  LMIKMSKey:
+    Type: AWS::KMS::Key
+    Properties:
+      Description: KMS Key for Lambda Capacity Provider Resource
+      KeyPolicy:
+        Version: '2012-10-17'
+        Statement:
+        - Sid: Enable IAM User Permissions
+          Effect: Allow
+          Principal:
+            AWS: !Sub "arn:${AWS::Partition}:iam::${AWS::AccountId}:root"
+          Action: kms:*
+          Resource: '*'
+        - Sid: Allow Lambda service
+          Effect: Allow
+          Principal:
+            Service: lambda.amazonaws.com
+          Action:
+          - kms:Decrypt
+          - kms:DescribeKey
+          Resource: '*'    # Lambda Managed Instances (LMI) VPC Resources
+
+  LMIVpc:
+    Type: AWS::EC2::VPC
+    Properties:
+      CidrBlock: 10.0.0.0/16
+      EnableDnsHostnames: true
+      EnableDnsSupport: true
+      Tags:
+      - Key: Name
+        Value: !Sub "${AWS::StackName}-VPC"
+
+  LMIPrivateSubnet:
+    Type: AWS::EC2::Subnet
+    Properties:
+      VpcId: !Ref LMIVpc
+      CidrBlock: 10.0.1.0/24
+      AvailabilityZone: !Select [0, !GetAZs '']
+      Tags:
+      - Key: Name
+        Value: !Sub "${AWS::StackName}-PrivateSubnet"
+
+  LMIPrivateRouteTable:
+    Type: AWS::EC2::RouteTable
+    Properties:
+      VpcId: !Ref LMIVpc
+      Tags:
+      - Key: Name
+        Value: !Sub "${AWS::StackName}-PrivateRT"
+
+  LMIPrivateSubnetRouteTableAssociation:
+    Type: AWS::EC2::SubnetRouteTableAssociation
+    Properties:
+      SubnetId: !Ref LMIPrivateSubnet
+      RouteTableId: !Ref LMIPrivateRouteTable
+
+  LMISecurityGroup:
+    Type: AWS::EC2::SecurityGroup
+    Properties:
+      GroupDescription: Security group for capacity provider Lambda functions
+      VpcId: !Ref LMIVpc
+      SecurityGroupEgress:
+      - IpProtocol: tcp
+        FromPort: 443
+        ToPort: 443
+        CidrIp: 10.0.0.0/16
+        Description: Allow HTTPS within VPC
+      Tags:
+      - Key: Name
+        Value: !Sub "${AWS::StackName}-LambdaSG"
+
+  VPCEndpointSecurityGroup:
+    Type: AWS::EC2::SecurityGroup
+    Properties:
+      GroupDescription: Security group for VPC endpoints
+      VpcId: !Ref LMIVpc
+      SecurityGroupIngress:
+      - IpProtocol: tcp
+        FromPort: 443
+        ToPort: 443
+        CidrIp: 10.0.0.0/16
+        Description: Allow HTTPS from within VPC
+      Tags:
+      - Key: Name
+        Value: !Sub "${AWS::StackName}-VPCEndpointSG"
+
+  CloudWatchLogsEndpoint:
+    Type: AWS::EC2::VPCEndpoint
+    Properties:
+      VpcId: !Ref LMIVpc
+      ServiceName: !Sub 'com.amazonaws.${AWS::Region}.logs'
+      VpcEndpointType: Interface
+      PrivateDnsEnabled: true
+      SubnetIds:
+      - !Ref LMIPrivateSubnet
+      SecurityGroupIds:
+      - !Ref VPCEndpointSecurityGroup
+      Tags:
+      - Key: Name
+        Value: !Sub "${AWS::StackName}-CloudWatchLogsEndpoint"
 Outputs:
   PreCreatedVpc:
     Description: Pre-created VPC that can be used inside other tests
@@ -66,5 +166,14 @@ Outputs:
     Description: Pre-created S3 Bucket that can be used inside other tests
     Value:
       Ref: PreCreatedS3Bucket
+  LMISubnetId:
+    Description: Private subnet ID for Lambda functions
+    Value: !Ref LMIPrivateSubnet
+  LMISecurityGroupId:
+    Description: Security group ID for Lambda functions
+    Value: !Ref LMISecurityGroup
+  LMIKMSKeyArn:
+    Description: ARN of the KMS key for Capacity Provider
+    Value: !GetAtt LMIKMSKey.Arn
 Metadata:
   SamTransformTest: true