diff --git a/src/powershell/README.md b/src/powershell/README.md
index f09ac1f02..59a391a2b 100644
--- a/src/powershell/README.md
+++ b/src/powershell/README.md
@@ -18,6 +18,7 @@ Installs PowerShell along with needed dependencies. Useful for base Dockerfiles
 | version | Select or enter a version of PowerShell. | string | latest |
 | modules | Optional comma separated list of PowerShell modules to install. If you need to install a specific version of a module, use '==' to specify the version (e.g. 'az.resources==2.5.0') | string | - |
 | powershellProfileURL | Optional (publicly accessible) URL to download PowerShell profile. | string | - |
+| preserveHistory | Optional Enable to preserve the powershell history across container restart/rebuilds | boolean | true |
 
 ## Customizations
 
diff --git a/src/powershell/devcontainer-feature.json b/src/powershell/devcontainer-feature.json
index 009f4c238..906d4bbcf 100644
--- a/src/powershell/devcontainer-feature.json
+++ b/src/powershell/devcontainer-feature.json
@@ -1,6 +1,6 @@
 {
     "id": "powershell",
-    "version": "2.0.2",
+    "version": "2.0.3",
     "name": "PowerShell",
     "documentationURL": "https://github.com/devcontainers/features/tree/main/src/powershell",
     "description": "Installs PowerShell along with needed dependencies. Useful for base Dockerfiles that often are missing required install dependencies like gpg.",
@@ -28,6 +28,11 @@
             "type": "string",
             "default": "",
             "description": "Optional (publicly accessible) URL to download PowerShell profile."
+        },
+        "preserveHistory": {
+            "type": "boolean",
+            "default": true,
+            "description": "Optional Enable to preserve the powershell history across container restart/rebuilds"
         }
     },
     "customizations": {
@@ -44,6 +49,16 @@
                 ]
             }
     },
+    "mounts": [
+      {
+        "type": "volume",
+        "source": "${devcontainerId}-powershell-history",
+        "target": "/dc/powershell"
+      }
+    ],
+    "onCreateCommand": {
+      "powershell": "/usr/local/share/powershell/scripts/oncreate.sh"
+    },
     "installsAfter": [
         "ghcr.io/devcontainers/features/common-utils"
     ]
diff --git a/src/powershell/install.sh b/src/powershell/install.sh
index cabd2cbb4..942bf6d8e 100755
--- a/src/powershell/install.sh
+++ b/src/powershell/install.sh
@@ -9,12 +9,16 @@
 
 set -e
 
+# Capture the location of this script once so later directory changes do not affect relative file lookups.
+SOURCE_DIR="$(pwd)"
+
 # Clean up
 rm -rf /var/lib/apt/lists/*
 
 POWERSHELL_VERSION=${VERSION:-"latest"}
 POWERSHELL_MODULES="${MODULES:-""}"
 POWERSHELL_PROFILE_URL="${POWERSHELLPROFILEURL}"
+PRESERVE_HISTORY="${PRESERVEHISTORY}"
 
 MICROSOFT_GPG_KEYS_URI="https://packages.microsoft.com/keys/microsoft.asc"
 #MICROSOFT_GPG_KEYS_URI=$(curl https://packages.microsoft.com/keys/microsoft.asc -o /usr/share/keyrings/microsoft-archive-keyring.gpg)
@@ -494,7 +498,30 @@ if [ -n "$POWERSHELL_PROFILE_URL" ]; then
     echo "Downloading PowerShell Profile from: $POWERSHELL_PROFILE_URL"
     # Get profile path from currently installed pwsh
     profilePath=$(pwsh -noni -c '$PROFILE.AllUsersAllHosts')
-    sudo -E curl -sSL -o "$profilePath" "$POWERSHELL_PROFILE_URL"
+    # Download to a temp file first so a non-200 response never overwrites the profile
+    tmpProfile="$(mktemp)"
+    http_status=$(curl -sSL -w '%{http_code}' -o "$tmpProfile" "$POWERSHELL_PROFILE_URL")
+    if [ "$http_status" = "200" ]; then
+        mv "$tmpProfile" "$profilePath"
+    else
+        echo "Failed to download PowerShell profile (HTTP ${http_status}). Skipping profile update." >&2
+        rm -f "$tmpProfile"
+    fi
+fi
+
+# Copy persistent history setup script
+ONCREATE_SOURCE="${SOURCE_DIR}/oncreate.sh"
+SCRIPTS_DIR="/usr/local/share/powershell/scripts"
+mkdir -p "$SCRIPTS_DIR"
+echo "Checking oncreate.sh"
+if [ ! -f "$ONCREATE_SOURCE" ]; then
+        echo "oncreate.sh not found at expected path: $ONCREATE_SOURCE" >&2
+        exit 1
+fi
+if [ -f "$ONCREATE_SOURCE" ]; then
+  cp "$ONCREATE_SOURCE" "$SCRIPTS_DIR/oncreate.sh"
+  sed -i "s|preserveHistoryFromInstallSh|${PRESERVE_HISTORY}|" "$SCRIPTS_DIR/oncreate.sh"
+  chmod +x "$SCRIPTS_DIR/oncreate.sh"
 fi
 
 # Clean up
diff --git a/src/powershell/oncreate.sh b/src/powershell/oncreate.sh
new file mode 100644
index 000000000..c9f6f5a0a
--- /dev/null
+++ b/src/powershell/oncreate.sh
@@ -0,0 +1,24 @@
+#!/usr/bin/env bash
+set -e
+
+PRESERVE_HISTORY="preserveHistoryFromInstallSh"
+HISTORY_SAVE_LINE='Set-PSReadLineOption -HistorySavePath /dc/powershell/history.txt'
+
+if [ "${PRESERVE_HISTORY}" = "true" ]; then
+	if [ "$(stat -c '%u:%g' "/dc/powershell")" = "$(id -u):$(id -g)" ]; then
+		echo "Already owned by the current user, nothing to do"
+	elif [ "$(id -u)" -eq 0 ]; then
+		chown -R "$(id -u):$(id -g)" "/dc/powershell"
+	elif command -v sudo >/dev/null 2>&1; then
+		sudo chown -R "$(id -u):$(id -g)" "/dc/powershell"
+	else
+		echo "Warning: unable to chown /dc/powershell (current user not root and no sudo available); history may not persist." >&2
+	fi
+		profile_path="$(pwsh -NoProfile -Command '$PROFILE')"
+		mkdir -p "$(dirname "$profile_path")"
+		touch "$profile_path"
+
+		if ! grep -Fxq "$HISTORY_SAVE_LINE" "$profile_path"; then
+				printf '\n%s\n' "$HISTORY_SAVE_LINE" >> "$profile_path"
+		fi
+fi