diff --git a/R/nullmodel_data.R b/R/nullmodel_data.R
index 697de1314..42aa52c7a 100644
--- a/R/nullmodel_data.R
+++ b/R/nullmodel_data.R
@@ -29,7 +29,7 @@ set_encoding(
     predictor_indicators = "traditional",
     compute_intercept = FALSE,
     remove_intercept = FALSE,
-    allow_sparse_x = FALSE
+    allow_sparse_x = TRUE
   )
 )
 
@@ -53,7 +53,7 @@ set_encoding(
     predictor_indicators = "traditional",
     compute_intercept = FALSE,
     remove_intercept = FALSE,
-    allow_sparse_x = FALSE
+    allow_sparse_x = TRUE
   )
 )
 
diff --git a/tests/testthat/_snaps/nullmodel.md b/tests/testthat/_snaps/nullmodel.md
new file mode 100644
index 000000000..ee456ea2b
--- /dev/null
+++ b/tests/testthat/_snaps/nullmodel.md
@@ -0,0 +1,48 @@
+# bad input
+
+    Code
+      translate(set_engine(null_model(mode = "regression")))
+    Condition
+      Error in `set_engine()`:
+      ! Missing engine. Possible mode/engine combinations are: classification {parsnip} and regression {parsnip}.
+
+---
+
+    Code
+      translate(set_engine(null_model(), "wat?"))
+    Condition
+      Error in `set_engine()`:
+      x Engine "wat?" is not supported for `null_model()`
+      i See `show_engines("null_model")`.
+
+# nullmodel execution
+
+    Code
+      res <- fit(set_engine(null_model(mode = "regression"), "parsnip"), hpc_bad_form,
+      data = hpc)
+    Condition
+      Error:
+      ! object 'term' not found
+
+# null_model printing
+
+    Code
+      print(null_model(mode = "classification"))
+    Output
+      Null Model Specification (classification)
+      
+      Computational engine: parsnip 
+      
+
+---
+
+    Code
+      print(translate(set_engine(null_model(mode = "classification"), "parsnip")))
+    Output
+      Null Model Specification (classification)
+      
+      Computational engine: parsnip 
+      
+      Model fit template:
+      parsnip::nullmodel(x = missing_arg(), y = missing_arg())
+
diff --git a/tests/testthat/test-nullmodel.R b/tests/testthat/test-nullmodel.R
index 9195aa706..47e31bbf1 100644
--- a/tests/testthat/test-nullmodel.R
+++ b/tests/testthat/test-nullmodel.R
@@ -147,3 +147,85 @@ test_that("check_args() works", {
   # Here for completeness, no checking is done
   expect_true(TRUE)
 })
+
+# ------------------------------------------------------------------------------
+
+test_that("null_model works with sparse matrix data - regression", {
+  skip_if_not_installed("sparsevctrs")
+
+  # Make materialization of sparse vectors throw an error
+  withr::local_options("sparsevctrs.verbose_materialize" = 3)
+
+  hotel_data <- sparse_hotel_rates()
+
+  spec <- null_model(mode = "regression") |>
+    set_engine("parsnip")
+
+  expect_no_error(
+    null_fit <- fit_xy(spec, x = hotel_data[, -1], y = hotel_data[, 1])
+  )
+
+  expect_no_error(
+    preds <- predict(null_fit, hotel_data)
+  )
+
+  # All predictions should be the mean of the outcome
+  expect_true(all(preds$.pred == preds$.pred[1]))
+})
+
+test_that("null_model works with sparse matrix data - classification", {
+  skip_if_not_installed("sparsevctrs")
+
+  # Make materialization of sparse vectors throw an error
+  withr::local_options("sparsevctrs.verbose_materialize" = 3)
+
+  hotel_data <- sparse_hotel_rates()
+
+  # Create a factor outcome for classification
+  y_class <- factor(ifelse(hotel_data[, 1] > median(hotel_data[, 1]), "high", "low"))
+
+  spec <- null_model(mode = "classification") |>
+    set_engine("parsnip")
+
+  expect_no_error(
+    null_fit <- fit_xy(spec, x = hotel_data[, -1], y = y_class)
+  )
+
+  expect_no_error(
+    preds <- predict(null_fit, hotel_data)
+  )
+
+  # All predictions should be the same (most prevalent class)
+  expect_true(all(preds$.pred_class == preds$.pred_class[1]))
+
+  expect_no_error(
+    probs <- predict(null_fit, hotel_data, type = "prob")
+  )
+
+  # All probability predictions should be identical
+  expect_true(all(probs$.pred_high == probs$.pred_high[1]))
+  expect_true(all(probs$.pred_low == probs$.pred_low[1]))
+})
+
+test_that("null_model works with sparse tibble data - regression", {
+  skip_if_not_installed("sparsevctrs")
+
+  # Make materialization of sparse vectors throw an error
+  withr::local_options("sparsevctrs.verbose_materialize" = 3)
+
+  hotel_data <- sparse_hotel_rates(tibble = TRUE)
+
+  spec <- null_model(mode = "regression") |>
+    set_engine("parsnip")
+
+  expect_no_error(
+    null_fit <- fit_xy(spec, x = hotel_data[, -1], y = hotel_data[, 1])
+  )
+
+  expect_no_error(
+    preds <- predict(null_fit, hotel_data)
+  )
+
+  # All predictions should be the mean of the outcome
+  expect_true(all(preds$.pred == preds$.pred[1]))
+})