diff --git a/zio-json/shared/src/main/scala-2.x/zio/json/macros.scala b/zio-json/shared/src/main/scala-2.x/zio/json/macros.scala
index 05c831cdc..3ca4469ef 100644
--- a/zio-json/shared/src/main/scala-2.x/zio/json/macros.scala
+++ b/zio-json/shared/src/main/scala-2.x/zio/json/macros.scala
@@ -297,10 +297,9 @@ object DeriveJsonDecoder {
 
         @tailrec
         private[this] def allowMissingValueDecoder(d: JsonDecoder[_]): Boolean = d match {
-          case _: OptionJsonDecoder[_]     => true
           case _: CollectionJsonDecoder[_] => !explicitEmptyCollections
           case d: MappedJsonDecoder[_]     => allowMissingValueDecoder(d.underlying)
-          case _                           => false
+          case _                           => true
         }
 
         override def unsafeDecodeMissing(trace: List[JsonError]): A = {
diff --git a/zio-json/shared/src/main/scala-3/zio/json/macros.scala b/zio-json/shared/src/main/scala-3/zio/json/macros.scala
index b9aac0d27..1e558faac 100644
--- a/zio-json/shared/src/main/scala-3/zio/json/macros.scala
+++ b/zio-json/shared/src/main/scala-3/zio/json/macros.scala
@@ -313,10 +313,9 @@ sealed class JsonDecoderDerivation(config: JsonCodecConfiguration) extends Deriv
 
         @tailrec
         private[this] def allowMissingValueDecoder(d: JsonDecoder[_]): Boolean = d match {
-          case _: OptionJsonDecoder[_] => true
           case _: CollectionJsonDecoder[_] => !explicitEmptyCollections
           case d: MappedJsonDecoder[_] => allowMissingValueDecoder(d.underlying)
-          case _                       => false
+          case _                       => true
         }
 
         override def unsafeDecodeMissing(trace: List[JsonError]): A = {
diff --git a/zio-json/shared/src/test/scala/zio/json/DecoderSpec.scala b/zio-json/shared/src/test/scala/zio/json/DecoderSpec.scala
index 7263b5252..014105de6 100644
--- a/zio-json/shared/src/test/scala/zio/json/DecoderSpec.scala
+++ b/zio-json/shared/src/test/scala/zio/json/DecoderSpec.scala
@@ -504,6 +504,21 @@ object DecoderSpec extends ZIOSpecDefault {
           assertTrue(
             json.fromJson[(Foo, Bar)] == Right((Foo(1), Bar("foo")))
           )
+        },
+        test("option custom codec") {
+          val json = """{"keyStatus": "certified"}"""
+          final case class Foo(v: String)
+          final case class RudderSettings(keyStatus: String, policyMode: Option[Foo])
+          implicit val encoderOptionPolicyMode: JsonEncoder[Option[Foo]] = JsonEncoder.string.contramap {
+            case None    => "default"
+            case Some(f) => f.v
+          }
+          implicit val decoderOptionPolicyMode: JsonDecoder[Option[Foo]] = JsonDecoder[Option[String]].mapOrFail {
+            case None | Some("default") => Right(None)
+            case Some(s)                => Right(Some(Foo(s)))
+          }
+          implicit lazy val codecRudderSettings: JsonCodec[RudderSettings] = DeriveJsonCodec.gen
+          assertTrue(json.fromJson[RudderSettings] == Right(RudderSettings("certified", None)))
         }
       ),
       suite("fromJsonAST")(
@@ -843,5 +858,4 @@ object DecoderSpec extends ZIOSpecDefault {
     implicit val eventDecoder: JsonDecoder[Event] = DeriveJsonDecoder.gen[Event]
     implicit val eventEncoder: JsonEncoder[Event] = DeriveJsonEncoder.gen[Event]
   }
-
 }