diff --git a/NEWS.md b/NEWS.md
index 37874d908..953e0b1cb 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -2,6 +2,8 @@
 
 * `fit_xy()` can now take dgCMatrix input for `x` argument (#1121).
 
+* `fit()` and `fit_xy()` can now take sparse tibbles as data values (#1165).
+
 * Transitioned package errors and warnings to use cli (#1147 and #1148 by
   @shum461, #1153 by @RobLBaker and @wright13, #1154 by @JamesHWade, #1160, 
   #1161, #1081).
diff --git a/R/arguments.R b/R/arguments.R
index ad1033270..0e62a0938 100644
--- a/R/arguments.R
+++ b/R/arguments.R
@@ -264,6 +264,7 @@ make_xy_call <- function(object, target, env) {
       none = rlang::expr(x),
       data.frame = rlang::expr(maybe_data_frame(x)),
       matrix = rlang::expr(maybe_matrix(x)),
+      dgCMatrix = rlang::expr(maybe_sparse_matrix(x)),
       cli::cli_abort("Invalid data type target: {target}.")
     )
   if (uses_weights) {
diff --git a/R/convert_data.R b/R/convert_data.R
index 87a20a3c0..73fea702d 100644
--- a/R/convert_data.R
+++ b/R/convert_data.R
@@ -41,9 +41,10 @@
                                     indicators = "traditional",
                                     composition = "data.frame",
                                     remove_intercept = TRUE) {
-  if (!(composition %in% c("data.frame", "matrix"))) {
+  if (!(composition %in% c("data.frame", "matrix", "dgCMatrix"))) {
     cli::cli_abort(
-      "{.arg composition} should be either {.val data.frame} or {.val matrix}."
+      "{.arg composition} should be either {.val data.frame}, {.val matrix}, or
+      {.val dgCMatrix}."
     )
   }
 
@@ -122,6 +123,18 @@
         xlevels = .getXlevels(mod_terms, mod_frame),
         options = options
       )
+  } else if (composition == "dgCMatrix") {
+    x <- sparsevctrs::coerce_to_sparse_matrix(data)
+    res <-
+      list(
+        x = x,
+        y = y,
+        weights = w,
+        offset = offset,
+        terms = mod_terms,
+        xlevels = .getXlevels(mod_terms, mod_frame),
+        options = options
+      )
   } else {
     # Since a matrix is requested, try to convert y but check
     # to see if it is possible
@@ -389,7 +402,11 @@ maybe_matrix <- function(x) {
 }
 
 maybe_sparse_matrix <- function(x) {
-  if (any(vapply(x, sparsevctrs::is_sparse_vector, logical(1)))) {
+  if (methods::is(x, "sparseMatrix")) {
+    return(x)
+  }
+
+  if (is_sparse_tibble(x)) {
     res <- sparsevctrs::coerce_to_sparse_matrix(x)
   } else {
     res <- as.matrix(x)
diff --git a/R/fit.R b/R/fit.R
index 0cfe7f5b0..52088a6b5 100644
--- a/R/fit.R
+++ b/R/fit.R
@@ -174,6 +174,8 @@ fit.model_spec <-
     eval_env$formula <- formula
     eval_env$weights <- wts
 
+    data <- materialize_sparse_tibble(data, object, "data")
+    
     fit_interface <-
       check_interface(eval_env$formula, eval_env$data, cl, object)
 
diff --git a/R/fit_helpers.R b/R/fit_helpers.R
index 625162771..6143c4505 100644
--- a/R/fit_helpers.R
+++ b/R/fit_helpers.R
@@ -129,6 +129,11 @@ form_xy <- function(object, control, env,
 
   indicators <- encoding_info %>% dplyr::pull(predictor_indicators)
   remove_intercept <- encoding_info %>% dplyr::pull(remove_intercept)
+  allow_sparse_x <- encoding_info %>% dplyr::pull(allow_sparse_x)
+
+  if (allow_sparse_x && is_sparse_tibble(env$data)) {
+    target <- "dgCMatrix"
+  }
 
   data_obj <- .convert_form_to_xy_fit(
     formula = env$formula,
diff --git a/R/sparsevctrs.R b/R/sparsevctrs.R
index a7a65cf45..d09416ba3 100644
--- a/R/sparsevctrs.R
+++ b/R/sparsevctrs.R
@@ -7,6 +7,27 @@ to_sparse_data_frame <- function(x, object) {
       "{.arg x} is a sparse matrix, but {.fn {class(object)[1]}} with
        engine {.code {object$engine}} doesn't accept that.")
     }
+  } else if (is.data.frame(x)) {
+    x <- materialize_sparse_tibble(x, object, "x")
+  }
+  x
+}
+
+is_sparse_tibble <- function(x) {
+  any(vapply(x, sparsevctrs::is_sparse_vector, logical(1)))
+}
+
+materialize_sparse_tibble <- function(x, object, input) {
+  if ((!allow_sparse(object)) && is_sparse_tibble(x)) {
+    cli::cli_warn(
+      "{.arg {input}} is a sparse tibble, but {.fn {class(object)[1]}} with
+      engine {.code {object$engine}} doesn't accept that. Converting to 
+      non-sparse."
+    )
+    for (i in seq_along(ncol(x))) {
+      # materialize with []
+      x[[i]] <- x[[i]][]
+    }
   }
   x
 }
diff --git a/tests/testthat/_snaps/sparsevctrs.md b/tests/testthat/_snaps/sparsevctrs.md
index 02cb9611b..3a849fbab 100644
--- a/tests/testthat/_snaps/sparsevctrs.md
+++ b/tests/testthat/_snaps/sparsevctrs.md
@@ -1,3 +1,19 @@
+# sparse tibble can be passed to `fit()
+
+    Code
+      lm_fit <- fit(spec, avg_price_per_room ~ ., data = hotel_data[1:100, ])
+    Condition
+      Warning:
+      `data` is a sparse tibble, but `linear_reg()` with engine `lm` doesn't accept that. Converting to non-sparse.
+
+# sparse tibble can be passed to `fit_xy()
+
+    Code
+      lm_fit <- fit_xy(spec, x = hotel_data[1:100, -1], y = hotel_data[1:100, 1])
+    Condition
+      Warning:
+      `x` is a sparse tibble, but `linear_reg()` with engine `lm` doesn't accept that. Converting to non-sparse.
+
 # sparse matrices can be passed to `fit_xy()
 
     Code
diff --git a/tests/testthat/test-sparsevctrs.R b/tests/testthat/test-sparsevctrs.R
index 2f9027306..4eb876ae8 100644
--- a/tests/testthat/test-sparsevctrs.R
+++ b/tests/testthat/test-sparsevctrs.R
@@ -1,3 +1,49 @@
+test_that("sparse tibble can be passed to `fit()", {
+  skip_if_not_installed("xgboost")
+
+  hotel_data <- sparse_hotel_rates()
+  hotel_data <- sparsevctrs::coerce_to_sparse_tibble(hotel_data)
+
+  spec <- boost_tree() %>%
+    set_mode("regression") %>%
+    set_engine("xgboost")
+
+  expect_no_error(
+    lm_fit <- fit(spec, avg_price_per_room ~ ., data = hotel_data)
+  )
+
+  spec <- linear_reg() %>%
+    set_mode("regression") %>%
+    set_engine("lm")
+
+  expect_snapshot(
+    lm_fit <- fit(spec, avg_price_per_room ~ ., data = hotel_data[1:100, ])
+  )
+})
+
+test_that("sparse tibble can be passed to `fit_xy()", {
+  skip_if_not_installed("xgboost")
+
+  hotel_data <- sparse_hotel_rates()
+  hotel_data <- sparsevctrs::coerce_to_sparse_tibble(hotel_data)
+
+  spec <- boost_tree() %>%
+    set_mode("regression") %>%
+    set_engine("xgboost")
+
+  expect_no_error(
+    lm_fit <- fit_xy(spec, x = hotel_data[, -1], y = hotel_data[, 1])
+  )
+
+  spec <- linear_reg() %>%
+    set_mode("regression") %>%
+    set_engine("lm")
+
+  expect_snapshot(
+    lm_fit <- fit_xy(spec, x = hotel_data[1:100, -1], y = hotel_data[1:100, 1])
+  )
+})
+
 test_that("sparse matrices can be passed to `fit_xy()", {
   skip_if_not_installed("xgboost")
 
@@ -66,7 +112,7 @@ test_that("maybe_sparse_matrix() is used correctly", {
   
   local_mocked_bindings(
     maybe_sparse_matrix = function(x) {
-      if (any(vapply(x, sparsevctrs::is_sparse_vector, logical(1)))) {
+      if (is_sparse_tibble(x)) {
         stop("sparse vectors detected")
       } else {
         stop("no sparse vectors detected")