diff --git a/docs/v3/develop/settings-ref.mdx b/docs/v3/develop/settings-ref.mdx
index 9c9816e9b8d3..839f92d27dc5 100644
--- a/docs/v3/develop/settings-ref.mdx
+++ b/docs/v3/develop/settings-ref.mdx
@@ -1183,7 +1183,7 @@ A connection timeout, in seconds, applied to database connections. Defaults to `
 `PREFECT_SERVER_DATABASE_CONNECTION_TIMEOUT`, `PREFECT_API_DATABASE_CONNECTION_TIMEOUT`
 
 ### `sqlalchemy_pool_size`
-Controls connection pool size when using a PostgreSQL database with the Prefect API. If not set, the default SQLAlchemy pool size will be used.
+Controls connection pool size of database connection pools from the Prefect API. If not set, the default SQLAlchemy pool size will be used.
 
 **Type**: `integer | None`
 
@@ -1194,6 +1194,18 @@ Controls connection pool size when using a PostgreSQL database with the Prefect
 **Supported environment variables**:
 `PREFECT_SERVER_DATABASE_SQLALCHEMY_POOL_SIZE`, `PREFECT_SQLALCHEMY_POOL_SIZE`
 
+### `connection_app_name`
+Controls the application_name field for connections opened from the connection pool when using a PostgreSQL database with the Prefect API.
+
+**Type**: `string | None`
+
+**Default**: `None`
+
+**TOML dotted key path**: `server.database.connection_app_name`
+
+**Supported environment variables**:
+`PREFECT_SERVER_DATABASE_CONNECTION_APP_NAME`
+
 ### `sqlalchemy_max_overflow`
 Controls maximum overflow of the connection pool when using a PostgreSQL database with the Prefect API. If not set, the default SQLAlchemy maximum overflow value will be used.
 
diff --git a/schemas/settings.schema.json b/schemas/settings.schema.json
index 6d4903602356..ecfcc749e43c 100644
--- a/schemas/settings.schema.json
+++ b/schemas/settings.schema.json
@@ -1046,13 +1046,29 @@
                         }
                     ],
                     "default": null,
-                    "description": "Controls connection pool size when using a PostgreSQL database with the Prefect API. If not set, the default SQLAlchemy pool size will be used.",
+                    "description": "Controls connection pool size of database connection pools from the Prefect API. If not set, the default SQLAlchemy pool size will be used.",
                     "supported_environment_variables": [
                         "PREFECT_SERVER_DATABASE_SQLALCHEMY_POOL_SIZE",
                         "PREFECT_SQLALCHEMY_POOL_SIZE"
                     ],
                     "title": "Sqlalchemy Pool Size"
                 },
+                "connection_app_name": {
+                    "anyOf": [
+                        {
+                            "type": "string"
+                        },
+                        {
+                            "type": "null"
+                        }
+                    ],
+                    "default": null,
+                    "description": "Controls the application_name field for connections opened from the connection pool when using a PostgreSQL database with the Prefect API.",
+                    "supported_environment_variables": [
+                        "PREFECT_SERVER_DATABASE_CONNECTION_APP_NAME"
+                    ],
+                    "title": "Connection App Name"
+                },
                 "sqlalchemy_max_overflow": {
                     "anyOf": [
                         {
diff --git a/src/prefect/server/database/configurations.py b/src/prefect/server/database/configurations.py
index 31c93b5eddf8..c09caec7fc28 100644
--- a/src/prefect/server/database/configurations.py
+++ b/src/prefect/server/database/configurations.py
@@ -26,6 +26,7 @@
     PREFECT_API_DATABASE_CONNECTION_TIMEOUT,
     PREFECT_API_DATABASE_ECHO,
     PREFECT_API_DATABASE_TIMEOUT,
+    PREFECT_SERVER_DATABASE_CONNECTION_APP_NAME,
     PREFECT_SQLALCHEMY_MAX_OVERFLOW,
     PREFECT_SQLALCHEMY_POOL_SIZE,
     PREFECT_TESTING_UNIT_TEST_MODE,
@@ -121,6 +122,7 @@ def __init__(
         connection_timeout: Optional[float] = None,
         sqlalchemy_pool_size: Optional[int] = None,
         sqlalchemy_max_overflow: Optional[int] = None,
+        connection_app_name: Optional[str] = None,
     ) -> None:
         self.connection_url = connection_url
         self.echo: bool = echo or PREFECT_API_DATABASE_ECHO.value()
@@ -134,6 +136,9 @@ def __init__(
         self.sqlalchemy_max_overflow: Optional[int] = (
             sqlalchemy_max_overflow or PREFECT_SQLALCHEMY_MAX_OVERFLOW.value()
         )
+        self.connection_app_name: Optional[str] = (
+            connection_app_name or PREFECT_SERVER_DATABASE_CONNECTION_APP_NAME.value()
+        )
 
     def unique_key(self) -> tuple[Hashable, ...]:
         """
@@ -210,6 +215,11 @@ async def engine(self) -> AsyncEngine:
             if self.connection_timeout is not None:
                 connect_args["timeout"] = self.connection_timeout
 
+            if self.connection_app_name is not None:
+                connect_args["server_settings"] = dict(
+                    application_name=self.connection_app_name
+                )
+
             if connect_args:
                 kwargs["connect_args"] = connect_args
 
@@ -337,6 +347,12 @@ async def engine(self) -> AsyncEngine:
             if self.timeout is not None:
                 kwargs["connect_args"] = dict(timeout=self.timeout)
 
+            if self.sqlalchemy_pool_size is not None:
+                kwargs["pool_size"] = self.sqlalchemy_pool_size
+
+            if self.sqlalchemy_max_overflow is not None:
+                kwargs["max_overflow"] = self.sqlalchemy_max_overflow
+
             # use `named` paramstyle for sqlite instead of `qmark` in very rare
             # circumstances, we've seen aiosqlite pass parameters in the wrong
             # order; by using named parameters we avoid this issue
diff --git a/src/prefect/settings/models/server/database.py b/src/prefect/settings/models/server/database.py
index f4820d218cfc..4ad352bbcad6 100644
--- a/src/prefect/settings/models/server/database.py
+++ b/src/prefect/settings/models/server/database.py
@@ -148,7 +148,7 @@ class ServerDatabaseSettings(PrefectBaseSettings):
 
     sqlalchemy_pool_size: Optional[int] = Field(
         default=None,
-        description="Controls connection pool size when using a PostgreSQL database with the Prefect API. If not set, the default SQLAlchemy pool size will be used.",
+        description="Controls connection pool size of database connection pools from the Prefect API. If not set, the default SQLAlchemy pool size will be used.",
         validation_alias=AliasChoices(
             AliasPath("sqlalchemy_pool_size"),
             "prefect_server_database_sqlalchemy_pool_size",
@@ -156,6 +156,11 @@ class ServerDatabaseSettings(PrefectBaseSettings):
         ),
     )
 
+    connection_app_name: Optional[str] = Field(
+        default=None,
+        description="Controls the application_name field for connections opened from the connection pool when using a PostgreSQL database with the Prefect API.",
+    )
+
     sqlalchemy_max_overflow: Optional[int] = Field(
         default=None,
         description="Controls maximum overflow of the connection pool when using a PostgreSQL database with the Prefect API. If not set, the default SQLAlchemy maximum overflow value will be used.",
diff --git a/tests/test_settings.py b/tests/test_settings.py
index 96f71927546a..ba925186bc2d 100644
--- a/tests/test_settings.py
+++ b/tests/test_settings.py
@@ -297,6 +297,7 @@
         "test_value": timedelta(seconds=10),
         "legacy": True,
     },
+    "PREFECT_SERVER_DATABASE_CONNECTION_APP_NAME": {"test_value": "testingconn"},
     "PREFECT_SERVER_DATABASE_CONNECTION_TIMEOUT": {"test_value": 10.0},
     "PREFECT_SERVER_DATABASE_CONNECTION_URL": {"test_value": "sqlite:///"},
     "PREFECT_SERVER_DATABASE_DRIVER": {"test_value": "sqlite+aiosqlite"},