diff --git a/src/lightning_lite/strategies/xla.py b/src/lightning_lite/strategies/xla.py
index 51bac19afbc24..ecd751e4d26d5 100644
--- a/src/lightning_lite/strategies/xla.py
+++ b/src/lightning_lite/strategies/xla.py
@@ -156,20 +156,22 @@ def broadcast(self, obj: TBroadcast, src: int = 0) -> TBroadcast:
         return obj
 
     def all_gather(self, tensor: Tensor, group: Optional[Any] = None, sync_grads: bool = False) -> Tensor:
-        """
-        Function to gather a tensor from several distributed processes
+        """Function to gather a tensor from several distributed processes.
+
         Args:
             tensor: tensor of shape (batch, ...)
             group: not available with TPUs
-            sync_grads: not available with TPUs
+            sync_grads: flag that allows users to synchronize gradients for the all_gather operation
         Return:
             A tensor of shape (world_size, batch, ...)
         """
         if isinstance(tensor, Tensor) and tensor.dim() == 0:
             tensor = tensor.unsqueeze(0)
+
+        import torch_xla.core.functions as xf
         import torch_xla.core.xla_model as xm
 
-        return xm.all_gather(tensor)
+        return xf.all_gather(tensor) if sync_grads else xm.all_gather(tensor)
 
     def save_checkpoint(
         self, checkpoint: Dict[str, Any], filepath: _PATH, storage_options: Optional[Any] = None
diff --git a/src/pytorch_lightning/strategies/tpu_spawn.py b/src/pytorch_lightning/strategies/tpu_spawn.py
index fd6b0c9693003..05545e7e00f27 100644
--- a/src/pytorch_lightning/strategies/tpu_spawn.py
+++ b/src/pytorch_lightning/strategies/tpu_spawn.py
@@ -289,20 +289,22 @@ def remove_checkpoint(self, filepath: _PATH) -> None:
             self.checkpoint_io.remove_checkpoint(filepath)
 
     def all_gather(self, tensor: Tensor, group: Optional[Any] = None, sync_grads: bool = False) -> Tensor:
-        """
-        Function to gather a tensor from several distributed processes
+        """Function to gather a tensor from several distributed processes.
+
         Args:
             tensor: tensor of shape (batch, ...)
             group: not available with TPUs
-            sync_grads: not available with TPUs
+            sync_grads: flag that allows users to synchronize gradients for the all_gather operation
         Return:
             A tensor of shape (world_size, batch, ...)
         """
         if isinstance(tensor, Tensor) and tensor.dim() == 0:
             tensor = tensor.unsqueeze(0)
+
+        import torch_xla.core.functions as xf
         import torch_xla.core.xla_model as xm
 
-        return xm.all_gather(tensor)
+        return xf.all_gather(tensor) if sync_grads else xm.all_gather(tensor)
 
     def teardown(self) -> None:
         super().teardown()
diff --git a/tests/tests_lite/strategies/test_xla.py b/tests/tests_lite/strategies/test_xla.py
index 11d41cb72cd16..14d3f2f713422 100644
--- a/tests/tests_lite/strategies/test_xla.py
+++ b/tests/tests_lite/strategies/test_xla.py
@@ -17,6 +17,7 @@
 from unittest.mock import Mock
 
 import pytest
+import torch
 from tests_lite.helpers.dataloaders import CustomNotImplementedErrorDataloader
 from tests_lite.helpers.models import RandomDataset, RandomIterableDataset
 from tests_lite.helpers.runif import RunIf
@@ -113,3 +114,24 @@ def test_xla_validate_unsupported_iterable_dataloaders(_, dataloader, monkeypatc
 
     with pytest.raises(TypeError, match="TPUs do not currently support"):
         XLAStrategy().process_dataloader(dataloader)
+
+
+def tpu_all_gather_fn(strategy):
+    for sync_grads in [True, False]:
+        tensor = torch.tensor(1.0, device=strategy.root_device, requires_grad=True)
+        result = strategy.all_gather(tensor, sync_grads=sync_grads)
+        summed = result.sum()
+        assert torch.equal(summed, torch.tensor(8.0))
+        summed.backward()
+        if sync_grads:
+            assert torch.equal(tensor.grad, torch.tensor(1.0))
+        else:
+            # As gradients are not synced, the original tensor will not have gradients.
+            assert tensor.grad is None
+
+
+@RunIf(tpu=True)
+@mock.patch.dict(os.environ, os.environ.copy(), clear=True)
+def test_tpu_all_gather():
+    """Test the all_gather operation on TPU."""
+    xla_launch(tpu_all_gather_fn)