diff --git a/mmv1/third_party/terraform/acctest/provider_test_utils.go b/mmv1/third_party/terraform/acctest/provider_test_utils.go
index 81bc0fd80a1d..0a13f0206aa1 100644
--- a/mmv1/third_party/terraform/acctest/provider_test_utils.go
+++ b/mmv1/third_party/terraform/acctest/provider_test_utils.go
@@ -40,6 +40,14 @@ func GoogleProviderConfig(t *testing.T) *transport_tpg.Config {
 
 	sdkProvider := provider.Provider()
 	rc := terraform.ResourceConfig{}
+
+	// `universe_domain` must be specified through config (i.e. unlike most provider settings there's no environment variable), and we check the value matches the credentials during provider initilization
+	// In the test environment we seed the value through a test-only environment variable, and we need to pre-seed a value in ResourceConfig as if it was in config to pass the check
+	universeDomain := envvar.GetTestUniverseDomainFromEnv(t)
+	if universeDomain != "" && universeDomain != "googleapis.com" {
+		rc.Config = make(map[string]interface{})
+		rc.Config["universe_domain"] = universeDomain
+	}
 	sdkProvider.Configure(context.Background(), &rc)
 	return sdkProvider.Meta().(*transport_tpg.Config)
 }
diff --git a/mmv1/third_party/terraform/envvar/envvar_utils.go b/mmv1/third_party/terraform/envvar/envvar_utils.go
index 537242cef5e9..dbd6b4707167 100644
--- a/mmv1/third_party/terraform/envvar/envvar_utils.go
+++ b/mmv1/third_party/terraform/envvar/envvar_utils.go
@@ -86,6 +86,10 @@ var UniverseDomainEnvVars = []string{
 	"GOOGLE_UNIVERSE_DOMAIN",
 }
 
+var ProjectPrefixEnvVars = []string{
+	"GOOGLE_PROJECT_PREFIX",
+}
+
 // This is the billing account that will be charged for the infrastructure used during testing. For
 // that reason, it is also the billing account used for creating new projects.
 var BillingAccountEnvVars = []string{
@@ -146,6 +150,11 @@ func GetTestUniverseDomainFromEnv(t *testing.T) string {
 	return transport_tpg.MultiEnvSearch(UniverseDomainEnvVars)
 }
 
+// Project Prefix of different universes
+func GetProjectPrefixFromEnv() string {
+	return transport_tpg.MultiEnvSearch(ProjectPrefixEnvVars)
+}
+
 // AccTestPreCheck ensures at least one of the region env variables is set.
 func GetTestRegionFromEnv() string {
 	return transport_tpg.MultiEnvSearch(RegionEnvVars)
diff --git a/mmv1/third_party/terraform/provider/provider.go.tmpl b/mmv1/third_party/terraform/provider/provider.go.tmpl
index d4f6bf90270b..76f0eb3f7246 100644
--- a/mmv1/third_party/terraform/provider/provider.go.tmpl
+++ b/mmv1/third_party/terraform/provider/provider.go.tmpl
@@ -426,7 +426,6 @@ func ProviderConfigure(ctx context.Context, d *schema.ResourceData, p *schema.Pr
 	if err := config.LoadAndValidate(stopCtx); err != nil {
 		return nil, diag.FromErr(err)
 	}
-
 	// Verify that universe domains match between credentials and configuration
 	if v, ok := d.GetOk("universe_domain"); ok {
 		if config.UniverseDomain == "" && v.(string) != "googleapis.com" { // v can't be "", as it wouldn't pass `ok` above
diff --git a/mmv1/third_party/terraform/provider/universe/universe_domain_compute_test.go b/mmv1/third_party/terraform/provider/universe/universe_domain_compute_test.go
index ea2703508e3b..89d1d5d39bcd 100644
--- a/mmv1/third_party/terraform/provider/universe/universe_domain_compute_test.go
+++ b/mmv1/third_party/terraform/provider/universe/universe_domain_compute_test.go
@@ -33,6 +33,31 @@ func TestAccUniverseDomainDisk(t *testing.T) {
 	})
 }
 
+func TestAccUniverseDomainDiskImage(t *testing.T) {
+
+	universeDomain := envvar.GetTestUniverseDomainFromEnv(t)
+	zone := envvar.GetTestZoneFromEnv()
+	prefix := envvar.GetProjectPrefixFromEnv()
+	image_project := ""
+
+	if prefix != "" {
+		image_project = prefix + ":debian-cloud"
+	} else {
+		image_project = "debian-cloud"
+	}
+
+	acctest.VcrTest(t, resource.TestCase{
+		PreCheck:                 func() { acctest.AccTestPreCheck(t) },
+		ProtoV5ProviderFactories: acctest.ProtoV5ProviderFactories(t),
+		CheckDestroy:             testAccCheckComputeDiskDestroyProducer(t),
+		Steps: []resource.TestStep{
+			{
+				Config: testAccUniverseDomain_basic_disk_image(universeDomain, zone, image_project),
+			},
+		},
+	})
+}
+
 func TestAccDefaultUniverseDomainDisk(t *testing.T) {
 	universeDomain := "googleapis.com"
 
@@ -85,6 +110,28 @@ resource "google_compute_instance_template" "instance_template" {
 `, universeDomain)
 }
 
+func testAccUniverseDomain_basic_disk_image(universeDomain, zone, image_project string) string {
+	return fmt.Sprintf(`
+provider "google" {
+  universe_domain = "%s"
+}
+
+data "google_compute_images" "debian" {
+  project     = "%s"
+  filter      = "name=debian-12*"
+}
+
+resource "google_compute_disk" "primary" {
+  name  = "async-test-disk"
+  type  = "pd-ssd"
+  zone  = "%s"
+
+  physical_block_size_bytes = 4096
+  image = "projects/%s/global/images/${data.google_compute_images.debian.images[0].name}"
+}
+`, universeDomain, image_project, zone, image_project)
+}
+
 func testAccCheckComputeDiskDestroyProducer(t *testing.T) func(s *terraform.State) error {
 	return func(s *terraform.State) error {
 		for name, rs := range s.RootModule().Resources {
diff --git a/mmv1/third_party/terraform/services/compute/image.go b/mmv1/third_party/terraform/services/compute/image.go
index e35942046e24..bc72330267f6 100644
--- a/mmv1/third_party/terraform/services/compute/image.go
+++ b/mmv1/third_party/terraform/services/compute/image.go
@@ -106,6 +106,9 @@ func ResolveImage(c *transport_tpg.Config, project, name, userAgent string) (str
 			break
 		}
 	}
+	if c.UniverseDomain != "" && c.UniverseDomain != "googleapis.com" {
+		resolveImageLink = regexp.MustCompile(fmt.Sprintf("^https://compute.%s/compute/[a-z0-9]+/projects/(%s)/global/images/(%s)", c.UniverseDomain, verify.ProjectRegex, resolveImageImageRegex))
+	}
 	switch {
 	case resolveImageLink.MatchString(name): // https://www.googleapis.com/compute/v1/projects/xyz/global/images/xyz
 		return name, nil