diff --git a/bundle/config/mutator/apply_presets.go b/bundle/config/mutator/apply_presets.go
index 59b8547b..2a9b0220 100644
--- a/bundle/config/mutator/apply_presets.go
+++ b/bundle/config/mutator/apply_presets.go
@@ -9,6 +9,7 @@ import (
 
 	"github.com/databricks/cli/bundle"
 	"github.com/databricks/cli/bundle/config"
+	"github.com/databricks/cli/libs/dbr"
 	"github.com/databricks/cli/libs/diag"
 	"github.com/databricks/cli/libs/dyn"
 	"github.com/databricks/cli/libs/textutil"
@@ -221,6 +222,17 @@ func (m *applyPresets) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnos
 		dashboard.DisplayName = prefix + dashboard.DisplayName
 	}
 
+	if config.IsExplicitlyEnabled((b.Config.Presets.InPlaceDeployment)) {
+		root := b.SyncRoot.Native()
+		isInWorkspace := strings.HasPrefix(root, "/Workspace/")
+		if isInWorkspace && dbr.RunsOnRuntime(ctx) {
+			b.Config.Workspace.FilePath = b.SyncRootPath
+		} else {
+			disabled := false
+			b.Config.Presets.InPlaceDeployment = &disabled
+		}
+	}
+
 	return diags
 }
 
diff --git a/bundle/config/mutator/apply_presets_test.go b/bundle/config/mutator/apply_presets_test.go
index 24295da4..52efb07b 100644
--- a/bundle/config/mutator/apply_presets_test.go
+++ b/bundle/config/mutator/apply_presets_test.go
@@ -8,6 +8,7 @@ import (
 	"github.com/databricks/cli/bundle/config"
 	"github.com/databricks/cli/bundle/config/mutator"
 	"github.com/databricks/cli/bundle/config/resources"
+	"github.com/databricks/cli/libs/vfs"
 	"github.com/databricks/databricks-sdk-go/service/catalog"
 	"github.com/databricks/databricks-sdk-go/service/jobs"
 	"github.com/stretchr/testify/require"
@@ -55,6 +56,7 @@ func TestApplyPresetsPrefix(t *testing.T) {
 						NamePrefix: tt.prefix,
 					},
 				},
+				SyncRoot: vfs.MustNew(t.TempDir()),
 			}
 
 			ctx := context.Background()
@@ -101,6 +103,7 @@ func TestApplyPresetsPrefixForUcSchema(t *testing.T) {
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
 			b := &bundle.Bundle{
+				SyncRoot: vfs.MustNew(t.TempDir()),
 				Config: config.Root{
 					Resources: config.Resources{
 						Schemas: map[string]*resources.Schema{
@@ -180,6 +183,7 @@ func TestApplyPresetsTags(t *testing.T) {
 						Tags: tt.tags,
 					},
 				},
+				SyncRoot: vfs.MustNew(t.TempDir()),
 			}
 
 			ctx := context.Background()
@@ -239,6 +243,7 @@ func TestApplyPresetsJobsMaxConcurrentRuns(t *testing.T) {
 						JobsMaxConcurrentRuns: tt.setting,
 					},
 				},
+				SyncRoot: vfs.MustNew(t.TempDir()),
 			}
 			ctx := context.Background()
 			diag := bundle.Apply(ctx, b, mutator.ApplyPresets())
@@ -264,6 +269,7 @@ func TestApplyPresetsPrefixWithoutJobSettings(t *testing.T) {
 				NamePrefix: "prefix-",
 			},
 		},
+		SyncRoot: vfs.MustNew(t.TempDir()),
 	}
 
 	ctx := context.Background()
@@ -355,6 +361,7 @@ func TestApplyPresetsResourceNotDefined(t *testing.T) {
 						TriggerPauseStatus: config.Paused,
 					},
 				},
+				SyncRoot: vfs.MustNew(t.TempDir()),
 			}
 
 			ctx := context.Background()
diff --git a/bundle/config/mutator/process_target_mode.go b/bundle/config/mutator/process_target_mode.go
index 44b53681..6ea0e7ef 100644
--- a/bundle/config/mutator/process_target_mode.go
+++ b/bundle/config/mutator/process_target_mode.go
@@ -57,6 +57,11 @@ func transformDevelopmentMode(ctx context.Context, b *bundle.Bundle) {
 		t.TriggerPauseStatus = config.Paused
 	}
 
+	if !config.IsExplicitlyDisabled(t.InPlaceDeployment) {
+		enabled := true
+		t.InPlaceDeployment = &enabled
+	}
+
 	if !config.IsExplicitlyDisabled(t.PipelinesDevelopment) {
 		enabled := true
 		t.PipelinesDevelopment = &enabled
diff --git a/bundle/config/mutator/process_target_mode_test.go b/bundle/config/mutator/process_target_mode_test.go
index 4135d5fd..04177a32 100644
--- a/bundle/config/mutator/process_target_mode_test.go
+++ b/bundle/config/mutator/process_target_mode_test.go
@@ -11,6 +11,7 @@ import (
 	"github.com/databricks/cli/bundle/config/resources"
 	"github.com/databricks/cli/libs/diag"
 	"github.com/databricks/cli/libs/tags"
+	"github.com/databricks/cli/libs/vfs"
 	sdkconfig "github.com/databricks/databricks-sdk-go/config"
 	"github.com/databricks/databricks-sdk-go/service/catalog"
 	"github.com/databricks/databricks-sdk-go/service/compute"
@@ -140,6 +141,7 @@ func mockBundle(mode config.Mode) *bundle.Bundle {
 				},
 			},
 		},
+		SyncRoot: vfs.MustNew("/Users/lennart.kats@databricks.com"),
 		// Use AWS implementation for testing.
 		Tagging: tags.ForCloud(&sdkconfig.Config{
 			Host: "https://company.cloud.databricks.com",
diff --git a/bundle/config/presets.go b/bundle/config/presets.go
index 61009a25..c5fb6e10 100644
--- a/bundle/config/presets.go
+++ b/bundle/config/presets.go
@@ -17,6 +17,11 @@ type Presets struct {
 	// JobsMaxConcurrentRuns is the default value for the max concurrent runs of jobs.
 	JobsMaxConcurrentRuns int `json:"jobs_max_concurrent_runs,omitempty"`
 
+	// InPlaceDeployment indicates whether in-place deployment is enabled. Works only in workspace
+	// When set to true, resources created during deployment will point to source files in the workspace instead of their workspace copies.
+	// No resources will be uploaded to workspace
+	InPlaceDeployment *bool `json:"in_place_deployment,omitempty"`
+
 	// Tags to add to all resources.
 	Tags map[string]string `json:"tags,omitempty"`
 }
diff --git a/bundle/deploy/files/upload.go b/bundle/deploy/files/upload.go
index bab4e176..bdad6f01 100644
--- a/bundle/deploy/files/upload.go
+++ b/bundle/deploy/files/upload.go
@@ -7,6 +7,7 @@ import (
 	"io/fs"
 
 	"github.com/databricks/cli/bundle"
+	"github.com/databricks/cli/bundle/config"
 	"github.com/databricks/cli/bundle/permissions"
 	"github.com/databricks/cli/libs/cmdio"
 	"github.com/databricks/cli/libs/diag"
@@ -23,6 +24,11 @@ func (m *upload) Name() string {
 }
 
 func (m *upload) Apply(ctx context.Context, b *bundle.Bundle) diag.Diagnostics {
+	if config.IsExplicitlyEnabled(b.Config.Presets.InPlaceDeployment) {
+		cmdio.LogString(ctx, "Bundle files uploading skipped: in-place deployment is enabled")
+		return nil
+	}
+
 	cmdio.LogString(ctx, fmt.Sprintf("Uploading bundle files to %s...", b.Config.Workspace.FilePath))
 	opts, err := GetSyncOptions(ctx, bundle.ReadOnly(b))
 	if err != nil {