diff --git a/server/lib/validators.test.ts b/server/lib/validators.test.ts
index ac95184a5..5ce95f45c 100644
--- a/server/lib/validators.test.ts
+++ b/server/lib/validators.test.ts
@@ -1,10 +1,29 @@
 import {
     getResourceRuleValueValidationError,
+    isValidDomain,
     isValidUrlGlobPattern
 } from "./validators";
 import { assertEquals } from "@test/assert";
 
 function runTests() {
+    console.log("Running domain validation tests...");
+
+    assertEquals(
+        isValidDomain("example.com"),
+        true,
+        "Standard ASCII domain should be valid"
+    );
+    assertEquals(
+        isValidDomain("xn--e1afmkfd.xn--p1ai"),
+        true,
+        "Punycode IDN domain should be valid"
+    );
+    assertEquals(
+        isValidDomain("example.invalid-tld"),
+        false,
+        "Domain with unknown TLD should be invalid"
+    );
+
     console.log("Running URL pattern validation tests...");
 
     // Test valid patterns
diff --git a/server/lib/validators.ts b/server/lib/validators.ts
index ff0c5fb3d..872ced221 100644
--- a/server/lib/validators.ts
+++ b/server/lib/validators.ts
@@ -171,9 +171,10 @@ export function isValidDomain(domain: string): boolean {
         if (!/^[a-zA-Z0-9-]+$/.test(label)) return false;
     }
 
-    // TLD should be at least 2 characters and contain only letters
+    // TLD should be at least 2 characters. Punycode TLDs can contain digits
+    // and hyphens, so validity is ultimately enforced by the TLD allowlist.
     const tld = labels[labels.length - 1];
-    if (tld.length < 2 || !/^[a-zA-Z]+$/.test(tld)) return false;
+    if (tld.length < 2) return false;
 
     // Check if TLD is in the list of valid TLDs
     if (!validTlds.includes(tld.toUpperCase())) return false;