diff --git a/packages/calcite-components/src/components/avatar/avatar.e2e.ts b/packages/calcite-components/src/components/avatar/avatar.e2e.ts
index 8c769695707..f42dcbf6e4f 100644
--- a/packages/calcite-components/src/components/avatar/avatar.e2e.ts
+++ b/packages/calcite-components/src/components/avatar/avatar.e2e.ts
@@ -1,6 +1,8 @@
 import { newE2EPage } from "@stencil/core/testing";
 import { accessible, defaults, hidden, renders } from "../../tests/commonTests";
 import { placeholderImage } from "../../../.storybook/placeholderImage";
+import { html } from "../../../support/formatting";
+import { CSS } from "./resources";
 
 const placeholderUrl = placeholderImage({
   width: 120,
@@ -63,7 +65,7 @@ describe("calcite-avatar", () => {
       const background = document.querySelector("calcite-avatar").shadowRoot.querySelector(".background");
       return background.getAttribute("style");
     });
-    expect(style).toEqual("background-color: rgb(245, 219, 214);");
+    expect(style).toEqual("background-color: rgb(245, 214, 236);");
   });
 
   it("renders default icon when no information is passed", async () => {
@@ -73,4 +75,27 @@ describe("calcite-avatar", () => {
     const visible = await icon.isVisible();
     expect(visible).toBe(true);
   });
+
+  it("generates unique background if names are similar", async () => {
+    const page = await newE2EPage();
+    await page.setContent(html`
+      <calcite-avatar full-name="John Doe" username="john_doe"></calcite-avatar>
+      <calcite-avatar full-name="John Doe 1" username="john_doe1"></calcite-avatar>
+      <calcite-avatar full-name="John Doe 2" username="john_doe2"></calcite-avatar>
+    `);
+
+    const avatars = [
+      await page.find(`calcite-avatar:nth-child(1) >>> .${CSS.background}`),
+      await page.find(`calcite-avatar:nth-child(2) >>> .${CSS.background}`),
+      await page.find(`calcite-avatar:nth-child(3) >>> .${CSS.background}`),
+    ];
+
+    const [firstBgColor, secondBgColor, thirdBgColor] = await Promise.all(
+      avatars.map((avatar) => avatar.getComputedStyle().then(({ backgroundColor }) => backgroundColor)),
+    );
+
+    expect(firstBgColor).not.toEqual(secondBgColor);
+    expect(secondBgColor).not.toEqual(thirdBgColor);
+    expect(firstBgColor).not.toEqual(thirdBgColor);
+  });
 });
diff --git a/packages/calcite-components/src/components/avatar/avatar.tsx b/packages/calcite-components/src/components/avatar/avatar.tsx
index df4030b1b6c..922bf1cad8d 100644
--- a/packages/calcite-components/src/components/avatar/avatar.tsx
+++ b/packages/calcite-components/src/components/avatar/avatar.tsx
@@ -2,6 +2,7 @@ import { Component, Element, h, Prop, State } from "@stencil/core";
 import { getModeName } from "../../utils/dom";
 import { isValidHex } from "../color-picker/utils";
 import { Scale } from "../interfaces";
+import { CSS } from "./resources";
 import { hexToHue, stringToHex } from "./utils";
 
 @Component({
@@ -65,7 +66,7 @@ export class Avatar {
       return (
         <img
           alt={this.label || ""}
-          class="thumbnail"
+          class={CSS.thumbnail}
           onError={() => (this.thumbnailFailedToLoad = true)}
           src={this.thumbnail}
         />
@@ -76,16 +77,16 @@ export class Avatar {
     return (
       <span
         aria-label={this.label || this.fullName}
-        class="background"
+        class={CSS.background}
         role="figure"
         style={{ backgroundColor }}
       >
         {initials ? (
-          <span aria-hidden="true" class="initials">
+          <span aria-hidden="true" class={CSS.initials}>
             {initials}
           </span>
         ) : (
-          <calcite-icon class="icon" icon="user" scale={this.scale} />
+          <calcite-icon class={CSS.icon} icon="user" scale={this.scale} />
         )}
       </span>
     );
diff --git a/packages/calcite-components/src/components/avatar/resources.ts b/packages/calcite-components/src/components/avatar/resources.ts
new file mode 100644
index 00000000000..5cacd848092
--- /dev/null
+++ b/packages/calcite-components/src/components/avatar/resources.ts
@@ -0,0 +1,6 @@
+export const CSS = {
+  thumbnail: "thumbnail",
+  background: "background",
+  initials: "initials",
+  icon: "icon",
+};
diff --git a/packages/calcite-components/src/components/avatar/utils.ts b/packages/calcite-components/src/components/avatar/utils.ts
index 406247145d0..7757a83bedd 100644
--- a/packages/calcite-components/src/components/avatar/utils.ts
+++ b/packages/calcite-components/src/components/avatar/utils.ts
@@ -5,12 +5,15 @@ import { hexToRGB } from "../color-picker/utils";
  * Convert a string to a valid hex by hashing its contents
  * and using the hash as a seed for three distinct color values
  *
- * @param str
+ * @param string
  */
-export function stringToHex(str: string): string {
+export function stringToHex(string: string): string {
+  // improve random color generation for similar strings.
+  string = mixStringDeterministically(string);
+
   let hash = 0;
-  for (let i = 0; i < str.length; i++) {
-    hash = str.charCodeAt(i) + ((hash << 5) - hash);
+  for (let i = 0; i < string.length; i++) {
+    hash = string.charCodeAt(i) + ((hash << 5) - hash);
   }
 
   let hex = "#";
@@ -21,6 +24,18 @@ export function stringToHex(str: string): string {
   return hex;
 }
 
+/**
+ * The function splits the string into two halves, reverses each half, and then concatenates them.
+ *
+ * @param {string} string - The input string to be mixed.
+ * @returns {string} - The mixed string.
+ */
+function mixStringDeterministically(string: string): string {
+  const midPoint = Math.floor(string.length / 2);
+  const reversed = string.split("").reverse().join("");
+  return reversed.substring(midPoint) + reversed.slice(0, midPoint);
+}
+
 /**
  * Find the hue of a color given the separate RGB color channels
  *