diff --git a/litestar/template/config.py b/litestar/template/config.py
index d2aa87c302..ecff5d3f58 100644
--- a/litestar/template/config.py
+++ b/litestar/template/config.py
@@ -54,4 +54,8 @@ def to_engine(self) -> EngineType:
     @cached_property
     def engine_instance(self) -> EngineType:
         """Return the template engine instance."""
-        return self.to_engine() if self.instance is None else self.instance
+        if self.instance is None:
+            return self.to_engine()
+        if callable(self.engine_callback):
+            self.engine_callback(self.instance)
+        return self.instance
diff --git a/tests/unit/test_template/test_template.py b/tests/unit/test_template/test_template.py
index b0d70d1f11..13f9c64e83 100644
--- a/tests/unit/test_template/test_template.py
+++ b/tests/unit/test_template/test_template.py
@@ -2,9 +2,10 @@
 
 import sys
 from pathlib import Path
-from typing import TYPE_CHECKING
+from typing import TYPE_CHECKING, Any
 
 import pytest
+from jinja2 import DictLoader, Environment
 
 from litestar import Litestar, MediaType, get
 from litestar.contrib.jinja import JinjaTemplateEngine
@@ -52,6 +53,39 @@ def callback(engine: TemplateEngineProtocol) -> None:
     assert received_engine is app.template_engine
 
 
+def test_engine_passed_to_callback_custom_env(tmp_path: Path) -> None:
+    received_engine: JinjaTemplateEngine | None = None
+
+    def callback(engine: TemplateEngineProtocol) -> None:
+        nonlocal received_engine
+        assert isinstance(engine, JinjaTemplateEngine), "Engine must be a JinjaTemplateEngine"
+        received_engine = engine
+        engine.register_template_callable(
+            key="check_context_key",
+            template_callable=my_template_function,
+        )
+
+    def my_template_function(ctx: dict[str, Any]) -> str:
+        return ctx.get("my_context_key", "nope")
+
+    my_custom_env = Environment(loader=DictLoader({"index.html": "check_context_key: {{ check_context_key() }}"}))
+    template_config = TemplateConfig(
+        instance=JinjaTemplateEngine.from_environment(my_custom_env),
+        engine_callback=callback,
+    )
+    app = Litestar(template_config=template_config)
+
+    @get("/")
+    def handler() -> Template:
+        return Template(template_name="index.html")
+
+    assert received_engine is not None
+    assert received_engine is app.template_engine
+    with create_test_client(route_handlers=[handler], template_config=template_config) as client:
+        response = client.get("/")
+        assert response.text == "check_context_key: nope"
+
+
 @pytest.mark.parametrize("engine", (JinjaTemplateEngine, MakoTemplateEngine, MiniJinjaTemplateEngine))
 def test_engine_instance(engine: type[TemplateEngineProtocol], tmp_path: Path) -> None:
     engine_instance = engine(directory=tmp_path, engine_instance=None)