diff --git a/erpnext/crm/doctype/crm_settings/crm_settings.js b/erpnext/crm/doctype/crm_settings/crm_settings.js
index 0fb695a3da4..ef71437be49 100644
--- a/erpnext/crm/doctype/crm_settings/crm_settings.js
+++ b/erpnext/crm/doctype/crm_settings/crm_settings.js
@@ -2,6 +2,35 @@
 // For license information, please see license.txt
 
 frappe.ui.form.on("CRM Settings", {
-	// refresh: function(frm) {
-	// }
+	refresh: function (frm) {
+		const flag = frm.events.calculate_visiblity_flag(frm);
+
+		frm.set_df_property("allowed_users", "hidden", !flag);
+		frm.set_df_property("allowed_users", "reqd", flag);
+	},
+
+	enable_frappe_crm_data_synchronization: function (frm) {
+		const flag = frm.events.calculate_visiblity_flag(frm);
+
+		if (flag) {
+			frappe.show_alert(
+				__("Allowed Users is required for data synchronization from remote Frappe CRM site.")
+			);
+		}
+
+		/*
+		make allowed_users field visible and mandatory if enable_frappe_crm_data_synchronization
+		is set and crm app is not installed.
+		*/
+
+		frm.set_df_property("allowed_users", "hidden", !flag);
+		frm.set_df_property("allowed_users", "reqd", flag);
+	},
+
+	calculate_visiblity_flag: function (frm) {
+		const crm_sync_enabled = frm.doc.enable_frappe_crm_data_synchronization;
+		const is_crm_installed = cint(frappe.utils.get_installed_apps().includes("crm"));
+
+		return crm_sync_enabled && !is_crm_installed;
+	},
 });
diff --git a/erpnext/crm/doctype/crm_settings/crm_settings.json b/erpnext/crm/doctype/crm_settings/crm_settings.json
index 8822dd7ea02..3539da5b7cb 100644
--- a/erpnext/crm/doctype/crm_settings/crm_settings.json
+++ b/erpnext/crm/doctype/crm_settings/crm_settings.json
@@ -120,9 +120,9 @@
    "fieldtype": "Column Break"
   },
   {
-   "depends_on": "eval:doc.enable_frappe_crm_data_synchronization === 1;",
    "fieldname": "allowed_users",
    "fieldtype": "Table MultiSelect",
+   "hidden": 1,
    "label": "Allowed Users",
    "options": "Frappe CRM Allowed User",
    "permlevel": 1
@@ -139,7 +139,7 @@
  "index_web_pages_for_search": 1,
  "issingle": 1,
  "links": [],
- "modified": "2026-06-22 01:26:13.474915",
+ "modified": "2026-07-01 01:09:16.461470",
  "modified_by": "Administrator",
  "module": "CRM",
  "name": "CRM Settings",
diff --git a/erpnext/crm/doctype/crm_settings/crm_settings.py b/erpnext/crm/doctype/crm_settings/crm_settings.py
index 7ca341adb77..379c55ae5b3 100644
--- a/erpnext/crm/doctype/crm_settings/crm_settings.py
+++ b/erpnext/crm/doctype/crm_settings/crm_settings.py
@@ -6,6 +6,8 @@ from frappe import _
 from frappe.custom.doctype.custom_field.custom_field import create_custom_fields
 from frappe.model.document import Document
 
+from erpnext.crm.frappe_crm_api import is_crm_installed
+
 
 class CRMSettings(Document):
 	# begin: auto-generated types
@@ -46,13 +48,16 @@ class CRMSettings(Document):
 			)
 
 	def validate_allowed_users(self):
-		if self.enable_frappe_crm_data_synchronization and not self.allowed_users:
+		if self.enable_frappe_crm_data_synchronization and not (is_crm_installed() or self.allowed_users):
 			frappe.throw(
 				_(
 					"Please add atleast one user on Allowed Users to allow Data Synchronization from Frappe CRM site."
 				)
 			)
 
+		if self.enable_frappe_crm_data_synchronization and is_crm_installed() and self.allowed_users:
+			frappe.throw(_("Allowed Users is not required as Frappe CRM is already installed on the site."))
+
 	def before_save(self):
 		self.clear_allowed_users()
 
diff --git a/erpnext/crm/frappe_crm_api.py b/erpnext/crm/frappe_crm_api.py
index 5db9b7dc652..ddd974663dc 100644
--- a/erpnext/crm/frappe_crm_api.py
+++ b/erpnext/crm/frappe_crm_api.py
@@ -1,5 +1,6 @@
 import json
 
+import click
 import frappe
 from frappe import _
 
@@ -150,7 +151,9 @@ def create_customer(customer_data=None):
 			for field in CUSTOMER_ALLOWED_FIELDS:
 				if customer_data.get(field) is not None:
 					customer.set(field, customer_data.get(field))
-			customer.insert(ignore_permissions=True)
+
+			# If CRM is installed on the site, User Permission cannot be ignored while saving Customer Records.
+			customer.insert(ignore_permissions=not is_crm_installed())
 			customer_name = customer.name
 
 		contacts = json.loads(customer_data.get("contacts"))
@@ -169,6 +172,10 @@ def validate_frappe_crm_sync():
 			_("Frappe CRM data synchronization is not enabled on ERPNext. Contact System Manager of ERPNext.")
 		)
 
+	# Skip allowed_users validation if CRM is installed on the site.
+	if is_crm_installed():
+		return
+
 	allowed_users = [d.user for d in CRMSettings.allowed_users]
 
 	if frappe.session.user not in allowed_users:
@@ -178,3 +185,35 @@ def validate_frappe_crm_sync():
 			),
 			exc=frappe.PermissionError,
 		)
+
+
+def is_crm_installed():
+	return "crm" in frappe.get_installed_apps()
+
+
+def remove_allowed_users_on_crm_install():
+	try:
+		CRMSettings = frappe.get_single("CRM Settings")
+
+		if not CRMSettings.enable_frappe_crm_data_synchronization:
+			return
+
+		CRMSettings.allowed_users = []
+		CRMSettings.save()
+		click.secho("Removed 'Allowed Users' from CRM Settings.")
+	except Exception:
+		click.secho("'Allowed Users' from CRM Settings couldn't be cleared.")
+
+
+def disable_frappe_crm_data_synchronization_on_crm_uninstall():
+	try:
+		CRMSettings = frappe.get_single("CRM Settings")
+
+		if not CRMSettings.enable_frappe_crm_data_synchronization:
+			return
+
+		CRMSettings.enable_frappe_crm_data_synchronization = 0
+		CRMSettings.save()
+		click.secho("'Enable Frappe CRM Data Synchronization' on CRM Settings has been disabled.")
+	except Exception:
+		click.secho("'Enable Frappe CRM Data Synchronization' on CRM Settings could not be disabled.")
diff --git a/erpnext/hooks.py b/erpnext/hooks.py
index a1c64b60377..118f047f19c 100644
--- a/erpnext/hooks.py
+++ b/erpnext/hooks.py
@@ -61,6 +61,9 @@ before_install = [
 ]
 after_install = "erpnext.setup.install.after_install"
 
+after_app_install = "erpnext.setup.install.after_app_install"
+after_app_uninstall = "erpnext.setup.install.after_app_uninstall"
+
 boot_session = "erpnext.startup.boot.boot_session"
 notification_config = "erpnext.startup.notifications.get_notification_config"
 get_help_messages = "erpnext.utilities.activation.get_help_messages"
diff --git a/erpnext/patches.txt b/erpnext/patches.txt
index fc9313f4bf7..f28e3e1840f 100644
--- a/erpnext/patches.txt
+++ b/erpnext/patches.txt
@@ -440,3 +440,4 @@ erpnext.patches.v16_0.set_posting_datetime_for_sabb_and_drop_indexes
 execute:frappe.db.set_single_value("Accounts Settings", "pcv_job_timeout", 3600)
 erpnext.patches.v15_0.backfill_sla_link_filters_on_custom_field
 erpnext.patches.v15_0.backfill_sla_link_filters_on_docfield
+erpnext.patches.v16_0.crm_settings_handle_allowed_users_for_frappe_crm
\ No newline at end of file
diff --git a/erpnext/patches/v16_0/crm_settings_handle_allowed_users_for_frappe_crm.py b/erpnext/patches/v16_0/crm_settings_handle_allowed_users_for_frappe_crm.py
new file mode 100644
index 00000000000..166cd5c66f8
--- /dev/null
+++ b/erpnext/patches/v16_0/crm_settings_handle_allowed_users_for_frappe_crm.py
@@ -0,0 +1,10 @@
+import frappe
+
+
+def execute():
+	from erpnext.crm.frappe_crm_api import is_crm_installed, remove_allowed_users_on_crm_install
+
+	if not is_crm_installed():
+		return
+
+	remove_allowed_users_on_crm_install()
diff --git a/erpnext/setup/install.py b/erpnext/setup/install.py
index 03fc31b253e..89e2a4c89ee 100644
--- a/erpnext/setup/install.py
+++ b/erpnext/setup/install.py
@@ -367,3 +367,19 @@ DEFAULT_ROLE_PROFILES = {
 		"Purchase Manager",
 	],
 }
+
+
+def after_app_install(app_name=None):
+	if app_name == "crm":
+		from erpnext.crm.frappe_crm_api import remove_allowed_users_on_crm_install
+
+		remove_allowed_users_on_crm_install()
+
+
+def after_app_uninstall(app_name=None):
+	if app_name == "crm":
+		from erpnext.crm.frappe_crm_api import disable_frappe_crm_data_synchronization_on_crm_uninstall
+
+		disable_frappe_crm_data_synchronization_on_crm_uninstall()
+
+		frappe.db.commit()  # nosemgrep