diff --git a/litellm/llms/hosted_vllm/embedding/README.md b/litellm/llms/hosted_vllm/embedding/README.md
index f82b3c77a6..2c58e16fc2 100644
--- a/litellm/llms/hosted_vllm/embedding/README.md
+++ b/litellm/llms/hosted_vllm/embedding/README.md
@@ -2,4 +2,15 @@ No transformation is required for hosted_vllm embedding.
 
 VLLM is a superset of OpenAI's `embedding` endpoint.
 
-To pass provider-specific parameters, see [this](https://docs.litellm.ai/docs/completion/provider_specific_params)
\ No newline at end of file
+## `encoding_format`
+
+For OpenAI-compatible embedding calls (including `openai/...` with a custom `api_base` pointing at vLLM), LiteLLM resolves `encoding_format` when it is not set on the request:
+
+1. Explicit value on the embedding call (`encoding_format=...`).
+2. Model config (`litellm_params.encoding_format` on the proxy `model_list` entry).
+3. Environment variable `LITELLM_DEFAULT_EMBEDDING_ENCODING_FORMAT` (e.g. in `.env` or container env).
+4. Default **`float`**.
+
+That avoids forwarding `encoding_format=None` to the provider/SDK where some servers behave poorly.
+
+To pass provider-specific parameters, see [provider-specific params](https://docs.litellm.ai/docs/completion/provider_specific_params).
\ No newline at end of file
diff --git a/litellm/main.py b/litellm/main.py
index 8cff8c0b9a..9d38575474 100644
--- a/litellm/main.py
+++ b/litellm/main.py
@@ -4700,7 +4700,10 @@ def embedding(  # noqa: PLR0915
     Parameters:
     - model: The embedding model to use.
     - input: The input for which embeddings are to be generated.
-    - encoding_format: Optional[str] The format to return the embeddings in. Can be either `float` or `base64`
+    - encoding_format: Optional[str] The format to return the embeddings in. Can be either `float` or `base64`.
+      For OpenAI-compatible embedding routing (`openai`, custom base URL, etc.), when omitted LiteLLM resolves:
+      explicit argument → mapped optional params (e.g. proxy `litellm_params`) → environment variable
+      `LITELLM_DEFAULT_EMBEDDING_ENCODING_FORMAT` → default `"float"`.
     - dimensions: The number of dimensions the resulting output embeddings should have. Only supported in text-embedding-3 and later models.
     - timeout: The timeout value for the API call, default 10 mins
     - litellm_call_id: The call ID for litellm logging.