diff --git a/pkg/dns/resolver/resolver.go b/pkg/dns/resolver/resolver.go
index 8f6c027ea286..fc52595b770c 100644
--- a/pkg/dns/resolver/resolver.go
+++ b/pkg/dns/resolver/resolver.go
@@ -1,6 +1,7 @@
 package resolver
 
 import (
+	"strings"
 	"sync"
 
 	"github.com/miekg/dns"
@@ -125,7 +126,10 @@ func (s *dnsResolver) serviceFromName(name string) (string, error) {
 		return "", errors.Errorf("wrong DNS name: %s", name)
 	}
 
-	service := split[0]
+	// If it terminates with the domain we remove it.
+	if split[len(split)-1] == s.domain {
+		split = split[0 : len(split)-1]
+	}
 
-	return service, nil
+	return strings.Join(split, "."), nil
 }
diff --git a/pkg/dns/server_test.go b/pkg/dns/server_test.go
index 5b0104cff551..b3ecc9c4c470 100644
--- a/pkg/dns/server_test.go
+++ b/pkg/dns/server_test.go
@@ -3,6 +3,8 @@ package dns_test
 import (
 	"fmt"
 
+	"github.com/kumahq/kuma/pkg/dns/vips"
+
 	"github.com/miekg/dns"
 	. "github.com/onsi/ginkgo"
 	. "github.com/onsi/gomega"
@@ -23,6 +25,7 @@ var _ = Describe("DNS server", func() {
 		stop := make(chan struct{})
 		done := make(chan struct{})
 		var metrics core_metrics.Metrics
+		var dnsResolver resolver.DNSResolver
 
 		BeforeEach(func() {
 			// setup
@@ -30,19 +33,14 @@ var _ = Describe("DNS server", func() {
 			port = uint32(p)
 			Expect(err).ToNot(HaveOccurred())
 
-			resolver := resolver.NewDNSResolver("mesh")
+			dnsResolver = resolver.NewDNSResolver("mesh")
 			m, err := core_metrics.NewMetrics("Standalone")
 			metrics = m
 			Expect(err).ToNot(HaveOccurred())
-			server, err := NewDNSServer(port, resolver, metrics)
+			server, err := NewDNSServer(port, dnsResolver, metrics)
 			Expect(err).ToNot(HaveOccurred())
-			resolver.SetVIPs(map[string]string{
-				"service": "240.0.0.1",
-			})
 
 			// given
-			ip, err = resolver.ForwardLookupFQDN("service.mesh")
-			Expect(err).ToNot(HaveOccurred())
 
 			go func() {
 				err := server.Start(stop)
@@ -58,12 +56,19 @@ var _ = Describe("DNS server", func() {
 		})
 
 		It("should resolve", func() {
+			// given
+			var err error
+			dnsResolver.SetVIPs(map[string]string{
+				"service": "240.0.0.1",
+			})
+			ip, err = dnsResolver.ForwardLookupFQDN("service.mesh")
+			Expect(err).ToNot(HaveOccurred())
+
 			// when
 			client := new(dns.Client)
 			message := new(dns.Msg)
 			_ = message.SetQuestion("service.mesh.", dns.TypeA)
 			var response *dns.Msg
-			var err error
 			Eventually(func() error {
 				response, _, err = client.Exchange(message, fmt.Sprintf("127.0.0.1:%d", port))
 				return err
@@ -78,6 +83,13 @@ var _ = Describe("DNS server", func() {
 		})
 
 		It("should resolve concurrent", func() {
+			// given
+			dnsResolver.SetVIPs(map[string]string{
+				"service": "240.0.0.1",
+			})
+			ip, err := dnsResolver.ForwardLookupFQDN("service.mesh")
+			Expect(err).ToNot(HaveOccurred())
+
 			resolved := make(chan struct{})
 			for i := 0; i < 100; i++ {
 				go func() {
@@ -103,11 +115,41 @@ var _ = Describe("DNS server", func() {
 		})
 
 		It("should not resolve", func() {
+			// given
+			var err error
+			dnsResolver.SetVIPs(map[string]string{
+				"service": "240.0.0.1",
+			})
+			ip, err = dnsResolver.ForwardLookupFQDN("service.mesh")
+			Expect(err).ToNot(HaveOccurred())
+
 			// when
 			client := new(dns.Client)
 			message := new(dns.Msg)
 			_ = message.SetQuestion("backend.mesh.", dns.TypeA)
 			var response *dns.Msg
+			Eventually(func() error {
+				response, _, err = client.Exchange(message, fmt.Sprintf("127.0.0.1:%d", port))
+				return err
+			}).ShouldNot(HaveOccurred())
+			// then
+			Expect(err).ToNot(HaveOccurred())
+			// and
+			Expect(len(response.Answer)).To(Equal(0))
+
+			// and metrics are published
+			Expect(test_metrics.FindMetric(metrics, "dns_server_resolution", "result", "unresolved").Counter.GetValue()).To(Equal(1.0))
+		})
+
+		It("should not resolve when no vips", func() {
+			// given
+			dnsResolver.SetVIPs(map[string]string{})
+
+			// when
+			client := new(dns.Client)
+			message := new(dns.Msg)
+			_ = message.SetQuestion("service.mesh.", dns.TypeA)
+			var response *dns.Msg
 			var err error
 			Eventually(func() error {
 				response, _, err = client.Exchange(message, fmt.Sprintf("127.0.0.1:%d", port))
@@ -121,5 +163,32 @@ var _ = Describe("DNS server", func() {
 			// and metrics are published
 			Expect(test_metrics.FindMetric(metrics, "dns_server_resolution", "result", "unresolved").Counter.GetValue()).To(Equal(1.0))
 		})
+
+		It("should resolve services with '.'", func() {
+			// given
+			var err error
+			dnsResolver.SetVIPs(vips.List{
+				"my.service": "240.0.0.1",
+			})
+			ip, err = dnsResolver.ForwardLookupFQDN("my.service.mesh")
+			Expect(err).ToNot(HaveOccurred())
+
+			// when
+			client := new(dns.Client)
+			message := new(dns.Msg)
+			_ = message.SetQuestion("my.service.mesh.", dns.TypeA)
+			var response *dns.Msg
+			Eventually(func() error {
+				response, _, err = client.Exchange(message, fmt.Sprintf("127.0.0.1:%d", port))
+				return err
+			}).ShouldNot(HaveOccurred())
+
+			// then
+			Expect(response.Answer[0].String()).To(Equal(fmt.Sprintf("my.service.mesh.\t60\tIN\tA\t%s", ip)))
+
+			// and metrics are published
+			Expect(test_metrics.FindMetric(metrics, "dns_server")).ToNot(BeNil())
+			Expect(test_metrics.FindMetric(metrics, "dns_server_resolution", "result", "resolved").Counter.GetValue()).To(Equal(1.0))
+		})
 	})
 })