diff --git a/Source/Editor/Content/Import/ModelImportEntry.cs b/Source/Editor/Content/Import/ModelImportEntry.cs
index b17c8314d..8bdd7264a 100644
--- a/Source/Editor/Content/Import/ModelImportEntry.cs
+++ b/Source/Editor/Content/Import/ModelImportEntry.cs
@@ -1,5 +1,6 @@
 // Copyright (c) 2012-2023 Wojciech Figat. All rights reserved.
 
+using System;
 using System.ComponentModel;
 using System.Runtime.CompilerServices;
 using System.Runtime.InteropServices;
@@ -316,6 +317,20 @@ namespace FlaxEditor.Content.Import
         [EditorOrder(400), DefaultValue(true)]
         public bool ImportMaterials { get; set; } = true;
 
+        /// <summary>
+        /// If checked, materials will be imported as instances of a base material.
+        /// </summary>
+        [EditorDisplay("Materials"), VisibleIf(nameof(ImportMaterials))]
+        [EditorOrder(405), DefaultValue(false)]
+        public bool ImportMaterialsAsInstances = false;
+
+        /// <summary>
+        /// The material to import the model's materials as an instance of.
+        /// </summary>
+        [EditorDisplay("Materials"), VisibleIf(nameof(ImportMaterialsAsInstances))]
+        [EditorOrder(406)]
+        public Material InstanceToImportAs = null; // TODO: only show if BOTH ImportMaterials and ImportMaterialsAsInstances are true.
+
         /// <summary>
         /// If checked, the importer will import texture files used by the model and any embedded texture resources.
         /// </summary>
@@ -406,6 +421,8 @@ namespace FlaxEditor.Content.Import
 
             // Misc
             public byte ImportMaterials;
+            public byte ImportMaterialsAsInstances;
+            public Guid InstanceToImportAs;
             public byte ImportTextures;
             public byte RestoreMaterialsOnReimport;
 
@@ -454,6 +471,8 @@ namespace FlaxEditor.Content.Import
                 LODCount = LODCount,
                 TriangleReduction = TriangleReduction,
                 ImportMaterials = (byte)(ImportMaterials ? 1 : 0),
+                ImportMaterialsAsInstances = (byte)(ImportMaterialsAsInstances ? 1 : 0),
+                InstanceToImportAs = InstanceToImportAs.ID,
                 ImportTextures = (byte)(ImportTextures ? 1 : 0),
                 RestoreMaterialsOnReimport = (byte)(RestoreMaterialsOnReimport ? 1 : 0),
                 GenerateSDF = (byte)(GenerateSDF ? 1 : 0),
@@ -496,6 +515,8 @@ namespace FlaxEditor.Content.Import
             LODCount = options.LODCount;
             TriangleReduction = options.TriangleReduction;
             ImportMaterials = options.ImportMaterials != 0;
+            ImportMaterialsAsInstances = options.ImportMaterialsAsInstances != 0;
+            InstanceToImportAs = FlaxEngine.Content.Load<Material>(options.InstanceToImportAs);
             ImportTextures = options.ImportTextures != 0;
             RestoreMaterialsOnReimport = options.RestoreMaterialsOnReimport != 0;
             GenerateSDF = options.GenerateSDF != 0;
diff --git a/Source/Editor/Managed/ManagedEditor.Internal.cpp b/Source/Editor/Managed/ManagedEditor.Internal.cpp
index dcaa25e6c..17708dab5 100644
--- a/Source/Editor/Managed/ManagedEditor.Internal.cpp
+++ b/Source/Editor/Managed/ManagedEditor.Internal.cpp
@@ -195,6 +195,8 @@ struct InternalModelOptions
 
     // Misc
     byte ImportMaterials;
+    byte ImportMaterialsAsInstances;
+    Guid InstanceToImportAs;
     byte ImportTextures;
     byte RestoreMaterialsOnReimport;
 
@@ -240,6 +242,8 @@ struct InternalModelOptions
         to->LODCount = from->LODCount;
         to->TriangleReduction = from->TriangleReduction;
         to->ImportMaterials = from->ImportMaterials;
+        to->ImportMaterialsAsInstances = from->ImportMaterialsAsInstances;
+        to->InstanceToImportAs = from->InstanceToImportAs;
         to->ImportTextures = from->ImportTextures;
         to->RestoreMaterialsOnReimport = from->RestoreMaterialsOnReimport;
         to->GenerateSDF = from->GenerateSDF;
@@ -282,6 +286,8 @@ struct InternalModelOptions
         to->LODCount = from->LODCount;
         to->TriangleReduction = from->TriangleReduction;
         to->ImportMaterials = from->ImportMaterials;
+        to->ImportMaterialsAsInstances = from->ImportMaterialsAsInstances;
+        to->InstanceToImportAs = from->InstanceToImportAs;
         to->ImportTextures = from->ImportTextures;
         to->RestoreMaterialsOnReimport = from->RestoreMaterialsOnReimport;
         to->GenerateSDF = from->GenerateSDF;
diff --git a/Source/Engine/Tools/ModelTool/ModelTool.Options.cpp b/Source/Engine/Tools/ModelTool/ModelTool.Options.cpp
index b7fb04855..7d1315a1f 100644
--- a/Source/Engine/Tools/ModelTool/ModelTool.Options.cpp
+++ b/Source/Engine/Tools/ModelTool/ModelTool.Options.cpp
@@ -61,6 +61,8 @@ void ModelTool::Options::Serialize(SerializeStream& stream, const void* otherObj
     SERIALIZE(LODCount);
     SERIALIZE(TriangleReduction);
     SERIALIZE(ImportMaterials);
+    SERIALIZE(ImportMaterialsAsInstances);
+    SERIALIZE(InstanceToImportAs);
     SERIALIZE(ImportTextures);
     SERIALIZE(RestoreMaterialsOnReimport);
     SERIALIZE(GenerateSDF);
@@ -102,6 +104,8 @@ void ModelTool::Options::Deserialize(DeserializeStream& stream, ISerializeModifi
     DESERIALIZE(LODCount);
     DESERIALIZE(TriangleReduction);
     DESERIALIZE(ImportMaterials);
+    DESERIALIZE(ImportMaterialsAsInstances);
+    DESERIALIZE(InstanceToImportAs);
     DESERIALIZE(ImportTextures);
     DESERIALIZE(RestoreMaterialsOnReimport);
     DESERIALIZE(GenerateSDF);
diff --git a/Source/Engine/Tools/ModelTool/ModelTool.h b/Source/Engine/Tools/ModelTool/ModelTool.h
index b29bed71f..cf6b15c3f 100644
--- a/Source/Engine/Tools/ModelTool/ModelTool.h
+++ b/Source/Engine/Tools/ModelTool/ModelTool.h
@@ -11,6 +11,7 @@
 #include "Engine/Graphics/Models/ModelData.h"
 #include "Engine/Graphics/Models/SkeletonData.h"
 #include "Engine/Animations/AnimationData.h"
+#include <Engine/Content/Assets/Material.h>
 
 class JsonWriter;
 
@@ -247,6 +248,8 @@ public:
 
         // Materials
         bool ImportMaterials = true;
+        bool ImportMaterialsAsInstances = false;
+        Guid InstanceToImportAs;
         bool ImportTextures = true;
         bool RestoreMaterialsOnReimport = true;