diff --git a/dowhy/causal_estimators/distance_matching_estimator.py b/dowhy/causal_estimators/distance_matching_estimator.py
index 3d0bd70f2..c35242b78 100644
--- a/dowhy/causal_estimators/distance_matching_estimator.py
+++ b/dowhy/causal_estimators/distance_matching_estimator.py
@@ -217,7 +217,7 @@ def estimate_effect(
                     n_neighbors=self.num_matches_per_unit,
                     metric=self.distance_metric,
                     algorithm="ball_tree",
-                    **self.distance_metric_params,
+                    metric_params=self.distance_metric_params,
                 ).fit(control[self._observed_common_causes.columns].values)
                 distances, indices = control_neighbors.kneighbors(treated[self._observed_common_causes.columns].values)
                 self.logger.debug("distances:")
@@ -257,7 +257,7 @@ def estimate_effect(
                         n_neighbors=self.num_matches_per_unit,
                         metric=self.distance_metric,
                         algorithm="ball_tree",
-                        **self.distance_metric_params,
+                        metric_params=self.distance_metric_params,
                     ).fit(group_control[self._observed_common_causes.columns].values)
                     distances, indices = control_neighbors.kneighbors(
                         group_treated[self._observed_common_causes.columns].values
@@ -293,7 +293,7 @@ def estimate_effect(
                 n_neighbors=self.num_matches_per_unit,
                 metric=self.distance_metric,
                 algorithm="ball_tree",
-                **self.distance_metric_params,
+                metric_params=self.distance_metric_params,
             ).fit(treated[self._observed_common_causes.columns].values)
             distances, indices = treated_neighbors.kneighbors(control[self._observed_common_causes.columns].values)
 
diff --git a/tests/causal_estimators/test_distance_matching_estimator.py b/tests/causal_estimators/test_distance_matching_estimator.py
index 7549a6a39..3a4bd97bc 100644
--- a/tests/causal_estimators/test_distance_matching_estimator.py
+++ b/tests/causal_estimators/test_distance_matching_estimator.py
@@ -149,3 +149,26 @@ def test_average_treatment_effect_via_simple_estimator(self):
             test_significance=[False],
             method_params={"num_simulations": 5, "num_null_simulations": 5},
         )
+
+    def test_distance_matching_with_mahalanobis_and_v_param(self, binary_treatment_dataset):
+        """Regression test for issue #1390: ensure V param is correctly passed as metric_params to NearestNeighbors."""
+        data = binary_treatment_dataset
+        model = CausalModel(data=data, treatment="v0", outcome="y", graph=GML_SINGLE_CAUSE)
+        estimand = model.identify_effect(proceed_when_unidentifiable=True)
+
+        # Calculate covariance matrix for W to use as V parameter
+        X = data[["W"]].values
+        V_matrix = np.cov(X.T)
+        if V_matrix.ndim == 0:
+            V_matrix = np.array([[V_matrix]])
+
+        estimate = model.estimate_effect(
+            estimand,
+            method_name="backdoor.distance_matching",
+            target_units="att",
+            method_params={
+                "distance_metric": "mahalanobis",
+                "V": V_matrix,
+            },
+        )
+        assert np.isfinite(estimate.value), "Estimate with Mahalanobis and V param should be finite."