diff --git a/apps/chat-e2e/src/assertions/promptModalAssertion.ts b/apps/chat-e2e/src/assertions/promptModalAssertion.ts
new file mode 100644
index 0000000000..b19aa03889
--- /dev/null
+++ b/apps/chat-e2e/src/assertions/promptModalAssertion.ts
@@ -0,0 +1,51 @@
+import { ExpectedMessages } from '@/src/testData';
+import { Colors } from '@/src/ui/domData';
+import { PromptModalDialog } from '@/src/ui/webElements';
+import { expect } from '@playwright/test';
+
+export class PromptModalAssertion {
+  readonly promptModalDialog: PromptModalDialog;
+
+  constructor(promptModalDialog: PromptModalDialog) {
+    this.promptModalDialog = promptModalDialog;
+  }
+
+  public async assertNameFieldIsInvalid(expectedErrorMessage: string) {
+    const nameBorderColors =
+      await this.promptModalDialog.name.getAllBorderColors();
+    Object.values(nameBorderColors).forEach((borders) => {
+      borders.forEach((borderColor) => {
+        expect
+          .soft(borderColor, ExpectedMessages.fieldIsHighlightedWithRed)
+          .toBe(Colors.textError);
+      });
+    });
+
+    const nameFieldErrorMessage = this.promptModalDialog.getFieldBottomMessage(
+      this.promptModalDialog.name,
+    );
+    await nameFieldErrorMessage.waitFor();
+
+    await expect
+      .soft(nameFieldErrorMessage, ExpectedMessages.promptNameInvalid)
+      .toHaveText(expectedErrorMessage);
+  }
+
+  public async assertNameFieldIsEmpty() {
+    expect
+      .soft(
+        await this.promptModalDialog.getName(),
+        ExpectedMessages.charactersAreNotDisplayed,
+      )
+      .toBe('');
+  }
+
+  public async assertPromptNameIsValid(expectedPromptName: string) {
+    expect
+      .soft(
+        await this.promptModalDialog.getName(),
+        ExpectedMessages.promptNameValid,
+      )
+      .toBe(expectedPromptName);
+  }
+}
diff --git a/apps/chat-e2e/src/core/dialFixtures.ts b/apps/chat-e2e/src/core/dialFixtures.ts
index b627f4cda2..892a3a0b77 100644
--- a/apps/chat-e2e/src/core/dialFixtures.ts
+++ b/apps/chat-e2e/src/core/dialFixtures.ts
@@ -27,6 +27,7 @@ import { FolderAssertion } from '@/src/assertions/folderAssertion';
 import { FooterAssertion } from '@/src/assertions/footerAssertion';
 import { MenuAssertion } from '@/src/assertions/menuAssertion';
 import { PromptListAssertion } from '@/src/assertions/promptListAssertion';
+import { PromptModalAssertion } from '@/src/assertions/promptModalAssertion';
 import { SendMessageAssertion } from '@/src/assertions/sendMessageAssertion';
 import { SettingsModalAssertion } from '@/src/assertions/settingsModalAssertion';
 import { SideBarAssertion } from '@/src/assertions/sideBarAssertion';
@@ -187,6 +188,7 @@ const dialTest = test.extend<
     conversationAssertion: SideBarEntityAssertion;
     chatBarFolderAssertion: FolderAssertion;
     errorToastAssertion: ErrorToastAssertion;
+    promptModalAssertion: PromptModalAssertion;
     tooltipAssertion: TooltipAssertion;
     confirmationDialogAssertion: ConfirmationDialogAssertion;
     chatBarAssertion: SideBarAssertion;
@@ -625,6 +627,10 @@ const dialTest = test.extend<
     const promptErrorToastAssertion = new ErrorToastAssertion(errorToast);
     await use(promptErrorToastAssertion);
   },
+  promptModalAssertion: async ({ promptModalDialog }, use) => {
+    const promptModalAssertion = new PromptModalAssertion(promptModalDialog);
+    await use(promptModalAssertion);
+  },
   tooltipAssertion: async ({ tooltip }, use) => {
     const tooltipAssertion = new TooltipAssertion(tooltip);
     await use(tooltipAssertion);
diff --git a/apps/chat-e2e/src/testData/expectedMessages.ts b/apps/chat-e2e/src/testData/expectedMessages.ts
index dc79cd0754..43cc40622a 100644
--- a/apps/chat-e2e/src/testData/expectedMessages.ts
+++ b/apps/chat-e2e/src/testData/expectedMessages.ts
@@ -58,6 +58,7 @@ export enum ExpectedMessages {
   promptModalClosed = 'Prompt modal dialog is closed',
   promptNotUpdated = 'Prompt is not updated',
   promptNameValid = 'Prompt name is valid',
+  promptNameInvalid = 'Prompt name is not valid',
   promptDescriptionValid = 'Prompt description is valid',
   promptContentValid = 'Prompt content is valid',
   promptVariablePlaceholderValid = 'Prompt variable placeholder is valid',
diff --git a/apps/chat-e2e/src/testData/prompts/promptData.ts b/apps/chat-e2e/src/testData/prompts/promptData.ts
index 82177d5c42..f0849098cb 100644
--- a/apps/chat-e2e/src/testData/prompts/promptData.ts
+++ b/apps/chat-e2e/src/testData/prompts/promptData.ts
@@ -24,7 +24,11 @@ export class PromptData extends FolderData {
 
   public prepareDefaultPrompt(name?: string) {
     const promptName = name ?? GeneratorUtil.randomString(10);
-    return this.promptBuilder.withName(promptName).withId(promptName).build();
+    return this.promptBuilder
+      .withName(promptName)
+      .withId(promptName)
+      .withContent(promptName)
+      .build();
   }
 
   public prepareDefaultSharedPrompt(name?: string) {
diff --git a/apps/chat-e2e/src/tests/promptFoldersSpecialChars.test.ts b/apps/chat-e2e/src/tests/promptFoldersSpecialChars.test.ts
index 5a876d472e..daf70bfce1 100644
--- a/apps/chat-e2e/src/tests/promptFoldersSpecialChars.test.ts
+++ b/apps/chat-e2e/src/tests/promptFoldersSpecialChars.test.ts
@@ -111,7 +111,7 @@ dialTest(
           { name: expectedFolderName },
           'visible',
         );
-        errorToastAssertion.assertToastIsHidden();
+        await errorToastAssertion.assertToastIsHidden();
       },
     );
 
diff --git a/apps/chat-e2e/src/tests/promptMaximumNameLength.test.ts b/apps/chat-e2e/src/tests/promptMaximumNameLength.test.ts
new file mode 100644
index 0000000000..098d06ae1a
--- /dev/null
+++ b/apps/chat-e2e/src/tests/promptMaximumNameLength.test.ts
@@ -0,0 +1,172 @@
+import dialTest from '@/src/core/dialFixtures';
+import {
+  ExpectedConstants,
+  ExpectedMessages,
+  MenuOptions,
+} from '@/src/testData';
+import { Overflow, Styles } from '@/src/ui/domData';
+import { expect } from '@playwright/test';
+
+dialTest(
+  'Prompt name consists of a maximum of 160 symbols.\n' +
+    'Long prompt name is cut in the panel.\n' +
+    'Prompt folder name consists of a maximum of 160 symbols',
+  async ({
+    dialHomePage,
+    promptData,
+    dataInjector,
+    prompts,
+    promptDropdownMenu,
+    promptModalDialog,
+    errorToastAssertion,
+    promptAssertion,
+    setTestIds,
+    promptBarFolderAssertion,
+    promptBar,
+    folderPrompts,
+  }) => {
+    setTestIds('EPMRTC-3171', 'EPMRTC-958', 'EPMRTC-3168');
+    const prompt = promptData.prepareDefaultPrompt();
+    await dataInjector.createPrompts([prompt]);
+    const longName =
+      'Lorem ipsum dolor sit amett consectetur adipiscing elit. Nullam ultricies ipsum nullaa nec viverra lectus rutrum id. Sed volutpat ante ac fringilla turpis duis!ABC';
+    const expectedName = longName.substring(
+      0,
+      ExpectedConstants.maxEntityNameLength,
+    );
+    const nameUnder160Symbols =
+      'This prompt is renamed to very long-long-long name to see how the system cuts the name';
+
+    await dialTest.step(
+      'Create a prompt and enter text longer than 160 symbols',
+      async () => {
+        await dialHomePage.openHomePage();
+        await dialHomePage.waitForPageLoaded({
+          isNewConversationVisible: true,
+        });
+        await promptBar.createNewPrompt();
+        await promptModalDialog.setField(promptModalDialog.name, longName);
+        await promptModalDialog.setField(
+          promptModalDialog.prompt,
+          ExpectedConstants.newPromptTitle(1),
+        );
+      },
+    );
+
+    await dialTest.step('Save the prompt', async () => {
+      await promptModalDialog.saveButton.click();
+    });
+
+    await dialTest.step(
+      'Verify the prompt name is cut to 160 symbols and no error toast is shown',
+      async () => {
+        await promptAssertion.assertEntityState(
+          { name: expectedName },
+          'visible',
+        );
+        await errorToastAssertion.assertToastIsHidden();
+      },
+    );
+
+    await dialTest.step('Rename the prompt to a long name', async () => {
+      await prompts.openEntityDropdownMenu(expectedName);
+      await promptDropdownMenu.selectMenuOption(MenuOptions.edit);
+      await promptModalDialog.setField(
+        promptModalDialog.name,
+        nameUnder160Symbols,
+      );
+      // Wait for the API request to update the prompt name
+      await promptModalDialog.updatePromptDetailsWithButton(
+        nameUnder160Symbols,
+        prompt.description,
+        prompt.content!,
+      );
+      prompt.name = nameUnder160Symbols;
+    });
+
+    await dialTest.step('Check the prompt name in the panel', async () => {
+      const promptNameElement = prompts.getPromptName(prompt.name);
+      const promptNameOverflow =
+        await promptNameElement.getComputedStyleProperty(Styles.text_overflow);
+      expect
+        .soft(promptNameOverflow[0], ExpectedMessages.entityNameIsTruncated)
+        .toBe(Overflow.ellipsis);
+    });
+
+    await dialTest.step(
+      'Hover over the prompt name and check the name in the panel',
+      async () => {
+        await prompts.getPromptName(prompt.name).hoverOver();
+        await promptAssertion.assertEntityDotsMenuState(
+          { name: prompt.name },
+          'visible',
+        );
+      },
+    );
+
+    await dialTest.step(
+      'Create two folders: Folder_parent -> Folder_child',
+      async () => {
+        for (let i = 1; i <= 2; i++) {
+          await promptBar.createNewFolder();
+          await promptBarFolderAssertion.assertFolderState(
+            { name: ExpectedConstants.newPromptFolderWithIndexTitle(i) },
+            'visible',
+          );
+        }
+
+        await promptBar.dragAndDropEntityToFolder(
+          folderPrompts.getFolderByName(
+            ExpectedConstants.newPromptFolderWithIndexTitle(2),
+          ),
+          folderPrompts.getFolderByName(
+            ExpectedConstants.newPromptFolderWithIndexTitle(1),
+          ),
+        );
+      },
+    );
+
+    await dialTest.step(
+      'Edit both folder names with more than 160 symbols names',
+      async () => {
+        // Rename Folder_parent
+        await folderPrompts.openFolderDropdownMenu(
+          ExpectedConstants.newPromptFolderWithIndexTitle(1),
+        );
+        await promptDropdownMenu.selectMenuOption(MenuOptions.rename);
+        await folderPrompts.editFolderNameWithTick(longName);
+
+        // Rename folder_child
+        await folderPrompts.openFolderDropdownMenu(
+          ExpectedConstants.newPromptFolderWithIndexTitle(2),
+        );
+        await promptDropdownMenu.selectMenuOption(MenuOptions.rename);
+        await folderPrompts.editFolderNameWithTick(longName);
+      },
+    );
+
+    await dialTest.step(
+      'Check that the folder names are cut to 160 symbols and no error message appears',
+      async () => {
+        // Get the actual folder names
+        const parentFolderName = await folderPrompts
+          .getFolderName(expectedName, 1)
+          .getElementInnerContent();
+        const childFolderName = await folderPrompts
+          .getFolderName(expectedName, 2)
+          .getElementInnerContent();
+
+        // Assert that the names are truncated to the expectedName
+        expect
+          .soft(parentFolderName, ExpectedMessages.folderNameUpdated)
+          .toBe(expectedName);
+        expect
+          .soft(childFolderName, ExpectedMessages.folderNameUpdated)
+          .toBe(expectedName);
+
+        // Assert that no error toast is shown
+        await errorToastAssertion.assertToastIsHidden();
+      },
+    );
+  },
+);
diff --git a/apps/chat-e2e/src/tests/promptsNames.test.ts b/apps/chat-e2e/src/tests/promptsNames.test.ts
new file mode 100644
index 0000000000..0408e68194
--- /dev/null
+++ b/apps/chat-e2e/src/tests/promptsNames.test.ts
@@ -0,0 +1,196 @@
+import dialTest from '@/src/core/dialFixtures';
+import {
+  ExpectedConstants,
+  ExpectedMessages,
+  MenuOptions,
+} from '@/src/testData';
+
+dialTest(
+  'Error message appears if to add a dot to the end of prompt name.\n' +
+    'Prompt name: allowed special characters.\n' +
+    'Prompt name: restricted special characters are not allowed to be entered while renaming.\n' +
+    'Prompt name: restricted special characters are removed from prompt name if to copy-paste.\n' +
+    'Prompt name: smiles, hieroglyph, specific letters in name.\n' +
+    'Prompt name: spaces in the middle of prompt name stay',
+  async ({
+    dialHomePage,
+    promptData,
+    dataInjector,
+    prompts,
+    promptDropdownMenu,
+    promptModalDialog,
+    errorToast,
+    errorToastAssertion,
+    promptAssertion,
+    setTestIds,
+    promptModalAssertion,
+  }) => {
+    setTestIds(
+      'EPMRTC-2991',
+      'EPMRTC-1278',
+      'EPMRTC-2993',
+      'EPMRTC-2994',
+      'EPMRTC-2997',
+      'EPMRTC-3085',
+    );
+    const prompt = promptData.prepareDefaultPrompt();
+    await dataInjector.createPrompts([prompt]);
+    const newNameWithDot = `${ExpectedConstants.newPromptTitle(1)}.`;
+    const nameWithRestrictedChars = `Prompt${ExpectedConstants.restrictedNameChars}_name`;
+    const expectedPromptName = 'Prompt_name';
+    const longNameWithEmojis =
+      '😂👍🥳 😷 🤧 🤠 🥴😇 😈 ⭐あおㅁㄹñ¿äß😂👍🥳 😷 🤧 🤠 🥴😇 😈 ⭐あおㅁㄹñ¿äß😂👍🥳 😷 🤧 🤠 🥴😇 😈 ⭐あおㅁㄹñ¿äß';
+    const nameWithSpaces = ' Prompt 1 ';
+    const expectedNameWithSpaces = nameWithSpaces.trim();
+
+    await dialTest.step('Add a dot at the end of a prompt name', async () => {
+      await dialHomePage.openHomePage();
+      await dialHomePage.waitForPageLoaded({
+        isNewConversationVisible: true,
+      });
+      await prompts.openEntityDropdownMenu(prompt.name);
+      await promptDropdownMenu.selectMenuOption(MenuOptions.edit);
+      await promptModalDialog.setField(promptModalDialog.name, newNameWithDot);
+    });
+
+    await dialTest.step(
+      'Check that the name field is red-bordered and an error message appears',
+      async () => {
+        await promptModalAssertion.assertNameFieldIsInvalid(
+          ExpectedConstants.nameWithDotErrorMessage,
+        );
+      },
+    );
+
+    await dialTest.step(
+      'Fill in the prompt body and click the Save button',
+      async () => {
+        await promptModalDialog.setField(
+          promptModalDialog.prompt,
+          ExpectedConstants.newPromptTitle(1),
+        );
+        await promptModalDialog.saveButton.click();
+      },
+    );
+
+    await dialTest.step('Check that a UI error appears', async () => {
+      await errorToastAssertion.assertToastIsVisible();
+      await errorToastAssertion.assertToastMessage(
+        ExpectedConstants.nameWithDotErrorMessage,
+        ExpectedMessages.notAllowedNameErrorShown,
+      );
+      // Wating for (Closing) the toast to move forward
+      await errorToast.waitForState({ state: 'hidden' });
+    });
+
+    await dialTest.step(
+      'Type restricted characters one by one in the Rename prompt dialog',
+      async () => {
+        for (const char of ExpectedConstants.restrictedNameChars.split('')) {
+          await promptModalDialog.setField(promptModalDialog.name, char);
+          await promptModalAssertion.assertNameFieldIsEmpty();
+        }
+      },
+    );
+
+    await dialTest.step(
+      'Copy and paste restricted characters to the prompt name and verify the name',
+      async () => {
+        await dialHomePage.copyToClipboard(nameWithRestrictedChars);
+        await promptModalDialog.name.click();
+        await dialHomePage.pasteFromClipboard();
+        await promptModalAssertion.assertPromptNameIsValid(expectedPromptName);
+        await promptModalDialog.saveButton.click();
+        prompt.name = expectedPromptName;
+      },
+    );
+
+    await dialTest.step(
+      'Verify the prompt is created and no error toast is shown',
+      async () => {
+        await promptAssertion.assertEntityState(
+          { name: expectedPromptName },
+          'visible',
+        );
+        await errorToastAssertion.assertToastIsHidden();
+      },
+    );
+
+    await dialTest.step(
+      'Add special characters to the prompt name',
+      async () => {
+        await prompts.openEntityDropdownMenu(prompt.name);
+        await promptDropdownMenu.selectMenuOption(MenuOptions.edit);
+        await promptModalDialog.setField(
+          promptModalDialog.name,
+          ExpectedConstants.allowedSpecialSymbolsInName(),
+        );
+        await promptModalDialog.setField(
+          promptModalDialog.prompt,
+          ExpectedConstants.newPromptTitle(1),
+        );
+        await promptModalDialog.saveButton.click();
+        prompt.name = ExpectedConstants.allowedSpecialSymbolsInName();
+      },
+    );
+
+    await dialTest.step(
+      'Verify the prompt is created and no error toast is shown',
+      async () => {
+        await promptAssertion.assertEntityState(
+          { name: prompt.name },
+          'visible',
+        );
+        await errorToastAssertion.assertToastIsHidden();
+      },
+    );
+
+    await dialTest.step(
+      'Update the prompt name to a long name with emojis',
+      async () => {
+        await prompts.openEntityDropdownMenu(prompt.name);
+        await promptDropdownMenu.selectMenuOption(MenuOptions.edit);
+        await promptModalDialog.setField(
+          promptModalDialog.name,
+          longNameWithEmojis,
+        );
+        await promptModalDialog.setField(
+          promptModalDialog.prompt,
+          ExpectedConstants.newPromptTitle(1),
+        );
+        await promptModalDialog.saveButton.click();
+        prompt.name = longNameWithEmojis;
+      },
+    );
+
+    await dialTest.step(
+      'Verify the prompt is renamed successfully and the name looks fine on the Prompt panel',
+      async () => {
+        await promptAssertion.assertEntityState(
+          { name: prompt.name },
+          'visible',
+        );
+        await errorToastAssertion.assertToastIsHidden();
+      },
+    );
+
+    await dialTest.step(
+      'Update the prompt name to " Prompt 1 " (spaces before, after, and in the middle)',
+      async () => {
+        await prompts.openEntityDropdownMenu(prompt.name);
+        await promptDropdownMenu.selectMenuOption(MenuOptions.edit);
+        await promptModalDialog.setField(
+          promptModalDialog.name,
+          nameWithSpaces,
+        );
+        await promptModalDialog.saveButton.click();
+        prompt.name = expectedNameWithSpaces;
+      },
+    );
+
+    await dialTest.step('Verify the prompt name is "Prompt 1"', async () => {
+      await promptAssertion.assertEntityState({ name: prompt.name }, 'visible');
+      await errorToastAssertion.assertToastIsHidden();
+    });
+  },
+);
diff --git a/apps/chat-e2e/src/ui/selectors/sideBarSelectors.ts b/apps/chat-e2e/src/ui/selectors/sideBarSelectors.ts
index c753bd7eec..abdc3dbf11 100644
--- a/apps/chat-e2e/src/ui/selectors/sideBarSelectors.ts
+++ b/apps/chat-e2e/src/ui/selectors/sideBarSelectors.ts
@@ -41,6 +41,7 @@ export const PromptBarSelectors = {
   newPromptButton: '[data-qa="new-prompt"]',
   prompts: '[data-qa="prompts-section-container"] >> [data-qa="prompts"]',
   prompt: '[data-qa="prompt"]',
+  promptName: '[data-qa="prompt-name"]',
   deletePrompts: '[data-qa="delete-prompts"]',
   pinnedChats: () =>
     `${PromptBarSelectors.promptFolders} > [data-qa="pinned-prompts-container"]`,
diff --git a/apps/chat-e2e/src/ui/webElements/promptModalDialog.ts b/apps/chat-e2e/src/ui/webElements/promptModalDialog.ts
index 5e27ad5cd8..f9e470e9e0 100644
--- a/apps/chat-e2e/src/ui/webElements/promptModalDialog.ts
+++ b/apps/chat-e2e/src/ui/webElements/promptModalDialog.ts
@@ -26,7 +26,7 @@ export class PromptModalDialog extends BaseElement {
 
   public async fillPromptDetails(
     name: string,
-    description: string,
+    description: string | undefined,
     value: string,
   ) {
     await this.name.click();
@@ -34,7 +34,9 @@ export class PromptModalDialog extends BaseElement {
     await this.name.typeInInput(name);
     await this.description.click();
     await this.page.keyboard.press(keys.ctrlPlusA);
-    await this.description.typeInInput(description);
+    if (description !== undefined) {
+      await this.description.typeInInput(description);
+    }
     await this.prompt.click();
     await this.page.keyboard.press(keys.ctrlPlusA);
     await this.prompt.typeInInput(value);
@@ -49,7 +51,7 @@ export class PromptModalDialog extends BaseElement {
 
   public async updatePromptDetailsWithButton(
     name: string,
-    description: string,
+    description: string | undefined,
     value: string,
   ) {
     await this.updatePromptDetails(name, description, value, () =>
@@ -69,7 +71,7 @@ export class PromptModalDialog extends BaseElement {
 
   public async updatePromptDetails(
     name: string,
-    description: string,
+    description: string | undefined,
     value: string,
     method: () => Promise<void>,
   ) {
diff --git a/apps/chat-e2e/src/ui/webElements/prompts.ts b/apps/chat-e2e/src/ui/webElements/prompts.ts
index 0e2a0ffe7c..8570f65203 100644
--- a/apps/chat-e2e/src/ui/webElements/prompts.ts
+++ b/apps/chat-e2e/src/ui/webElements/prompts.ts
@@ -17,4 +17,7 @@ export class Prompts extends SideBarEntities {
       return response.request().postDataJSON();
     }
   }
+  public getPromptName(name: string, index?: number) {
+    return this.getEntityName(PromptBarSelectors.promptName, name, index);
+  }
 }
diff --git a/apps/chat/src/components/Promptbar/components/Prompt.tsx b/apps/chat/src/components/Promptbar/components/Prompt.tsx
index d6997e1ef6..079a47a952 100644
--- a/apps/chat/src/components/Promptbar/components/Prompt.tsx
+++ b/apps/chat/src/components/Promptbar/components/Prompt.tsx
@@ -406,7 +406,10 @@ export const PromptComponent = ({
             <IconBulb size={18} className="text-secondary" />
           </ShareIcon>
 
-          <div className="relative max-h-5 flex-1 truncate whitespace-pre break-all text-left">
+          <div
+            className="relative max-h-5 flex-1 truncate whitespace-pre break-all text-left"
+            data-qa="prompt-name"
+          >
             <Tooltip
               tooltip={t(
                 getEntityNameError(isNameInvalid, isInvalidPath, isExternal),