diff --git a/.changeset/short-flies-collect.md b/.changeset/short-flies-collect.md
new file mode 100644
index 0000000000000..d393f92175c57
--- /dev/null
+++ b/.changeset/short-flies-collect.md
@@ -0,0 +1,5 @@
+---
+'@backstage/config-loader': patch
+---
+
+Handle empty config files gracefully
diff --git a/packages/config-loader/src/loader.test.ts b/packages/config-loader/src/loader.test.ts
index 058f59aef1f10..8c4d0b48a4888 100644
--- a/packages/config-loader/src/loader.test.ts
+++ b/packages/config-loader/src/loader.test.ts
@@ -104,6 +104,7 @@ describe('loadConfig', () => {
       `,
       '/root/secrets/substituted.txt': '123abc',
       '/root/${ESCAPE_ME}.txt': 'notSubstituted',
+      '/root/empty.yaml': '# just a comment',
     });
   });
 
@@ -469,6 +470,17 @@ describe('loadConfig', () => {
     await new Promise(resolve => setTimeout(resolve, 1000));
   });
 
+  it('handles empty files gracefully', async () => {
+    await expect(
+      loadConfig({
+        configRoot: '/root',
+        configTargets: [{ path: '/root/empty.yaml' }],
+      }),
+    ).resolves.toEqual({
+      appConfigs: [],
+    });
+  });
+
   function defer<T>() {
     let resolve: (value: T) => void;
     const promise = new Promise<T>(_resolve => {
diff --git a/packages/config-loader/src/loader.ts b/packages/config-loader/src/loader.ts
index 7ceb2e85488d9..9537d2d945ee8 100644
--- a/packages/config-loader/src/loader.ts
+++ b/packages/config-loader/src/loader.ts
@@ -160,13 +160,17 @@ export async function loadConfig(
       };
 
       const input = yaml.parse(await readFile(configPath));
-      const substitutionTransform = createSubstitutionTransform(env);
-      const data = await applyConfigTransforms(dir, input, [
-        createIncludeTransform(env, readFile, substitutionTransform),
-        substitutionTransform,
-      ]);
 
-      fileConfigs.push({ data, context: basename(configPath) });
+      // A completely empty file ends up as a null return value
+      if (input !== null) {
+        const substitutionTransform = createSubstitutionTransform(env);
+        const data = await applyConfigTransforms(dir, input, [
+          createIncludeTransform(env, readFile, substitutionTransform),
+          substitutionTransform,
+        ]);
+
+        fileConfigs.push({ data, context: basename(configPath) });
+      }
     }
 
     return { fileConfigs, loadedPaths };