diff --git a/vllm/engine/arg_utils.py b/vllm/engine/arg_utils.py
index 987c1be3d5ad9..d759ce04d75e7 100644
--- a/vllm/engine/arg_utils.py
+++ b/vllm/engine/arg_utils.py
@@ -317,9 +317,10 @@ def add_cli_args(parser: FlexibleArgumentParser) -> FlexibleArgumentParser:
         parser.add_argument('--block-size',
                             type=int,
                             default=EngineArgs.block_size,
-                            choices=[8, 16, 32, 128, 256, 512, 1024, 2048],
+                            choices=[8, 16, 32],
                             help='Token block size for contiguous chunks of '
-                            'tokens.')
+                            'tokens. This is ignored on neuron devices and '
+                            'set to max-model-len')
 
         parser.add_argument('--enable-prefix-caching',
                             action='store_true',
@@ -793,7 +794,8 @@ def create_engine_config(self) -> EngineConfig:
             limit_mm_per_prompt=self.limit_mm_per_prompt,
         )
         cache_config = CacheConfig(
-            block_size=self.block_size,
+            block_size=self.block_size if self.device != "neuron" else
+            self.max_model_len,  # neuron needs block_size = max_model_len
             gpu_memory_utilization=self.gpu_memory_utilization,
             swap_space=self.swap_space,
             cache_dtype=self.kv_cache_dtype,
diff --git a/vllm/executor/neuron_executor.py b/vllm/executor/neuron_executor.py
index b45d5d86b54fa..02627de3e0be7 100644
--- a/vllm/executor/neuron_executor.py
+++ b/vllm/executor/neuron_executor.py
@@ -4,7 +4,8 @@
 from vllm.logger import init_logger
 from vllm.lora.request import LoRARequest
 from vllm.sequence import ExecuteModelRequest, SamplerOutput
-from vllm.utils import make_async
+from vllm.utils import (get_distributed_init_method, get_ip, get_open_port,
+                        make_async)
 
 logger = init_logger(__name__)
 
@@ -24,14 +25,17 @@ def _init_executor(self) -> None:
 
     def _init_worker(self):
         from vllm.worker.neuron_worker import NeuronWorker
-
+        distributed_init_method = get_distributed_init_method(
+            get_ip(), get_open_port())
         self.driver_worker = NeuronWorker(
-            self.model_config,
-            self.parallel_config,
-            self.scheduler_config,
-            self.device_config,
-            self.cache_config,
-        )
+            model_config=self.model_config,
+            parallel_config=self.parallel_config,
+            scheduler_config=self.scheduler_config,
+            device_config=self.device_config,
+            cache_config=self.cache_config,
+            local_rank=0,
+            rank=0,
+            distributed_init_method=distributed_init_method)
         self.driver_worker.init_device()
         self.driver_worker.load_model()
 
diff --git a/vllm/worker/neuron_worker.py b/vllm/worker/neuron_worker.py
index 3b0ded36ca1b6..fff14d6402b44 100644
--- a/vllm/worker/neuron_worker.py
+++ b/vllm/worker/neuron_worker.py
@@ -6,6 +6,8 @@
 
 from vllm.config import (CacheConfig, DeviceConfig, ModelConfig,
                          ParallelConfig, SchedulerConfig)
+from vllm.distributed import (ensure_model_parallel_initialized,
+                              init_distributed_environment)
 from vllm.model_executor import set_random_seed
 from vllm.sequence import ExecuteModelRequest
 from vllm.worker.neuron_model_runner import NeuronModelRunner
@@ -24,12 +26,18 @@ def __init__(
         scheduler_config: SchedulerConfig,
         device_config: DeviceConfig,
         cache_config: CacheConfig,
+        local_rank: int,
+        rank: int,
+        distributed_init_method: str,
     ) -> None:
         self.model_config = model_config
         self.parallel_config = parallel_config
         self.scheduler_config = scheduler_config
         self.device_config = device_config
         self.cache_config = cache_config
+        self.local_rank = local_rank
+        self.rank = rank
+        self.distributed_init_method = distributed_init_method
         if self.model_config.trust_remote_code:
             # note: lazy import to avoid importing torch before initializing
             from vllm.utils import init_cached_hf_modules
@@ -40,6 +48,8 @@ def __init__(
         self.is_driver_worker = True
 
     def init_device(self) -> None:
+        self.init_distributed_environment()
+
         # Set random seed.
         set_random_seed(self.model_config.seed)
 
@@ -98,3 +108,20 @@ def get_cache_block_size_bytes(self) -> int:
         This is required for speculative decoding; it is not yet implemented.
         """
         raise NotImplementedError
+
+    def init_distributed_environment(self):
+        """Neuron uses transformers-neuronx for tensor parallelism.
+
+        vLLM still needs the environment inited when TP/PP > 1
+        """
+        init_distributed_environment(
+            world_size=1,
+            rank=self.rank,
+            local_rank=self.local_rank,
+            distributed_init_method=self.distributed_init_method,
+            backend="gloo",
+        )
+        ensure_model_parallel_initialized(
+            1,
+            1,
+        )