diff --git a/CHANGELOG.md b/CHANGELOG.md
index 20bc9e6c2..8fdaeeed0 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@
 - sks: add `rotate-karpenter-credentials` command #797
 - sks: add `active-nodepool-templates` command #797
 - new command `exo ai deployment instance-type` that allows showing what GPU is usable in which zone #809
+- instance create: add support for setting a reverse dns with the `--reverse-dns` flag #816
 
 ### Bug fixes
 
@@ -30,6 +31,7 @@
 - test(testscript): add validation handling in PTY-based interactive flows #801
 - test(testscript): add API testscript runner with per-scenario resource lifecycle #804
 - test(testscript): make PTY inputs deterministic via event-driven @wait: synchronisation #804
+- test(testscript): add create reverse-DNS coverage for compute instances
 
 ## 1.93.0
 
diff --git a/cmd/compute/instance/instance_create.go b/cmd/compute/instance/instance_create.go
index b186a4b6b..a5e66a2b6 100644
--- a/cmd/compute/instance/instance_create.go
+++ b/cmd/compute/instance/instance_create.go
@@ -44,6 +44,7 @@ type instanceCreateCmd struct {
 	Labels                map[string]string `cli-flag:"label" cli-usage:"instance label (format: key=value)"`
 	PrivateNetworks       []string          `cli-flag:"private-network" cli-usage:"instance Private Network NAME|ID (can be specified multiple times)"`
 	PublicIPAssignment    string            `cli-flag:"public-ip" cli-usage:"Configures public IP assignment of the Instances (none|inet4|dual). (default: inet4)"`
+	ReverseDNS            string            `cli-usage:"Reverse DNS Domain"`
 	SSHKeys               []string          `cli-flag:"ssh-key" cli-usage:"SSH key to deploy on the instance (can be specified multiple times)"`
 	Protection            bool              `cli-flag:"protection" cli-usage:"enable delete protection"`
 	SecurityGroups        []string          `cli-flag:"security-group" cli-usage:"instance Security Group NAME|ID (can be specified multiple times)"`
@@ -252,6 +253,8 @@ func (c *instanceCreateCmd) CmdRun(cmd *cobra.Command, _ []string) error { //nol
 		instanceReq.ApplicationConsistentSnapshotEnabled = &c.AppConsistentSnapshot
 	}
 
+	updateRDNS := cmd.Flags().Changed(exocmd.MustCLICommandFlagName(c, &c.ReverseDNS))
+
 	var instanceID v3.UUID
 	utils.DecorateAsyncOperation(fmt.Sprintf("Creating instance %q...", c.Name), func() {
 		var op *v3.Operation
@@ -281,6 +284,17 @@ func (c *instanceCreateCmd) CmdRun(cmd *cobra.Command, _ []string) error { //nol
 			}
 		}
 
+		if updateRDNS {
+			op, err = client.UpdateReverseDNSInstance(ctx, instanceID, v3.UpdateReverseDNSInstanceRequest{DomainName: c.ReverseDNS})
+			if err != nil {
+				return
+			}
+			_, err = client.Wait(ctx, op, v3.OperationStateSuccess)
+			if err != nil {
+				return
+			}
+		}
+
 		if c.Protection {
 			var value v3.UUID
 			var op *v3.Operation
diff --git a/tests/e2e/scenarios/with-api/compute/instance_create_reverse_dns.txtar b/tests/e2e/scenarios/with-api/compute/instance_create_reverse_dns.txtar
new file mode 100644
index 000000000..01f6212ff
--- /dev/null
+++ b/tests/e2e/scenarios/with-api/compute/instance_create_reverse_dns.txtar
@@ -0,0 +1,14 @@
+# Test: exo compute instance create supports --reverse-dns
+# Full lifecycle: create a dedicated instance with reverse DNS, verify it, then delete it.
+# TEST_ZONE and TEST_RUN_ID are injected by the API test runner.
+
+exec exo --zone $TEST_ZONE --output-format json compute instance create cli-e2e-rdns-$TEST_RUN_ID --instance-type standard.tiny --template 'Linux Ubuntu 22.04 LTS 64-bit' --disk-size 10 --reverse-dns rdns-$TEST_RUN_ID.example.org
+
+json-setenv INSTANCE_ID id stdout
+
+wait-instance-state $TEST_ZONE $INSTANCE_ID running 300
+
+exec exo --zone $TEST_ZONE --output-format json compute instance show $INSTANCE_ID
+stdout '"reverse_dns":"rdns-[a-z0-9-]+\.example\.org\."'
+
+exec exo --zone $TEST_ZONE compute instance delete --force $INSTANCE_ID
diff --git a/tests/e2e/scenarios/without-api/compute_instance_create_flags.txtar b/tests/e2e/scenarios/without-api/compute_instance_create_flags.txtar
new file mode 100644
index 000000000..12fde7341
--- /dev/null
+++ b/tests/e2e/scenarios/without-api/compute_instance_create_flags.txtar
@@ -0,0 +1,6 @@
+# Test: compute instance create --help shows the reverse DNS flag
+
+exec exo compute instance create --help
+stdout '--reverse-dns'
+stdout '--instance-type'
+stdout '--template'