diff --git a/vllm/config.py b/vllm/config.py
index 24f536c04ae65..1eb5e10452892 100644
--- a/vllm/config.py
+++ b/vllm/config.py
@@ -723,17 +723,11 @@ def _verify_args(self) -> None:
         if self.distributed_executor_backend == "ray":
             from vllm.executor import ray_utils
             ray_utils.assert_ray_available()
-        if not self.disable_custom_all_reduce and self.world_size > 1:
-            if is_hip():
-                self.disable_custom_all_reduce = True
-                logger.info(
-                    "Disabled the custom all-reduce kernel because it is not "
-                    "supported on AMD GPUs.")
-            elif self.pipeline_parallel_size > 1:
-                self.disable_custom_all_reduce = True
-                logger.info(
-                    "Disabled the custom all-reduce kernel because it is not "
-                    "supported with pipeline parallelism.")
+        if is_hip():
+            self.disable_custom_all_reduce = True
+            logger.info(
+                "Disabled the custom all-reduce kernel because it is not "
+                "supported on AMD GPUs.")
         if self.ray_workers_use_nsight and (
                 not self.distributed_executor_backend == "ray"):
             raise ValueError("Unable to use nsight profiling unless workers "
diff --git a/vllm/distributed/parallel_state.py b/vllm/distributed/parallel_state.py
index faf9177adc8d3..66ffe6e8a9fa9 100644
--- a/vllm/distributed/parallel_state.py
+++ b/vllm/distributed/parallel_state.py
@@ -719,14 +719,19 @@ def init_world_group(ranks: List[int], local_rank: int,
     )
 
 
-def init_model_parallel_group(group_ranks: List[List[int]], local_rank: int,
-                              backend: str) -> GroupCoordinator:
+def init_model_parallel_group(
+        group_ranks: List[List[int]],
+        local_rank: int,
+        backend: str,
+        use_custom_allreduce: Optional[bool] = None) -> GroupCoordinator:
+    if use_custom_allreduce is None:
+        use_custom_allreduce = _ENABLE_CUSTOM_ALL_REDUCE
     return GroupCoordinator(
         group_ranks=group_ranks,
         local_rank=local_rank,
         torch_distributed_backend=backend,
         use_pynccl=True,
-        use_custom_allreduce=_ENABLE_CUSTOM_ALL_REDUCE,
+        use_custom_allreduce=use_custom_allreduce,
     )
 
 
@@ -888,8 +893,11 @@ def initialize_model_parallel(
     for i in range(num_pipeline_model_parallel_groups):
         ranks = list(range(i, world_size, num_pipeline_model_parallel_groups))
         group_ranks.append(ranks)
+    # pipeline parallel does not need custom allreduce
     _PP = init_model_parallel_group(group_ranks,
-                                    get_world_group().local_rank, backend)
+                                    get_world_group().local_rank,
+                                    backend,
+                                    use_custom_allreduce=False)
 
 
 def ensure_model_parallel_initialized(