diff --git a/README.md b/README.md
index 41ebb63..b74e21d 100644
--- a/README.md
+++ b/README.md
@@ -97,6 +97,10 @@ module "s3_bucket_for_waf_logs" {
 }
 ```
 
+### Bucket with a custom policy attached
+
+When you need to attach a custom policy to the bucket, you can use the `policy` argument. To keep bucket policy with correct S3 bucket and AWS account properties, you can use the placeholders `_S3_BUCKET_ID_`, `_S3_BUCKET_ARN_`, and `_AWS_ACCOUNT_ID_` in the policy document. Those values will be replaced with the actual values during the policy attachment. This is especially useful when using bucket prefixes.
+
 ## Conditional creation
 
 Sometimes you need to have a way to create S3 resources conditionally but Terraform does not allow to use `count` inside `module` block, so the solution is to specify argument `create_bucket`.
diff --git a/examples/complete/main.tf b/examples/complete/main.tf
index b033b99..407e1cb 100644
--- a/examples/complete/main.tf
+++ b/examples/complete/main.tf
@@ -60,6 +60,27 @@ data "aws_iam_policy_document" "bucket_policy" {
       "arn:aws:s3:::${local.bucket_name}",
     ]
   }
+
+  statement {
+    principals {
+      type        = "AWS"
+      identifiers = [aws_iam_role.this.arn]
+    }
+
+    actions = [
+      "s3:ListBucket",
+    ]
+
+    resources = [
+      "_S3_BUCKET_ARN_",
+    ]
+
+    condition {
+      test     = "StringNotEquals"
+      variable = "aws:PrincipalAccount"
+      values   = ["_AWS_ACCOUNT_ID_"]
+    }
+  }
 }
 
 module "log_bucket" {
diff --git a/main.tf b/main.tf
index 56c5e4e..87fcc67 100644
--- a/main.tf
+++ b/main.tf
@@ -16,6 +16,24 @@ locals {
 
   attach_policy = var.attach_require_latest_tls_policy || var.attach_access_log_delivery_policy || var.attach_elb_log_delivery_policy || var.attach_lb_log_delivery_policy || var.attach_cloudtrail_log_delivery_policy || var.attach_deny_insecure_transport_policy || var.attach_inventory_destination_policy || var.attach_deny_incorrect_encryption_headers || var.attach_deny_incorrect_kms_key_sse || var.attach_deny_unencrypted_object_uploads || var.attach_deny_ssec_encrypted_object_uploads || var.attach_policy || var.attach_waf_log_delivery_policy
 
+  # Placeholders in the policy document to be replaced with the actual values
+  policy_placeholders = {
+    "_S3_BUCKET_ID_"   = var.is_directory_bucket ? aws_s3_directory_bucket.this[0].bucket : aws_s3_bucket.this[0].id,
+    "_S3_BUCKET_ARN_"  = var.is_directory_bucket ? aws_s3_directory_bucket.this[0].arn : aws_s3_bucket.this[0].arn,
+    "_AWS_ACCOUNT_ID_" = data.aws_caller_identity.current.account_id
+  }
+
+  policy = local.create_bucket && local.attach_policy ? replace(
+    replace(
+      replace(
+        data.aws_iam_policy_document.combined[0].json,
+        "_S3_BUCKET_ID_", local.policy_placeholders["_S3_BUCKET_ID_"]
+      ),
+      "_S3_BUCKET_ARN_", local.policy_placeholders["_S3_BUCKET_ARN_"]
+    ),
+    "_AWS_ACCOUNT_ID_", local.policy_placeholders["_AWS_ACCOUNT_ID_"]
+  ) : ""
+
   # Variables with type `any` should be jsonencode()'d when value is coming from Terragrunt
   grants               = try(jsondecode(var.grant), var.grant)
   cors_rules           = try(jsondecode(var.cors_rule), var.cors_rule)
@@ -591,7 +609,7 @@ resource "aws_s3_bucket_policy" "this" {
   # Ref: https://github.com/hashicorp/terraform-provider-aws/issues/7628
 
   bucket = var.is_directory_bucket ? aws_s3_directory_bucket.this[0].bucket : aws_s3_bucket.this[0].id
-  policy = data.aws_iam_policy_document.combined[0].json
+  policy = local.policy
 
   depends_on = [
     aws_s3_bucket_public_access_block.this