diff --git a/experimental/ssh/cmd/server.go b/experimental/ssh/cmd/server.go
index efe283f28a..d73ad2d5c4 100644
--- a/experimental/ssh/cmd/server.go
+++ b/experimental/ssh/cmd/server.go
@@ -30,6 +30,7 @@ and proxies them to local SSH daemon processes.
 	var version string
 	var secretScopeName string
 	var authorizedKeySecretName string
+	var serverless bool
 
 	cmd.Flags().StringVar(&clusterID, "cluster", "", "Databricks cluster ID")
 	cmd.MarkFlagRequired("cluster")
@@ -43,6 +44,7 @@ and proxies them to local SSH daemon processes.
 	cmd.Flags().IntVar(&maxClients, "max-clients", defaultMaxClients, "Maximum number of SSH clients")
 	cmd.Flags().DurationVar(&shutdownDelay, "shutdown-delay", defaultShutdownDelay, "Delay before shutting down after no pings from clients")
 	cmd.Flags().StringVar(&version, "version", "", "Client version of the Databricks CLI")
+	cmd.Flags().BoolVar(&serverless, "serverless", false, "Enable serverless mode for Jupyter initialization")
 
 	cmd.PreRunE = func(cmd *cobra.Command, args []string) error {
 		// The server can be executed under a directory with an invalid bundle configuration.
@@ -70,6 +72,7 @@ and proxies them to local SSH daemon processes.
 			AuthorizedKeySecretName: authorizedKeySecretName,
 			DefaultPort:             defaultServerPort,
 			PortRange:               serverPortRange,
+			Serverless:              serverless,
 		}
 		return server.Run(ctx, wsc, opts)
 	}
diff --git a/experimental/ssh/internal/client/client.go b/experimental/ssh/internal/client/client.go
index 940f792f0e..3d0e1a5527 100644
--- a/experimental/ssh/internal/client/client.go
+++ b/experimental/ssh/internal/client/client.go
@@ -429,6 +429,7 @@ func submitSSHTunnelJob(ctx context.Context, client *databricks.WorkspaceClient,
 		"shutdownDelay":           opts.ShutdownDelay.String(),
 		"maxClients":              strconv.Itoa(opts.MaxClients),
 		"sessionId":               sessionID,
+		"serverless":              strconv.FormatBool(opts.IsServerlessMode()),
 	}
 
 	cmdio.LogString(ctx, "Submitting a job to start the ssh server...")
diff --git a/experimental/ssh/internal/client/ssh-server-bootstrap.py b/experimental/ssh/internal/client/ssh-server-bootstrap.py
index 8dc0aff16a..397254436f 100644
--- a/experimental/ssh/internal/client/ssh-server-bootstrap.py
+++ b/experimental/ssh/internal/client/ssh-server-bootstrap.py
@@ -17,7 +17,8 @@
 dbutils.widgets.text("authorizedKeySecretName", "")
 dbutils.widgets.text("maxClients", "10")
 dbutils.widgets.text("shutdownDelay", "10m")
-dbutils.widgets.text("sessionId", "")  # Required: unique identifier for the session
+dbutils.widgets.text("sessionId", "")
+dbutils.widgets.text("serverless", "false")
 
 
 def cleanup():
@@ -115,6 +116,7 @@ def run_ssh_server():
     session_id = dbutils.widgets.get("sessionId")
     if not session_id:
         raise RuntimeError("Session ID is required. Please provide it using the 'sessionId' widget.")
+    serverless = dbutils.widgets.get("serverless")
 
     arch = platform.machine()
     if arch == "x86_64":
@@ -137,6 +139,7 @@ def run_ssh_server():
         "server",
         f"--cluster={ctx.clusterId}",
         f"--session-id={session_id}",
+        f"--serverless={serverless}",
         f"--secret-scope-name={secrets_scope}",
         f"--authorized-key-secret-name={public_key_secret_name}",
         f"--max-clients={max_clients}",
diff --git a/experimental/ssh/internal/server/jupyter-init.py b/experimental/ssh/internal/server/jupyter-init.py
index 3e58b2f94a..e212f9d9e8 100644
--- a/experimental/ssh/internal/server/jupyter-init.py
+++ b/experimental/ssh/internal/server/jupyter-init.py
@@ -1,7 +1,7 @@
 from typing import List, Optional
 from IPython.core.getipython import get_ipython
 from IPython.display import display as ip_display
-from dbruntime import UserNamespaceInitializer
+import os
 
 
 def _log_exceptions(func):
@@ -18,18 +18,21 @@ def wrapper(*args, **kwargs):
     return wrapper
 
 
-_user_namespace_initializer = UserNamespaceInitializer.getOrCreate()
-_entry_point = _user_namespace_initializer.get_spark_entry_point()
-_globals = _user_namespace_initializer.get_namespace_globals()
-for name, value in _globals.items():
-    print(f"Registering global: {name} = {value}")
-    if name not in globals():
-        globals()[name] = value
+@_log_exceptions
+def _setup_dedicated_session():
+    from dbruntime import UserNamespaceInitializer
 
+    _user_namespace_initializer = UserNamespaceInitializer.getOrCreate()
+    _entry_point = _user_namespace_initializer.get_spark_entry_point()
+    _globals = _user_namespace_initializer.get_namespace_globals()
+    for name, value in _globals.items():
+        print(f"Registering global: {name} = {value}")
+        if name not in globals():
+            globals()[name] = value
 
-# 'display' from the runtime uses custom widgets that don't work in Jupyter.
-# We use the IPython display instead (in combination with the html formatter for DataFrames).
-globals()["display"] = ip_display
+    # 'display' from the runtime uses custom widgets that don't work in Jupyter.
+    # We use the IPython display instead (in combination with the html formatter for DataFrames).
+    globals()["display"] = ip_display
 
 
 @_log_exceptions
@@ -157,19 +160,28 @@ def _parse_line_for_databricks_magics(lines: List[str]) -> List[str]:
 
 
 @_log_exceptions
-def _register_magics():
-    """Register the magic command parser with IPython."""
+def _register_common_magics():
+    """Register the common magic command parser with IPython."""
+    ip = get_ipython()
+    ip.input_transformers_cleanup.append(_parse_line_for_databricks_magics)
+
+
+@_log_exceptions
+def _register_pip_magics(user_namespace_initializer: any, entry_point: any):
+    """Register the pip magic command parser with IPython."""
     from dbruntime.DatasetInfo import UserNamespaceDict
     from dbruntime.PipMagicOverrides import PipMagicOverrides
+    from dbruntime import UserNamespaceInitializer
 
+    user_namespace_initializer = UserNamespaceInitializer.getOrCreate()
+    entry_point = user_namespace_initializer.get_spark_entry_point()
     user_ns = UserNamespaceDict(
-        _user_namespace_initializer.get_namespace_globals(),
-        _entry_point.getDriverConf(),
-        _entry_point,
+        user_namespace_initializer.get_namespace_globals(),
+        entry_point.getDriverConf(),
+        entry_point,
     )
     ip = get_ipython()
-    ip.input_transformers_cleanup.append(_parse_line_for_databricks_magics)
-    ip.register_magics(PipMagicOverrides(_entry_point, _globals["sc"]._conf, user_ns))
+    ip.register_magics(PipMagicOverrides(entry_point, globals["sc"]._conf, user_ns))
 
 
 @_log_exceptions
@@ -186,6 +198,34 @@ def df_html(df: DataFrame) -> str:
     html_formatter.for_type(DataFrame, df_html)
 
 
-_register_magics()
+@_log_exceptions
+def _setup_serverless_session():
+    import IPython
+    from databricks.connect import DatabricksSession
+
+    user_ns = getattr(IPython.get_ipython(), "user_ns", {})
+    existing_session = getattr(user_ns, "spark", None)
+    try:
+        # Clear the existing local spark session, otherwise DatabricksSession will re-use it.
+        user_ns["spark"] = None
+        globals()["spark"] = None
+        # DatabricksSession will use the existing env vars for the connection.
+        spark_session = DatabricksSession.builder.serverless(True).getOrCreate()
+        user_ns["spark"] = spark_session
+        globals()["spark"] = spark_session
+    except Exception as e:
+        user_ns["spark"] = existing_session
+        globals()["spark"] = existing_session
+        raise e
+
+
+if os.environ.get("DATABRICKS_JUPYTER_SERVERLESS") == "true":
+    _setup_serverless_session()
+else:
+    _setup_dedicated_session()
+    _register_pip_magics()
+
+
+_register_common_magics()
 _register_formatters()
 _register_runtime_hooks()
diff --git a/experimental/ssh/internal/server/server.go b/experimental/ssh/internal/server/server.go
index 92fa76050a..05243ec3c3 100644
--- a/experimental/ssh/internal/server/server.go
+++ b/experimental/ssh/internal/server/server.go
@@ -34,6 +34,8 @@ type ServerOptions struct {
 	// SessionID is the unique identifier for the session (cluster ID for dedicated clusters, connection name for serverless).
 	// Used for metadata storage path. Defaults to ClusterID if not set.
 	SessionID string
+	// Serverless indicates whether the server is running on serverless compute.
+	Serverless bool
 	// The directory to store sshd configuration
 	ConfigDir string
 	// The name of the secrets scope to use for client and server keys
diff --git a/experimental/ssh/internal/server/sshd.go b/experimental/ssh/internal/server/sshd.go
index c8f23d02a5..6a8125d2b3 100644
--- a/experimental/ssh/internal/server/sshd.go
+++ b/experimental/ssh/internal/server/sshd.go
@@ -67,6 +67,9 @@ func prepareSSHDConfig(ctx context.Context, client *databricks.WorkspaceClient,
 	setEnv += " GIT_CONFIG_GLOBAL=/Workspace/.proc/self/git/config"
 	setEnv += " ENABLE_DATABRICKS_CLI=true"
 	setEnv += " PYTHONPYCACHEPREFIX=/tmp/pycache"
+	if opts.Serverless {
+		setEnv += " DATABRICKS_JUPYTER_SERVERLESS=true"
+	}
 
 	sshdConfigContent := "PubkeyAuthentication yes\n" +
 		"PasswordAuthentication no\n" +