diff --git a/cmd/api/api/api_test.go b/cmd/api/api/api_test.go
index a6abfb4..8371f99 100644
--- a/cmd/api/api/api_test.go
+++ b/cmd/api/api/api_test.go
@@ -25,7 +25,10 @@ import (
 // newTestService creates an ApiService for testing with automatic cleanup
 func newTestService(t *testing.T) *ApiService {
 	cfg := &config.Config{
-		DataDir: t.TempDir(),
+		DataDir:     t.TempDir(),
+		BridgeName:  "vmbr0",
+		SubnetCIDR:  "10.100.0.0/16",
+		DNSServer:   "1.1.1.1",
 	}
 
 	p := paths.New(cfg.DataDir)
@@ -44,6 +47,11 @@ func newTestService(t *testing.T) *ApiService {
 	}
 	instanceMgr := instances.NewManager(p, imageMgr, systemMgr, networkMgr, deviceMgr, volumeMgr, limits, "", nil, nil)
 
+	// Initialize network manager (creates bridge for network-enabled tests)
+	if err := networkMgr.Initialize(ctx(), nil); err != nil {
+		t.Logf("Warning: failed to initialize network manager: %v (network tests may fail)", err)
+	}
+
 	// Register cleanup for orphaned Cloud Hypervisor processes
 	t.Cleanup(func() {
 		cleanupOrphanedProcesses(t, cfg.DataDir)
@@ -54,6 +62,7 @@ func newTestService(t *testing.T) *ApiService {
 		ImageManager:    imageMgr,
 		InstanceManager: instanceMgr,
 		VolumeManager:   volumeMgr,
+		NetworkManager:  networkMgr,
 		DeviceManager:   deviceMgr,
 		ResourceManager: resourceMgr,
 	}
diff --git a/cmd/api/api/instances_test.go b/cmd/api/api/instances_test.go
index 90116bf..005241a 100644
--- a/cmd/api/api/instances_test.go
+++ b/cmd/api/api/instances_test.go
@@ -148,7 +148,7 @@ func TestInstanceLifecycle_StopStart(t *testing.T) {
 
 	// 1. Create instance
 	t.Log("Creating instance...")
-	networkEnabled := false
+	networkEnabled := true
 	createResp, err := svc.CreateInstance(ctx(), oapi.CreateInstanceRequestObject{
 		Body: &oapi.CreateInstanceRequest{
 			Name:  "test-lifecycle",
diff --git a/lib/network/allocate.go b/lib/network/allocate.go
index b3906f9..b622ace 100644
--- a/lib/network/allocate.go
+++ b/lib/network/allocate.go
@@ -27,8 +27,8 @@ func (m *manager) CreateAllocation(ctx context.Context, req AllocateRequest) (*N
 		return nil, fmt.Errorf("get default network: %w", err)
 	}
 
-	// 2. Check name uniqueness
-	exists, err := m.NameExists(ctx, req.InstanceName)
+	// 2. Check name uniqueness (exclude current instance to allow restarts)
+	exists, err := m.NameExists(ctx, req.InstanceName, req.InstanceID)
 	if err != nil {
 		return nil, fmt.Errorf("check name exists: %w", err)
 	}
diff --git a/lib/network/derive.go b/lib/network/derive.go
index fc352bb..591bab3 100644
--- a/lib/network/derive.go
+++ b/lib/network/derive.go
@@ -113,14 +113,20 @@ func (m *manager) ListAllocations(ctx context.Context) ([]Allocation, error) {
 	return allocations, nil
 }
 
-// NameExists checks if instance name is already used in the default network
-func (m *manager) NameExists(ctx context.Context, name string) (bool, error) {
+// NameExists checks if instance name is already used in the default network.
+// excludeInstanceID allows excluding a specific instance from the check (used when
+// starting an existing instance to avoid it conflicting with itself).
+func (m *manager) NameExists(ctx context.Context, name string, excludeInstanceID string) (bool, error) {
 	allocations, err := m.ListAllocations(ctx)
 	if err != nil {
 		return false, err
 	}
 
 	for _, alloc := range allocations {
+		// Skip the excluded instance (e.g., when restarting an instance)
+		if excludeInstanceID != "" && alloc.InstanceID == excludeInstanceID {
+			continue
+		}
 		if alloc.InstanceName == name {
 			return true, nil
 		}
diff --git a/lib/network/manager.go b/lib/network/manager.go
index 9102a59..5fed5d1 100644
--- a/lib/network/manager.go
+++ b/lib/network/manager.go
@@ -29,7 +29,7 @@ type Manager interface {
 	// Queries (derive from CH/snapshots)
 	GetAllocation(ctx context.Context, instanceID string) (*Allocation, error)
 	ListAllocations(ctx context.Context) ([]Allocation, error)
-	NameExists(ctx context.Context, name string) (bool, error)
+	NameExists(ctx context.Context, name string, excludeInstanceID string) (bool, error)
 
 	// GetUploadBurstMultiplier returns the configured multiplier for upload burst ceiling.
 	GetUploadBurstMultiplier() int