diff --git a/src/accelerate/accelerator.py b/src/accelerate/accelerator.py
index c859bcc8cb2..e5de09794ed 100755
--- a/src/accelerate/accelerator.py
+++ b/src/accelerate/accelerator.py
@@ -1354,7 +1354,7 @@ def prepare_model(self, model: torch.nn.Module, device_placement: bool = None, e
         elif device_placement and not has_hf_device_map:
             model = model.to(self.device)
 
-        if self.native_amp:
+        if self.native_amp and self.distributed_type != DistributedType.FSDP:
             model._original_forward = model.forward
             model_forward_func = model.forward.__func__ if hasattr(model.forward, "__func__") else model.forward
             autocast_context = get_mixed_precision_context_manager(self.native_amp, self.autocast_handler)
diff --git a/src/accelerate/commands/config/cluster.py b/src/accelerate/commands/config/cluster.py
index 3634a7ed320..ba2f0535dfc 100644
--- a/src/accelerate/commands/config/cluster.py
+++ b/src/accelerate/commands/config/cluster.py
@@ -386,9 +386,9 @@ def get_cluster_input():
                 error_message="Please enter yes or no.",
             )
             fsdp_config["fsdp_sync_module_states"] = _ask_field(
-                "Do you want each individually wrapped FSDP unit to broadcast module parameters from rank 0 at the start? [yes/NO]: ",
+                "Do you want each individually wrapped FSDP unit to broadcast module parameters from rank 0 at the start? [YES/no]: ",
                 _convert_yes_no_to_bool,
-                default=False,
+                default=True,
                 error_message="Please enter yes or no.",
             )
 
diff --git a/src/accelerate/commands/launch.py b/src/accelerate/commands/launch.py
index 0e51cdfa9e4..fcabd13a78b 100644
--- a/src/accelerate/commands/launch.py
+++ b/src/accelerate/commands/launch.py
@@ -526,7 +526,7 @@ def launch_command_parser(subparsers=None):
     )
     fsdp_args.add_argument(
         "--fsdp_sync_module_states",
-        default="false",
+        default="true",
         type=str,
         help="If True, each individually wrapped FSDP unit will broadcast module parameters from rank 0."
         " (useful only when `use_fsdp` flag is passed).",
diff --git a/src/accelerate/utils/dataclasses.py b/src/accelerate/utils/dataclasses.py
index e51f069f309..57294885546 100644
--- a/src/accelerate/utils/dataclasses.py
+++ b/src/accelerate/utils/dataclasses.py
@@ -859,7 +859,7 @@ class FullyShardedDataParallelPlugin:
         },
     )
     sync_module_states: bool = field(
-        default=False,
+        default=True,
         metadata={
             "help": "If True, each individually wrapped FSDP unit will broadcast module parameters from rank 0 "
             "to ensure they are the same across all ranks after initialization"
@@ -874,14 +874,7 @@ class FullyShardedDataParallelPlugin:
     )
 
     def __post_init__(self):
-        from torch.distributed.fsdp.fully_sharded_data_parallel import (
-            BackwardPrefetch,
-            CPUOffload,
-            FullOptimStateDictConfig,
-            FullStateDictConfig,
-            ShardingStrategy,
-            StateDictType,
-        )
+        from torch.distributed.fsdp.fully_sharded_data_parallel import BackwardPrefetch, CPUOffload, ShardingStrategy
 
         prefix = "FSDP_"
         if self.sharding_strategy is None:
@@ -900,18 +893,14 @@ def __post_init__(self):
 
         if self.state_dict_type is None:
             state_dict_type_policy = os.environ.get(prefix + "STATE_DICT_TYPE", "FULL_STATE_DICT")
-            self.state_dict_type = StateDictType(FSDP_STATE_DICT_TYPE.index(state_dict_type_policy) + 1)
-
-            if self.state_dict_type == StateDictType.FULL_STATE_DICT:
-                if self.state_dict_config is None:
-                    self.state_dict_config = FullStateDictConfig(offload_to_cpu=True, rank0_only=True)
-                if self.optim_state_dict_config is None:
-                    self.optim_state_dict_config = FullOptimStateDictConfig(offload_to_cpu=True, rank0_only=True)
-
+            self.set_state_dict_type(state_dict_type_policy)
         self.use_orig_params = strtobool(os.environ.get(prefix + "USE_ORIG_PARAMS", "False")) == 1
-        self.sync_module_states = strtobool(os.environ.get(prefix + "SYNC_MODULE_STATES", "False")) == 1
+        self.sync_module_states = strtobool(os.environ.get(prefix + "SYNC_MODULE_STATES", "True")) == 1
         self.forward_prefetch = strtobool(os.environ.get(prefix + "FORWARD_PREFETCH", "False")) == 1
 
+        if self.sync_module_states:
+            self.param_init_fn = lambda x: x.to_empty(device=torch.cuda.current_device(), recurse=False)
+
     @staticmethod
     def get_module_class_from_name(module, name):
         """
@@ -976,6 +965,21 @@ def set_mixed_precision(self, mixed_precision):
         if self.mixed_precision_policy is None:
             self.mixed_precision_policy = MixedPrecision(param_dtype=dtype, reduce_dtype=dtype, buffer_dtype=dtype)
 
+    def set_state_dict_type(self, state_dict_type_policy):
+        from torch.distributed.fsdp.fully_sharded_data_parallel import (
+            FullOptimStateDictConfig,
+            FullStateDictConfig,
+            StateDictType,
+        )
+
+        self.state_dict_type = StateDictType(FSDP_STATE_DICT_TYPE.index(state_dict_type_policy) + 1)
+
+        if self.state_dict_type == StateDictType.FULL_STATE_DICT:
+            if self.state_dict_config is None:
+                self.state_dict_config = FullStateDictConfig(offload_to_cpu=True, rank0_only=True)
+            if self.optim_state_dict_config is None:
+                self.optim_state_dict_config = FullOptimStateDictConfig(offload_to_cpu=True, rank0_only=True)
+
 
 @dataclass
 class MegatronLMPlugin: