diff --git a/vllm/distributed/device_communicators/all_reduce_utils.py b/vllm/distributed/device_communicators/all_reduce_utils.py
index ff2d7436b..3c347ef75 100644
--- a/vllm/distributed/device_communicators/all_reduce_utils.py
+++ b/vllm/distributed/device_communicators/all_reduce_utils.py
@@ -27,6 +27,7 @@ from vllm.utils.torch_utils import cuda_device_count_stateless
 
 logger = init_logger(__name__)
 
+KiB = 1024
 MiB = 1024 * 1024
 # Max size for each world size in case symmetric memory is available
 # For different SM architectures
@@ -60,17 +61,44 @@ SYMM_MEM_ALL_REDUCE_MAX_SIZES = {
     },
 }
 
+# NCCL symmetric memory allreduce configuration based on H100 and GB200 benchmarks.
+# PyNCCL-symm outperforms custom_AR for small and large tensor sizes,
+# while custom_AR wins for mid-range sizes.
+#
+# Benchmark results (8 GPUs):
+#   2K - 16K:   PyNCCL-symm wins (1.35x - 1.48x faster)
+#   32K - 64K:  custom_AR wins
+#   128K - 1G:  PyNCCL-symm wins (1.12x - 6.14x faster)
+#
+# Benchmark results (4 GPUs):
+#   2K - 16K:   PyNCCL-symm wins (1.21x - 1.30x faster)
+#   32K - 256K: custom_AR wins (1.07x - 1.35x faster)
+#   512K - 1G:  PyNCCL-symm wins (1.10x - 2.32x faster)
+#
+# The config defines ranges where custom_AR is preferred (symm_mem disabled).
 NCCL_SYMM_MEM_ALL_REDUCE_CONFIG: dict[str, Any] = {
     "min_world_size": 4,
-    "thresholds": {
-        4: 2 * MiB,  # 2 MB
-        8: 1 * MiB,  # 1 MB
+    # Ranges where custom_AR outperforms NCCL symm_mem: (lower_bound, upper_bound)
+    # NCCL symm_mem will NOT be used for sizes in range: lower < size < upper
+    "custom_ar_preferred_ranges": {
+        4: (16 * KiB, 512 * KiB),  # custom_AR wins for 32K-256K
+        8: (16 * KiB, 128 * KiB),  # custom_AR wins for 32K-64K
     },
     "always_use_above_world_size": 8,  # Always use symm mem for world_size > 8
 }
 
 
 def should_nccl_symm_mem_allreduce(world_size: int, input_tensor: torch.Tensor) -> bool:
+    """
+    Determine if NCCL symmetric memory allreduce should be used.
+
+    Based on H100 and GB200 benchmarks, NCCL symm_mem is preferred for:
+    - Small tensors (≤16K): Lower latency than custom_AR
+    - Large tensors (≥128K for 8 GPUs, ≥512K for 4 GPUs): Better bandwidth
+
+    Custom_AR is preferred for mid-range sizes where its P2P approach
+    has lower overhead than the symm_mem copy-in/copy-out pattern.
+    """
     from vllm.distributed.device_communicators.pynccl_allocator import (
         is_symmetric_memory_enabled,
     )
@@ -80,11 +108,20 @@ def should_nccl_symm_mem_allreduce(world_size: int, input_tensor: torch.Tensor)
 
     if not is_symmetric_memory_enabled():
         return False
+
     if world_size < NCCL_SYMM_MEM_ALL_REDUCE_CONFIG["min_world_size"]:
         return False
-    threshold = NCCL_SYMM_MEM_ALL_REDUCE_CONFIG["thresholds"].get(world_size)
-    if threshold is not None and input_tensor.nbytes >= threshold:
-        return True
+
+    tensor_size = input_tensor.nbytes
+    custom_ar_range = NCCL_SYMM_MEM_ALL_REDUCE_CONFIG["custom_ar_preferred_ranges"].get(
+        world_size
+    )
+
+    if custom_ar_range is not None:
+        lower_bound, upper_bound = custom_ar_range
+        # Use symm_mem for small sizes (≤ lower_bound) and large sizes (≥ upper_bound)
+        # Use custom_AR (not symm_mem) for mid-range sizes
+        return tensor_size <= lower_bound or tensor_size >= upper_bound
     return world_size > NCCL_SYMM_MEM_ALL_REDUCE_CONFIG["always_use_above_world_size"]