diff --git a/doc/changes/dev/13700.bugfix.rst b/doc/changes/dev/13700.bugfix.rst
new file mode 100644
index 00000000000..ba07c461923
--- /dev/null
+++ b/doc/changes/dev/13700.bugfix.rst
@@ -0,0 +1 @@
+Fix bug where :func:`mne.channels.DigMontage.set_montage` raised an :exc:`IndexError` on MEG+EEG recordings when EEG reference positions were set to the placeholder value ``[1, 0, 0]`` (i.e., digitization was not performed), by :newcontrib:`Famous077`.
\ No newline at end of file
diff --git a/doc/changes/names.inc b/doc/changes/names.inc
index 5191225daf3..ac53955a57f 100644
--- a/doc/changes/names.inc
+++ b/doc/changes/names.inc
@@ -97,7 +97,7 @@
 .. _Ezequiel Mikulan: https://github.com/ezemikulan
 .. _Ezequiel Mikulan: https://github.com/ezemikulan
 .. _Fahimeh Mamashli: https://github.com/fmamashli
-.. _Famous Raj Bhat: https://github.com/Famous077
+.. _Famous077: https://github.com/Famous077
 .. _Farzin Negahbani: https://github.com/Farzin-Negahbani
 .. _Federico Raimondo: https://github.com/fraimondo
 .. _Federico Zamberlan: https://github.com/fzamberlan
diff --git a/mne/channels/montage.py b/mne/channels/montage.py
index 2f84b425fc0..04d454201f2 100644
--- a/mne/channels/montage.py
+++ b/mne/channels/montage.py
@@ -1256,7 +1256,12 @@ def _backcompat_value(pos, ref_pos):
     # keep reference location from EEG-like channels if they
     # already exist and are all the same.
     # Note: ref position is an empty list for fieldtrip data
-    if len(ref_pos) and ref_pos[0].any() and (ref_pos[0] == ref_pos).all():
+    if (
+        len(ref_pos)
+        and ref_pos[0].any()
+        and (ref_pos[0] == ref_pos).all()
+        and not np.array_equal(ref_pos[0], [1.0, 0.0, 0.0])
+    ):
         eeg_ref_pos = ref_pos[0]
         # since we have an EEG reference position, we have
         # to add it into the info['dig'] as EEG000
diff --git a/mne/channels/tests/test_montage.py b/mne/channels/tests/test_montage.py
index 0294cbe9d16..e5e16d985bb 100644
--- a/mne/channels/tests/test_montage.py
+++ b/mne/channels/tests/test_montage.py
@@ -21,13 +21,14 @@
 
 import mne.channels.montage
 from mne import (
-    __file__ as _mne_file,
-)
-from mne import (
+    EpochsArray,
     create_info,
     pick_types,
     read_evokeds,
 )
+from mne import (
+    __file__ as _mne_file,
+)
 from mne._fiff._digitization import (
     _count_points_by_type,
     _format_dig_points,
@@ -2145,3 +2146,28 @@ def test_fnirs_montage():
     raw.set_channel_types({ch_name: "eeg" for ch_name in raw.ch_names[-2:]})
     with pytest.raises(ValueError, match="mix of fNIRS"):
         raw.get_montage()
+
+
+def test_set_montage_meg_eeg_no_digitization():
+    """Regression test for GH-12011.
+
+    set_montage() must not crash when MEG+EEG info has EEG reference
+    positions set to the [1, 0, 0] sentinel (digitization was skipped).
+    """
+    ch_names = [f"EEG{i:03d}" for i in range(1, 11)] + ["MEG0111"]
+    ch_types = ["eeg"] * 10 + ["grad"]
+    info = create_info(ch_names=ch_names, sfreq=1000.0, ch_types=ch_types)
+
+    # Simulate MEG reader behaviour when digitization is skipped:
+    # EEG ref position (loc[3:6]) is set to the [1, 0, 0] sentinel
+    with info._unlock():
+        for ch in info["chs"]:
+            if ch["ch_name"].startswith("EEG"):
+                ch["loc"][3:6] = [1.0, 0.0, 0.0]
+
+    data = np.zeros((1, len(ch_names), 100))
+    epochs = EpochsArray(data, info)
+
+    # This must not raise IndexError (regression test for GH-12011)
+    montage = make_standard_montage("standard_1020")
+    epochs.set_montage(montage, on_missing="ignore")