diff --git a/NEWS.md b/NEWS.md
index e173119a7..df61137e2 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -4,7 +4,7 @@
 
 * `recipe()`, `prep()`, and `bake()` now work with sparse tibbles. (#1364, #1366)
 
-* `recipe()` now works with sparse matrices. (#1364)
+* `recipe()` and `prep()` now work with sparse matrices. (#1364, #1368)
 
 # recipes 1.1.0
 
diff --git a/R/misc.R b/R/misc.R
index f11ebb4d3..a86195fb9 100644
--- a/R/misc.R
+++ b/R/misc.R
@@ -660,6 +660,9 @@ validate_training_data <- function(x, rec, fresh, call = rlang::caller_env()) {
     }
     x <- rec$template
   } else {
+    if (is_sparse_matrix(x)) {
+      x <- sparsevctrs::coerce_to_sparse_tibble(x)
+    }
     if (!is_tibble(x)) {
       x <- as_tibble(x)
     }
diff --git a/tests/testthat/test-sparsevctrs.R b/tests/testthat/test-sparsevctrs.R
index 6db6576a5..9caad9c82 100644
--- a/tests/testthat/test-sparsevctrs.R
+++ b/tests/testthat/test-sparsevctrs.R
@@ -110,3 +110,26 @@ test_that("recipe() accepts sparse matrices", {
   )
 })
 
+test_that("prep() accepts sparse matrices", {
+  skip_if_not_installed("modeldata")
+
+  hotel_data <- sparse_hotel_rates()
+
+  rec_spec <- recipe(avg_price_per_room ~ ., data = hotel_data)
+  
+  expect_no_error(
+    rec <- prep(rec_spec)
+  )
+
+  expect_true(
+    is_sparse_tibble(rec$template)
+  )
+  
+  expect_no_error(
+    rec <- prep(rec_spec, training = hotel_data)
+  )
+
+  expect_true(
+    is_sparse_tibble(rec$template)
+  )
+})