diff --git a/packages/server/src/routes/federation.peerAccept.test.ts b/packages/server/src/routes/federation.peerAccept.test.ts
index b1fce8be..6ce1e1c3 100644
--- a/packages/server/src/routes/federation.peerAccept.test.ts
+++ b/packages/server/src/routes/federation.peerAccept.test.ts
@@ -355,3 +355,77 @@ describe('POST /api/federation/peer/initiate — persists remote instanceName fr
     expect(row?.instanceName).toBeNull();
   });
 });
+
+describe('POST /api/federation/approval-requests/:id/approve — persists remote instanceName from handshake response', () => {
+  let app: FastifyInstance;
+
+  beforeEach(async () => {
+    sqlite = new Database(':memory:');
+    testDb = drizzle(sqlite, { schema });
+    applyMigrations(sqlite);
+    seedInstanceSettings('Local Backspace');
+    app = await buildApp();
+  });
+
+  afterEach(() => {
+    vi.unstubAllGlobals();
+  });
+
+  function seedApprovalRequest(): string {
+    const id = 'approval-1';
+    testDb.insert(schema.peerApprovalRequests).values({
+      id,
+      origin: 'https://remote.example',
+      instanceName: 'Stale Name',
+      hmacSecret: 'their-old-secret',
+      requestedAt: Date.now(),
+      expiresAt: Date.now() + 30 * 24 * 60 * 60 * 1000,
+    }).run();
+    return id;
+  }
+
+  it('writes remote.instanceName when remote /peer/accept succeeds', async () => {
+    const approvalId = seedApprovalRequest();
+
+    vi.stubGlobal('fetch', vi.fn(async () =>
+      new Response(JSON.stringify({ accepted: true, instanceName: 'Remote Backspace' }), {
+        status: 200,
+        headers: { 'content-type': 'application/json' },
+      }),
+    ));
+
+    const response = await app.inject({
+      method: 'POST',
+      url: `/api/federation/approval-requests/${approvalId}/approve`,
+      payload: {},
+    });
+
+    expect(response.statusCode).toBe(200);
+    const row = testDb.select().from(schema.federationPeers)
+      .where(eq(schema.federationPeers.origin, 'https://remote.example')).get();
+    expect(row?.status).toBe('active');
+    expect(row?.instanceName).toBe('Remote Backspace');
+  });
+
+  it('writes null instanceName when remote response omits the field', async () => {
+    const approvalId = seedApprovalRequest();
+
+    vi.stubGlobal('fetch', vi.fn(async () =>
+      new Response(JSON.stringify({ accepted: true }), {
+        status: 200,
+        headers: { 'content-type': 'application/json' },
+      }),
+    ));
+
+    const response = await app.inject({
+      method: 'POST',
+      url: `/api/federation/approval-requests/${approvalId}/approve`,
+      payload: {},
+    });
+
+    expect(response.statusCode).toBe(200);
+    const row = testDb.select().from(schema.federationPeers)
+      .where(eq(schema.federationPeers.origin, 'https://remote.example')).get();
+    expect(row?.instanceName).toBeNull();
+  });
+});
diff --git a/packages/server/src/routes/federation.ts b/packages/server/src/routes/federation.ts
index b66e444d..11136582 100644
--- a/packages/server/src/routes/federation.ts
+++ b/packages/server/src/routes/federation.ts
@@ -1169,8 +1169,21 @@ export async function federationRoutes(app: FastifyInstance): Promise<void> {
           return reply.code(502).send({ error: errorMessage, statusCode: 502 });
         }
 
+        // Parse the remote's instanceName from the response body so the
+        // federation panel renders a friendly label. Tolerate omission and
+        // non-JSON bodies — same pattern as performHandshake and /peer/initiate.
+        let remoteInstanceName: string | null = null;
+        try {
+          const body = (await response.json()) as { instanceName?: string | null };
+          if (typeof body?.instanceName === 'string' && body.instanceName.length > 0) {
+            remoteInstanceName = body.instanceName;
+          }
+        } catch {
+          // Non-JSON body — leave null.
+        }
+
         db.update(schema.federationPeers)
-          .set({ status: 'active', lastSeenAt: now })
+          .set({ status: 'active', lastSeenAt: now, instanceName: remoteInstanceName })
           .where(eq(schema.federationPeers.id, peerId))
           .run();