diff --git a/crates/vm/src/builtins/function.rs b/crates/vm/src/builtins/function.rs
index c6c4aaf2b..b0bd5a010 100644
--- a/crates/vm/src/builtins/function.rs
+++ b/crates/vm/src/builtins/function.rs
@@ -1321,9 +1321,7 @@ impl Constructor for PyFunction {
         let mut func = Self::new(args.code.clone(), args.globals.clone(), vm)?;
         // Set function name if provided
         if let Some(name) = args.name.into_option() {
-            *func.name.lock() = name.clone();
-            // Also update qualname to match the name
-            *func.qualname.lock() = name;
+            *func.name.lock() = name;
         }
         // Now set additional attributes directly
         if let Some(closure_tuple) = closure {
diff --git a/extra_tests/snippets/stdlib_types.py b/extra_tests/snippets/stdlib_types.py
index bffc9f824..892daeb4b 100644
--- a/extra_tests/snippets/stdlib_types.py
+++ b/extra_tests/snippets/stdlib_types.py
@@ -66,3 +66,18 @@ if sys.implementation.name == "rustpython":
         deep_alias = list[deep_alias]
     with assert_raises(RecursionError):
         hash(deep_alias)
+
+
+# FunctionType preserves the code qualified name when a name is supplied.
+def outer():
+    def nested():
+        pass
+
+    return nested
+
+
+original = outer()
+for name in ("renamed", ""):
+    function = types.FunctionType(original.__code__, globals(), name)
+    assert function.__name__ == name
+    assert function.__qualname__ == "outer.<locals>.nested"