diff --git a/nameresolution/consul/consul.go b/nameresolution/consul/consul.go
index a92630591b..66533b4c30 100644
--- a/nameresolution/consul/consul.go
+++ b/nameresolution/consul/consul.go
@@ -323,7 +323,13 @@ func formatAddress(address string, port string) (addr string, err error) {
 		return fmt.Sprintf("[%s]:%s", address, port), nil
 	}
 
-	return "", fmt.Errorf("invalid ip address %s", address)
+	// addr is not a valid IP address
+	// use net.JoinHostPort to format address if address is a valid hostname
+	if _, err := net.LookupHost(address); err == nil {
+		return net.JoinHostPort(address, port), nil
+	}
+
+	return "", fmt.Errorf("invalid ip address or unreachable hostname: %s", address)
 }
 
 // getConfig configuration from metadata, defaults are best suited for self-hosted mode.
diff --git a/nameresolution/consul/consul_test.go b/nameresolution/consul/consul_test.go
index 8f269ffde3..3f36c3394b 100644
--- a/nameresolution/consul/consul_test.go
+++ b/nameresolution/consul/consul_test.go
@@ -845,6 +845,35 @@ func TestResolveID(t *testing.T) {
 				assert.Equal(t, "[2001:db8:3333:4444:5555:6666:7777:8888]:50005", addr)
 			},
 		},
+		{
+			"should get localhost (hostname) from service",
+			nr.ResolveRequest{
+				ID: "test-app",
+			},
+			func(t *testing.T, req nr.ResolveRequest) {
+				t.Helper()
+				mock := mockClient{
+					mockHealth: mockHealth{
+						serviceResult: []*consul.ServiceEntry{
+							{
+								Service: &consul.AgentService{
+									Address: "localhost",
+									Port:    8600,
+									Meta: map[string]string{
+										"DAPR_PORT": "50005",
+									},
+								},
+							},
+						},
+					},
+				}
+				resolver := newResolver(logger.NewLogger("test"), testConfig, &mock, &registry{}, make(chan struct{}))
+
+				addr, _ := resolver.ResolveID(context.Background(), req)
+
+				assert.Equal(t, "localhost:50005", addr)
+			},
+		},
 		{
 			"should get random address from service",
 			nr.ResolveRequest{