diff --git a/file/src/main/java/org/apache/pulsar/io/file/FileSource.java b/file/src/main/java/org/apache/pulsar/io/file/FileSource.java
index c201977d56..ff82ce8854 100644
--- a/file/src/main/java/org/apache/pulsar/io/file/FileSource.java
+++ b/file/src/main/java/org/apache/pulsar/io/file/FileSource.java
@@ -36,15 +36,21 @@
 public class FileSource extends PushSource<byte[]> {
 
     private ExecutorService executor;
-    private final BlockingQueue<File> workQueue = new LinkedBlockingQueue<>();
-    private final BlockingQueue<File> inProcess = new LinkedBlockingQueue<>();
-    private final BlockingQueue<File> recentlyProcessed = new LinkedBlockingQueue<>();
+    private BlockingQueue<File> workQueue;
+    private BlockingQueue<File> inProcess;
+    private BlockingQueue<File> recentlyProcessed;
 
     @Override
     public void open(Map<String, Object> config, SourceContext sourceContext) throws Exception {
         FileSourceConfig fileConfig = FileSourceConfig.load(config);
         fileConfig.validate();
 
+        // Initialize bounded queues based on configuration to prevent OOM
+        int queueCapacity = fileConfig.getMaxQueueSize();
+        workQueue = new LinkedBlockingQueue<>(queueCapacity);
+        inProcess = new LinkedBlockingQueue<>(queueCapacity);
+        recentlyProcessed = new LinkedBlockingQueue<>(queueCapacity);
+
         // One extra for the File listing thread, and another for the cleanup thread
         executor = Executors.newFixedThreadPool(fileConfig.getNumWorkers() + 2);
         executor.execute(new FileListingThread(fileConfig, workQueue, inProcess, recentlyProcessed));
diff --git a/file/src/main/java/org/apache/pulsar/io/file/FileSourceConfig.java b/file/src/main/java/org/apache/pulsar/io/file/FileSourceConfig.java
index d9b1e1f3a4..fb2614de86 100644
--- a/file/src/main/java/org/apache/pulsar/io/file/FileSourceConfig.java
+++ b/file/src/main/java/org/apache/pulsar/io/file/FileSourceConfig.java
@@ -110,6 +110,12 @@ public class FileSourceConfig implements Serializable {
      */
     private Integer numWorkers = 1;
 
+    /**
+     * The maximum capacity of the internal queues. This provides backpressure
+     * to prevent OutOfMemoryErrors when processing is slower than file listing.
+     */
+    private Integer maxQueueSize = 1000;
+
     /**
      * If set, do not delete but only rename file that has been processed.
      * This config only work when 'keepFile' property is false.
@@ -170,6 +176,10 @@ public void validate() {
             throw new IllegalArgumentException("The property numWorkers must be greater than zero");
         }
 
+        if (maxQueueSize != null && maxQueueSize <= 0) {
+            throw new IllegalArgumentException("The property maxQueueSize must be greater than zero");
+        }
+
         if (processedFileSuffix != null && keepFile) {
             throw new IllegalArgumentException(
                     "The property keepFile must be false if the property processedFileSuffix is set");
diff --git a/file/src/test/java/org/apache/pulsar/io/file/FileSourceConfigTest.java b/file/src/test/java/org/apache/pulsar/io/file/FileSourceConfigTest.java
index e7d497f5a9..6097e2d1ae 100644
--- a/file/src/test/java/org/apache/pulsar/io/file/FileSourceConfigTest.java
+++ b/file/src/test/java/org/apache/pulsar/io/file/FileSourceConfigTest.java
@@ -18,8 +18,10 @@
  */
 package org.apache.pulsar.io.file;
 
+import static org.testng.Assert.assertEquals;
 import static org.testng.Assert.assertFalse;
 import static org.testng.Assert.assertNotNull;
+import static org.testng.Assert.assertThrows;
 import static org.testng.Assert.assertTrue;
 import java.io.File;
 import java.io.IOException;
@@ -142,6 +144,52 @@ public final void invalidKeepFileTest() throws  IOException {
         config.validate();
     }
 
+    @Test
+    public void testDefaultMaxQueueSize() throws Exception {
+        Map<String, Object> map = new HashMap<>();
+        map.put("inputDirectory", "/tmp"); // Dummy directory just to pass basic validation
+
+        FileSourceConfig config = FileSourceConfig.load(map);
+
+        // Assert that if the user provides no value, it defaults to 1000
+        assertEquals(config.getMaxQueueSize(), Integer.valueOf(1000));
+    }
+
+    @Test
+    public void testValidMaxQueueSize() throws Exception {
+        Map<String, Object> map = new HashMap<>();
+        map.put("inputDirectory", "/tmp");
+        map.put("maxQueueSize", 5000);
+
+        FileSourceConfig config = FileSourceConfig.load(map);
+
+        // Assert that the custom value is loaded correctly
+        assertEquals(config.getMaxQueueSize(), Integer.valueOf(5000));
+
+        // Should not throw any exceptions
+        config.validate();
+    }
+
+    @Test
+    public void testInvalidMaxQueueSize() {
+        Map<String, Object> map = new HashMap<>();
+        map.put("inputDirectory", "/tmp");
+
+        // Test 0
+        map.put("maxQueueSize", 0);
+        assertThrows(IllegalArgumentException.class, () -> {
+            FileSourceConfig config = FileSourceConfig.load(map);
+            config.validate();
+        });
+
+        // Test Negative Number
+        map.put("maxQueueSize", -5);
+        assertThrows(IllegalArgumentException.class, () -> {
+            FileSourceConfig config = FileSourceConfig.load(map);
+            config.validate();
+        });
+    }
+
     private File getFile(String name) {
         ClassLoader classLoader = getClass().getClassLoader();
         return new File(classLoader.getResource(name).getFile());