diff --git a/docs/reference/service-identities/README.mdx b/docs/reference/service-identities/README.mdx
index fa5590b12..43784cfbb 100644
--- a/docs/reference/service-identities/README.mdx
+++ b/docs/reference/service-identities/README.mdx
@@ -9,9 +9,11 @@ Otterize uses universal service identities to refer to services, regardless of w
 How do Otterize operators decide what is the name of the service that runs within the pod? The algorithm is as follows:
 
 1. If the pod has an `intents.otterize.com/service-name` label, its value is used as the service name. This allows developers and
-   automations to explicitly name services, if needed.
-2. If there is no `intents.otterize.com/service-name` label, a recursive look up is performed for the Kubernetes resource owner of
+   automations to explicitly name services, if needed. The value should not contain dots `.` as they are used to
+   differentiate between service name and namespace.
+2. If there is no `intents.otterize.com/service-name` label, a recursive look-up is performed for the Kubernetes resource owner of
    the pod, until the root resource is reached, and its name is used as the service name. For example, if you have
    a `Deployment` named `checkoutservice`, which then creates and owns a `ReplicaSet`, which then creates and owns
    a `Pod`, then the service name for that pod is `checkoutservice` - same as the name of the `Deployment`. This is
-   intended to capture the likely-more-meaningful "human name" of the service.
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+   intended to capture the likely-more-meaningful "human name" of the service. If the root resource name contains
+   dots `.` they are replaced with underscores `_` in the service name.
\ No newline at end of file