diff --git a/packages/schema/src/cli/actions/init.ts b/packages/schema/src/cli/actions/init.ts
index 9d798b865..5790997e6 100644
--- a/packages/schema/src/cli/actions/init.ts
+++ b/packages/schema/src/cli/actions/init.ts
@@ -1,6 +1,7 @@
 import colors from 'colors';
 import fs from 'fs';
 import path from 'path';
+import pkgJson from '../../package.json';
 import { PackageManagers, ensurePackage, installPackage } from '../../utils/pkg-utils';
 import { getVersion } from '../../utils/version-utils';
 import { CliError } from '../cli-error';
@@ -50,8 +51,10 @@ export async function init(projectPath: string, options: Options) {
         }
     }
 
-    ensurePackage('prisma', true, options.packageManager, 'latest', projectPath);
-    ensurePackage('@prisma/client', false, options.packageManager, 'latest', projectPath);
+    const latestSupportedPrismaVersion = getLatestSupportedPrismaVersion();
+
+    ensurePackage('prisma', true, options.packageManager, latestSupportedPrismaVersion, projectPath);
+    ensurePackage('@prisma/client', false, options.packageManager, latestSupportedPrismaVersion, projectPath);
 
     const tag = options.tag ?? getVersion();
     installPackage('zenstack', true, options.packageManager, tag, projectPath);
@@ -75,3 +78,15 @@ Moving forward please edit this file and run "zenstack generate" to regenerate P
         await checkNewVersion();
     }
 }
+
+function getLatestSupportedPrismaVersion() {
+    const versionSpec = pkgJson.peerDependencies.prisma;
+    let maxVersion: string | undefined;
+    const hyphen = versionSpec.indexOf('-');
+    if (hyphen > 0) {
+        maxVersion = versionSpec.substring(hyphen + 1).trim();
+    } else {
+        maxVersion = versionSpec;
+    }
+    return maxVersion ?? 'latest';
+}
diff --git a/packages/schema/src/package.json b/packages/schema/src/package.json
new file mode 120000
index 000000000..4e26811d4
--- /dev/null
+++ b/packages/schema/src/package.json
@@ -0,0 +1 @@
+../package.json
\ No newline at end of file
diff --git a/tests/integration/tsconfig.json b/tests/integration/tsconfig.json
index 2771cd805..e11b3381d 100644
--- a/tests/integration/tsconfig.json
+++ b/tests/integration/tsconfig.json
@@ -6,7 +6,8 @@
         "forceConsistentCasingInFileNames": true,
         "strict": true,
         "skipLibCheck": true,
-        "experimentalDecorators": true
+        "experimentalDecorators": true,
+        "resolveJsonModule": true
     },
     "include": ["**/*.ts", "**/*.d.ts"]
 }