diff --git a/doc/classes/ProjectSettings.xml b/doc/classes/ProjectSettings.xml
index 829f7370f7f..3483e385fbe 100644
--- a/doc/classes/ProjectSettings.xml
+++ b/doc/classes/ProjectSettings.xml
@@ -2527,7 +2527,7 @@
 			Sets which physics engine to use for 3D physics.
 			[b]DEFAULT[/b] is currently equivalent to [b]GodotPhysics3D[/b], but may change in future releases. Select an explicit implementation if you want to ensure that your project stays on the same engine.
 			[b]GodotPhysics3D[/b] is Godot's internal 3D physics engine.
-			[b]Jolt Physics[/b] is an alternative physics engine that is generally faster and more reliable than [b]GodotPhysics3D[/b]. As it was recently implemented, it is currently considered experimental and its behavior may change in future releases.
+			[b]Jolt Physics[/b] is an alternative physics engine that is generally faster and more reliable than [b]GodotPhysics3D[/b]. As it was recently implemented, it is currently considered experimental and its behavior may change in future releases. Jolt Physics is the default for projects created starting in Godot 4.6.
 			[b]Dummy[/b] is a 3D physics server that does nothing and returns only dummy values, effectively disabling all 3D physics functionality.
 			Third-party extensions and modules can add other physics engines to select with this setting.
 		</member>
diff --git a/editor/editor_node.cpp b/editor/editor_node.cpp
index 5e1cb86a6bb..f3f89e48d26 100644
--- a/editor/editor_node.cpp
+++ b/editor/editor_node.cpp
@@ -907,7 +907,17 @@ void EditorNode::_notification(int p_what) {
 			feature_profile_manager->notify_changed();
 
 			// Save the project after opening to mark it as last modified, except in headless mode.
+			// Also use this opportunity to ensure default settings are applied to new projects created from the command line
+			// using `touch project.godot`.
 			if (DisplayServer::get_singleton()->window_can_draw()) {
+				const String project_settings_path = ProjectSettings::get_singleton()->get_resource_path().path_join("project.godot");
+				// Check the file's size in bytes as an optimization. If it's under 10 bytes, the file is assumed to be empty.
+				if (FileAccess::get_size(project_settings_path) < 10) {
+					const HashMap<String, Variant> initial_settings = get_initial_settings();
+					for (const KeyValue<String, Variant> &initial_setting : initial_settings) {
+						ProjectSettings::get_singleton()->set_setting(initial_setting.key, initial_setting.value);
+					}
+				}
 				ProjectSettings::get_singleton()->save();
 			}
 
@@ -7528,6 +7538,17 @@ void EditorNode::notify_settings_overrides_changed() {
 	settings_overrides_changed = true;
 }
 
+// Returns the list of project settings to add to new projects. This is used by the
+// project manager creation dialog, but also applies to empty `project.godot` files
+// to cover the command line workflow of creating projects using `touch project.godot`.
+//
+// This is used to set better defaults for new projects without affecting existing projects.
+HashMap<String, Variant> EditorNode::get_initial_settings() {
+	HashMap<String, Variant> settings;
+	settings["physics/3d/physics_engine"] = "Jolt Physics";
+	return settings;
+}
+
 EditorNode::EditorNode() {
 	DEV_ASSERT(!singleton);
 	singleton = this;
diff --git a/editor/editor_node.h b/editor/editor_node.h
index a44975d417d..ca147a05e0a 100644
--- a/editor/editor_node.h
+++ b/editor/editor_node.h
@@ -768,6 +768,9 @@ public:
 	static bool immediate_confirmation_dialog(const String &p_text, const String &p_ok_text = TTR("Ok"), const String &p_cancel_text = TTR("Cancel"), uint32_t p_wrap_width = 0);
 
 	static bool is_cmdline_mode();
+
+	static HashMap<String, Variant> get_initial_settings();
+
 	static void cleanup();
 
 	EditorPluginList *get_editor_plugins_force_input_forwarding() { return editor_plugins_force_input_forwarding; }
diff --git a/editor/project_manager/project_dialog.cpp b/editor/project_manager/project_dialog.cpp
index b44f3a53494..031ab7711fe 100644
--- a/editor/project_manager/project_dialog.cpp
+++ b/editor/project_manager/project_dialog.cpp
@@ -34,6 +34,7 @@
 #include "core/io/dir_access.h"
 #include "core/io/zip_io.h"
 #include "core/version.h"
+#include "editor/editor_node.h"
 #include "editor/editor_string_names.h"
 #include "editor/gui/editor_file_dialog.h"
 #include "editor/settings/editor_settings.h"
@@ -545,6 +546,11 @@ void ProjectDialog::ok_pressed() {
 		initial_settings["application/config/features"] = project_features;
 		initial_settings["application/config/name"] = project_name->get_text().strip_edges();
 		initial_settings["application/config/icon"] = "res://icon.svg";
+		ProjectSettings::CustomMap extra_settings = EditorNode::get_initial_settings();
+		for (const KeyValue<String, Variant> &extra_setting : extra_settings) {
+			// Merge with other initial settings defined above.
+			initial_settings[extra_setting.key] = extra_setting.value;
+		}
 
 		Error err = ProjectSettings::get_singleton()->save_custom(path.path_join("project.godot"), initial_settings, Vector<String>(), false);
 		if (err != OK) {