diff --git a/lib/react_on_rails/engine.rb b/lib/react_on_rails/engine.rb
index 8e4e6d859c..f2f9c0fb93 100644
--- a/lib/react_on_rails/engine.rb
+++ b/lib/react_on_rails/engine.rb
@@ -6,12 +6,10 @@ module ReactOnRails
   class Engine < ::Rails::Engine
     # Validate package versions and compatibility on Rails startup
     # This ensures the application fails fast if versions don't match or packages are misconfigured
-    # Skip validation during installation tasks (e.g., shakapacker:install)
+    # Skip validation during installation tasks (e.g., shakapacker:install) or generator runtime
     initializer "react_on_rails.validate_version_and_package_compatibility" do
       config.after_initialize do
-        # Skip validation if package.json doesn't exist yet (during initial setup)
-        package_json = VersionChecker::NodePackageVersion.package_json_path
-        next unless File.exist?(package_json)
+        next if Engine.skip_version_validation?
 
         Rails.logger.info "[React on Rails] Validating package version and compatibility..."
         VersionChecker.build.validate_version_and_package_compatibility!
@@ -19,6 +17,36 @@ class Engine < ::Rails::Engine
       end
     end
 
+    # Determine if version validation should be skipped
+    # @return [Boolean] true if validation should be skipped
+    def self.skip_version_validation?
+      # Check package.json first as it's cheaper and handles more cases
+      if package_json_missing?
+        Rails.logger.debug "[React on Rails] Skipping validation - package.json not found"
+        return true
+      end
+
+      # Skip during generator runtime since packages are installed during execution
+      if running_generator?
+        Rails.logger.debug "[React on Rails] Skipping validation during generator runtime"
+        return true
+      end
+
+      false
+    end
+
+    # Check if we're running a Rails generator
+    # @return [Boolean] true if running a generator
+    def self.running_generator?
+      !ARGV.empty? && ARGV.first&.in?(%w[generate g])
+    end
+
+    # Check if package.json doesn't exist yet
+    # @return [Boolean] true if package.json is missing
+    def self.package_json_missing?
+      !File.exist?(VersionChecker::NodePackageVersion.package_json_path)
+    end
+
     config.to_prepare do
       ReactOnRails::ServerRenderingPool.reset_pool
     end
diff --git a/spec/react_on_rails/engine_spec.rb b/spec/react_on_rails/engine_spec.rb
new file mode 100644
index 0000000000..2b2fa83545
--- /dev/null
+++ b/spec/react_on_rails/engine_spec.rb
@@ -0,0 +1,160 @@
+# frozen_string_literal: true
+
+require_relative "spec_helper"
+
+module ReactOnRails
+  RSpec.describe Engine do
+    describe ".skip_version_validation?" do
+      let(:package_json_path) { "/fake/path/package.json" }
+
+      before do
+        allow(VersionChecker::NodePackageVersion).to receive(:package_json_path)
+          .and_return(package_json_path)
+        allow(Rails.logger).to receive(:debug)
+      end
+
+      context "when package.json doesn't exist" do
+        before do
+          allow(File).to receive(:exist?).with(package_json_path).and_return(false)
+        end
+
+        it "returns true" do
+          expect(described_class.skip_version_validation?).to be true
+        end
+
+        it "logs debug message about missing package.json" do
+          described_class.skip_version_validation?
+          expect(Rails.logger).to have_received(:debug)
+            .with("[React on Rails] Skipping validation - package.json not found")
+        end
+      end
+
+      context "when package.json exists" do
+        before do
+          allow(File).to receive(:exist?).with(package_json_path).and_return(true)
+        end
+
+        context "when running a generator" do
+          before do
+            stub_const("ARGV", ["generate", "react_on_rails:install"])
+          end
+
+          it "returns true" do
+            expect(described_class.skip_version_validation?).to be true
+          end
+
+          it "logs debug message about generator runtime" do
+            described_class.skip_version_validation?
+            expect(Rails.logger).to have_received(:debug)
+              .with("[React on Rails] Skipping validation during generator runtime")
+          end
+        end
+
+        context "when running a generator with short form" do
+          before do
+            stub_const("ARGV", ["g", "react_on_rails:install"])
+          end
+
+          it "returns true" do
+            expect(described_class.skip_version_validation?).to be true
+          end
+        end
+
+        context "when ARGV is empty" do
+          before do
+            stub_const("ARGV", [])
+          end
+
+          it "returns false" do
+            expect(described_class.skip_version_validation?).to be false
+          end
+        end
+
+        context "when running other commands" do
+          %w[server console runner].each do |command|
+            context "when running '#{command}'" do
+              before do
+                stub_const("ARGV", [command])
+              end
+
+              it "returns false" do
+                expect(described_class.skip_version_validation?).to be false
+              end
+            end
+          end
+        end
+      end
+    end
+
+    describe ".running_generator?" do
+      context "when ARGV is empty" do
+        before do
+          stub_const("ARGV", [])
+        end
+
+        it "returns false" do
+          expect(described_class.running_generator?).to be false
+        end
+      end
+
+      context "when ARGV.first is 'generate'" do
+        before do
+          stub_const("ARGV", %w[generate model User])
+        end
+
+        it "returns true" do
+          expect(described_class.running_generator?).to be true
+        end
+      end
+
+      context "when ARGV.first is 'g'" do
+        before do
+          stub_const("ARGV", %w[g controller Users])
+        end
+
+        it "returns true" do
+          expect(described_class.running_generator?).to be true
+        end
+      end
+
+      context "when ARGV.first is another command" do
+        before do
+          stub_const("ARGV", ["server"])
+        end
+
+        it "returns false" do
+          expect(described_class.running_generator?).to be false
+        end
+      end
+    end
+
+    describe ".package_json_missing?" do
+      let(:package_json_path) { "/fake/path/package.json" }
+
+      before do
+        allow(VersionChecker::NodePackageVersion).to receive(:package_json_path)
+          .and_return(package_json_path)
+      end
+
+      context "when package.json exists" do
+        before do
+          allow(File).to receive(:exist?).with(package_json_path).and_return(true)
+        end
+
+        it "returns false" do
+          expect(described_class.package_json_missing?).to be false
+        end
+      end
+
+      context "when package.json doesn't exist" do
+        before do
+          allow(File).to receive(:exist?).with(package_json_path).and_return(false)
+        end
+
+        it "returns true" do
+          expect(described_class.package_json_missing?).to be true
+        end
+      end
+    end
+  end
+end