diff --git a/vllm_gaudi/v1/worker/hpu_model_runner.py b/vllm_gaudi/v1/worker/hpu_model_runner.py
index 7d3d392d35..c2799faeed 100644
--- a/vllm_gaudi/v1/worker/hpu_model_runner.py
+++ b/vllm_gaudi/v1/worker/hpu_model_runner.py
@@ -783,14 +783,14 @@ def __init__(
         self.use_hpu_graph = not self.model_config.enforce_eager
         self.max_batch_size = self.scheduler_config.max_num_seqs
         self.max_num_seqs = self.scheduler_config.max_num_seqs
-        self.max_cudagraph_capture_size = self.vllm_config.compilation_config.max_cudagraph_capture_size
         if prompt_profile_cfg:
             self.max_prefill_batch_size = prompt_profile_cfg[0]
         else:
             self.max_prefill_batch_size = with_default(get_config().VLLM_PROMPT_BS_BUCKET_MAX, 1)
         self.seen_configs: set = set()
-        self.max_num_batched_tokens = \
-            self.scheduler_config.max_num_batched_tokens
+        self.max_num_batched_tokens = self.scheduler_config.max_num_batched_tokens
+        self.max_graph_capture_tokens = self.vllm_config.compilation_config.max_cudagraph_capture_size if \
+            self.vllm_config.compilation_config.max_cudagraph_capture_size is not None else self.max_num_batched_tokens
         self.use_prefix_caching = (self.vllm_config.cache_config.enable_prefix_caching)
         self.bucketing_manager = HPUBucketingManager()
         max_num_prefill_seqs = self.max_num_seqs if self.use_merged_prefill \
@@ -2575,7 +2575,9 @@ def _execute_model_generic(self,
         additional_kwargs = {}
         if htorch.utils.internal.is_lazy():
             use_graphs = self._use_graphs()
-            if self.max_cudagraph_capture_size is not None and batch_size * seq_len > self.max_cudagraph_capture_size:
+            # skip HPU graphs for long prefills
+            if seq_len > 1 and \
+                batch_size * (seq_len + num_blocks * self.block_size) > self.max_graph_capture_tokens:
                 use_graphs = False
             additional_kwargs.update({"bypass_hpu_graphs": not use_graphs})
         else: