diff --git a/source/scripts/init/src/apply_system_defaults/apply_system_defaults.c b/source/scripts/init/src/apply_system_defaults/apply_system_defaults.c
index 0a589550..a7b83540 100644
--- a/source/scripts/init/src/apply_system_defaults/apply_system_defaults.c
+++ b/source/scripts/init/src/apply_system_defaults/apply_system_defaults.c
@@ -72,6 +72,11 @@
 #define PARTNER_DEFAULT_MIGRATE_PSM  					"/tmp/.apply_partner_defaults_psm"
 #define PARTNER_DEFAULT_MIGRATE_FOR_NEW_PSM_MEMBER  	"/tmp/.apply_partner_defaults_new_psm_member"
 
+#if defined(_ONESTACK_PRODUCT_REQ_)
+#define BUSINESS_MODE_FILE "/nvram/.business-mode"
+#define SETSTACKMODE_INIT_FLAG "/nvram/.setstackmode_intialize"
+#endif
+
 #define PARTNER_ID_LEN 64
 
 #ifndef UNIT_TEST_DOCKER_SUPPORT
@@ -2376,6 +2381,14 @@ static int apply_partnerId_default_values (char *data, char *PartnerID)
    		APPLY_PRINT("%s - Deletion of %s file handled in PSM init \n", __FUNCTION__, PARTNER_DEFAULT_APPLY_FILE );
 		//Delete at PSM init
 		//system( "rm -rf /nvram/.apply_partner_defaults" );
+#if defined(_ONESTACK_PRODUCT_REQ_)
+		// Partner defaults being applied (partner change) - need to reconfigure stackmode
+		if (access(SETSTACKMODE_INIT_FLAG, F_OK) == 0)
+		{
+			unlink(SETSTACKMODE_INIT_FLAG);
+			APPLY_PRINT("%s - Deleted %s to force stackmode reconfiguration\n", __FUNCTION__, SETSTACKMODE_INIT_FLAG);
+		}
+#endif
   	}
 
 	if ( access( PARTNER_DEFAULT_MIGRATE_PSM , F_OK ) == 0 )  
@@ -3529,6 +3542,36 @@ static void getPartnerIdWithRetry(char* buf, char* PartnerID)
       APPLY_PRINT("%s - Failed to apply_value_to_sysevent block into sysevent for '%s'\n", __FUNCTION__, PartnerID);
    }
 
+#if defined(_ONESTACK_PRODUCT_REQ_)
+   // Set stackmode based on business-mode marker file
+   if (access(BUSINESS_MODE_FILE, F_OK) == 0)
+   {
+      // Business mode marker file exists, set to business mode
+      if (syscfg_set(NULL, "stackmode", "business") == 0)
+      {
+         syscfg_commit();
+         APPLY_PRINT("%s - Set stackmode to business (marker file present)\n", __FUNCTION__);
+      }
+      else
+      {
+         APPLY_PRINT("%s - Failed to set stackmode to business\n", __FUNCTION__);
+      }
+   }
+   else
+   {
+      // No business mode marker file, set to residential mode
+      if (syscfg_set(NULL, "stackmode", "residential") == 0)
+      {
+         syscfg_commit();
+         APPLY_PRINT("%s - Set stackmode to residential (no marker file)\n", __FUNCTION__);
+      }
+      else
+      {
+         APPLY_PRINT("%s - Failed to set stackmode to residential\n", __FUNCTION__);
+      }
+   }
+#endif
+
    sysevent_close(global_fd, global_id);
 
    return(0);
diff --git a/source/scripts/init/system/utopia_init_xb6.sh b/source/scripts/init/system/utopia_init_xb6.sh
index f21e3c78..2d75ea65 100755
--- a/source/scripts/init/system/utopia_init_xb6.sh
+++ b/source/scripts/init/system/utopia_init_xb6.sh
@@ -287,6 +287,27 @@ CheckAndReCreateDB()
 	fi 
 }
 
+# Call setstackmode binary to set stackmode marker (with optimization)
+if [ -x /usr/bin/setstackmode ]; then
+      SETSTACKMODE_INIT_FLAG="/nvram/.setstackmode_intialize"
+      
+      # Optimization: Check if initialization flag exists
+      if [ -f "$SETSTACKMODE_INIT_FLAG" ]; then
+          echo "[utopia][init] setstackmode already initialized, skipping binary execution"
+      else
+          echo "[utopia][init] Calling setstackmode binary to configure stack mode"
+          /usr/bin/setstackmode
+          ret=$?
+          if [ $ret -eq 0 ]; then
+              echo "[utopia][init] setstackmode binary executed successfully (return code: $ret)"
+          else
+              echo "[utopia][init] setstackmode binary failed with return code: $ret"
+          fi
+      fi
+else
+      echo "[utopia][init] setstackmode binary not found, skipping stack mode configuration"
+fi
+
 echo "[utopia][init] Starting syscfg using file store ($SYSCFG_NEW_FILE)"
 if [ -f $SYSCFG_NEW_FILE ]; then
         # Check and remove immutable attribute on syscfg.db if set