diff --git a/src/terraform/NOTES.md b/src/terraform/NOTES.md
index 2c1540aee..74a90639e 100644
--- a/src/terraform/NOTES.md
+++ b/src/terraform/NOTES.md
@@ -4,6 +4,37 @@
 
 On August 10, 2023, HashiCorp announced a change of license for its products, including Terraform. After ~9 years of Terraform being open source under the MPL v2 license, it was to move under a non-open source BSL v1.1 license, starting from the next (1.6) version. See https://github.com/hashicorp/terraform/blob/main/LICENSE
 
+## Custom Download Server
+
+The `customDownloadServer` option allows you to specify an alternative server for downloading Terraform and Sentinel packages. This is useful for organizations that maintain internal mirrors or have proxies for HashiCorp downloads.
+
+When using this option:
+- Provide the complete URL including protocol (e.g., `https://my-mirror.example.com`)
+- The server should mirror the HashiCorp releases structure
+
+Example:
+```json
+"features": {
+    "ghcr.io/devcontainers/features/terraform:1": {
+        "customDownloadServer": "https://my-mirror.example.com"
+    }
+}
+```
+
+### ⚠️ Security Considerations
+
+When using a custom download server, be aware of the following security implications:
+
+- **Server Verification**: Always verify that the custom server is trustworthy and maintained by your organization or a trusted entity. Using an untrusted or compromised server could lead to downloading malicious software.
+  
+- **Supply Chain Risks**: Malicious actors may attempt to distribute compromised versions of Terraform that contain backdoors, cryptominers, or other harmful code.
+  
+- **Integrity Checks**: The feature performs SHA256 checks when available, but these are only as trustworthy as the source of the checksums. If both the binaries and checksums come from a compromised server, the integrity check may pass despite the software being malicious.
+  
+- **Organizational Policy**: Ensure your custom download server adheres to your organization's security policies and implements proper access controls.
+
+Always use the official HashiCorp download server (https://releases.hashicorp.com) unless you have a specific need for an alternative source.
+
 ## OS Support
 
 This Feature should work on recent versions of Debian/Ubuntu-based distributions with the `apt` package manager installed.
diff --git a/src/terraform/devcontainer-feature.json b/src/terraform/devcontainer-feature.json
index d022f83c1..db1bacc67 100644
--- a/src/terraform/devcontainer-feature.json
+++ b/src/terraform/devcontainer-feature.json
@@ -1,6 +1,6 @@
 {
     "id": "terraform",
-    "version": "1.3.10",
+    "version": "1.4.0",
     "name": "Terraform, tflint, and TFGrunt",
     "documentationURL": "https://github.com/devcontainers/features/tree/main/src/terraform",
     "description": "Installs the Terraform CLI and optionally TFLint and Terragrunt. Auto-detects latest version and installs needed dependencies.",
@@ -54,6 +54,11 @@
             "type": "string",
             "default": "",
             "description": "Connect to a keyserver using a proxy by configuring this option"
+        },
+        "customDownloadServer": {
+            "type": "string",
+            "default": "",
+            "description": "Custom server URL for downloading Terraform and Sentinel packages, including protocol (e.g., https://releases.hashicorp.com). If not provided, the default HashiCorp download server (https://releases.hashicorp.com) will be used."
         }
     },
     "customizations": {
diff --git a/src/terraform/install.sh b/src/terraform/install.sh
index a2aace9b4..fb7abc6ee 100755
--- a/src/terraform/install.sh
+++ b/src/terraform/install.sh
@@ -18,6 +18,7 @@ TERRAGRUNT_VERSION="${TERRAGRUNT:-"latest"}"
 INSTALL_SENTINEL=${INSTALLSENTINEL:-false}
 INSTALL_TFSEC=${INSTALLTFSEC:-false}
 INSTALL_TERRAFORM_DOCS=${INSTALLTERRAFORMDOCS:-false}
+CUSTOM_DOWNLOAD_SERVER="${CUSTOMDOWNLOADSERVER:-""}"
 
 TERRAFORM_SHA256="${TERRAFORM_SHA256:-"automatic"}"
 TFLINT_SHA256="${TFLINT_SHA256:-"automatic"}"
@@ -26,6 +27,11 @@ SENTINEL_SHA256="${SENTINEL_SHA256:-"automatic"}"
 TFSEC_SHA256="${TFSEC_SHA256:-"automatic"}"
 TERRAFORM_DOCS_SHA256="${TERRAFORM_DOCS_SHA256:-"automatic"}"
 
+HASHICORP_RELEASES_URL="https://releases.hashicorp.com"
+if [ -n "${CUSTOM_DOWNLOAD_SERVER}" ]; then
+    HASHICORP_RELEASES_URL="${CUSTOM_DOWNLOAD_SERVER}"
+fi
+
 TERRAFORM_GPG_KEY="72D7468F"
 TFLINT_GPG_KEY_URI="https://raw.githubusercontent.com/terraform-linters/tflint/v0.46.1/8CE69160EB3F2FE9.key"
 KEYSERVER_PROXY="${HTTPPROXY:-"${HTTP_PROXY:-""}"}"
@@ -357,7 +363,7 @@ find_version_from_git_tags TERRAGRUNT_VERSION "$terragrunt_url"
 install_terraform() {
     local TERRAFORM_VERSION=$1
     terraform_filename="terraform_${TERRAFORM_VERSION}_linux_${architecture}.zip"
-    curl -sSL -o ${terraform_filename} "https://releases.hashicorp.com/terraform/${TERRAFORM_VERSION}/${terraform_filename}"
+    curl -sSL -o ${terraform_filename} "${HASHICORP_RELEASES_URL}/terraform/${TERRAFORM_VERSION}/${terraform_filename}"
 }
 
 mkdir -p /tmp/tf-downloads
@@ -373,8 +379,8 @@ fi
 if [ "${TERRAFORM_SHA256}" != "dev-mode" ]; then
     if [ "${TERRAFORM_SHA256}" = "automatic" ]; then
         receive_gpg_keys TERRAFORM_GPG_KEY
-        curl -sSL -o terraform_SHA256SUMS https://releases.hashicorp.com/terraform/${TERRAFORM_VERSION}/terraform_${TERRAFORM_VERSION}_SHA256SUMS 
-        curl -sSL -o terraform_SHA256SUMS.sig https://releases.hashicorp.com/terraform/${TERRAFORM_VERSION}/terraform_${TERRAFORM_VERSION}_SHA256SUMS.${TERRAFORM_GPG_KEY}.sig
+        curl -sSL -o terraform_SHA256SUMS "${HASHICORP_RELEASES_URL}/terraform/${TERRAFORM_VERSION}/terraform_${TERRAFORM_VERSION}_SHA256SUMS" 
+        curl -sSL -o terraform_SHA256SUMS.sig "${HASHICORP_RELEASES_URL}/terraform/${TERRAFORM_VERSION}/terraform_${TERRAFORM_VERSION}_SHA256SUMS.${TERRAFORM_GPG_KEY}.sig"
         gpg --verify terraform_SHA256SUMS.sig terraform_SHA256SUMS
     else
         echo "${TERRAFORM_SHA256} *${terraform_filename}" > terraform_SHA256SUMS
@@ -464,7 +470,7 @@ fi
 
 if [ "${INSTALL_SENTINEL}" = "true" ]; then
     SENTINEL_VERSION="latest"
-    sentinel_releases_url='https://releases.hashicorp.com/sentinel'
+    sentinel_releases_url="${HASHICORP_RELEASES_URL}/sentinel"
     find_sentinel_version_from_url SENTINEL_VERSION ${sentinel_releases_url}
     sentinel_filename="sentinel_${SENTINEL_VERSION}_linux_${architecture}.zip"
     echo "(*) Downloading Sentinel... ${sentinel_filename}"
diff --git a/test/terraform/custom_download_server.sh b/test/terraform/custom_download_server.sh
new file mode 100755
index 000000000..9f0fdd600
--- /dev/null
+++ b/test/terraform/custom_download_server.sh
@@ -0,0 +1,13 @@
+#!/bin/bash
+
+set -e
+
+# Import test library
+source dev-container-features-test-lib
+
+# Check if terraform was installed correctly and it's the expected version
+check "terraform installed" terraform --version
+check "terraform version matches" terraform --version | grep "1.6.5"
+
+# Report results
+reportResults
diff --git a/test/terraform/custom_download_server_with_sentinel.sh b/test/terraform/custom_download_server_with_sentinel.sh
new file mode 100755
index 000000000..9675b39b9
--- /dev/null
+++ b/test/terraform/custom_download_server_with_sentinel.sh
@@ -0,0 +1,16 @@
+#!/bin/bash
+
+set -e
+
+# Import test library
+source dev-container-features-test-lib
+
+# Check if terraform was installed correctly and it's the expected version
+check "terraform installed" terraform --version
+check "terraform version matches" terraform --version | grep "1.6.5"
+
+# Check if sentinel was installed correctly
+check "sentinel installed" sentinel --version
+
+# Report results
+reportResults
diff --git a/test/terraform/scenarios.json b/test/terraform/scenarios.json
index 04693666c..ea6b35b09 100644
--- a/test/terraform/scenarios.json
+++ b/test/terraform/scenarios.json
@@ -70,5 +70,24 @@
                 "tflint": "0.40.0"
             }
         }
+    },
+    "custom_download_server": {
+        "image": "mcr.microsoft.com/devcontainers/base:jammy",
+        "features": {
+            "terraform": {
+                "version": "1.6.5",
+                "customDownloadServer": "https://releases.hashicorp.com"
+            }
+        }
+    },
+    "custom_download_server_with_sentinel": {
+        "image": "mcr.microsoft.com/devcontainers/base:jammy",
+        "features": {
+            "terraform": {
+                "version": "1.6.5",
+                "installSentinel": true,
+                "customDownloadServer": "https://releases.hashicorp.com"
+            }
+        }
     }
 }
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