diff --git a/NEXT_CHANGELOG.md b/NEXT_CHANGELOG.md
index 491321a48c..30be1b7884 100644
--- a/NEXT_CHANGELOG.md
+++ b/NEXT_CHANGELOG.md
@@ -6,6 +6,7 @@
 
 ### CLI
 * Skip non-exportable objects (e.g., `MLFLOW_EXPERIMENT`) during `workspace export-dir` instead of failing ([#4081](https://github.com/databricks/cli/issues/4081))
+* Allow domain_friendly_name to be used in name_prefix in development mode ([#4173](https://github.com/databricks/cli/pull/4173))
 
 ### Bundles
 
diff --git a/bundle/config/mutator/resourcemutator/validate_target_mode.go b/bundle/config/mutator/resourcemutator/validate_target_mode.go
index ed8a6b796f..190c60c9b9 100644
--- a/bundle/config/mutator/resourcemutator/validate_target_mode.go
+++ b/bundle/config/mutator/resourcemutator/validate_target_mode.go
@@ -69,7 +69,7 @@ func validateDevelopmentMode(b *bundle.Bundle) diag.Diagnostics {
 			diags = diags.Extend(diag.Errorf("%s must start with '~/' or contain the current username to ensure uniqueness when using 'mode: development'", path))
 		}
 	}
-	if p.NamePrefix != "" && !strings.Contains(p.NamePrefix, u.ShortName) && !strings.Contains(p.NamePrefix, u.UserName) {
+	if p.NamePrefix != "" && !namePrefixContainsUserIdentifier(p.NamePrefix, u) {
 		// Resources such as pipelines require a unique name, e.g. '[dev steve] my_pipeline'.
 		// For this reason we require the name prefix to contain the current username;
 		// it's a pitfall for users if they don't include it and later find out that
@@ -83,6 +83,21 @@ func validateDevelopmentMode(b *bundle.Bundle) diag.Diagnostics {
 	return diags
 }
 
+// namePrefixContainsUserIdentifier checks if the name prefix contains any user identifier
+// (username, short name, or domain friendly name) to ensure uniqueness.
+func namePrefixContainsUserIdentifier(prefix string, u *config.User) bool {
+	if strings.Contains(prefix, u.UserName) {
+		return true
+	}
+	if strings.Contains(prefix, u.ShortName) {
+		return true
+	}
+	if u.DomainFriendlyName != "" && strings.Contains(prefix, u.DomainFriendlyName) {
+		return true
+	}
+	return false
+}
+
 // findNonUserPath finds the first workspace path such as root_path that doesn't
 // contain the current username or current user's shortname.
 func findNonUserPath(b *bundle.Bundle) string {
diff --git a/bundle/config/mutator/resourcemutator/validate_target_mode_test.go b/bundle/config/mutator/resourcemutator/validate_target_mode_test.go
index 13ac277fba..f65d585954 100644
--- a/bundle/config/mutator/resourcemutator/validate_target_mode_test.go
+++ b/bundle/config/mutator/resourcemutator/validate_target_mode_test.go
@@ -192,4 +192,23 @@ func TestValidateDevelopmentMode(t *testing.T) {
 	b.Config.Workspace.ResourcePath = "/Users/lennart@company.com/.bundle/x/y/resources"
 	diags = validateDevelopmentMode(b)
 	require.NoError(t, diags.Error())
+
+	// Test with a bundle that has a prefix containing the domain_friendly_name
+	b = mockBundle(config.Development)
+	b.Config.Workspace.CurrentUser.DomainFriendlyName = "lennartfriendly"
+	b.Config.Presets.NamePrefix = "[dev-lennartfriendly]"
+	diags = validateDevelopmentMode(b)
+	require.NoError(t, diags.Error())
+
+	// Test with a bundle that has a prefix containing the short_name
+	b = mockBundle(config.Development)
+	b.Config.Presets.NamePrefix = "[dev-lennart]"
+	diags = validateDevelopmentMode(b)
+	require.NoError(t, diags.Error())
+
+	// Test with a bundle that has a prefix containing the username
+	b = mockBundle(config.Development)
+	b.Config.Presets.NamePrefix = "[dev-lennart@company.com]"
+	diags = validateDevelopmentMode(b)
+	require.NoError(t, diags.Error())
 }