diff --git a/vllm/engine/arg_utils.py b/vllm/engine/arg_utils.py
index 3db069ec64ee4..7b9adc401abcf 100644
--- a/vllm/engine/arg_utils.py
+++ b/vllm/engine/arg_utils.py
@@ -122,7 +122,7 @@ class EngineArgs:
     cpu_offload_gb: float = 0  # GiB
     gpu_memory_utilization: float = 0.90
     max_num_batched_tokens: Optional[int] = None
-    max_num_seqs: int = 256
+    max_num_seqs: Optional[int] = None
     max_logprobs: int = 20  # Default value for OpenAI Chat Completions API
     disable_log_stats: bool = False
     revision: Optional[str] = None
@@ -205,6 +205,9 @@ def __post_init__(self):
         # by user.
         if self.enable_prefix_caching is None:
             self.enable_prefix_caching = bool(envs.VLLM_USE_V1)
+        # Override max_num_seqs if it's not set by user.
+        if self.max_num_seqs is None:
+            self.max_num_seqs = 256 if not envs.VLLM_USE_V1 else 1024
 
         # support `EngineArgs(compilation_config={...})`
         # without having to manually construct a
@@ -1225,19 +1228,19 @@ def _override_v1_engine_args(self, usage_context: UsageContext) -> None:
         """
         assert envs.VLLM_USE_V1, "V1 is not enabled"
 
+        # V1 always uses chunked prefills.
+        self.enable_chunked_prefill = True
+        # When no user override, set the default values based on the usage
+        # context.
+        # TODO(woosuk): Tune the default values for different hardware.
         if self.max_num_batched_tokens is None:
-            # When no user override, set the default values based on the
-            # usage context.
             if usage_context == UsageContext.LLM_CLASS:
-                logger.warning("Setting max_num_batched_tokens to 8192 "
-                               "for LLM_CLASS usage context.")
-                self.max_num_seqs = 1024
                 self.max_num_batched_tokens = 8192
             elif usage_context == UsageContext.OPENAI_API_SERVER:
-                logger.warning("Setting max_num_batched_tokens to 2048 "
-                               "for OPENAI_API_SERVER usage context.")
-                self.max_num_seqs = 1024
                 self.max_num_batched_tokens = 2048
+            logger.warning(
+                "Setting max_num_batched_tokens to %d for %s usage context.",
+                self.max_num_batched_tokens, usage_context.value)
 
     def _override_v1_engine_config(self, engine_config: VllmConfig) -> None:
         """