diff --git a/.changeset/eighty-olives-live.md b/.changeset/eighty-olives-live.md
new file mode 100644
index 0000000000..16898701f4
--- /dev/null
+++ b/.changeset/eighty-olives-live.md
@@ -0,0 +1,5 @@
+---
+'@backstage/backend-common': patch
+---
+
+Updated the `DatabaseManager` to include the plugin id in the Postgres application name of the database connections created for each plugin.
diff --git a/packages/backend-common/src/database/DatabaseManager.test.ts b/packages/backend-common/src/database/DatabaseManager.test.ts
index 336e5d499c..69386d77c5 100644
--- a/packages/backend-common/src/database/DatabaseManager.test.ts
+++ b/packages/backend-common/src/database/DatabaseManager.test.ts
@@ -165,6 +165,7 @@ describe('DatabaseManager', () => {
           user: 'foo',
           password: 'bar',
           port: '5432',
+          application_name: 'backstage_plugin_pluginwithoutconfig',
         },
       });
 
@@ -741,5 +742,83 @@ describe('DatabaseManager', () => {
 
       expect(baseConfig.data.role).toEqual('backstage-plugin');
     });
+
+    it('Defaults the application_name for postgres clients', async () => {
+      const testManager = DatabaseManager.fromConfig(
+        new ConfigReader({
+          backend: {
+            database: {
+              client: 'pg',
+              connection: {},
+            },
+          },
+        }),
+      );
+
+      await testManager.forPlugin('testplugin').getClient();
+      const mockCalls = mocked(createDatabaseClient).mock.calls.splice(-1);
+      const [baseConfig, _] = mockCalls[0];
+      expect(baseConfig.get()).toMatchObject({
+        connection: {
+          application_name: 'backstage_plugin_testplugin',
+        },
+      });
+    });
+
+    it('Allows manually setting the application_name for postgres clients', async () => {
+      const testManager = DatabaseManager.fromConfig(
+        new ConfigReader({
+          backend: {
+            database: {
+              client: 'pg',
+              connection: {
+                application_name: 'backstage_custom_app_name',
+              },
+            },
+          },
+        }),
+      );
+
+      await testManager.forPlugin('testplugin').getClient();
+      const mockCalls = mocked(createDatabaseClient).mock.calls.splice(-1);
+      const [baseConfig, overrides] = mockCalls[0];
+      expect(baseConfig.get().connection.application_name).toBe(
+        'backstage_custom_app_name',
+      );
+      expect(overrides.connection.application_name).toBeUndefined();
+    });
+
+    it('Allows manually setting the application_name for individual plugin client', async () => {
+      const testManager = DatabaseManager.fromConfig(
+        new ConfigReader({
+          backend: {
+            database: {
+              client: 'pg',
+              connection: {
+                host: 'localhost',
+                user: 'foo',
+                password: 'bar',
+                database: 'foodb',
+                application_name: 'backstage_custom_app_name',
+              },
+              plugin: {
+                overrideplugin: {
+                  connection: {
+                    application_name: 'custom_plugin',
+                  },
+                },
+              },
+            },
+          },
+        }),
+      );
+
+      await testManager.forPlugin('overrideplugin').getClient();
+      const mockCalls = mocked(createDatabaseClient).mock.calls.splice(-1);
+      const [baseConfig, _] = mockCalls[0];
+      expect(baseConfig.get().connection.application_name).toBe(
+        'custom_plugin',
+      );
+    });
   });
 });
diff --git a/packages/backend-common/src/database/DatabaseManager.ts b/packages/backend-common/src/database/DatabaseManager.ts
index 02f2c6b172..db5d36afad 100644
--- a/packages/backend-common/src/database/DatabaseManager.ts
+++ b/packages/backend-common/src/database/DatabaseManager.ts
@@ -268,6 +268,12 @@ export class DatabaseManager {
       client,
     );
 
+    if (client === 'pg') {
+      (
+        baseConnection as Knex.PgConnectionConfig
+      ).application_name ||= `backstage_plugin_${pluginId}`;
+    }
+
     return {
       // include base connection if client type has not been overridden
       ...(overridden ? {} : baseConnection),