diff --git a/packages/vitest/src/node/plugins/workspace.ts b/packages/vitest/src/node/plugins/workspace.ts
index f6df0efd2c81..d04d29d30639 100644
--- a/packages/vitest/src/node/plugins/workspace.ts
+++ b/packages/vitest/src/node/plugins/workspace.ts
@@ -1,4 +1,5 @@
-import { basename, dirname, relative } from 'pathe'
+import { existsSync, readFileSync } from 'node:fs'
+import { basename, dirname, relative, resolve } from 'pathe'
 import type { UserConfig as ViteConfig, Plugin as VitePlugin } from 'vite'
 import { configDefaults } from '../../defaults'
 import { generateScopedClassName } from '../../integrations/css/css-modules'
@@ -35,10 +36,20 @@ export function WorkspaceVitestPlugin(project: WorkspaceProject, options: Worksp
         const root = testConfig.root || viteConfig.root || options.root
         let name = testConfig.name
         if (!name) {
-          if (typeof options.workspacePath === 'string')
-            name = basename(options.workspacePath.endsWith('/') ? options.workspacePath.slice(0, -1) : dirname(options.workspacePath))
-          else
+          if (typeof options.workspacePath === 'string') {
+            // if there is a package.json, read the name from it
+            const dir = options.workspacePath.endsWith('/')
+              ? options.workspacePath.slice(0, -1)
+              : dirname(options.workspacePath)
+            const pkgJsonPath = resolve(dir, 'package.json')
+            if (existsSync(pkgJsonPath))
+              name = JSON.parse(readFileSync(pkgJsonPath, 'utf-8')).name
+            if (typeof name !== 'string' || !name)
+              name = basename(dir)
+          }
+          else {
             name = options.workspacePath.toString()
+          }
         }
 
         const config: ViteConfig = {
diff --git a/test/watch/test/workspaces.test.ts b/test/watch/test/workspaces.test.ts
index 30fcdbeb0c69..87cff84823d4 100644
--- a/test/watch/test/workspaces.test.ts
+++ b/test/watch/test/workspaces.test.ts
@@ -65,7 +65,7 @@ it('editing a file that is imported in different workspaces reruns both files',
   writeFileSync(srcMathFile, `${srcMathContent}\n`, 'utf8')
 
   await vitest.waitForStdout('RERUN  src/math.ts')
-  await vitest.waitForStdout('|space_3| math.space-3-test.ts')
+  await vitest.waitForStdout('|@vitest/space_3| math.space-3-test.ts')
   await vitest.waitForStdout('|space_1| test/math.spec.ts')
   await vitest.waitForStdout('Test Files  2 passed')
 })
@@ -100,7 +100,7 @@ it('adding a new test file matching core project config triggers re-run', async
 
   // Test case should not be run by other projects
   expect(vitest.stdout).not.include('|space_1|')
-  expect(vitest.stdout).not.include('|space_3|')
+  expect(vitest.stdout).not.include('|@vitest/space_3|')
   expect(vitest.stdout).not.include('|node|')
   expect(vitest.stdout).not.include('|happy-dom|')
 })
@@ -114,7 +114,7 @@ it('adding a new test file matching project specific config triggers re-run', as
 
   await vitest.waitForStdout('Running added dynamic test')
   await vitest.waitForStdout('RERUN  space_3/new-dynamic.space-3-test.ts')
-  await vitest.waitForStdout('|space_3| new-dynamic.space-3-test.ts')
+  await vitest.waitForStdout('|@vitest/space_3| new-dynamic.space-3-test.ts')
 
   // Wait for tests to end
   await vitest.waitForStdout('Waiting for file changes')
diff --git a/test/workspaces/space_3/package.json b/test/workspaces/space_3/package.json
new file mode 100644
index 000000000000..db61b2ef3abf
--- /dev/null
+++ b/test/workspaces/space_3/package.json
@@ -0,0 +1,4 @@
+{
+  "name": "@vitest/space_3",
+  "private": true
+}
diff --git a/test/workspaces/space_3/vitest.config.ts b/test/workspaces/space_3/vitest.config.ts
index 55bdced7da5d..956f9e5c8c84 100644
--- a/test/workspaces/space_3/vitest.config.ts
+++ b/test/workspaces/space_3/vitest.config.ts
@@ -3,7 +3,6 @@ import { defineProject } from 'vitest/config'
 export default defineProject({
   test: {
     include: ['**/*.space-3-test.ts'],
-    name: 'space_3',
     environment: 'node',
     globalSetup: './localSetup.ts',
   },