diff --git a/docker_autoscaler.tf b/docker_autoscaler.tf
index 2e678fec..512e74c6 100644
--- a/docker_autoscaler.tf
+++ b/docker_autoscaler.tf
@@ -98,6 +98,7 @@ resource "aws_autoscaling_group" "autoscaler" {
 
     content {
       instances_distribution {
+        on_demand_allocation_strategy            = var.runner_worker_docker_autoscaler_asg.on_demand_allocation_strategy
         on_demand_base_capacity                  = var.runner_worker_docker_autoscaler_asg.on_demand_base_capacity
         on_demand_percentage_above_base_capacity = var.runner_worker_docker_autoscaler_asg.on_demand_percentage_above_base_capacity
         spot_allocation_strategy                 = var.runner_worker_docker_autoscaler_asg.spot_allocation_strategy
diff --git a/variables.tf b/variables.tf
index b1c84570..0c8fcba7 100644
--- a/variables.tf
+++ b/variables.tf
@@ -813,9 +813,10 @@ variable "runner_worker_docker_autoscaler_asg" {
     health_check_type = Controls how health checking is done. Values are - EC2 and ELB.
     instance_refresh_min_healthy_percentage = The amount of capacity in the Auto Scaling group that must remain healthy during an instance refresh to allow the operation to continue, as a percentage of the desired capacity of the Auto Scaling group.
     instance_refresh_triggers = Set of additional property names that will trigger an Instance Refresh. A refresh will always be triggered by a change in any of launch_configuration, launch_template, or mixed_instances_policy.
+    on_demand_allocation_strategy = Strategy for allocating on-demand instances. Valid values: 'prioritized' (by override order) or 'lowest-price'. Must be 'lowest-price' when instance_requirements is used — AWS rejects any other value with attribute-based instance selection. Defaults to 'lowest-price'.
     on_demand_base_capacity = Absolute minimum amount of desired capacity that must be fulfilled by on-demand instances.
     on_demand_percentage_above_base_capacity = Percentage split between on-demand and Spot instances above the base on-demand capacity.
-    spot_allocation_strategy = How to allocate capacity across the Spot pools. 'lowest-price' to optimize cost, 'capacity-optimized' to reduce interruptions.
+    spot_allocation_strategy = How to allocate capacity across the Spot pools. 'lowest-price' to optimize cost, 'capacity-optimized' to reduce interruptions, 'price-capacity-optimized' to balance both price and capacity availability (recommended for most workloads).
     spot_instance_pools = Number of Spot pools per availability zone to allocate capacity. EC2 Auto Scaling selects the cheapest Spot pools and evenly allocates Spot capacity across the number of Spot pools that you specify.
     subnet_ids = The list of subnet IDs to use for the Runner Worker when the fleet mode is enabled.
     default_instance_type = Default instance type for the launch template
@@ -830,6 +831,7 @@ variable "runner_worker_docker_autoscaler_asg" {
     health_check_type                        = optional(string, "EC2")
     instance_refresh_min_healthy_percentage  = optional(number, 90)
     instance_refresh_triggers                = optional(list(string), [])
+    on_demand_allocation_strategy            = optional(string, "lowest-price")
     on_demand_base_capacity                  = optional(number, 0)
     on_demand_percentage_above_base_capacity = optional(number, 100)
     spot_allocation_strategy                 = optional(string, "lowest-price")
@@ -857,6 +859,11 @@ variable "runner_worker_docker_autoscaler_asg" {
     condition     = length(var.runner_worker_docker_autoscaler_asg.types) == 0 || length(var.runner_worker_docker_autoscaler_asg.instance_requirements) == 0
     error_message = "AWS does not allow setting both 'types' and 'instance_requirements' at the same time. Set only one."
   }
+
+  validation {
+    condition     = length(var.runner_worker_docker_autoscaler_asg.instance_requirements) == 0 || var.runner_worker_docker_autoscaler_asg.on_demand_allocation_strategy == "lowest-price"
+    error_message = "on_demand_allocation_strategy must be set to 'lowest-price' when instance_requirements is used — AWS rejects any other value with attribute-based instance selection."
+  }
 }
 
 variable "runner_worker_docker_machine_role" {