diff --git a/frontend/src/lib/components/workspaceSettings/DataTableSettings.svelte b/frontend/src/lib/components/workspaceSettings/DataTableSettings.svelte
index 60794c6923..218ae19239 100644
--- a/frontend/src/lib/components/workspaceSettings/DataTableSettings.svelte
+++ b/frontend/src/lib/components/workspaceSettings/DataTableSettings.svelte
@@ -41,8 +41,6 @@
 		}
 		return s
 	}
-
-	let DEFAULT_DATATABLE_DB_NAME = 'datatable_db'
 </script>
 
 <script lang="ts">
@@ -61,7 +59,7 @@
 	import Row from '../table/Row.svelte'
 	import TextInput from '../text_input/TextInput.svelte'
 	import Tooltip from '../Tooltip.svelte'
-	import { isCustomInstanceDbEnabled } from './utils.svelte'
+	import { isCustomInstanceDbEnabled, getUnusedInstanceDbName } from './utils.svelte'
 	import { random_adj } from '../random_positive_adjetive'
 	import { sendUserToast } from '$lib/toast'
 	import { SettingService, WorkspaceService, type GetSettingsResponse } from '$lib/gen'
@@ -97,6 +95,18 @@
 		tempSettings.dataTables.splice(index, 1)
 	}
 
+	const customInstanceDbs = resource([() => $workspaceStore], SettingService.listCustomInstanceDbs)
+
+	function defaultInstanceDbName(): string {
+		const usedNames = [
+			...Object.keys(customInstanceDbs.current ?? {}),
+			...tempSettings.dataTables
+				.filter((d) => d.database.resource_type === 'instance' && d.database.resource_path)
+				.map((d) => d.database.resource_path!)
+		]
+		return getUnusedInstanceDbName('dt', $workspaceStore ?? '', usedNames)
+	}
+
 	function onNewDataTable() {
 		const name = tempSettings.dataTables.some((d) => d.name === 'main')
 			? `${random_adj()}_datatable`
@@ -105,13 +115,11 @@
 			name,
 			database: {
 				resource_type: $isCustomInstanceDbEnabled ? 'instance' : 'postgresql',
-				resource_path: $isCustomInstanceDbEnabled ? DEFAULT_DATATABLE_DB_NAME : undefined
+				resource_path: $isCustomInstanceDbEnabled ? defaultInstanceDbName() : undefined
 			}
 		})
 	}
 
-	const customInstanceDbs = resource([() => $workspaceStore], SettingService.listCustomInstanceDbs)
-
 	async function onSave() {
 		try {
 			if (
@@ -228,7 +236,7 @@
 										dataTable.database = {
 											resource_type,
 											resource_path:
-												resource_type === 'instance' ? DEFAULT_DATATABLE_DB_NAME : undefined
+												resource_type === 'instance' ? defaultInstanceDbName() : undefined
 										}
 									}
 								}
diff --git a/frontend/src/lib/components/workspaceSettings/DucklakeSettings.svelte b/frontend/src/lib/components/workspaceSettings/DucklakeSettings.svelte
index 0f02b1667f..4dd0ed0053 100644
--- a/frontend/src/lib/components/workspaceSettings/DucklakeSettings.svelte
+++ b/frontend/src/lib/components/workspaceSettings/DucklakeSettings.svelte
@@ -80,13 +80,11 @@
 	import Popover from '../meltComponents/Popover.svelte'
 	import TextInput from '../text_input/TextInput.svelte'
 	import { slide } from 'svelte/transition'
-	import { isCustomInstanceDbEnabled } from './utils.svelte'
+	import { isCustomInstanceDbEnabled, getUnusedInstanceDbName } from './utils.svelte'
 	import { resource } from 'runed'
 	import CustomInstanceDbSelect from './CustomInstanceDbSelect.svelte'
 	import Label from '../Label.svelte'
 
-	const DEFAULT_DUCKLAKE_CATALOG_NAME = 'ducklake_catalog'
-
 	type Props = {
 		ducklakeSettings: DucklakeSettingsType
 		ducklakeSavedSettings: DucklakeSettingsType
@@ -100,6 +98,16 @@
 		onDiscard = undefined
 	}: Props = $props()
 
+	function defaultInstanceDbName(): string {
+		const usedNames = [
+			...Object.keys(customInstanceDbs.current ?? {}),
+			...ducklakeSettings.ducklakes
+				.filter((d) => d.catalog.resource_type === 'instance' && d.catalog.resource_path)
+				.map((d) => d.catalog.resource_path!)
+		]
+		return getUnusedInstanceDbName('dl', $workspaceStore ?? '', usedNames)
+	}
+
 	function onNewDucklake() {
 		const name = ducklakeSettings.ducklakes.some((d) => d.name === 'main')
 			? `${random_adj()}_ducklake`
@@ -108,7 +116,7 @@
 			name,
 			catalog: {
 				resource_type: $isCustomInstanceDbEnabled ? 'instance' : 'postgresql',
-				resource_path: $isCustomInstanceDbEnabled ? DEFAULT_DUCKLAKE_CATALOG_NAME : undefined
+				resource_path: $isCustomInstanceDbEnabled ? defaultInstanceDbName() : undefined
 			},
 			storage: {
 				storage: undefined,
@@ -272,7 +280,7 @@
 										ducklake.catalog = {
 											resource_type,
 											resource_path:
-												resource_type === 'instance' ? DEFAULT_DUCKLAKE_CATALOG_NAME : undefined
+												resource_type === 'instance' ? defaultInstanceDbName() : undefined
 										}
 									}
 								}
diff --git a/frontend/src/lib/components/workspaceSettings/utils.svelte.ts b/frontend/src/lib/components/workspaceSettings/utils.svelte.ts
index 3d5d70afec..6925be9c04 100644
--- a/frontend/src/lib/components/workspaceSettings/utils.svelte.ts
+++ b/frontend/src/lib/components/workspaceSettings/utils.svelte.ts
@@ -7,3 +7,31 @@ export let isCustomInstanceDbEnabled = derived(
 	[superadmin],
 	([superadmin_]) => superadmin_ && !isCloudHosted()
 )
+
+// Postgres caps identifiers at 63 bytes; the backend rejects longer db names.
+const MAX_INSTANCE_DB_NAME_LEN = 63
+
+// Builds a default instance database name scoped to the workspace (e.g. `dt_myworkspace`),
+// appending `_1`, `_2`... until an unused name is found. Workspace ids may contain hyphens,
+// which are not valid in unquoted postgres identifiers, so they are replaced with underscores.
+// The result is truncated to keep it within the postgres identifier length limit.
+export function getUnusedInstanceDbName(
+	prefix: string,
+	workspaceId: string,
+	usedNames: Iterable<string>
+): string {
+	const used = new Set(usedNames)
+	const base = `${prefix}_${workspaceId.toLowerCase().replace(/-/g, '_')}`.slice(
+		0,
+		MAX_INSTANCE_DB_NAME_LEN
+	)
+	if (!used.has(base)) return base
+	let i = 1
+	let candidate: string
+	do {
+		const suffix = `_${i}`
+		candidate = base.slice(0, MAX_INSTANCE_DB_NAME_LEN - suffix.length) + suffix
+		i++
+	} while (used.has(candidate))
+	return candidate
+}
diff --git a/frontend/src/lib/components/workspaceSettings/utils.test.ts b/frontend/src/lib/components/workspaceSettings/utils.test.ts
new file mode 100644
index 0000000000..68115e6a62
--- /dev/null
+++ b/frontend/src/lib/components/workspaceSettings/utils.test.ts
@@ -0,0 +1,45 @@
+import { describe, expect, it } from 'vitest'
+
+import { getUnusedInstanceDbName } from './utils.svelte'
+
+describe('getUnusedInstanceDbName', () => {
+	it('scopes the name to the workspace with the given prefix', () => {
+		expect(getUnusedInstanceDbName('dt', 'myworkspace', [])).toBe('dt_myworkspace')
+		expect(getUnusedInstanceDbName('dl', 'myworkspace', [])).toBe('dl_myworkspace')
+	})
+
+	it('lowercases and replaces hyphens with underscores', () => {
+		expect(getUnusedInstanceDbName('dt', 'My-Team', [])).toBe('dt_my_team')
+	})
+
+	it('appends an incrementing suffix when the name is already used', () => {
+		expect(getUnusedInstanceDbName('dt', 'abc', ['dt_abc'])).toBe('dt_abc_1')
+		expect(getUnusedInstanceDbName('dt', 'abc', ['dt_abc', 'dt_abc_1'])).toBe('dt_abc_2')
+	})
+
+	it('skips over already-used suffixed names', () => {
+		expect(getUnusedInstanceDbName('dt', 'abc', ['dt_abc', 'dt_abc_2'])).toBe('dt_abc_1')
+		expect(getUnusedInstanceDbName('dt', 'abc', ['dt_abc', 'dt_abc_1', 'dt_abc_2'])).toBe(
+			'dt_abc_3'
+		)
+	})
+
+	it('accepts any iterable of used names', () => {
+		expect(getUnusedInstanceDbName('dt', 'abc', new Set(['dt_abc']))).toBe('dt_abc_1')
+	})
+
+	it('truncates the base name to the postgres 63-char identifier limit', () => {
+		const longId = 'w'.repeat(100)
+		const name = getUnusedInstanceDbName('dt', longId, [])
+		expect(name.length).toBe(63)
+		expect(name.startsWith('dt_')).toBe(true)
+	})
+
+	it('keeps the result within 63 chars even when appending a suffix', () => {
+		const longId = 'w'.repeat(100)
+		const base = getUnusedInstanceDbName('dt', longId, []) // length 63
+		const name = getUnusedInstanceDbName('dt', longId, [base])
+		expect(name.length).toBeLessThanOrEqual(63)
+		expect(name.endsWith('_1')).toBe(true)
+	})
+})