diff --git a/cmd/apps/init.go b/cmd/apps/init.go
index 144b5b7c6d..09a23c4bb7 100644
--- a/cmd/apps/init.go
+++ b/cmd/apps/init.go
@@ -457,6 +457,21 @@ func promptForResource(ctx context.Context, r manifest.Resource, theme *huh.Them
 	return map[string]string{r.Key(): value}, nil
 }
 
+// findTemplateProjectDir finds the project source directory within a template.
+// Templates may contain a {{.project_name}} subdirectory that holds the actual project files.
+func findTemplateProjectDir(templateDir string) string {
+	entries, err := os.ReadDir(templateDir)
+	if err != nil {
+		return templateDir
+	}
+	for _, e := range entries {
+		if e.IsDir() && strings.Contains(e.Name(), "{{.project_name}}") {
+			return filepath.Join(templateDir, e.Name())
+		}
+	}
+	return templateDir
+}
+
 // cloneRepo clones a git repository to a temporary directory.
 func cloneRepo(ctx context.Context, repoURL, branch string) (string, error) {
 	tempDir, err := os.MkdirTemp("", "appkit-template-*")
@@ -605,6 +620,28 @@ func runCreate(ctx context.Context, opts createOptions) error {
 		}
 	}
 
+	// Start npm install early in the background while the user answers questions.
+	// npm only needs package.json/package-lock.json which exist in the cloned
+	// template directory. The project_name template variable in package.json
+	// doesn't affect dependency resolution.
+	var npmInstallCh <-chan error
+	var npmSrcDir string
+	if cleanup != nil { // Only for cloned templates (safe to install into temp dir)
+		srcProjDir := findTemplateProjectDir(templateDir)
+		if _, statErr := os.Stat(filepath.Join(srcProjDir, "package.json")); statErr == nil {
+			npmSrcDir = srcProjDir
+			// Ensure .npmrc is available (templates use _npmrc naming convention)
+			npmrcSrc := filepath.Join(srcProjDir, "_npmrc")
+			npmrcDst := filepath.Join(srcProjDir, ".npmrc")
+			if data, readErr := os.ReadFile(npmrcSrc); readErr == nil {
+				if _, statErr2 := os.Stat(npmrcDst); os.IsNotExist(statErr2) {
+					_ = os.WriteFile(npmrcDst, data, 0o644)
+				}
+			}
+			npmInstallCh = initializer.StartNpmInstallAsync(ctx, srcProjDir)
+		}
+	}
+
 	// Step 3: Load manifest from template (optional — templates without it skip plugin/resource logic)
 	var m *manifest.Manifest
 	if manifest.HasManifest(templateDir) {
@@ -811,6 +848,27 @@ func runCreate(ctx context.Context, opts createOptions) error {
 		return runErr
 	}
 
+	// Wait for background npm install (if running) and move node_modules to project.
+	if npmInstallCh != nil {
+		moveErr := prompt.RunWithSpinnerCtx(ctx, "Installing dependencies...", func() error {
+			if installErr := <-npmInstallCh; installErr != nil {
+				return installErr
+			}
+			src := filepath.Join(npmSrcDir, "node_modules")
+			dst := filepath.Join(absOutputDir, "node_modules")
+			if renameErr := os.Rename(src, dst); renameErr != nil {
+				// Fallback for cross-device moves (e.g. /tmp -> home)
+				return exec.CommandContext(ctx, "mv", src, dst).Run()
+			}
+			return nil
+		})
+		if moveErr != nil {
+			log.Warnf(ctx, "Background npm install failed, will retry: %v", moveErr)
+			// Clean up any partial node_modules so Initialize retries properly
+			os.RemoveAll(filepath.Join(absOutputDir, "node_modules"))
+		}
+	}
+
 	// Initialize project based on type (Node.js, Python, etc.)
 	var nextStepsCmd string
 	projectInitializer := initializer.GetProjectInitializer(absOutputDir)
diff --git a/cmd/apps/init_test.go b/cmd/apps/init_test.go
index a96b984261..52957a5ca1 100644
--- a/cmd/apps/init_test.go
+++ b/cmd/apps/init_test.go
@@ -459,6 +459,42 @@ func TestAppendUniqueNoValues(t *testing.T) {
 	assert.Equal(t, []string{"a", "b"}, result)
 }
 
+func TestFindTemplateProjectDir(t *testing.T) {
+	t.Run("returns project_name subdir when present", func(t *testing.T) {
+		dir := t.TempDir()
+		projDir := filepath.Join(dir, "{{.project_name}}")
+		require.NoError(t, os.Mkdir(projDir, 0o755))
+		// Also add a non-matching directory to ensure we pick the right one
+		require.NoError(t, os.Mkdir(filepath.Join(dir, "other"), 0o755))
+
+		result := findTemplateProjectDir(dir)
+		assert.Equal(t, projDir, result)
+	})
+
+	t.Run("returns input dir when no project_name subdir", func(t *testing.T) {
+		dir := t.TempDir()
+		require.NoError(t, os.Mkdir(filepath.Join(dir, "src"), 0o755))
+		require.NoError(t, os.WriteFile(filepath.Join(dir, "package.json"), []byte("{}"), 0o644))
+
+		result := findTemplateProjectDir(dir)
+		assert.Equal(t, dir, result)
+	})
+
+	t.Run("returns input dir when dir is empty", func(t *testing.T) {
+		dir := t.TempDir()
+
+		result := findTemplateProjectDir(dir)
+		assert.Equal(t, dir, result)
+	})
+
+	t.Run("returns input dir when dir does not exist", func(t *testing.T) {
+		dir := filepath.Join(t.TempDir(), "nonexistent")
+
+		result := findTemplateProjectDir(dir)
+		assert.Equal(t, dir, result)
+	})
+}
+
 func TestRunManifestOnlyFound(t *testing.T) {
 	dir := t.TempDir()
 	manifestPath := filepath.Join(dir, manifest.ManifestFileName)
diff --git a/libs/apps/initializer/initializer_test.go b/libs/apps/initializer/initializer_test.go
index d39076b2d4..1e82a96908 100644
--- a/libs/apps/initializer/initializer_test.go
+++ b/libs/apps/initializer/initializer_test.go
@@ -1,9 +1,11 @@
 package initializer
 
 import (
+	"context"
 	"os"
 	"path/filepath"
 	"testing"
+	"time"
 
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
@@ -155,6 +157,47 @@ func TestDetectPythonCommand(t *testing.T) {
 	}
 }
 
+func TestStartNpmInstallAsyncReturnsChannel(t *testing.T) {
+	// Cancelled context ensures the process exits quickly regardless of npm availability.
+	ctx, cancel := context.WithCancel(context.Background())
+	cancel()
+
+	tmpDir := t.TempDir()
+	require.NoError(t, os.WriteFile(filepath.Join(tmpDir, "package.json"), []byte(`{"name":"test"}`), 0o644))
+
+	ch := StartNpmInstallAsync(ctx, tmpDir)
+	require.NotNil(t, ch)
+
+	// Channel must yield exactly one value (nil if npm not found, or error from cancelled ctx).
+	select {
+	case <-ch:
+		// ok – received a value
+	case <-time.After(10 * time.Second):
+		t.Fatal("timed out waiting for StartNpmInstallAsync channel")
+	}
+}
+
+func TestInitializeSkipsNpmInstallWhenNodeModulesExists(t *testing.T) {
+	tmpDir := t.TempDir()
+
+	// Create a package.json without appkit so appkit setup is also skipped.
+	require.NoError(t, os.WriteFile(
+		filepath.Join(tmpDir, "package.json"),
+		[]byte(`{"name":"test","dependencies":{"express":"^4.0.0"}}`),
+		0o644,
+	))
+
+	// Pre-create node_modules to simulate a completed async install.
+	require.NoError(t, os.MkdirAll(filepath.Join(tmpDir, "node_modules", ".package-lock.json"), 0o755))
+
+	init := &InitializerNodeJs{}
+	result := init.Initialize(context.Background(), tmpDir)
+
+	// Should succeed without actually running npm install.
+	assert.True(t, result.Success)
+	assert.Equal(t, "Node.js project initialized successfully", result.Message)
+}
+
 func getTypeName(i Initializer) string {
 	switch i.(type) {
 	case *InitializerNodeJs:
diff --git a/libs/apps/initializer/nodejs.go b/libs/apps/initializer/nodejs.go
index 1e96f43f72..9bb039fb9a 100644
--- a/libs/apps/initializer/nodejs.go
+++ b/libs/apps/initializer/nodejs.go
@@ -20,12 +20,14 @@ type InitializerNodeJs struct {
 func (i *InitializerNodeJs) Initialize(ctx context.Context, workDir string) *InitResult {
 	i.workDir = workDir
 
-	// Step 1: Run npm install
-	if err := i.runNpmInstall(ctx, workDir); err != nil {
-		return &InitResult{
-			Success: false,
-			Message: "Failed to install dependencies",
-			Error:   err,
+	// Step 1: Run npm install (skip if node_modules already exists, e.g. from async pre-install)
+	if _, err := os.Stat(filepath.Join(workDir, "node_modules")); os.IsNotExist(err) {
+		if err := i.runNpmInstall(ctx, workDir); err != nil {
+			return &InitResult{
+				Success: false,
+				Message: "Failed to install dependencies",
+				Error:   err,
+			}
 		}
 	}
 
@@ -67,6 +69,25 @@ func (i *InitializerNodeJs) SupportsDevRemote() bool {
 	return i.hasAppkit(i.workDir)
 }
 
+// StartNpmInstallAsync starts npm ci in the given directory in a background goroutine.
+// Returns a channel that receives nil on success or an error when complete.
+// If npm is not available, the channel receives nil immediately.
+func StartNpmInstallAsync(ctx context.Context, workDir string) <-chan error {
+	ch := make(chan error, 1)
+	if _, err := exec.LookPath("npm"); err != nil {
+		ch <- nil
+		return ch
+	}
+	go func() {
+		cmd := exec.CommandContext(ctx, "npm", "ci", "--no-audit", "--no-fund", "--prefer-offline")
+		cmd.Dir = workDir
+		cmd.Stdout = nil
+		cmd.Stderr = nil
+		ch <- cmd.Run()
+	}()
+	return ch
+}
+
 // runNpmInstall runs npm install in the project directory.
 func (i *InitializerNodeJs) runNpmInstall(ctx context.Context, workDir string) error {
 	// Check if npm is available