diff --git a/packages/cspell/src/__snapshots__/app.test.ts.snap b/packages/cspell/src/__snapshots__/app.test.ts.snap
index 2d17607fbf5..60111d5b8e8 100644
--- a/packages/cspell/src/__snapshots__/app.test.ts.snap
+++ b/packages/cspell/src/__snapshots__/app.test.ts.snap
@@ -10551,8 +10551,8 @@ exports[`Validate cli > app help [ 'init', '--help' ] 1`] = `
   "  --dictionary <dictionary>  Enable a dictionary. Can be used multiple times.",
   "  --no-comments              Do not add comments to the config file.",
   "  --remove-comments          Remove all comments from the config file.",
-  "  --schema                   Add or update the schema reference. This is the",
-  "                             default for a new file.",
+  "  --schema                   Add or update the schema reference. Default for a",
+  "                             config with no settings.",
   "  --no-schema                Do not add the schema reference to the config file.",
   "  --stdout                   Write the configuration to stdout instead of a",
   "                             file.",
diff --git a/packages/cspell/src/commandInit.test.ts b/packages/cspell/src/commandInit.test.ts
index ceb6e72cfb9..c32fc560a9a 100644
--- a/packages/cspell/src/commandInit.test.ts
+++ b/packages/cspell/src/commandInit.test.ts
@@ -11,7 +11,7 @@ import { run } from './app.mjs';
 const oldSchema = 'https://example.com/old.schema.json';
 const yamlSchemaComment = `# yaml-language-server: $schema=${cspellConfigFileSchema}`;
 
-describe('cspell init $schema', () => {
+describe('cspell init', () => {
     let tempDir: string;
 
     beforeEach(async () => {
@@ -84,4 +84,60 @@ describe('cspell init $schema', () => {
         const content = await init('cspell.config.yaml', ...args);
         expect(content.includes(yamlSchemaComment)).toBe(expected);
     });
+
+    async function initConfig(fileName: string, ...args: string[]): Promise<string> {
+        const filePath = path.join(tempDir, fileName);
+        await run(new Command(), [...process.argv.slice(0, 2), 'init', '--config', filePath, ...args]);
+        return fs.readFile(filePath, 'utf8');
+    }
+
+    const newFileSettings = { $schema: cspellConfigFileSchema, version: '0.2', language: 'en' };
+
+    test.each`
+        fileName
+        ${'cspell.json'}
+        ${'cspell.jsonc'}
+    `('new $fileName with --config', async ({ fileName }) => {
+        expect(JSON.parse(await initConfig(fileName, '--no-comments'))).toEqual(newFileSettings);
+    });
+
+    test('new JSON file with --output and the default format', async () => {
+        const filePath = path.join(tempDir, 'cspell.json');
+        await run(new Command(), [...process.argv.slice(0, 2), 'init', '--output', filePath]);
+        expect(JSON.parse(await fs.readFile(filePath, 'utf8'))).toEqual(newFileSettings);
+    });
+
+    test('existing JSON file only changes what was asked for', async () => {
+        await writeConfig('cspell.json', '{ "words": ["one"] }\n');
+        expect(JSON.parse(await initConfig('cspell.json'))).toEqual({ words: ['one'] });
+        expect(JSON.parse(await initConfig('cspell.json', '--locale', 'en-GB'))).toEqual({
+            words: ['one'],
+            language: 'en-GB',
+        });
+    });
+
+    test('existing YAML file is unchanged', async () => {
+        const content = 'words:\n  - one\n';
+        await writeConfig('cspell.config.yaml', content);
+        expect(await initConfig('cspell.config.yaml')).toBe(content);
+    });
+
+    test('existing file with no settings is initialized', async () => {
+        await writeConfig('cspell.json', '{}\n');
+        expect(JSON.parse(await initConfig('cspell.json'))).toEqual(newFileSettings);
+    });
+
+    test('package.json without a cspell section gets one', async () => {
+        await writeConfig('package.json', '{ "name": "sample" }\n');
+        expect(JSON.parse(await initConfig('package.json'))).toEqual({
+            name: 'sample',
+            cspell: { version: '0.2', language: 'en' },
+        });
+    });
+
+    test('package.json with a cspell section is unchanged', async () => {
+        const packageJson = { name: 'sample', cspell: { words: ['one'] } };
+        await writeConfig('package.json', JSON.stringify(packageJson));
+        expect(JSON.parse(await initConfig('package.json'))).toEqual(packageJson);
+    });
 });
diff --git a/packages/cspell/src/commandInit.ts b/packages/cspell/src/commandInit.ts
index 68659d504ef..3fd51508cbb 100644
--- a/packages/cspell/src/commandInit.ts
+++ b/packages/cspell/src/commandInit.ts
@@ -31,7 +31,7 @@ export function commandInit(prog: Command): Command {
         .option('--no-comments', 'Do not add comments to the config file.')
         .addOption(crOpt('--remove-comments', 'Remove all comments from the config file.').implies({ comments: false }))
         .addOption(
-            crOpt('--schema', 'Add or update the schema reference. This is the default for a new file.').default(
+            crOpt('--schema', 'Add or update the schema reference. Default for a config with no settings.').default(
                 undefined,
             ),
         )
diff --git a/packages/cspell/src/config/adjustConfig.ts b/packages/cspell/src/config/adjustConfig.ts
index eb3aa953f1f..3fef5847f16 100644
--- a/packages/cspell/src/config/adjustConfig.ts
+++ b/packages/cspell/src/config/adjustConfig.ts
@@ -10,7 +10,7 @@ import { isCfgArrayNode, MutableCSpellConfigFile } from 'cspell-config-lib';
 
 import { toError } from '../util/errors.js';
 
-export async function fileExists(url: URL): Promise<boolean> {
+async function fileExists(url: URL): Promise<boolean> {
     if (url.protocol !== 'file:') {
         return false; // Only check file URLs
     }
diff --git a/packages/cspell/src/config/configInit.ts b/packages/cspell/src/config/configInit.ts
index b1956f43ab1..0c254895875 100644
--- a/packages/cspell/src/config/configInit.ts
+++ b/packages/cspell/src/config/configInit.ts
@@ -6,8 +6,9 @@ import type { CSpellConfigFile, CSpellConfigFileReaderWriter } from 'cspell-conf
 import { createReaderWriter, cspellConfigFileSchema } from 'cspell-config-lib';
 
 import { console } from '../console.js';
-import { addDictionariesToConfigFile, addImportsToConfigFile, fileExists } from './adjustConfig.js';
+import { addDictionariesToConfigFile, addImportsToConfigFile } from './adjustConfig.js';
 import { applyValuesToConfigFile } from './config.js';
+import type { CommentConfig } from './constants.js';
 import { defaultConfig } from './constants.js';
 import type { InitOptions } from './options.js';
 
@@ -24,9 +25,8 @@ const defaultConfigYaml = `
 export async function configInit(options: InitOptions): Promise<void> {
     const rw = createReaderWriter();
     const url = determineFileNameURL(options);
-    const schema = options.schema ?? !(await fileExists(url));
-    const configFile = await createConfigFile(rw, url, options);
-    await applyOptionsToConfigFile(configFile, { ...options, schema });
+    const configFile = await createConfigFile(rw, url);
+    await applyOptionsToConfigFile(configFile, options);
     await fs.mkdir(new URL('./', configFile.url), { recursive: true });
 
     if (options.stdout) {
@@ -38,6 +38,7 @@ export async function configInit(options: InitOptions): Promise<void> {
 
 async function applyOptionsToConfigFile(configFile: CSpellConfigFile, options: InitOptions): Promise<CSpellConfigFile> {
     const settings: CSpellSettings = {};
+    const hasSettings = Object.keys(configFile.settings).length > 0;
 
     const addComments =
         options.comments ||
@@ -47,7 +48,7 @@ async function applyOptionsToConfigFile(configFile: CSpellConfigFile, options: I
         configFile.removeAllComments();
     }
 
-    if (options.schema) {
+    if (options.schema ?? !hasSettings) {
         configFile.setSchema(schemaRef);
     }
 
@@ -55,7 +56,8 @@ async function applyOptionsToConfigFile(configFile: CSpellConfigFile, options: I
         settings.language = options.locale;
     }
 
-    applyValuesToConfigFile(configFile, settings, defaultConfig, addComments);
+    const defaults = hasSettings ? withoutDefaultValues(defaultConfig) : defaultConfig;
+    applyValuesToConfigFile(configFile, settings, defaults, addComments);
 
     if (options.import) {
         await addImportsToConfigFile(
@@ -76,6 +78,10 @@ async function applyOptionsToConfigFile(configFile: CSpellConfigFile, options: I
     return configFile;
 }
 
+function withoutDefaultValues(config: CommentConfig): CommentConfig {
+    return Object.fromEntries(Object.entries(config).map(([key, entry]) => [key, { ...entry, value: undefined }]));
+}
+
 function determineFileNameURL(options: InitOptions): URL {
     if (options.config) {
         return toFileURL(options.config);
@@ -110,32 +116,16 @@ function determineDefaultFileName(options: InitOptions): string {
     throw new Error(`Unsupported format: ${options.format}`);
 }
 
-function getDefaultContent(options: InitOptions): string {
-    switch (options.format) {
-        case undefined:
-        case 'yaml': {
-            return defaultConfigYaml;
-        }
-        case 'json':
-        case 'jsonc': {
-            return defaultConfigJson;
-        }
-        default: {
-            throw new Error(`Unsupported format: ${options.format}`);
-        }
-    }
+function getDefaultContent(url: URL): string {
+    return /\.jsonc?$/.test(url.pathname) ? defaultConfigJson : defaultConfigYaml;
 }
 
-async function createConfigFile(
-    rw: CSpellConfigFileReaderWriter,
-    url: URL,
-    options: InitOptions,
-): Promise<CSpellConfigFile> {
+async function createConfigFile(rw: CSpellConfigFileReaderWriter, url: URL): Promise<CSpellConfigFile> {
     if (url.pathname.endsWith('package.json')) {
         return rw.readConfig(url);
     }
 
-    const content = await fs.readFile(url, 'utf8').catch(() => getDefaultContent(options));
+    const content = await fs.readFile(url, 'utf8').catch(() => getDefaultContent(url));
 
     return rw.parse({ url, content });
 }
diff --git a/packages/cspell/src/config/options.ts b/packages/cspell/src/config/options.ts
index df05e714da9..cddfc84ec3c 100644
--- a/packages/cspell/src/config/options.ts
+++ b/packages/cspell/src/config/options.ts
@@ -33,7 +33,7 @@ export interface BaseConfigOptions {
      * Whether to add the schema reference to the configuration file.
      * - `true` - the schema reference will be added / updated.
      * - `false` - no schema reference will be added.
-     * - `undefined` - the schema reference will be added only when creating a new file.
+     * - `undefined` - the schema reference will be added only if the configuration has no settings yet.
      */
     schema?: boolean;
     /**