diff --git a/.chronus/changes/tcgc-api-version-optional-2026-01-20.md b/.chronus/changes/tcgc-api-version-optional-2026-01-20.md
new file mode 100644
index 0000000000..c2502ab695
--- /dev/null
+++ b/.chronus/changes/tcgc-api-version-optional-2026-01-20.md
@@ -0,0 +1,7 @@
+---
+changeKind: fix
+packages:
+  - "@azure-tools/typespec-client-generator-core"
+---
+
+The `apiVersion` parameter in client initialization is now correctly marked as `optional: true` for all client-level API version parameters, including both single-service and multi-service scenarios.
diff --git a/packages/typespec-client-generator-core/src/clients.ts b/packages/typespec-client-generator-core/src/clients.ts
index d07b48e6f4..fe6c7fd112 100644
--- a/packages/typespec-client-generator-core/src/clients.ts
+++ b/packages/typespec-client-generator-core/src/clients.ts
@@ -257,8 +257,12 @@ function addDefaultClientParameters<
       multipleServiceApiVersionParam.apiVersions = [];
       multipleServiceApiVersionParam.clientDefaultValue = undefined;
       multipleServiceApiVersionParam.type = getTypeSpecBuiltInType(context, "string");
+      // API version parameters at the client level should always be optional
+      multipleServiceApiVersionParam.optional = true;
       defaultClientParamters.push(multipleServiceApiVersionParam);
     } else {
+      // API version parameters at the client level should always be optional
+      apiVersionParam.optional = true;
       defaultClientParamters.push(apiVersionParam);
     }
   }
diff --git a/packages/typespec-client-generator-core/test/clients/params.test.ts b/packages/typespec-client-generator-core/test/clients/params.test.ts
index 66d5858096..df02f8e325 100644
--- a/packages/typespec-client-generator-core/test/clients/params.test.ts
+++ b/packages/typespec-client-generator-core/test/clients/params.test.ts
@@ -599,7 +599,7 @@ it("service with default api version, method with api version param", async () =
   const clientApiVersionParam = client.clientInitialization.parameters[1];
   strictEqual(clientApiVersionParam.name, "apiVersion");
   strictEqual(clientApiVersionParam.onClient, true);
-  strictEqual(clientApiVersionParam.optional, false);
+  strictEqual(clientApiVersionParam.optional, true);
   strictEqual(clientApiVersionParam.kind, "method");
   strictEqual(clientApiVersionParam.clientDefaultValue, "v1");
   strictEqual(clientApiVersionParam.isApiVersionParam, true);
@@ -646,7 +646,7 @@ it("service with default api version, method with path api version param", async
   const clientApiVersionParam = client.clientInitialization.parameters[1];
   strictEqual(clientApiVersionParam.name, "apiVersion");
   strictEqual(clientApiVersionParam.onClient, true);
-  strictEqual(clientApiVersionParam.optional, false);
+  strictEqual(clientApiVersionParam.optional, true);
   strictEqual(clientApiVersionParam.kind, "method");
   strictEqual(clientApiVersionParam.clientDefaultValue, "v1");
   strictEqual(clientApiVersionParam.isApiVersionParam, true);
diff --git a/packages/typespec-client-generator-core/test/clients/structure.test.ts b/packages/typespec-client-generator-core/test/clients/structure.test.ts
index da93b9f8a0..1197132a9f 100644
--- a/packages/typespec-client-generator-core/test/clients/structure.test.ts
+++ b/packages/typespec-client-generator-core/test/clients/structure.test.ts
@@ -498,7 +498,7 @@ it("single with core", async () => {
   )[0];
   strictEqual(apiVersionParam.name, "apiVersion");
   strictEqual(apiVersionParam.onClient, true);
-  strictEqual(apiVersionParam.optional, false);
+  strictEqual(apiVersionParam.optional, true);
   strictEqual(apiVersionParam.kind, "method");
   strictEqual(apiVersionParam.clientDefaultValue, "2022-12-01-preview");
 });
@@ -564,7 +564,7 @@ it("multiple with core", async () => {
   )[0];
   strictEqual(apiVersionParam.name, "apiVersion");
   strictEqual(apiVersionParam.onClient, true);
-  strictEqual(apiVersionParam.optional, false);
+  strictEqual(apiVersionParam.optional, true);
   strictEqual(apiVersionParam.kind, "method");
   strictEqual(apiVersionParam.clientDefaultValue, "2022-12-01");
 });
@@ -816,6 +816,7 @@ it("one client from multiple services", async () => {
   strictEqual(apiVersionParam.clientDefaultValue, undefined);
   // For multi-service clients, the api version param type should be string
   strictEqual(apiVersionParam.type.kind, "string");
+  strictEqual(apiVersionParam.optional, true);
   const aiClient = client.children!.find((c) => c.name === "AI");
   ok(aiClient);
 
@@ -999,6 +1000,7 @@ it("one client from multiple services without version dependency", async () => {
   strictEqual(apiVersionParam.clientDefaultValue, undefined);
   // For multi-service clients, the api version param type should be string
   strictEqual(apiVersionParam.type.kind, "string");
+  strictEqual(apiVersionParam.optional, true);
 
   const aiClient = client.children!.find((c) => c.name === "AI");
   ok(aiClient);
@@ -1121,6 +1123,7 @@ it("one client from multiple services with `@clientLocation`", async () => {
   strictEqual(apiVersionParam.clientDefaultValue, undefined);
   // For multi-service clients, the api version param type should be string
   strictEqual(apiVersionParam.type.kind, "string");
+  strictEqual(apiVersionParam.optional, true);
 
   const aiClient = client.children!.find((c) => c.name === "AI");
   ok(aiClient);