diff --git a/forc-util/src/lib.rs b/forc-util/src/lib.rs
index ac005dfb05d..38976965e10 100644
--- a/forc-util/src/lib.rs
+++ b/forc-util/src/lib.rs
@@ -78,9 +78,9 @@ pub fn validate_name(name: &str, use_case: &str) -> Result<()> {
             it conflicts with Forc's build directory names"
         );
     }
-    if name == "test" {
+    if name.to_lowercase() == "test" {
         bail!(
-            "the name `test` cannot be used as a package name, \
+            "the name `test` cannot be used as a project name, \
             it conflicts with Sway's built-in test library"
         );
     }
diff --git a/forc/src/ops/forc_init.rs b/forc/src/ops/forc_init.rs
index 70acdaa104d..af3440b49e0 100644
--- a/forc/src/ops/forc_init.rs
+++ b/forc/src/ops/forc_init.rs
@@ -1,6 +1,7 @@
 use crate::cli::InitCommand;
 use crate::utils::defaults;
 use anyhow::{anyhow, Context, Result};
+use forc_util::validate_name;
 use serde::Deserialize;
 use std::fs;
 use std::fs::File;
@@ -49,6 +50,7 @@ struct ContentResponse {
 
 pub fn init(command: InitCommand) -> Result<()> {
     let project_name = command.project_name;
+    validate_name(&project_name, "project name")?;
 
     match command.template {
         Some(template) => {