diff --git a/litellm/main.py b/litellm/main.py
index a77a03522a..7eac01ff6f 100644
--- a/litellm/main.py
+++ b/litellm/main.py
@@ -3366,7 +3366,10 @@ def embedding(
             api_base = api_base or litellm.api_base or get_secret("AZURE_API_BASE")
 
             api_version = (
-                api_version or litellm.api_version or get_secret("AZURE_API_VERSION")
+                api_version
+                or litellm.api_version
+                or get_secret("AZURE_API_VERSION")
+                or litellm.AZURE_DEFAULT_API_VERSION
             )
 
             azure_ad_token = optional_params.pop("azure_ad_token", None) or get_secret(
diff --git a/litellm/tests/test_embedding.py b/litellm/tests/test_embedding.py
index 31268395f1..54c823e4dc 100644
--- a/litellm/tests/test_embedding.py
+++ b/litellm/tests/test_embedding.py
@@ -226,31 +226,40 @@ def test_openai_azure_embedding_with_oidc_and_cf():
         os.environ["AZURE_API_KEY"] = old_key
 
 
-def test_openai_azure_embedding_optional_arg(mocker):
-    mocked_create_embeddings = mocker.patch.object(
-        openai.resources.embeddings.Embeddings,
-        "create",
-        return_value=openai.types.create_embedding_response.CreateEmbeddingResponse(
+def _openai_mock_response(*args, **kwargs):
+    new_response = MagicMock()
+    new_response.headers = {"hello": "world"}
+
+    new_response.parse.return_value = (
+        openai.types.create_embedding_response.CreateEmbeddingResponse(
             data=[],
             model="azure/test",
             object="list",
             usage=openai.types.create_embedding_response.Usage(
                 prompt_tokens=1, total_tokens=2
             ),
-        ),
-    )
-    _ = litellm.embedding(
-        model="azure/test",
-        input=["test"],
-        api_version="test",
-        api_base="test",
-        azure_ad_token="test",
+        )
     )
+    return new_response
 
-    assert mocked_create_embeddings.called_once_with(
-        model="test", input=["test"], timeout=600
-    )
-    assert "azure_ad_token" not in mocked_create_embeddings.call_args.kwargs
+
+def test_openai_azure_embedding_optional_arg():
+
+    with patch.object(
+        openai.resources.embeddings.Embeddings,
+        "create",
+        side_effect=_openai_mock_response,
+    ) as mock_client:
+        _ = litellm.embedding(
+            model="azure/test",
+            input=["test"],
+            api_version="test",
+            api_base="test",
+            azure_ad_token="test",
+        )
+
+        assert mock_client.called_once_with(model="test", input=["test"], timeout=600)
+        assert "azure_ad_token" not in mock_client.call_args.kwargs
 
 
 # test_openai_azure_embedding()