diff --git a/tests/test_model_utils.py b/tests/test_model_utils.py
index 7e3fde991dd..bbaf87a11f4 100644
--- a/tests/test_model_utils.py
+++ b/tests/test_model_utils.py
@@ -12,9 +12,12 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 
+import pytest
+import transformers
+from packaging.version import Version
 from transformers import AutoModelForCausalLM
 
-from trl.models.utils import disable_gradient_checkpointing
+from trl.models.utils import _override_model_generation_config, disable_gradient_checkpointing
 
 
 class TestDisableGradientCheckpointing:
@@ -32,3 +35,56 @@ def test_when_enabled(self):
         with disable_gradient_checkpointing(model):
             assert model.is_gradient_checkpointing is False
         assert model.is_gradient_checkpointing is True
+
+
+class TestOverrideModelGenerationConfig:
+    """Tests for _override_model_generation_config (workaround for transformers#42762).
+
+    Qwen2.5 models ship with a model-specific generation_config that sets temperature
+    close to 0 (near-greedy). On transformers < 5.0, passing generation_config to
+    model.generate() merges model defaults on top, silently overriding training kwargs
+    such as temperature=1.0. _override_model_generation_config temporarily replaces the
+    model's generation_config with the training kwargs so the merge is a no-op.
+    """
+
+    def test_overrides_model_generation_config_during_context(self):
+        """Inside the context, model.generation_config reflects the training kwargs.
+
+        Only applies to transformers < 5.0; on v5+ the upstream bug is fixed and
+        the context manager is a no-op.
+        """
+        if Version(transformers.__version__) >= Version("5.0.0"):
+            pytest.skip("transformers >= 5.0 fixes the upstream bug; context manager is a no-op")
+        model = AutoModelForCausalLM.from_pretrained("trl-internal-testing/tiny-Qwen2ForCausalLM-2.5")
+        training_kwargs = {"temperature": 1.0, "do_sample": True}
+        with _override_model_generation_config(model, generation_kwargs=training_kwargs):
+            assert model.generation_config.temperature == 1.0
+            assert model.generation_config.do_sample is True
+
+    def test_restores_original_generation_config_after_context(self):
+        """After the context, model.generation_config is restored to its original value."""
+        model = AutoModelForCausalLM.from_pretrained("trl-internal-testing/tiny-Qwen2ForCausalLM-2.5")
+        original_temperature = model.generation_config.temperature
+        original_config_id = id(model.generation_config)
+        training_kwargs = {"temperature": 1.0, "do_sample": True}
+        with _override_model_generation_config(model, generation_kwargs=training_kwargs):
+            pass
+        assert model.generation_config.temperature == original_temperature
+        assert id(model.generation_config) == original_config_id
+
+    def test_no_op_when_generation_kwargs_is_none(self):
+        """When generation_kwargs is None, the context manager yields without modifying the model."""
+        model = AutoModelForCausalLM.from_pretrained("trl-internal-testing/tiny-Qwen2ForCausalLM-2.5")
+        original_config_id = id(model.generation_config)
+        with _override_model_generation_config(model, generation_kwargs=None):
+            assert id(model.generation_config) == original_config_id
+
+    def test_no_op_on_transformers_v5(self):
+        """On transformers >= 5.0 the upstream bug is fixed; the context manager is a no-op."""
+        if Version(transformers.__version__) < Version("5.0.0"):
+            return  # only meaningful on transformers v5+
+        model = AutoModelForCausalLM.from_pretrained("trl-internal-testing/tiny-Qwen2ForCausalLM-2.5")
+        original_config_id = id(model.generation_config)
+        training_kwargs = {"temperature": 1.0}
+        with _override_model_generation_config(model, generation_kwargs=training_kwargs):
+            assert id(model.generation_config) == original_config_id
diff --git a/trl/trainer/grpo_trainer.py b/trl/trainer/grpo_trainer.py
index 67c1c0ecc6b..6348701f559 100644
--- a/trl/trainer/grpo_trainer.py
+++ b/trl/trainer/grpo_trainer.py
@@ -1362,7 +1362,10 @@ def _generate_single_turn(self, prompt_ids, images, multimodal_fields):
             with (
                 profiling_context(self, "transformers.generate_batch"),
                 unwrap_model_for_generation(
-                    self.model_wrapped, self.accelerator, gather_deepspeed3_params=self.args.ds3_gather_for_generation
+                    self.model_wrapped,
+                    self.accelerator,
+                    gather_deepspeed3_params=self.args.ds3_gather_for_generation,
+                    generation_kwargs=self.generation_kwargs,  # Override model.generation_config with generation_kwargs to fix transformers#42762
                 ) as unwrapped_model,
                 torch.no_grad(),
                 FSDP.summon_full_params(self.model_wrapped, recurse=False) if self.is_fsdp_enabled else nullcontext(),
diff --git a/trl/trainer/rloo_trainer.py b/trl/trainer/rloo_trainer.py
index 0613241dc6a..50d7e844fcb 100644
--- a/trl/trainer/rloo_trainer.py
+++ b/trl/trainer/rloo_trainer.py
@@ -981,7 +981,10 @@ def _generate_single_turn(self, prompt_ids, images, multimodal_fields):
             with (
                 profiling_context(self, "transformers.generate_batch"),
                 unwrap_model_for_generation(
-                    self.model_wrapped, self.accelerator, gather_deepspeed3_params=self.args.ds3_gather_for_generation
+                    self.model_wrapped,
+                    self.accelerator,
+                    gather_deepspeed3_params=self.args.ds3_gather_for_generation,
+                    generation_kwargs=self.generation_kwargs,  # Override model.generation_config with generation_kwargs to fix transformers#42762
                 ) as unwrapped_model,
                 torch.no_grad(),
                 FSDP.summon_full_params(self.model_wrapped, recurse=False) if self.is_fsdp_enabled else nullcontext(),