diff --git a/packages/subgraph-service/contracts/SubgraphService.sol b/packages/subgraph-service/contracts/SubgraphService.sol
index 5023e6160..49fff030b 100644
--- a/packages/subgraph-service/contracts/SubgraphService.sol
+++ b/packages/subgraph-service/contracts/SubgraphService.sol
@@ -71,7 +71,11 @@ contract SubgraphService is
      * @param minimumProvisionTokens The minimum amount of provisioned tokens required to create an allocation
      * @param maximumDelegationRatio The maximum delegation ratio allowed for an allocation
      */
-    function initialize(uint256 minimumProvisionTokens, uint32 maximumDelegationRatio) external initializer {
+    function initialize(
+        uint256 minimumProvisionTokens,
+        uint32 maximumDelegationRatio,
+        uint256 stakeToFeesRatio
+    ) external initializer {
         __Ownable_init(msg.sender);
         __DataService_init();
         __DataServicePausable_init();
@@ -79,6 +83,7 @@ contract SubgraphService is
 
         _setProvisionTokensRange(minimumProvisionTokens, type(uint256).max);
         _setDelegationRatio(maximumDelegationRatio);
+        _setStakeToFeesRatio(stakeToFeesRatio);
     }
 
     /**
@@ -373,8 +378,7 @@ contract SubgraphService is
      * @notice See {ISubgraphService.setStakeToFeesRatio}
      */
     function setStakeToFeesRatio(uint256 stakeToFeesRatio_) external override onlyOwner {
-        stakeToFeesRatio = stakeToFeesRatio_;
-        emit StakeToFeesRatioSet(stakeToFeesRatio_);
+        _setStakeToFeesRatio(stakeToFeesRatio_);
     }
 
     /**
@@ -558,4 +562,10 @@ contract SubgraphService is
         emit QueryFeesCollected(indexer, tokensCollected, tokensCurators);
         return tokensCollected;
     }
+
+    function _setStakeToFeesRatio(uint256 _stakeToFeesRatio) private {
+        require(_stakeToFeesRatio != 0, SubgraphServiceInvalidZeroStakeToFeesRatio());
+        stakeToFeesRatio = _stakeToFeesRatio;
+        emit StakeToFeesRatioSet(_stakeToFeesRatio);
+    }
 }
diff --git a/packages/subgraph-service/contracts/interfaces/ISubgraphService.sol b/packages/subgraph-service/contracts/interfaces/ISubgraphService.sol
index e12554303..b83d672f7 100644
--- a/packages/subgraph-service/contracts/interfaces/ISubgraphService.sol
+++ b/packages/subgraph-service/contracts/interfaces/ISubgraphService.sol
@@ -122,6 +122,11 @@ interface ISubgraphService is IDataServiceFees {
      */
     error SubgraphServiceAllocationIsAltruistic(address allocationId);
 
+    /**
+     * @notice Thrown when trying to set stake to fees ratio to zero
+     */
+    error SubgraphServiceInvalidZeroStakeToFeesRatio();
+
     /**
      * @notice Close a stale allocation
      * @dev This function can be permissionlessly called when the allocation is stale.
diff --git a/packages/subgraph-service/test/SubgraphBaseTest.t.sol b/packages/subgraph-service/test/SubgraphBaseTest.t.sol
index d42b66e29..f1aa9b96c 100644
--- a/packages/subgraph-service/test/SubgraphBaseTest.t.sol
+++ b/packages/subgraph-service/test/SubgraphBaseTest.t.sol
@@ -151,7 +151,7 @@ abstract contract SubgraphBaseTest is Utils, Constants {
         address subgraphServiceProxy = UnsafeUpgrades.deployTransparentProxy(
             subgraphServiceImplementation,
             users.governor,
-            abi.encodeCall(SubgraphService.initialize, (minimumProvisionTokens, delegationRatio))
+            abi.encodeCall(SubgraphService.initialize, (minimumProvisionTokens, delegationRatio, stakeToFeesRatio))
         );
         subgraphService = SubgraphService(subgraphServiceProxy);
 
@@ -183,10 +183,10 @@ abstract contract SubgraphBaseTest is Utils, Constants {
     }
 
     function setupProtocol() private {
+        resetPrank(users.deployer);
+        subgraphService.transferOwnership(users.governor);
         resetPrank(users.governor);
         staking.setMaxThawingPeriod(MAX_THAWING_PERIOD);
-        resetPrank(users.deployer);
-        subgraphService.setStakeToFeesRatio(stakeToFeesRatio);
         subgraphService.setMaxPOIStaleness(maxPOIStaleness);
         subgraphService.setCurationCut(curationCut);
     }
diff --git a/packages/subgraph-service/test/subgraphService/SubgraphService.t.sol b/packages/subgraph-service/test/subgraphService/SubgraphService.t.sol
index 05c038680..8f51784bb 100644
--- a/packages/subgraph-service/test/subgraphService/SubgraphService.t.sol
+++ b/packages/subgraph-service/test/subgraphService/SubgraphService.t.sol
@@ -30,6 +30,12 @@ contract SubgraphServiceTest is SubgraphServiceSharedTest {
      * MODIFIERS
      */
 
+    modifier useGovernor() {
+        vm.startPrank(users.governor);
+        _;
+        vm.stopPrank();
+    }
+
     modifier useOperator() {
         resetPrank(users.indexer);
         staking.setOperator(users.operator, address(subgraphService), true);
diff --git a/packages/subgraph-service/test/subgraphService/governance/stakeToFeesRatio.t.sol b/packages/subgraph-service/test/subgraphService/governance/stakeToFeesRatio.t.sol
new file mode 100644
index 000000000..bfd09073e
--- /dev/null
+++ b/packages/subgraph-service/test/subgraphService/governance/stakeToFeesRatio.t.sol
@@ -0,0 +1,43 @@
+// SPDX-License-Identifier: MIT
+pragma solidity 0.8.27;
+
+import "forge-std/Test.sol";
+
+import { ISubgraphService } from "../../../contracts/interfaces/ISubgraphService.sol";
+import { SubgraphServiceTest } from "../SubgraphService.t.sol";
+import { OwnableUpgradeable } from "@openzeppelin/contracts-upgradeable/access/OwnableUpgradeable.sol";
+
+contract DisputeManagerGovernanceArbitratorTest is SubgraphServiceTest {
+
+    /**
+     * ACTIONS
+     */
+
+    function _setStakeToFeesRatio(uint256 _stakeToFeesRatio) internal {
+        vm.expectEmit(address(subgraphService));
+        emit ISubgraphService.StakeToFeesRatioSet(_stakeToFeesRatio);
+        subgraphService.setStakeToFeesRatio(_stakeToFeesRatio);
+        assertEq(subgraphService.stakeToFeesRatio(), _stakeToFeesRatio);
+    }
+
+    /*
+     * TESTS
+     */
+
+    function test_Governance_SetStakeToFeesRatio(uint256 stakeToFeesRatio) public useGovernor {
+        vm.assume(stakeToFeesRatio > 0);
+        _setStakeToFeesRatio(stakeToFeesRatio);
+    }
+
+    function test_Governance_RevertWhen_ZeroValue() public useGovernor {
+        uint256 stakeToFeesRatio = 0;
+        vm.expectRevert(abi.encodeWithSelector(ISubgraphService.SubgraphServiceInvalidZeroStakeToFeesRatio.selector));
+        subgraphService.setStakeToFeesRatio(stakeToFeesRatio);
+    }
+
+    function test_Governance_RevertWhen_NotGovernor() public useIndexer {
+        uint256 stakeToFeesRatio = 2;
+        vm.expectRevert(abi.encodeWithSelector(OwnableUpgradeable.OwnableUnauthorizedAccount.selector, users.indexer));
+        subgraphService.setStakeToFeesRatio(stakeToFeesRatio);
+    }
+}