diff --git a/crates/uv-cli/src/lib.rs b/crates/uv-cli/src/lib.rs
index aff0af791c3e..64982e255513 100644
--- a/crates/uv-cli/src/lib.rs
+++ b/crates/uv-cli/src/lib.rs
@@ -1794,7 +1794,11 @@ pub struct InitArgs {
     #[arg(long)]
     pub name: Option<PackageName>,
 
-    /// Do not create a readme file.
+    /// Create a virtual workspace instead of a project.
+    #[arg(long)]
+    pub r#virtual: bool,
+
+    /// Do not create a `README.md` file.
     #[arg(long)]
     pub no_readme: bool,
 
diff --git a/crates/uv-workspace/src/lib.rs b/crates/uv-workspace/src/lib.rs
index db7979cfb920..f9bc90906388 100644
--- a/crates/uv-workspace/src/lib.rs
+++ b/crates/uv-workspace/src/lib.rs
@@ -1,5 +1,6 @@
 pub use workspace::{
-    DiscoveryOptions, ProjectWorkspace, VirtualProject, Workspace, WorkspaceError, WorkspaceMember,
+    check_nested_workspaces, DiscoveryOptions, ProjectWorkspace, VirtualProject, Workspace,
+    WorkspaceError, WorkspaceMember,
 };
 
 pub mod pyproject;
diff --git a/crates/uv-workspace/src/workspace.rs b/crates/uv-workspace/src/workspace.rs
index a8ee6acb2396..42d23a6ae91f 100644
--- a/crates/uv-workspace/src/workspace.rs
+++ b/crates/uv-workspace/src/workspace.rs
@@ -160,6 +160,8 @@ impl Workspace {
             workspace_root.simplified_display()
         );
 
+        check_nested_workspaces(&workspace_root, options);
+
         // Unlike in `ProjectWorkspace` discovery, we might be in a virtual workspace root without
         // being in any specific project.
         let current_project = pyproject_toml
@@ -170,6 +172,7 @@ impl Workspace {
                 project,
                 pyproject_toml,
             });
+
         Self::collect_members(
             workspace_root.clone(),
             // This method supports only absolute paths.
@@ -526,8 +529,6 @@ impl Workspace {
             .and_then(|uv| uv.sources)
             .unwrap_or_default();
 
-        check_nested_workspaces(&workspace_root, options);
-
         Ok(Workspace {
             install_path: workspace_root,
             lock_path,
@@ -966,7 +967,7 @@ async fn find_workspace(
 }
 
 /// Warn when the valid workspace is included in another workspace.
-fn check_nested_workspaces(inner_workspace_root: &Path, options: &DiscoveryOptions) {
+pub fn check_nested_workspaces(inner_workspace_root: &Path, options: &DiscoveryOptions) {
     for outer_workspace_root in inner_workspace_root
         .ancestors()
         .take_while(|path| {
@@ -1025,8 +1026,9 @@ fn check_nested_workspaces(inner_workspace_root: &Path, options: &DiscoveryOptio
             };
             if !is_excluded {
                 warn_user!(
-                    "Nested workspaces are not supported, but outer workspace includes existing workspace: `{}`",
-                    pyproject_toml_path.user_display().cyan(),
+                    "Nested workspaces are not supported, but outer workspace (`{}`) includes `{}`",
+                    outer_workspace_root.simplified_display().cyan(),
+                    inner_workspace_root.simplified_display().cyan()
                 );
             }
         }
@@ -1159,6 +1161,8 @@ impl VirtualProject {
                 .map_err(WorkspaceError::Normalize)?
                 .to_path_buf();
 
+            check_nested_workspaces(&project_path, options);
+
             let workspace = Workspace::collect_members(
                 project_path,
                 PathBuf::new(),
diff --git a/crates/uv/src/commands/project/init.rs b/crates/uv/src/commands/project/init.rs
index b240a368f8c6..87d612377dbc 100644
--- a/crates/uv/src/commands/project/init.rs
+++ b/crates/uv/src/commands/project/init.rs
@@ -1,5 +1,5 @@
 use std::fmt::Write;
-use std::path::PathBuf;
+use std::path::Path;
 
 use anyhow::{Context, Result};
 use owo_colors::OwoColorize;
@@ -16,7 +16,7 @@ use uv_python::{
 use uv_resolver::RequiresPython;
 use uv_warnings::warn_user_once;
 use uv_workspace::pyproject_mut::PyProjectTomlMut;
-use uv_workspace::{DiscoveryOptions, Workspace, WorkspaceError};
+use uv_workspace::{check_nested_workspaces, DiscoveryOptions, Workspace, WorkspaceError};
 
 use crate::commands::project::find_requires_python;
 use crate::commands::reporters::PythonDownloadReporter;
@@ -24,10 +24,11 @@ use crate::commands::ExitStatus;
 use crate::printer::Printer;
 
 /// Add one or more packages to the project requirements.
-#[allow(clippy::single_match_else)]
+#[allow(clippy::single_match_else, clippy::fn_params_excessive_bools)]
 pub(crate) async fn init(
     explicit_path: Option<String>,
     name: Option<PackageName>,
+    r#virtual: bool,
     no_readme: bool,
     python: Option<String>,
     isolated: bool,
@@ -46,7 +47,7 @@ pub(crate) async fn init(
     // Default to the current directory if a path was not provided.
     let path = match explicit_path {
         None => std::env::current_dir()?.canonicalize()?,
-        Some(ref path) => PathBuf::from(path),
+        Some(ref path) => absolutize_path(Path::new(path))?.to_path_buf(),
     };
 
     // Make sure a project does not already exist in the given directory.
@@ -61,9 +62,6 @@ pub(crate) async fn init(
         );
     }
 
-    // Canonicalize the path to the project.
-    let path = absolutize_path(&path)?;
-
     // Default to the directory name if a name was not provided.
     let name = match name {
         Some(name) => name,
@@ -77,6 +75,96 @@ pub(crate) async fn init(
         }
     };
 
+    if r#virtual {
+        init_virtual_workspace(&path, isolated)?;
+    } else {
+        init_project(
+            &path,
+            &name,
+            no_readme,
+            python,
+            isolated,
+            python_preference,
+            python_fetch,
+            connectivity,
+            native_tls,
+            cache,
+            printer,
+        )
+        .await?;
+    }
+
+    // Create the `README.md` if it does not already exist.
+    if !no_readme {
+        let readme = path.join("README.md");
+        if !readme.exists() {
+            fs_err::write(readme, String::new())?;
+        }
+    }
+
+    let project = if r#virtual { "workspace" } else { "project" };
+    match explicit_path {
+        // Initialized a project in the current directory.
+        None => {
+            writeln!(
+                printer.stderr(),
+                "Initialized {} `{}`",
+                project,
+                name.cyan()
+            )?;
+        }
+        // Initialized a project in the given directory.
+        Some(path) => {
+            let path = path
+                .simple_canonicalize()
+                .unwrap_or_else(|_| path.simplified().to_path_buf());
+
+            writeln!(
+                printer.stderr(),
+                "Initialized {} `{}` at `{}`",
+                project,
+                name.cyan(),
+                path.display().cyan()
+            )?;
+        }
+    }
+
+    Ok(ExitStatus::Success)
+}
+
+/// Initialize a virtual workspace at the given path.
+fn init_virtual_workspace(path: &Path, isolated: bool) -> Result<()> {
+    // Ensure that we aren't creating a nested workspace.
+    if !isolated {
+        check_nested_workspaces(path, &DiscoveryOptions::default());
+    }
+
+    // Create the `pyproject.toml`.
+    let pyproject = indoc::indoc! {r"
+        [tool.uv.workspace]
+        members = []
+    "};
+
+    fs_err::create_dir_all(path)?;
+    fs_err::write(path.join("pyproject.toml"), pyproject)?;
+
+    Ok(())
+}
+
+/// Initialize a project (and, implicitly, a workspace root) at the given path.
+async fn init_project(
+    path: &Path,
+    name: &PackageName,
+    no_readme: bool,
+    python: Option<String>,
+    isolated: bool,
+    python_preference: PythonPreference,
+    python_fetch: PythonFetch,
+    connectivity: Connectivity,
+    native_tls: bool,
+    cache: &Cache,
+    printer: Printer,
+) -> Result<()> {
     // Discover the current workspace, if it exists.
     let workspace = if isolated {
         None
@@ -86,7 +174,7 @@ pub(crate) async fn init(
         match Workspace::discover(
             parent,
             &DiscoveryOptions {
-                ignore: std::iter::once(path.as_ref()).collect(),
+                ignore: std::iter::once(path).collect(),
                 ..DiscoveryOptions::default()
             },
         )
@@ -177,7 +265,8 @@ pub(crate) async fn init(
         readme = if no_readme { "" } else { "\nreadme = \"README.md\"" },
         requires_python = requires_python.specifiers(),
     };
-    fs_err::create_dir_all(&path)?;
+
+    fs_err::create_dir_all(path)?;
     fs_err::write(path.join("pyproject.toml"), pyproject)?;
 
     // Create `src/{name}/__init__.py` if it does not already exist.
@@ -194,16 +283,8 @@ pub(crate) async fn init(
         )?;
     }
 
-    // Create the `README.md` if it does not already exist.
-    if !no_readme {
-        let readme = path.join("README.md");
-        if !readme.exists() {
-            fs_err::write(readme, String::new())?;
-        }
-    }
-
     if let Some(workspace) = workspace {
-        if workspace.excludes(&path)? {
+        if workspace.excludes(path)? {
             // If the member is excluded by the workspace, ignore it.
             writeln!(
                 printer.stderr(),
@@ -211,7 +292,7 @@ pub(crate) async fn init(
                 name.cyan(),
                 workspace.install_path().simplified_display().cyan()
             )?;
-        } else if workspace.includes(&path)? {
+        } else if workspace.includes(path)? {
             // If the member is already included in the workspace, skip the `members` addition.
             writeln!(
                 printer.stderr(),
@@ -239,26 +320,5 @@ pub(crate) async fn init(
         }
     }
 
-    match explicit_path {
-        // Initialized a project in the current directory.
-        None => {
-            writeln!(printer.stderr(), "Initialized project `{}`", name.cyan())?;
-        }
-
-        // Initialized a project in the given directory.
-        Some(path) => {
-            let path = path
-                .simple_canonicalize()
-                .unwrap_or_else(|_| path.simplified().to_path_buf());
-
-            writeln!(
-                printer.stderr(),
-                "Initialized project `{}` at `{}`",
-                name.cyan(),
-                path.display().cyan()
-            )?;
-        }
-    }
-
-    Ok(ExitStatus::Success)
+    Ok(())
 }
diff --git a/crates/uv/src/lib.rs b/crates/uv/src/lib.rs
index f35ab03f949b..bd889d152853 100644
--- a/crates/uv/src/lib.rs
+++ b/crates/uv/src/lib.rs
@@ -857,6 +857,7 @@ async fn run_project(
             commands::init(
                 args.path,
                 args.name,
+                args.r#virtual,
                 args.no_readme,
                 args.python,
                 globals.isolated,
diff --git a/crates/uv/src/settings.rs b/crates/uv/src/settings.rs
index aa1ae5e72456..2815d4597166 100644
--- a/crates/uv/src/settings.rs
+++ b/crates/uv/src/settings.rs
@@ -153,6 +153,7 @@ impl CacheSettings {
 pub(crate) struct InitSettings {
     pub(crate) path: Option<String>,
     pub(crate) name: Option<PackageName>,
+    pub(crate) r#virtual: bool,
     pub(crate) no_readme: bool,
     pub(crate) python: Option<String>,
 }
@@ -164,6 +165,7 @@ impl InitSettings {
         let InitArgs {
             path,
             name,
+            r#virtual,
             no_readme,
             python,
         } = args;
@@ -171,6 +173,7 @@ impl InitSettings {
         Self {
             path,
             name,
+            r#virtual,
             no_readme,
             python,
         }
diff --git a/crates/uv/tests/init.rs b/crates/uv/tests/init.rs
index 143ebb494841..c60fc87f7621 100644
--- a/crates/uv/tests/init.rs
+++ b/crates/uv/tests/init.rs
@@ -603,7 +603,7 @@ fn init_workspace_isolated() -> Result<()> {
 }
 
 #[test]
-fn init_nested_workspace() -> Result<()> {
+fn init_project_inside_project() -> Result<()> {
     let context = TestContext::new("3.12");
 
     let pyproject_toml = context.temp_dir.child("pyproject.toml");
@@ -733,6 +733,64 @@ fn init_explicit_workspace() -> Result<()> {
 fn init_virtual_workspace() -> Result<()> {
     let context = TestContext::new("3.12");
 
+    let child = context.temp_dir.child("foo");
+    child.create_dir_all()?;
+
+    let pyproject_toml = child.join("pyproject.toml");
+
+    uv_snapshot!(context.filters(), context.init().current_dir(&child).arg("--virtual"), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    warning: `uv init` is experimental and may change without warning
+    Initialized workspace `foo`
+    "###);
+
+    let pyproject = fs_err::read_to_string(&pyproject_toml)?;
+    insta::with_settings!({
+        filters => context.filters(),
+    }, {
+        assert_snapshot!(
+            pyproject, @r###"
+        [tool.uv.workspace]
+        members = []
+        "###
+        );
+    });
+
+    uv_snapshot!(context.filters(), context.init().current_dir(&child).arg("bar"), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    warning: `uv init` is experimental and may change without warning
+    Adding `bar` as member of workspace `[TEMP_DIR]/foo`
+    Initialized project `bar` at `[TEMP_DIR]/foo/bar`
+    "###);
+
+    let pyproject = fs_err::read_to_string(pyproject_toml)?;
+    insta::with_settings!({
+        filters => context.filters(),
+    }, {
+        assert_snapshot!(
+            pyproject, @r###"
+        [tool.uv.workspace]
+        members = ["bar"]
+        "###
+        );
+    });
+
+    Ok(())
+}
+
+/// Run `uv init --virtual` from within a workspace.
+#[test]
+fn init_nested_virtual_workspace() -> Result<()> {
+    let context = TestContext::new("3.12");
+
     let pyproject_toml = context.temp_dir.child("pyproject.toml");
     pyproject_toml.write_str(indoc! {
         r"
@@ -741,18 +799,29 @@ fn init_virtual_workspace() -> Result<()> {
         ",
     })?;
 
-    let child = context.temp_dir.join("foo");
-    uv_snapshot!(context.filters(), context.init().current_dir(&context.temp_dir).arg(&child), @r###"
+    uv_snapshot!(context.filters(), context.init().current_dir(&context.temp_dir).arg("--virtual").arg("foo"), @r###"
     success: true
     exit_code: 0
     ----- stdout -----
 
     ----- stderr -----
     warning: `uv init` is experimental and may change without warning
-    Adding `foo` as member of workspace `[TEMP_DIR]/`
-    Initialized project `foo` at `[TEMP_DIR]/foo`
+    warning: Nested workspaces are not supported, but outer workspace (`[TEMP_DIR]/`) includes `[TEMP_DIR]/foo`
+    Initialized workspace `foo` at `[TEMP_DIR]/foo`
     "###);
 
+    let pyproject = fs_err::read_to_string(context.temp_dir.join("foo").join("pyproject.toml"))?;
+    insta::with_settings!({
+        filters => context.filters(),
+    }, {
+        assert_snapshot!(
+            pyproject, @r###"
+        [tool.uv.workspace]
+        members = []
+        "###
+        );
+    });
+
     let workspace = fs_err::read_to_string(context.temp_dir.join("pyproject.toml"))?;
     insta::with_settings!({
         filters => context.filters(),
@@ -760,7 +829,7 @@ fn init_virtual_workspace() -> Result<()> {
         assert_snapshot!(
             workspace, @r###"
         [tool.uv.workspace]
-        members = ["foo"]
+        members = []
         "###
         );
     });