diff --git a/src/core/net/dns_types.cpp b/src/core/net/dns_types.cpp
index b2df69ae5..f6b8c58b7 100644
--- a/src/core/net/dns_types.cpp
+++ b/src/core/net/dns_types.cpp
@@ -612,8 +612,9 @@ Error Name::LabelIterator::GetNextLabel(void)
             // `mMessage.GetOffset()` must point to the start of the
             // DNS header.
             nextLabelOffset = mMessage.GetOffset() + (BigEndian::HostSwap16(pointerValue) & kPointerLabelOffsetMask);
-            VerifyOrExit(nextLabelOffset < mNextLabelOffset, error = kErrorParse);
+            VerifyOrExit(nextLabelOffset < mMinLabelOffset, error = kErrorParse);
             mNextLabelOffset = nextLabelOffset;
+            mMinLabelOffset  = nextLabelOffset;
 
             // Go back through the `while(true)` loop to get the next label.
         }
diff --git a/src/core/net/dns_types.hpp b/src/core/net/dns_types.hpp
index 1083ee59e..d822bacd1 100644
--- a/src/core/net/dns_types.hpp
+++ b/src/core/net/dns_types.hpp
@@ -1145,6 +1145,7 @@ private:
             : mMessage(aMessage)
             , mNextLabelOffset(aLabelOffset)
             , mNameEndOffset(kUnsetNameEndOffset)
+            , mMinLabelOffset(aLabelOffset)
         {
         }
 
@@ -1162,6 +1163,7 @@ private:
         uint8_t        mLabelLength;      // Length of current label (number of chars).
         uint16_t       mNextLabelOffset;  // Offset in `mMessage` to the start of the next label.
         uint16_t       mNameEndOffset;    // Offset in `mMessage` to the byte after the end of domain name field.
+        uint16_t       mMinLabelOffset;   // Offset in `mMessage` to the start of the earliest parsed label.
     };
 
     Name(const char *aString, const Message *aMessage, uint16_t aOffset)
diff --git a/tests/unit/test_dns.cpp b/tests/unit/test_dns.cpp
index e3bac5c41..c11545dcd 100644
--- a/tests/unit/test_dns.cpp
+++ b/tests/unit/test_dns.cpp
@@ -1031,6 +1031,85 @@ void TestDnsCompressedName(void)
     printf("- Name3 after `AppendTo()`: \"%s\"\n", name);
     // `ReadName()` for name-4 will fail due to first label containing dot char.
 
+    printf("----------------------------------------------------------------\n");
+    printf("Improperly formatted names (looped)\n");
+
+    {
+        // Pointer label jumps forward to offset 6.
+        static const uint8_t kEncodedName[] = {3, 'F', 'O', 'O', 0xc0, 6, 2, 'A', 'B', 0};
+
+        SuccessOrQuit(message->SetLength(0));
+        SuccessOrQuit(message->Append(kEncodedName));
+        DumpBuffer("pointer-moving-forward", kEncodedName, sizeof(kEncodedName));
+        offset = 0;
+        VerifyOrQuit(Dns::Name::ParseName(*message, offset) == kErrorParse);
+        VerifyOrQuit(Dns::Name::ReadName(*message, offset, name) == kErrorParse);
+    }
+
+    {
+        // Pointer label jumps back to offset 0 creating a loop.
+        static const uint8_t kEncodedName[] = {0xc0, 0};
+
+        SuccessOrQuit(message->SetLength(0));
+        SuccessOrQuit(message->Append(kEncodedName));
+        DumpBuffer("looped-name", kEncodedName, sizeof(kEncodedName));
+        offset = 0;
+        VerifyOrQuit(Dns::Name::ParseName(*message, offset) == kErrorParse);
+        VerifyOrQuit(Dns::Name::ReadName(*message, offset, name) == kErrorParse);
+    }
+
+    {
+        // After first label, we have a pointer label jumping back to
+        // offset 0, creating a loop.
+
+        static const uint8_t kEncodedName[] = {3, 'F', 'O', 'O', 0xc0, 0};
+
+        SuccessOrQuit(message->SetLength(0));
+        SuccessOrQuit(message->Append(kEncodedName));
+        DumpBuffer("looped-one-label", kEncodedName, sizeof(kEncodedName));
+        offset = 0;
+        VerifyOrQuit(Dns::Name::ParseName(*message, offset) == kErrorParse);
+        VerifyOrQuit(Dns::Name::ReadName(*message, offset, name) == kErrorParse);
+        VerifyOrQuit(Dns::Name::CompareName(*message, offset, "FOO.") == kErrorParse);
+    }
+
+    {
+        // After two labels we have a pointer label jumping back to
+        // start of the first label. Name itself starts at offset 3
+        // (first 3 bytes are unused).
+
+        static const uint8_t kEncodedName[] = {0, 0, 0, 3, 'F', 'O', 'O', 2, 'B', 'A', 0xc0, 3};
+
+        SuccessOrQuit(message->SetLength(0));
+        SuccessOrQuit(message->Append(kEncodedName));
+        DumpBuffer("looped-two-labels", kEncodedName, sizeof(kEncodedName));
+        offset = 3;
+        VerifyOrQuit(Dns::Name::ParseName(*message, offset) == kErrorParse);
+        VerifyOrQuit(Dns::Name::ReadName(*message, offset, name) == kErrorParse);
+        VerifyOrQuit(Dns::Name::CompareName(*message, offset, "FOO.BA.") == kErrorParse);
+    }
+
+    {
+        // Same as last case, but pointer label now points to
+        // immediately before the first label (at offset 2). The name
+        // is now valid.
+
+        static const uint8_t kEncodedName[] = {0, 0, 0, 3, 'F', 'O', 'O', 2, 'B', 'A', 0xc0, 2};
+
+        SuccessOrQuit(message->SetLength(0));
+        SuccessOrQuit(message->Append(kEncodedName));
+        DumpBuffer("valid-name", kEncodedName, sizeof(kEncodedName));
+        offset = 3;
+        SuccessOrQuit(Dns::Name::ParseName(*message, offset));
+        VerifyOrQuit(offset == sizeof(kEncodedName));
+
+        offset = 3;
+        SuccessOrQuit(Dns::Name::ReadName(*message, offset, name));
+        VerifyOrQuit(offset == sizeof(kEncodedName));
+        VerifyOrQuit(strcmp(name, "FOO.BA.") == 0);
+        printf("Read name =\"%s\"\n", name);
+    }
+
     message->Free();
     message2->Free();
     testFreeInstance(instance);