diff --git a/lib/spring/application.rb b/lib/spring/application.rb
index 6fdbbb3a..92477903 100644
--- a/lib/spring/application.rb
+++ b/lib/spring/application.rb
@@ -123,7 +123,11 @@ def preload
       watcher.add Spring.gemfile, Spring.gemfile_lock
 
       if defined?(Rails) && Rails.application
-        watcher.add Rails.application.paths["config/initializers"]
+        Rails::Engine.descendants.each do |engine|
+          if engine.root.to_s.start_with?(Rails.root.to_s)
+            watcher.add engine.paths["config/initializers"]
+          end
+        end
         watcher.add Rails.application.paths["config/database"]
         if secrets_path = Rails.application.paths["config/secrets"]
           watcher.add secrets_path
diff --git a/test/support/acceptance_test.rb b/test/support/acceptance_test.rb
index af2acc31..80df8efa 100644
--- a/test/support/acceptance_test.rb
+++ b/test/support/acceptance_test.rb
@@ -715,6 +715,26 @@ def exec_name
       test "rails db:system:change" do
         assert_success "bin/rails db:system:change --to=sqlite3"
       end
+
+      test "watches embedded engine initializers" do
+        engine_file = app.path("engine/lib/my_engine.rb")
+        engine_file.mkpath
+        engine_file.write(<<~RUBY)
+          require "rails/engine"
+
+          class MyEngine < Rails::Engine
+          end
+        RUBY
+        app.path("engine/config/initializers/first.rb").write("")
+
+        assert_success app.spring_test_command
+
+        app.path("engine/config/initializers/second.rb").write("")
+
+        app.await_reload
+
+        assert_success app.spring_test_command
+      end
     end
   end
 end