diff --git a/apps/api/src/api/tool/tool_instances.py b/apps/api/src/api/tool/tool_instances.py
index 77f159c..5206d08 100644
--- a/apps/api/src/api/tool/tool_instances.py
+++ b/apps/api/src/api/tool/tool_instances.py
@@ -853,19 +853,31 @@ async def create_instance(
         # Generate unique name
         instance_name = f"{tool_type.name}-{repo.name}-{uuid.uuid4().hex[:8]}"
 
-        # Auto-generate display name with numbering when duplicates exist
+        # Auto-generate display name with scoped numbering.
+        # When a workspace is provided, use workspace name + tool type.
+        # Otherwise fall back to repo name + tool type.
         if data.display_name:
             instance_display = data.display_name
         else:
-            auto_name = f"{_project.name} / {repo.name} / {tool_type.display_name}"
-            result = await session.execute(
-                select(ToolInstance).where(
-                    ToolInstance.project_id == project_id,
-                    ToolInstance.repository_id == repo_id,
-                    ToolInstance.tool_type_id == tool_type_id,
-                    ToolInstance.owner_id == user_id,
+            scope_name = workspace.name if workspace else repo.name
+            auto_name = f"{scope_name} / {tool_type.display_name}"
+
+            if workspace:
+                count_query = (
+                    select(ToolInstance)
+                    .where(ToolInstance.workspace_id == workspace_id)
+                    .where(ToolInstance.tool_type_id == tool_type_id)
+                    .where(ToolInstance.owner_id == user_id)
                 )
-            )
+            else:
+                count_query = (
+                    select(ToolInstance)
+                    .where(ToolInstance.repository_id == repo_id)
+                    .where(ToolInstance.tool_type_id == tool_type_id)
+                    .where(ToolInstance.owner_id == user_id)
+                )
+
+            result = await session.execute(count_query)
             existing_count = len(result.scalars().all())
             if existing_count > 0:
                 instance_display = f"{auto_name} #{existing_count + 1}"