diff --git a/esphome/components/ethernet/ethernet_component_esp32.cpp b/esphome/components/ethernet/ethernet_component_esp32.cpp
index 1d9903271e..ea732e84ff 100644
--- a/esphome/components/ethernet/ethernet_component_esp32.cpp
+++ b/esphome/components/ethernet/ethernet_component_esp32.cpp
@@ -10,6 +10,9 @@
 #include <lwip/dns.h>
 #include <cinttypes>
 #include "esp_event.h"
+#ifdef USE_PSRAM
+#include <esp_psram.h>
+#endif
 
 // IDF 6.0 moved per-chip PHY/MAC drivers to the Espressif Component Registry;
 // they are no longer included via esp_eth.h and need explicit includes.
@@ -71,6 +74,32 @@ static const char *const TAG = "ethernet";
 // PHY register size for hex logging
 static constexpr size_t PHY_REG_SIZE = 2;
 
+// Dual wifi + ethernet SPI builds: the one place internal RAM is short and lwip's other buffers are
+// already in PSRAM. Not with L2 TAP, whose filter lives in the glue's input path this replaces.
+#if defined(USE_PSRAM) && defined(USE_ETHERNET_SPI) && defined(USE_WIFI) && !defined(CONFIG_ESP_NETIF_L2_TAP)
+#define USE_ETHERNET_RX_PSRAM
+// NOLINTNEXTLINE(cppcoreguidelines-avoid-non-const-global-variables) - reported by dump_config()
+static bool rx_psram_installed = false;
+
+// ESP-IDF ethernet drivers malloc() every received frame in internal RAM, where it stays until lwIP
+// hands it to the application. Move it to PSRAM; if that fails the frame is passed on where it is.
+static esp_err_t eth_input_to_psram(esp_eth_handle_t handle, uint8_t *buffer, uint32_t length, void *priv) {
+  auto *copy = static_cast<uint8_t *>(heap_caps_malloc(length, MALLOC_CAP_SPIRAM | MALLOC_CAP_8BIT));
+  if (copy != nullptr) {
+    memcpy(copy, buffer, length);
+    free(buffer);  // NOLINT(cppcoreguidelines-no-malloc) - allocated by the driver with malloc()
+    buffer = copy;
+  } else {
+    static bool warned = false;  // once, this runs per frame in the driver's task
+    if (!warned) {
+      warned = true;
+      ESP_LOGW(TAG, "PSRAM allocation failed, frame kept in internal RAM (reported once)");
+    }
+  }
+  return esp_netif_receive(static_cast<esp_netif_t *>(priv), buffer, length, nullptr);
+}
+#endif
+
 void EthernetComponent::log_error_and_mark_failed_(esp_err_t err, const char *message) {
   ESP_LOGE(TAG, "%s: (%d) %s", message, err, esp_err_to_name(err));
   this->mark_failed();
@@ -453,6 +482,16 @@ void EthernetComponent::ethernet_lazy_init_() {
   /* attach Ethernet driver to TCP/IP stack */
   err = esp_netif_attach(this->eth_netif_, esp_eth_new_netif_glue(this->eth_handle_));
   ESPHL_ERROR_CHECK(err, "ETH netif attach error");
+#ifdef USE_ETHERNET_RX_PSRAM
+  // The glue frees every receive buffer with free(), so the replacement buffer must come from the heap
+  if (esp_psram_is_initialized()) {
+    err = esp_eth_update_input_path(this->eth_handle_, eth_input_to_psram, this->eth_netif_);
+    rx_psram_installed = err == ESP_OK;
+    if (!rx_psram_installed) {
+      ESP_LOGW(TAG, "PSRAM RX path not installed: %s", esp_err_to_name(err));
+    }
+  }
+#endif
 
   // Register user defined event handers
   err = esp_event_handler_register(ETH_EVENT, ESP_EVENT_ANY_ID, &EthernetComponent::eth_event_handler, nullptr);
@@ -630,6 +669,13 @@ void EthernetComponent::dump_config() {
                 this->clk_pin_, this->mdc_pin_, this->mdio_pin_, this->phy_addr_);
 #endif
   ESP_LOGCONFIG(TAG, "  Type: %s", eth_type);
+#ifdef USE_ETHERNET_RX_PSRAM
+  // Only known once the driver is up; with enable_on_boot: false that is after this dump
+  if (this->ethernet_initialized_) {
+    ESP_LOGCONFIG(TAG, "  RX frames: %s",
+                  rx_psram_installed ? LOG_STR_LITERAL("PSRAM") : LOG_STR_LITERAL("internal RAM"));
+  }
+#endif
 }
 
 network::IPAddresses EthernetComponent::get_ip_addresses() {
diff --git a/tests/components/ethernet/test-w5500-wifi-psram.esp32-s3-idf.yaml b/tests/components/ethernet/test-w5500-wifi-psram.esp32-s3-idf.yaml
new file mode 100644
index 0000000000..d454dbadc3
--- /dev/null
+++ b/tests/components/ethernet/test-w5500-wifi-psram.esp32-s3-idf.yaml
@@ -0,0 +1,15 @@
+# W5500 next to wifi with PSRAM: compiles the input path that moves received frames to PSRAM
+packages:
+  ethernet: !include common-w5500.yaml
+
+psram:
+  mode: quad
+
+wifi:
+  ssid: MySSID
+  password: password1
+
+network:
+  priority:
+    - ethernet
+    - wifi