diff --git a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Image/StreamingImageAssetHandler.cpp b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Image/StreamingImageAssetHandler.cpp
index e73d8e1c03..f241ba6602 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Image/StreamingImageAssetHandler.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Image/StreamingImageAssetHandler.cpp
@@ -7,6 +7,7 @@
  */
 
 #include <Atom/RPI.Reflect/Image/StreamingImageAssetHandler.h>
+#include <AzCore/Settings/SettingsRegistry.h>
 #include <AzFramework/Asset/AssetSystemBus.h>
 
 namespace AZ
@@ -44,30 +45,58 @@ namespace AZ
 
         Data::AssetId StreamingImageAssetHandler::AssetMissingInCatalog(const Data::Asset<Data::AssetData>& asset)
         {
-            // Escalate the asset to the top of the list
-            AzFramework::AssetSystemRequestBus::Broadcast(
-                &AzFramework::AssetSystem::AssetSystemRequests::EscalateAssetByUuid, asset.GetId().m_guid);
+            // Find out if the asset is missing completely, or just still processing
+            // and escalate the asset to the top of the list
+            AzFramework::AssetSystem::AssetStatus missingAssetStatus;
+            AzFramework::AssetSystemRequestBus::BroadcastResult(
+                missingAssetStatus, &AzFramework::AssetSystem::AssetSystemRequests::GetAssetStatusById, asset.GetId().m_guid);
 
-            // Make sure the default fallback image has been processed so that it is part of the asset catalog
+            // Generate asset info to use to register the fallback asset with the asset catalog
+            Data::AssetInfo assetInfo;
+            assetInfo.m_relativePath = "textures/defaults/defaultfallback.png.streamingimage";
+            assetInfo.m_assetType = azrtti_typeid<StreamingImageAsset>();
+
+            bool useDebugFallbackImages = true;
+            if (auto settingsRegistry = AZ::SettingsRegistry::Get(); settingsRegistry != nullptr)
+            {
+                settingsRegistry->GetObject(useDebugFallbackImages, "/O3DE/Atom/RPI/UseDebugFallbackImages");
+            }
+
+            if (useDebugFallbackImages)
+            {
+                switch (missingAssetStatus)
+                {
+                case AzFramework::AssetSystem::AssetStatus::AssetStatus_Queued:
+                case AzFramework::AssetSystem::AssetStatus::AssetStatus_Compiling:
+                    assetInfo.m_relativePath = "textures/defaults/processing.png.streamingimage";
+                    break;
+                case AzFramework::AssetSystem::AssetStatus::AssetStatus_Failed:
+                    assetInfo.m_relativePath = "textures/defaults/processingfailed.png.streamingimage";
+                    break;
+                case AzFramework::AssetSystem::AssetStatus::AssetStatus_Missing:
+                case AzFramework::AssetSystem::AssetStatus::AssetStatus_Unknown:
+                case AzFramework::AssetSystem::AssetStatus::AssetStatus_Compiled:
+                    assetInfo.m_relativePath = "textures/defaults/missing.png.streamingimage";
+                    break;
+                }
+            }
+
+            // Make sure the fallback image has been processed
             AzFramework::AssetSystem::AssetStatus status = AzFramework::AssetSystem::AssetStatus_Unknown;
             AzFramework::AssetSystemRequestBus::BroadcastResult(
-                status, &AzFramework::AssetSystemRequestBus::Events::CompileAssetSync, "textures/defaults/defaultnouvs.tif.streamingimage");
-
-            // Get the id of the fallback image
-            Data::AssetInfo assetInfo;
-            assetInfo.m_relativePath = "textures/defaults/defaultnouvs.tif.streamingimage";
-            Data::AssetId assetId;
+                status, &AzFramework::AssetSystemRequestBus::Events::CompileAssetSync, assetInfo.m_relativePath);
+            
+            // Generate the id of the fallback image
             Data::AssetCatalogRequestBus::BroadcastResult(
-                assetId, &Data::AssetCatalogRequestBus::Events::GenerateAssetIdTEMP,
+                assetInfo.m_assetId, &Data::AssetCatalogRequestBus::Events::GenerateAssetIdTEMP,
                 assetInfo.m_relativePath.c_str());
 
-            assetInfo.m_assetId = Data::AssetId(assetId.m_guid, StreamingImageAsset::GetImageAssetSubId());
+            assetInfo.m_assetId.m_subId = StreamingImageAsset::GetImageAssetSubId();
 
             // Register the fallback image with the asset catalog
-            Data::AssetCatalogRequestBus::Broadcast(
-                &Data::AssetCatalogRequestBus::Events::RegisterAsset, assetInfo.m_assetId, assetInfo);
+            Data::AssetCatalogRequestBus::Broadcast(&Data::AssetCatalogRequestBus::Events::RegisterAsset, assetInfo.m_assetId, assetInfo);
 
-            // Use a default Image as a fallback
+            // Return the asset id of the fallback image
             return assetInfo.m_assetId;
         }
     }
diff --git a/Gems/Atom/RPI/Registry/atom_rpi.release.setreg b/Gems/Atom/RPI/Registry/atom_rpi.release.setreg
new file mode 100644
index 0000000000..d1be96431d
--- /dev/null
+++ b/Gems/Atom/RPI/Registry/atom_rpi.release.setreg
@@ -0,0 +1,9 @@
+{
+    "O3DE": {
+        "Atom": {
+            "RPI": {
+				"UseDebugFallbackImages": false
+            }
+        }
+    }
+}
diff --git a/Gems/Atom/RPI/Registry/atom_rpi.setreg b/Gems/Atom/RPI/Registry/atom_rpi.setreg
index bcbade5d38..bf6d95602e 100644
--- a/Gems/Atom/RPI/Registry/atom_rpi.setreg
+++ b/Gems/Atom/RPI/Registry/atom_rpi.setreg
@@ -17,7 +17,8 @@
                     "DynamicDrawSystemDescriptor": {
                         "DynamicBufferPoolSize": 50331648 // 3 * 16 * 1024 * 1024 (for 3 frames)
                     }
-                }
+                },				
+				"UseDebugFallbackImages": true
             }
         }
     }