diff --git a/cmd/diff/diffprocessor/function_provider.go b/cmd/diff/diffprocessor/function_provider.go
index 488850f..9b8a580 100644
--- a/cmd/diff/diffprocessor/function_provider.go
+++ b/cmd/diff/diffprocessor/function_provider.go
@@ -275,8 +275,8 @@ func generateContainerName(pkg, instanceID string) string {
 	// Handle SHA256 digest references: name@sha256:digest
 	// Extract just the function name and a truncated digest
 	if before, after, ok := strings.Cut(nameAndVersion, "@sha256:"); ok {
-		funcName := before
-		digest := after // Skip "@sha256:"
+		funcName := strings.ReplaceAll(before, ":", "-")
+		digest := after
 
 		// Use first 12 chars of digest (like Docker short image IDs)
 		if len(digest) > 12 {
diff --git a/cmd/diff/diffprocessor/function_provider_test.go b/cmd/diff/diffprocessor/function_provider_test.go
index 7b17bb9..6df9826 100644
--- a/cmd/diff/diffprocessor/function_provider_test.go
+++ b/cmd/diff/diffprocessor/function_provider_test.go
@@ -545,6 +545,10 @@ func TestGenerateContainerName(t *testing.T) {
 			pkg:  "xpkg.io/test/function@sha256:abc123",
 			want: "function-abc123-comp-test1234",
 		},
+		"TagAndDigest": {
+			pkg:  "registry.io/path/function-auto-ready:v0.6.1-0@sha256:751a4afb65f1abcdef1234567890abcdef1234567890abcdef1234567890abcd",
+			want: "function-auto-ready-v0.6.1-0-751a4afb65f1-comp-test1234",
+		},
 	}
 
 	for name, tt := range tests {