diff --git a/apis/kueue/v1beta1/clusterqueue_types.go b/apis/kueue/v1beta1/clusterqueue_types.go
index dced114ca6..cfd8aa2b7d 100644
--- a/apis/kueue/v1beta1/clusterqueue_types.go
+++ b/apis/kueue/v1beta1/clusterqueue_types.go
@@ -243,6 +243,21 @@ const (
 	PreemptionPolicyLowerOrNewerEqualPriority PreemptionPolicy = "LowerOrNewerEqualPriority"
 )
 
+type FlavorFungibilityPolicy string
+
+const (
+	Borrow        FlavorFungibilityPolicy = "Borrow"
+	Preempt       FlavorFungibilityPolicy = "Preempt"
+	TryNextFlavor FlavorFungibilityPolicy = "TryNextFlavor"
+)
+
+type FlavorFungibility struct {
+	// +kubebuilder:validation:Enum="Borrow,TryNextFlavor"
+	WhenCanBorrow FlavorFungibilityPolicy `json:"whenCanBorrow"`
+	// +kubebuilder:validation:Enum="Preempt,TryNextFlavor"
+	WhenCanPreempt FlavorFungibilityPolicy `json:"whenCanPreempt"`
+}
+
 // ClusterQueuePreemption contains policies to preempt Workloads from this
 // ClusterQueue or the ClusterQueue's cohort.
 type ClusterQueuePreemption struct {
@@ -276,6 +291,8 @@ type ClusterQueuePreemption struct {
 	// +kubebuilder:default=Never
 	// +kubebuilder:validation:Enum=Never;LowerPriority;LowerOrNewerEqualPriority
 	WithinClusterQueue PreemptionPolicy `json:"withinClusterQueue,omitempty"`
+
+	FlavorFungibility FlavorFungibility `json:"flavorFungibility"`
 }
 
 //+kubebuilder:object:root=true
diff --git a/pkg/cache/cache.go b/pkg/cache/cache.go
index 97d45a56d9..860172ea15 100644
--- a/pkg/cache/cache.go
+++ b/pkg/cache/cache.go
@@ -31,6 +31,7 @@ import (
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
 
+	"sigs.k8s.io/kueue/apis/kueue/v1beta1"
 	kueue "sigs.k8s.io/kueue/apis/kueue/v1beta1"
 	utilindexer "sigs.k8s.io/kueue/pkg/controller/core/indexer"
 	"sigs.k8s.io/kueue/pkg/metrics"
@@ -141,6 +142,8 @@ type ClusterQueue struct {
 	Preemption        kueue.ClusterQueuePreemption
 	Status            metrics.ClusterQueueStatus
 
+	FlavorFungibility v1beta1.FlavorFungibility
+
 	// The following fields are not populated in a snapshot.
 
 	// Key is localQueue's key (namespace/name).
diff --git a/pkg/scheduler/flavorassigner/flavorassigner.go b/pkg/scheduler/flavorassigner/flavorassigner.go
index 50ea8a50a8..30e084f556 100644
--- a/pkg/scheduler/flavorassigner/flavorassigner.go
+++ b/pkg/scheduler/flavorassigner/flavorassigner.go
@@ -32,6 +32,7 @@ import (
 	"k8s.io/component-helpers/scheduling/corev1/nodeaffinity"
 	"k8s.io/utils/pointer"
 
+	"sigs.k8s.io/kueue/apis/kueue/v1beta1"
 	kueue "sigs.k8s.io/kueue/apis/kueue/v1beta1"
 	"sigs.k8s.io/kueue/pkg/cache"
 	"sigs.k8s.io/kueue/pkg/workload"
@@ -339,6 +340,9 @@ func (a *Assignment) findFlavorForResourceGroup(
 	var bestAssignment ResourceAssignment
 	bestAssignmentMode := NoFit
 
+	policyBorrow := cq.FlavorFungibility.WhenCanBorrow
+	policyPreempt := cq.FlavorFungibility.WhenCanPreempt
+
 	// We will only check against the flavors' labels for the resource.
 	selector := flavorSelector(spec, rg.LabelKeys)
 	for _, flvQuotas := range rg.Flavors {
@@ -364,6 +368,7 @@ func (a *Assignment) findFlavorForResourceGroup(
 			continue
 		}
 
+		whetherNeedBorrowing := false
 		assignments := make(ResourceAssignment, len(requests))
 		// Calculate representativeMode for this assignment as the worst mode among all requests.
 		representativeMode := Fit
@@ -376,6 +381,7 @@ func (a *Assignment) findFlavorForResourceGroup(
 			}
 			if mode < representativeMode {
 				representativeMode = mode
+				whetherNeedBorrowing = whetherNeedBorrowing || borrow > 0
 			}
 			if representativeMode == NoFit {
 				// The flavor doesn't fit, no need to check other resources.
@@ -389,13 +395,25 @@ func (a *Assignment) findFlavorForResourceGroup(
 			}
 		}
 
+		if representativeMode == Preempt && policyPreempt == v1beta1.Preempt {
+			return assignments, nil
+		}
+
+		if representativeMode == Fit && whetherNeedBorrowing && policyBorrow == v1beta1.Borrow {
+			return assignments, nil
+		}
+
+		if representativeMode == Fit && !whetherNeedBorrowing {
+			return assignments, nil
+		}
+
 		if representativeMode > bestAssignmentMode {
 			bestAssignment = assignments
 			bestAssignmentMode = representativeMode
-			if bestAssignmentMode == Fit {
-				// All the resources fit in the cohort, no need to check more flavors.
-				return bestAssignment, nil
-			}
+			// if bestAssignmentMode == Fit {
+			// 	// All the resources fit in the cohort, no need to check more flavors.
+			// 	return bestAssignment, nil
+			// }
 		}
 	}
 	return bestAssignment, status