diff --git a/python/ray/_private/runtime_env/packaging.py b/python/ray/_private/runtime_env/packaging.py
index 5691c6796f30..258d3b382adb 100644
--- a/python/ray/_private/runtime_env/packaging.py
+++ b/python/ray/_private/runtime_env/packaging.py
@@ -779,6 +779,7 @@ async def download_and_unpack_package(
     gcs_client: Optional[GcsClient] = None,
     logger: Optional[logging.Logger] = default_logger,
     overwrite: bool = False,
+    transport_params: Optional[dict] = None,
 ) -> str:
     """Download the package corresponding to this URI and unpack it if zipped.
 
@@ -792,6 +793,11 @@ async def download_and_unpack_package(
         gcs_client: Client to use for downloading from the GCS.
         logger: The logger to use.
         overwrite: If True, overwrite the existing package.
+        transport_params: Optional transport parameters for smart_open. These parameters
+            will be passed to smart_open when downloading from remote storage.
+            For protocols with default configurations (S3, Azure, GCS, ABFSS),
+            these parameters will be merged with defaults, with custom parameters
+            taking precedence.
 
     Returns:
         Path to the local directory containing the unpacked package files.
@@ -874,7 +880,12 @@ async def download_and_unpack_package(
                 else:
                     return str(pkg_file)
             elif protocol in Protocol.remote_protocols():
-                protocol.download_remote_uri(source_uri=pkg_uri, dest_file=pkg_file)
+                # Use provided transport_params or fall back to None
+                protocol.download_remote_uri(
+                    source_uri=pkg_uri,
+                    dest_file=pkg_file,
+                    transport_params=transport_params,
+                )
 
                 if pkg_file.suffix in [".zip", ".jar"]:
                     unzip_package(
diff --git a/python/ray/_private/runtime_env/protocol.py b/python/ray/_private/runtime_env/protocol.py
index c293cc47034f..dac098a84930 100644
--- a/python/ray/_private/runtime_env/protocol.py
+++ b/python/ray/_private/runtime_env/protocol.py
@@ -233,13 +233,20 @@ def open_file(uri, mode, *, transport_params=None):
         return open_file, None
 
     @classmethod
-    def download_remote_uri(cls, protocol: str, source_uri: str, dest_file: str):
+    def download_remote_uri(
+        cls,
+        protocol: str,
+        source_uri: str,
+        dest_file: str,
+        transport_params: dict = None,
+    ):
         """Download file from remote URI to destination file.
 
         Args:
             protocol: The protocol to use for downloading (e.g., 's3', 'https').
             source_uri: The source URI to download from.
             dest_file: The destination file path to save to.
+            transport_params: Optional transport parameters for smart_open.
 
         Raises:
             ImportError: If required dependencies for the protocol are not installed.
@@ -275,10 +282,40 @@ def open_file(uri, mode, *, transport_params=None):
                     + cls._MISSING_DEPENDENCIES_WARNING
                 )
 
+        if transport_params:
+            tp = cls._merge_transport_params(tp, transport_params)
+
         with open_file(source_uri, "rb", transport_params=tp) as fin:
             with open(dest_file, "wb") as fout:
                 fout.write(fin.read())
 
+    @classmethod
+    def _merge_transport_params(cls, default_params, custom_params: dict):
+        """
+        Merge custom transport parameters with default parameters.
+        Custom parameters take precedence over default parameters.
+        Performs a deep merge for nested dictionaries.
+        """
+        if custom_params is None:
+            return default_params
+
+        if default_params is None:
+            return custom_params
+
+        merged = default_params.copy()
+
+        for key, value in custom_params.items():
+            if (
+                key in merged
+                and isinstance(merged[key], dict)
+                and isinstance(value, dict)
+            ):
+                merged[key] = cls._merge_transport_params(merged[key], value)
+            else:
+                merged[key] = value
+
+        return merged
+
 
 Protocol = enum.Enum(
     "Protocol",
@@ -298,8 +335,10 @@ def _remote_protocols(cls):
 Protocol.remote_protocols = _remote_protocols
 
 
-def _download_remote_uri(self, source_uri, dest_file):
-    return ProtocolsProvider.download_remote_uri(self.value, source_uri, dest_file)
+def _download_remote_uri(self, source_uri, dest_file, transport_params=None):
+    return ProtocolsProvider.download_remote_uri(
+        self.value, source_uri, dest_file, transport_params
+    )
 
 
 Protocol.download_remote_uri = _download_remote_uri
diff --git a/python/ray/_private/runtime_env/py_modules.py b/python/ray/_private/runtime_env/py_modules.py
index 2a5dbe7423c4..bf40f3497072 100644
--- a/python/ray/_private/runtime_env/py_modules.py
+++ b/python/ray/_private/runtime_env/py_modules.py
@@ -205,9 +205,16 @@ async def create(
         context: RuntimeEnvContext,
         logger: Optional[logging.Logger] = default_logger,
     ) -> int:
+        # Extract transport_params from runtime_env config if available
+        config = runtime_env.get("config")
+        transport_params = config.get("transport_params") if config else None
 
         module_dir = await download_and_unpack_package(
-            uri, self._resources_dir, self._gcs_client, logger=logger
+            uri,
+            self._resources_dir,
+            self._gcs_client,
+            logger=logger,
+            transport_params=transport_params,
         )
 
         if is_whl_uri(uri):
diff --git a/python/ray/_private/runtime_env/working_dir.py b/python/ray/_private/runtime_env/working_dir.py
index 27579e550e3a..38a6a611100a 100644
--- a/python/ray/_private/runtime_env/working_dir.py
+++ b/python/ray/_private/runtime_env/working_dir.py
@@ -192,12 +192,17 @@ async def create(
         context: RuntimeEnvContext,
         logger: logging.Logger = default_logger,
     ) -> int:
+        # Extract transport_params from runtime_env config if available
+        config = runtime_env.get("config")
+        transport_params = config.get("transport_params") if config else None
+
         local_dir = await download_and_unpack_package(
             uri,
             self._resources_dir,
             self._gcs_client,
             logger=logger,
             overwrite=True,
+            transport_params=transport_params,
         )
         return get_directory_size_bytes(local_dir)
 
diff --git a/python/ray/runtime_env/runtime_env.py b/python/ray/runtime_env/runtime_env.py
index 2b7d5d9be5f2..2b7ef8c7f415 100644
--- a/python/ray/runtime_env/runtime_env.py
+++ b/python/ray/runtime_env/runtime_env.py
@@ -42,14 +42,24 @@ class RuntimeEnvConfig(dict):
         eager_install: Indicates whether to install the runtime environment
             on the cluster at `ray.init()` time, before the workers are leased.
             This flag is set to `True` by default.
+        transport_params: Optional transport parameters for downloading packages
+            from remote storage (e.g., S3, GCS, Azure). This is a dictionary
+            of type Dict[str, Any] that will be passed to smart_open when
+            downloading remote URIs.
     """
 
-    known_fields: Set[str] = {"setup_timeout_seconds", "eager_install", "log_files"}
+    known_fields: Set[str] = {
+        "setup_timeout_seconds",
+        "eager_install",
+        "log_files",
+        "transport_params",
+    }
 
     _default_config: Dict = {
         "setup_timeout_seconds": DEFAULT_RUNTIME_ENV_TIMEOUT_SECONDS,
         "eager_install": True,
         "log_files": [],
+        "transport_params": None,
     }
 
     def __init__(
@@ -57,6 +67,7 @@ def __init__(
         setup_timeout_seconds: int = DEFAULT_RUNTIME_ENV_TIMEOUT_SECONDS,
         eager_install: bool = True,
         log_files: Optional[List[str]] = None,
+        transport_params: Optional[Dict[str, Any]] = None,
     ):
         super().__init__()
         if not isinstance(setup_timeout_seconds, int):
@@ -91,6 +102,17 @@ def __init__(
 
         self["log_files"] = log_files
 
+        if transport_params is not None:
+            if not isinstance(transport_params, dict):
+                raise TypeError(
+                    "transport_params must be a dict or None, got "
+                    f"{transport_params} with type {type(transport_params)}."
+                )
+        else:
+            transport_params = self._default_config["transport_params"]
+
+        self["transport_params"] = transport_params
+
     @staticmethod
     def parse_and_validate_runtime_env_config(
         config: Union[Dict, "RuntimeEnvConfig"]
@@ -137,6 +159,7 @@ def from_proto(cls, runtime_env_config: ProtoRuntimeEnvConfig):
         # assign the default value to setup_timeout_seconds.
         if setup_timeout_seconds == 0:
             setup_timeout_seconds = cls._default_config["setup_timeout_seconds"]
+
         return cls(
             setup_timeout_seconds=setup_timeout_seconds,
             eager_install=runtime_env_config.eager_install,
@@ -277,6 +300,10 @@ class MyClass:
         config: config for runtime environment. Either
             a dict or a RuntimeEnvConfig. Field: (1) setup_timeout_seconds, the
             timeout of runtime environment creation,  timeout is in seconds.
+            (2) transport_params, optional transport parameters for downloading
+            packages from remote storage (e.g., S3, GCS, Azure). This is a
+            dictionary of type Dict[str, Any] that will be passed to smart_open
+            when downloading remote URIs.
         image_uri: URI to a container image. The Ray worker process runs
             in a container with this image. This parameter only works alone,
             or with the ``config`` or ``env_vars`` parameters.