diff --git a/app/controllers/api/v1/peers/search_controller.rb b/app/controllers/api/v1/peers/search_controller.rb
index 0c503d9bc54..1780554c5d8 100644
--- a/app/controllers/api/v1/peers/search_controller.rb
+++ b/app/controllers/api/v1/peers/search_controller.rb
@@ -27,7 +27,7 @@ class Api::V1::Peers::SearchController < Api::BaseController
       @domains = InstancesIndex.query(function_score: {
         query: {
           prefix: {
-            domain: TagManager.instance.normalize_domain(params[:q].strip),
+            domain: normalized_domain,
           },
         },
 
@@ -37,11 +37,18 @@ class Api::V1::Peers::SearchController < Api::BaseController
         },
       }).limit(10).pluck(:domain)
     else
-      domain = params[:q].strip
-      domain = TagManager.instance.normalize_domain(domain)
-      @domains = Instance.searchable.where(Instance.arel_table[:domain].matches("#{Instance.sanitize_sql_like(domain)}%", false, true)).limit(10).pluck(:domain)
+      domain = normalized_domain
+      @domains = Instance.searchable.domain_starts_with(domain).limit(10).pluck(:domain)
     end
   rescue Addressable::URI::InvalidURIError
     @domains = []
   end
+
+  def normalized_domain
+    TagManager.instance.normalize_domain(query_value)
+  end
+
+  def query_value
+    params[:q].strip
+  end
 end
diff --git a/app/models/instance.rb b/app/models/instance.rb
index 17ee0cbb1e0..8f8d87c62a6 100644
--- a/app/models/instance.rb
+++ b/app/models/instance.rb
@@ -23,6 +23,7 @@ class Instance < ApplicationRecord
 
   scope :searchable, -> { where.not(domain: DomainBlock.select(:domain)) }
   scope :matches_domain, ->(value) { where(arel_table[:domain].matches("%#{value}%")) }
+  scope :domain_starts_with, ->(value) { where(arel_table[:domain].matches("#{sanitize_sql_like(value)}%", false, true)) }
   scope :by_domain_and_subdomains, ->(domain) { where("reverse('.' || domain) LIKE reverse(?)", "%.#{domain}") }
 
   def self.refresh
diff --git a/spec/requests/api/v1/peers/search_spec.rb b/spec/requests/api/v1/peers/search_spec.rb
new file mode 100644
index 00000000000..dcdea387a5b
--- /dev/null
+++ b/spec/requests/api/v1/peers/search_spec.rb
@@ -0,0 +1,59 @@
+# frozen_string_literal: true
+
+require 'rails_helper'
+
+describe 'API Peers Search' do
+  describe 'GET /api/v1/peers/search' do
+    context 'when peers api is disabled' do
+      before do
+        Setting.peers_api_enabled = false
+      end
+
+      it 'returns http not found response' do
+        get '/api/v1/peers/search'
+
+        expect(response)
+          .to have_http_status(404)
+      end
+    end
+
+    context 'with no search param' do
+      it 'returns http success and empty response' do
+        get '/api/v1/peers/search'
+
+        expect(response)
+          .to have_http_status(200)
+        expect(body_as_json)
+          .to be_blank
+      end
+    end
+
+    context 'with invalid search param' do
+      it 'returns http success and empty response' do
+        get '/api/v1/peers/search', params: { q: 'ftp://Invalid-Host!!.valüe' }
+
+        expect(response)
+          .to have_http_status(200)
+        expect(body_as_json)
+          .to be_blank
+      end
+    end
+
+    context 'with search param' do
+      let!(:account) { Fabricate(:account, domain: 'host.example') }
+
+      before { Instance.refresh }
+
+      it 'returns http success and json with known domains' do
+        get '/api/v1/peers/search', params: { q: 'host.example' }
+
+        expect(response)
+          .to have_http_status(200)
+        expect(body_as_json.size)
+          .to eq(1)
+        expect(body_as_json.first)
+          .to eq(account.domain)
+      end
+    end
+  end
+end