diff --git a/.changeset/silent-pianos-battle.md b/.changeset/silent-pianos-battle.md
new file mode 100644
index 0000000000..0e323a1a44
--- /dev/null
+++ b/.changeset/silent-pianos-battle.md
@@ -0,0 +1,5 @@
+---
+'@shopify/cli-hydrogen': patch
+---
+
+Fix bug in CLI not recognising the --install-deps flag when creating projects
diff --git a/packages/cli/src/commands/hydrogen/init.test.ts b/packages/cli/src/commands/hydrogen/init.test.ts
new file mode 100644
index 0000000000..75e5fbf94c
--- /dev/null
+++ b/packages/cli/src/commands/hydrogen/init.test.ts
@@ -0,0 +1,93 @@
+import {describe, it, expect, vi, beforeEach} from 'vitest';
+import {temporaryDirectoryTask} from 'tempy';
+import {runInit} from './init.js';
+import {ui} from '@shopify/cli-kit';
+import {installNodeModules} from '@shopify/cli-kit/node/node-package-manager';
+
+describe('init', () => {
+  beforeEach(() => {
+    vi.resetAllMocks();
+    vi.mock('@shopify/cli-kit');
+    vi.mock('../../utils/transpile-ts.js');
+    vi.mock('../../utils/template-downloader.js', async () => ({
+      getLatestTemplates: () => Promise.resolve({}),
+    }));
+    vi.mock('@shopify/cli-kit/node/node-package-manager');
+    vi.mocked(ui.prompt).mockImplementation(() =>
+      Promise.resolve({installDeps: 'false'}),
+    );
+  });
+
+  const defaultOptions = (stubs: Record<any, unknown>) => ({
+    template: 'hello-world',
+    language: 'js',
+    path: 'path/to/project',
+    ...stubs,
+  });
+
+  describe('installDeps', () => {
+    it('prompts the user to install dependencies when installDeps is not passed', async () => {
+      await temporaryDirectoryTask(async (tmpDir) => {
+        // Given
+        const options = defaultOptions({path: tmpDir});
+
+        vi.mocked(ui.prompt).mockImplementation(() =>
+          Promise.resolve({installDeps: 'false'}),
+        );
+
+        // When
+        await runInit(options);
+
+        // Then
+        expect(ui.prompt).toHaveBeenCalledWith(
+          expect.arrayContaining([
+            expect.objectContaining({
+              name: 'installDeps',
+            }),
+          ]),
+        );
+        expect(installNodeModules).not.toHaveBeenCalled();
+      });
+    });
+
+    it('does not prompt the user to install dependencies when installDeps is true', async () => {
+      await temporaryDirectoryTask(async (tmpDir) => {
+        // Given
+        const options = defaultOptions({installDeps: true, path: tmpDir});
+
+        // When
+        await runInit(options);
+
+        // Then
+        expect(ui.prompt).not.toHaveBeenCalledWith(
+          expect.arrayContaining([
+            expect.objectContaining({
+              name: 'installDeps',
+            }),
+          ]),
+        );
+        expect(installNodeModules).toHaveBeenCalled();
+      });
+    });
+
+    it('does not show a prompt to install dependencies when installDeps is false', async () => {
+      await temporaryDirectoryTask(async (tmpDir) => {
+        // Given
+        const options = defaultOptions({installDeps: false, path: tmpDir});
+
+        // When
+        await runInit(options);
+
+        // Then
+        expect(ui.prompt).not.toHaveBeenCalledWith(
+          expect.arrayContaining([
+            expect.objectContaining({
+              name: 'installDeps',
+            }),
+          ]),
+        );
+        expect(installNodeModules).not.toHaveBeenCalled();
+      });
+    });
+  });
+});
diff --git a/packages/cli/src/commands/hydrogen/init.ts b/packages/cli/src/commands/hydrogen/init.ts
index 747edc55e2..861f9f5c31 100644
--- a/packages/cli/src/commands/hydrogen/init.ts
+++ b/packages/cli/src/commands/hydrogen/init.ts
@@ -6,7 +6,11 @@ import {
 import {renderFatalError} from '@shopify/cli-kit/node/ui';
 import Flags from '@oclif/core/lib/flags.js';
 import {output, path} from '@shopify/cli-kit';
-import {commonFlags, parseProcessFlags} from '../../utils/flags.js';
+import {
+  commonFlags,
+  parseProcessFlags,
+  flagsToCamelObject,
+} from '../../utils/flags.js';
 import {transpileProject} from '../../utils/transpile-ts.js';
 import {getLatestTemplates} from '../../utils/template-downloader.js';
 import {checkHydrogenVersion} from '../../utils/check-version.js';
@@ -46,7 +50,7 @@ export default class Init extends Command {
     // @ts-ignore
     const {flags} = await this.parse(Init);
 
-    await runInit({...flags});
+    await runInit(flagsToCamelObject(flags));
   }
 }