diff --git a/.changeset/popular-pumas-sin.md b/.changeset/popular-pumas-sin.md
new file mode 100644
index 00000000000..b49d867553e
--- /dev/null
+++ b/.changeset/popular-pumas-sin.md
@@ -0,0 +1,5 @@
+---
+'@shopify/polaris': patch
+---
+
+Ensure Avatar has no background color if an source prop is passed in to allow for transparent images
diff --git a/polaris-react/src/components/Avatar/Avatar.scss b/polaris-react/src/components/Avatar/Avatar.scss
index 3e9699fd857..879774563ff 100644
--- a/polaris-react/src/components/Avatar/Avatar.scss
+++ b/polaris-react/src/components/Avatar/Avatar.scss
@@ -28,6 +28,10 @@
     // stylelint-enable
     background: var(--p-color-avatar-background-experimental);
     color: var(--p-color-avatar-color-experimental);
+
+    &.imageHasLoaded {
+      background: transparent;
+    }
   }
 
   @media (forced-colors: active) {