diff --git a/plugins/analytics-module-newrelic-browser/README.md b/plugins/analytics-module-newrelic-browser/README.md
index e31496505d..a94a60575e 100644
--- a/plugins/analytics-module-newrelic-browser/README.md
+++ b/plugins/analytics-module-newrelic-browser/README.md
@@ -74,6 +74,32 @@ app:
 
 This plugin supports sending user context to New Relic Browser by providing a User ID. This requires instantiating the `NewRelicBrowser` instance with an `identityApi` instance passed to it, but this is optional. If omitted the plugin will not send user context to New Relic Browser.
 
+By default the user ID is calculated as a SHA-256 hash of the current user's `userEntityRef` as returned by the `identityApi`. To set a
+different value, provide a `userIdTransform` function alongside `identityApi` when you instantiate `NewRelicBrowser`. This function will be passed the `userEntityRef` as an argument and should resolve to the value you wish to set as the user ID. For example:
+
+```typescript
+import {
+  analyticsApiRef,
+  configApiRef,
+  identityApiRef,
+} from '@backstage/core-plugin-api';
+import { GoogleAnalytics } from '@backstage/plugin-analytics-module-newrelic-browser';
+
+export const apis: AnyApiFactory[] = [
+  createApiFactory({
+    api: analyticsApiRef,
+    deps: { configApi: configApiRef, identityApi: identityApiRef },
+    factory: ({ configApi, identityApi }) =>
+      NewRelicBrowser.fromConfig(configApi, {
+        identityApi,
+        userIdTransform: async (userEntityRef: string): Promise<string> => {
+          return customHashingFunction(userEntityRef);
+        },
+      }),
+  }),
+];
+```
+
 ## Development
 
 If you would like to contribute improvements to this plugin, the easiest way to
diff --git a/plugins/analytics-module-newrelic-browser/src/apis/implementations/AnalyticsApi/NewRelicBrowser.ts b/plugins/analytics-module-newrelic-browser/src/apis/implementations/AnalyticsApi/NewRelicBrowser.ts
index 291d5eba68..293c0a9b45 100644
--- a/plugins/analytics-module-newrelic-browser/src/apis/implementations/AnalyticsApi/NewRelicBrowser.ts
+++ b/plugins/analytics-module-newrelic-browser/src/apis/implementations/AnalyticsApi/NewRelicBrowser.ts
@@ -43,6 +43,7 @@ export class NewRelicBrowser implements AnalyticsApi {
   private constructor(
     options: NewRelicBrowserOptions,
     identityApi?: IdentityApi,
+    userIdTransform?: 'sha-256' | ((userEntityRef: string) => Promise<string>),
   ) {
     // Configure the New Relic Browser agent
     const agentOptions = {
@@ -76,14 +77,31 @@ export class NewRelicBrowser implements AnalyticsApi {
     // Initialize the agent
     this.agent = new BrowserAgent(agentOptions) as unknown as NewRelicAPI;
 
+    // Check if identity has been provided
     if (identityApi) {
       identityApi.getBackstageIdentity().then(identity => {
-        this.agent.setUserId(identity.userEntityRef);
+        if (typeof userIdTransform === 'function') {
+          userIdTransform(identity.userEntityRef).then(userId => {
+            this.agent.setUserId(userId);
+          });
+        } else {
+          this.hash(identity.userEntityRef).then(userId => {
+            this.agent.setUserId(userId);
+          });
+        }
       });
     }
   }
 
-  static fromConfig(config: Config, options: { identityApi?: IdentityApi }) {
+  static fromConfig(
+    config: Config,
+    options: {
+      identityApi?: IdentityApi;
+      userIdTransform?:
+        | 'sha-256'
+        | ((userEntityRef: string) => Promise<string>);
+    },
+  ) {
     const browserOptions: NewRelicBrowserOptions = {
       endpoint: config.getString('app.analytics.nr.endpoint'),
       accountId: config.getString('app.analytics.nr.accountId'),
@@ -96,7 +114,11 @@ export class NewRelicBrowser implements AnalyticsApi {
       cookiesEnabled:
         config.getOptionalBoolean('app.analytics.nr.cookiesEnabled') ?? false,
     };
-    return new NewRelicBrowser(browserOptions, options.identityApi);
+    return new NewRelicBrowser(
+      browserOptions,
+      options.identityApi,
+      options.userIdTransform,
+    );
   }
 
   captureEvent(event: AnalyticsEvent) {
@@ -138,4 +160,17 @@ export class NewRelicBrowser implements AnalyticsApi {
       this.agent.addPageAction(action, customAttributes);
     }
   }
+
+  /**
+   * Simple hash function; relies on web cryptography + the sha-256 algorithm.
+   * @param value value to be hashed
+   */
+  private async hash(value: string): Promise<string> {
+    const digest = await window.crypto.subtle.digest(
+      'sha-256',
+      new TextEncoder().encode(value),
+    );
+    const hashArray = Array.from(new Uint8Array(digest));
+    return hashArray.map(b => b.toString(16).padStart(2, '0')).join('');
+  }
 }