diff --git a/plugin-server/src/cdp/templates/_transformations/ip-anonymization/ip-anonymization.template.test.ts b/plugin-server/src/cdp/templates/_transformations/ip-anonymization/ip-anonymization.template.test.ts
new file mode 100644
index 0000000000000..fd945574f7ac9
--- /dev/null
+++ b/plugin-server/src/cdp/templates/_transformations/ip-anonymization/ip-anonymization.template.test.ts
@@ -0,0 +1,107 @@
+import { HogFunctionInvocationGlobals } from '../../../types'
+import { TemplateTester } from '../../test/test-helpers'
+import { template } from './ip-anonymization.template'
+
+describe('ip-anonymization.template', () => {
+    const tester = new TemplateTester(template)
+    let mockGlobals: HogFunctionInvocationGlobals
+
+    beforeEach(async () => {
+        await tester.beforeEach()
+    })
+
+    it('should anonymize IPv4 address by zeroing last octet', async () => {
+        mockGlobals = tester.createGlobals({
+            event: {
+                properties: {
+                    $ip: '89.160.20.129',
+                },
+            },
+        })
+
+        const response = await tester.invoke({}, mockGlobals)
+
+        expect(response.finished).toBe(true)
+        expect(response.error).toBeUndefined()
+        expect(response.execResult).toMatchObject({
+            properties: {
+                $ip: '89.160.20.0',
+            },
+        })
+    })
+
+    it('should handle event with no IP address', async () => {
+        mockGlobals = tester.createGlobals({
+            event: {
+                properties: {},
+            },
+        })
+
+        const response = await tester.invoke({}, mockGlobals)
+
+        expect(response.finished).toBe(true)
+        expect(response.error).toBeUndefined()
+        expect(response.execResult).toMatchObject({
+            properties: {},
+        })
+    })
+
+    it('should handle invalid IP address format', async () => {
+        const invalidIPs = [
+            '89.160.20', // missing octet
+            '', // empty string
+            'abc.def.ghi.jkl', // non-numeric
+            '256.256.256.256', // values > 255
+            '1.2.3.4.5', // too many octets
+            'not an ip',
+        ]
+
+        for (const invalidIP of invalidIPs) {
+            mockGlobals = tester.createGlobals({
+                event: {
+                    properties: {
+                        $ip: invalidIP,
+                    },
+                },
+            })
+
+            const response = await tester.invoke({}, mockGlobals)
+
+            expect(response.finished).toBe(true)
+            expect(response.error).toBeUndefined()
+            expect(response.execResult).toMatchObject({
+                properties: {
+                    $ip: invalidIP,
+                },
+            })
+        }
+    })
+
+    it('should handle various IPv4 formats', async () => {
+        const testCases = [
+            { input: '192.168.1.1', expected: '192.168.1.0' },
+            { input: '10.0.0.255', expected: '10.0.0.0' },
+            { input: '172.16.254.1', expected: '172.16.254.0' },
+        ]
+
+        for (const testCase of testCases) {
+            mockGlobals = tester.createGlobals({
+                event: {
+                    properties: {
+                        $ip: testCase.input,
+                    },
+                },
+            })
+
+            const response = await tester.invoke({}, mockGlobals)
+
+            expect(response.finished).toBe(true)
+            expect(response.error).toBeUndefined()
+            expect(response.execResult).toMatchObject({
+                properties: {
+                    $ip: testCase.expected,
+                },
+            })
+        }
+    })
+})
diff --git a/plugin-server/src/cdp/templates/_transformations/ip-anonymization/ip-anonymization.template.ts b/plugin-server/src/cdp/templates/_transformations/ip-anonymization/ip-anonymization.template.ts
new file mode 100644
index 0000000000000..54cee73e617f1
--- /dev/null
+++ b/plugin-server/src/cdp/templates/_transformations/ip-anonymization/ip-anonymization.template.ts
@@ -0,0 +1,46 @@
+import { HogFunctionTemplate } from '../../types'
+
+export const template: HogFunctionTemplate = {
+    free: true,
+    status: 'alpha',
+    type: 'transformation',
+    id: 'template-ip-anonymization',
+    name: 'IP Anonymization',
+    description:
+        'This transformation sets the last octet of an IP address to zero (e.g., 12.214.31.144 → 12.214.31.0), protecting user privacy and reducing disclosure risk.',
+    icon_url: '/static/hedgehog/builder-hog-01.png',
+    category: ['Custom'],
+    hog: `
+// Check if the event has an IP address
+if (empty(event.properties?.$ip)) {
+    print('No IP address found in event')
+    return event
+}
+
+let ip := event.properties.$ip
+let parts := splitByString('.', ip)
+
+// Check if we have exactly 4 parts for IPv4
+if (length(parts) != 4) {
+    print('Invalid IP address format: wrong number of octets')
+    return event
+}
+
+// Validate each octet is a number between 0 and 255
+for (let i := 1; i <= 4; i := i + 1) {
+    let octet := toInt(parts[i])
+    if (octet = null or octet < 0 or octet > 255) {
+        print('Invalid IP address: octets must be numbers between 0 and 255')
+        return event
+    }
+}
+
+// Replace the last octet with '0'
+let anonymizedIp := concat(parts[1], '.', parts[2], '.', parts[3], '.0')
+    
+let returnEvent := event
+returnEvent.properties.$ip := anonymizedIp
+return returnEvent
+    `,
+    inputs_schema: [],
+}
diff --git a/plugin-server/src/cdp/templates/index.ts b/plugin-server/src/cdp/templates/index.ts
index 9038b57969157..d130c79c2eb74 100644
--- a/plugin-server/src/cdp/templates/index.ts
+++ b/plugin-server/src/cdp/templates/index.ts
@@ -2,6 +2,7 @@ import { DESTINATION_PLUGINS, TRANSFORMATION_PLUGINS } from '../legacy-plugins'
 import { template as webhookTemplate } from './_destinations/webhook/webhook.template'
 import { template as defaultTransformationTemplate } from './_transformations/default/default.template'
 import { template as geoipTemplate } from './_transformations/geoip/geoip.template'
+import { template as ipAnonymizationTemplate } from './_transformations/ip-anonymization/ip-anonymization.template'
 import { HogFunctionTemplate } from './types'
 
 export const HOG_FUNCTION_TEMPLATES_DESTINATIONS: HogFunctionTemplate[] = [webhookTemplate]
@@ -9,6 +10,7 @@ export const HOG_FUNCTION_TEMPLATES_DESTINATIONS: HogFunctionTemplate[] = [webho
 export const HOG_FUNCTION_TEMPLATES_TRANSFORMATIONS: HogFunctionTemplate[] = [
     defaultTransformationTemplate,
     geoipTemplate,
+    ipAnonymizationTemplate,
 ]
 
 export const HOG_FUNCTION_TEMPLATES_DESTINATIONS_DEPRECATED: HogFunctionTemplate[] = DESTINATION_PLUGINS.map(