diff --git a/packages/cli/src/commands/init/init.ts b/packages/cli/src/commands/init/init.ts
index b6351cb19a..926166b712 100644
--- a/packages/cli/src/commands/init/init.ts
+++ b/packages/cli/src/commands/init/init.ts
@@ -28,6 +28,8 @@ import {getBunVersionIfAvailable} from '../../tools/bun';
 import {getNpmVersionIfAvailable} from '../../tools/npm';
 import {getYarnVersionIfAvailable} from '../../tools/yarn';
 import {createHash} from 'crypto';
+import semver from 'semver';
+import {executeCommand} from '../../tools/executeCommand';
 
 const DEFAULT_VERSION = 'latest';
 
@@ -56,6 +58,30 @@ interface TemplateOptions {
   installCocoaPods?: string | boolean;
 }
 
+const YARN_VERSION = '3.6.4';
+
+const bumpYarnVersion = async (silent: boolean, root: string) => {
+  try {
+    let yarnVersion = semver.parse(getYarnVersionIfAvailable());
+    if (yarnVersion && semver.major(yarnVersion) === 1) {
+      await executeCommand('yarn', ['set', 'version', YARN_VERSION], {
+        root,
+        silent,
+      });
+
+      // React Native doesn't support PnP, so we need to set nodeLinker to node-modules. Read more here: https://github.com/react-native-community/cli/issues/27#issuecomment-1772626767
+
+      await executeCommand(
+        'yarn',
+        ['config', 'set', 'nodeLinker', 'node-modules'],
+        {root, silent},
+      );
+    }
+  } catch (e) {
+    logger.debug(e as string);
+  }
+};
+
 function doesDirectoryExist(dir: string) {
   return fs.existsSync(dir);
 }
@@ -168,6 +194,10 @@ async function createFromTemplate({
       packageName,
     });
 
+    if (packageManager === 'yarn') {
+      await bumpYarnVersion(false, projectDirectory);
+    }
+
     loader.succeed();
     const {postInitScript} = templateConfig;
     if (postInitScript) {
diff --git a/packages/cli/src/tools/executeCommand.ts b/packages/cli/src/tools/executeCommand.ts
new file mode 100644
index 0000000000..61bec24936
--- /dev/null
+++ b/packages/cli/src/tools/executeCommand.ts
@@ -0,0 +1,16 @@
+import {logger} from '@react-native-community/cli-tools';
+import execa from 'execa';
+
+export function executeCommand(
+  command: string,
+  args: Array<string>,
+  options: {
+    root: string;
+    silent?: boolean;
+  },
+) {
+  return execa(command, args, {
+    stdio: options.silent && !logger.isVerbose() ? 'pipe' : 'inherit',
+    cwd: options.root,
+  });
+}
diff --git a/packages/cli/src/tools/packageManager.ts b/packages/cli/src/tools/packageManager.ts
index b465f1858e..53921d944b 100644
--- a/packages/cli/src/tools/packageManager.ts
+++ b/packages/cli/src/tools/packageManager.ts
@@ -1,8 +1,7 @@
-import execa from 'execa';
-import {logger} from '@react-native-community/cli-tools';
 import {getYarnVersionIfAvailable, isProjectUsingYarn} from './yarn';
 import {getBunVersionIfAvailable, isProjectUsingBun} from './bun';
 import {getNpmVersionIfAvailable, isProjectUsingNpm} from './npm';
+import {executeCommand} from './executeCommand';
 
 export type PackageManager = keyof typeof packageManagers;
 
@@ -51,17 +50,6 @@ function configurePackageManager(
   return executeCommand(pm, args, options);
 }
 
-function executeCommand(
-  command: string,
-  args: Array<string>,
-  options: Options,
-) {
-  return execa(command, args, {
-    stdio: options.silent && !logger.isVerbose() ? 'pipe' : 'inherit',
-    cwd: options.root,
-  });
-}
-
 export function shouldUseYarn(options: Options) {
   if (options.packageManager === 'yarn') {
     return getYarnVersionIfAvailable();