diff --git a/sagemaker-train/src/sagemaker/train/common_utils/finetune_utils.py b/sagemaker-train/src/sagemaker/train/common_utils/finetune_utils.py
index 6479e803bd..dd91c347f4 100644
--- a/sagemaker-train/src/sagemaker/train/common_utils/finetune_utils.py
+++ b/sagemaker-train/src/sagemaker/train/common_utils/finetune_utils.py
@@ -743,7 +743,7 @@ def _create_output_config(sagemaker_session,s3_output_path=None, kms_key_id=None
         s3_output_path = _get_default_s3_output_path(sagemaker_session)
     
     # Validate S3 path exists
-    _validate_s3_path_exists(s3_output_path, sagemaker_session)
+    _validate_s3_path_exists(s3_output_path, sagemaker_session, kms_key_id=kms_key_id)
 
     return OutputDataConfig(
         s3_output_path=s3_output_path,
@@ -830,8 +830,16 @@ def _validate_eula_for_gated_model(model, accept_eula, is_gated_model):
     return accept_eula
 
 
-def _validate_s3_path_exists(s3_path: str, sagemaker_session):
-    """Validate S3 path and create bucket/prefix if they don't exist."""
+def _validate_s3_path_exists(s3_path: str, sagemaker_session, kms_key_id: Optional[str] = None):
+    """Validate S3 path and create bucket/prefix if they don't exist.
+
+    Args:
+        s3_path: S3 path to validate.
+        sagemaker_session: SageMaker session used to create the S3 client.
+        kms_key_id: Optional KMS key ID. When provided, objects created to
+            initialize a missing prefix are written with SSE-KMS encryption so
+            that validation does not fail on buckets enforcing KMS encryption.
+    """
     if not s3_path.startswith("s3://"):
         raise ValueError(f"Invalid S3 path format: {s3_path}")
     
@@ -867,7 +875,11 @@ def _validate_s3_path_exists(s3_path: str, sagemaker_session):
                 # Create the prefix by putting an empty object
                 if not prefix.endswith('/'):
                     prefix += '/'
-                s3_client.put_object(Bucket=bucket_name, Key=prefix, Body=b'')
+                put_object_kwargs = {"Bucket": bucket_name, "Key": prefix, "Body": b''}
+                if kms_key_id:
+                    put_object_kwargs["ServerSideEncryption"] = "aws:kms"
+                    put_object_kwargs["SSEKMSKeyId"] = kms_key_id
+                s3_client.put_object(**put_object_kwargs)
                 
     except Exception as e:
         raise ValueError(f"Failed to validate/create S3 path '{s3_path}': {str(e)}")
diff --git a/sagemaker-train/tests/unit/train/common_utils/test_finetune_utils.py b/sagemaker-train/tests/unit/train/common_utils/test_finetune_utils.py
index c98dea477f..cef9c62eee 100644
--- a/sagemaker-train/tests/unit/train/common_utils/test_finetune_utils.py
+++ b/sagemaker-train/tests/unit/train/common_utils/test_finetune_utils.py
@@ -452,7 +452,9 @@ def test__create_output_config(self, mock_validate_s3):
         
         assert config.s3_output_path == "s3://bucket/output"
         assert config.kms_key_id == "kms-key"
-        mock_validate_s3.assert_called_once_with("s3://bucket/output", mock_session)
+        mock_validate_s3.assert_called_once_with(
+            "s3://bucket/output", mock_session, kms_key_id="kms-key"
+        )
 
     def test__convert_input_data_to_channels(self):
 
@@ -558,6 +560,24 @@ def test__validate_s3_path_exists_with_prefix_not_exists(self, mock_boto_client)
         mock_s3_client.list_objects_v2.assert_called_once_with(Bucket="test-bucket", Prefix="prefix", MaxKeys=1)
         mock_s3_client.put_object.assert_called_once_with(Bucket="test-bucket", Key="prefix/", Body=b'')
 
+    @patch('boto3.client')
+    def test__validate_s3_path_exists_with_prefix_not_exists_kms(self, mock_boto_client):
+        """Test S3 path validation uses SSE-KMS when kms_key_id is provided"""
+        mock_session = Mock()
+        mock_s3_client = Mock()
+        mock_session.boto_session.client.return_value = mock_s3_client
+        mock_s3_client.list_objects_v2.return_value = {}  # No contents
+
+        _validate_s3_path_exists("s3://test-bucket/prefix", mock_session, kms_key_id="kms-key")
+
+        mock_s3_client.put_object.assert_called_once_with(
+            Bucket="test-bucket",
+            Key="prefix/",
+            Body=b'',
+            ServerSideEncryption="aws:kms",
+            SSEKMSKeyId="kms-key",
+        )
+
 
 class TestMlflowVersionMeetsMinimum:
     def test_meets_minimum(self):