diff --git a/src/core/net/dns_types.cpp b/src/core/net/dns_types.cpp
index 34412e3b2..d8a21dba9 100644
--- a/src/core/net/dns_types.cpp
+++ b/src/core/net/dns_types.cpp
@@ -639,6 +639,9 @@ Error Name::LabelIterator::ReadLabel(char *aLabelBuffer, uint8_t &aLabelLength,
     aLabelBuffer[mLabelLength] = kNullChar;
     aLabelLength               = mLabelLength;
 
+    // Check that there is no `kNullChar` (`\0`) in the read label.
+    VerifyOrExit(StringLength(aLabelBuffer, mLabelLength) == mLabelLength, error = kErrorParse);
+
     if (!aAllowDotCharInLabel)
     {
         VerifyOrExit(StringFind(aLabelBuffer, kLabelSeparatorChar) == nullptr, error = kErrorParse);
@@ -1592,10 +1595,6 @@ Error PtrRecord::ReadPtrName(const Message &aMessage,
     aOffset = startOffset + sizeof(PtrRecord);
     SuccessOrExit(error = Name::ReadLabel(aMessage, aOffset, aLabelBuffer, aLabelBufferSize));
 
-    // The first label of a PTR target (the service-instance or host label)
-    // must be non-empty.
-    VerifyOrExit(aLabelBuffer[0] != kNullChar, error = kErrorParse);
-
     if (aNameBuffer != nullptr)
     {
         SuccessOrExit(error = Name::ReadName(aMessage, aOffset, aNameBuffer, aNameBufferSize));
diff --git a/tests/unit/test_dns.cpp b/tests/unit/test_dns.cpp
index c4a1a2a6c..c0240c0ba 100644
--- a/tests/unit/test_dns.cpp
+++ b/tests/unit/test_dns.cpp
@@ -161,6 +161,14 @@ void TestDnsName(void)
         {"_s1._sub._srv._udp.default.service.arpa.", "_s1", "_sub._srv._udp", "default.service.arpa.", true},
     };
 
+    typedef uint8_t EncodedNameWithNullChar[6];
+
+    static const EncodedNameWithNullChar kEncodedNamesWithNullChar[] = {
+        {4, 0, 'a', 'b', 'c', 0}, // Null char at the start of the label
+        {4, 'a', 0, 'c', 'd', 0}, // Null char in the middle of the label
+        {4, 'a', 'b', 'c', 0, 0}  // Null char in the end of the label
+    };
+
     printf("================================================================\n");
     printf("TestDnsName()\n");
 
@@ -626,6 +634,22 @@ void TestDnsName(void)
                                          "012345678901234567890123456789012345678901234567890123456789012") ==
                  kErrorInvalidArgs);
 
+    printf("----------------------------------------------------------------\n");
+    printf("Name::ReadLabel() when there is null-char \'\\0\' in the label\n");
+
+    for (const EncodedNameWithNullChar &encodedName : kEncodedNamesWithNullChar)
+    {
+        SuccessOrQuit(message->SetLength(0));
+        SuccessOrQuit(message->AppendBytes(encodedName, sizeof(encodedName)));
+
+        SuccessOrQuit(message->Read(0, buffer, message->GetLength()));
+        DumpBuffer("EncodedName", buffer, message->GetLength());
+
+        offset      = 0;
+        labelLength = sizeof(label);
+        VerifyOrQuit(Dns::Name::ReadLabel(*message, offset, label, labelLength) == kErrorParse);
+    }
+
     message->Free();
     testFreeInstance(instance);
 }