diff --git a/pkg/db/pgx.go b/pkg/db/pgx.go
index dc78b711..1d36261b 100644
--- a/pkg/db/pgx.go
+++ b/pkg/db/pgx.go
@@ -3,19 +3,34 @@ package db
 import (
 	"context"
 	"database/sql"
+	"errors"
 	"fmt"
+	"regexp"
 	"time"
 
+	"github.com/jackc/pgx/v5/pgconn"
 	"github.com/jackc/pgx/v5/pgxpool"
 	"github.com/jackc/pgx/v5/stdlib"
 	"github.com/xmtp/xmtpd/pkg/migrations"
 )
 
-func newPGXDB(
-	ctx context.Context,
-	dsn string,
-	waitForDB, statementTimeout time.Duration,
-) (*sql.DB, error) {
+const MAX_NAMESPACE_LENGTH = 32
+
+var allowedNamespaceRe = regexp.MustCompile(`^[a-zA-Z_][a-zA-Z0-9_]*$`)
+
+func waitUntilDBReady(ctx context.Context, db *pgxpool.Pool, waitTime time.Duration) error {
+	waitUntil := time.Now().Add(waitTime)
+
+	err := db.Ping(ctx)
+
+	for err != nil && time.Now().Before(waitUntil) {
+		time.Sleep(3 * time.Second)
+		err = db.Ping(ctx)
+	}
+	return err
+}
+
+func parseConfig(dsn string, statementTimeout time.Duration) (*pgxpool.Config, error) {
 	config, err := pgxpool.ParseConfig(dsn)
 	if err != nil {
 		return nil, err
@@ -24,23 +39,118 @@ func newPGXDB(
 	config.ConnConfig.RuntimeParams["statement_timeout"] = fmt.Sprint(
 		statementTimeout.Milliseconds(),
 	)
+	return config, nil
+}
 
+func newPGXDB(
+	ctx context.Context,
+	config *pgxpool.Config,
+	waitForDB time.Duration,
+) (*sql.DB, error) {
 	dbPool, err := pgxpool.NewWithConfig(ctx, config)
 	if err != nil {
 		return nil, err
 	}
 
+	if err = waitUntilDBReady(ctx, dbPool, waitForDB); err != nil {
+		return nil, err
+	}
+
 	db := stdlib.OpenDBFromPool(dbPool)
 
-	waitUntil := time.Now().Add(waitForDB)
+	return db, nil
+}
 
-	err = db.Ping()
-	for err != nil && time.Now().Before(waitUntil) {
-		time.Sleep(3 * time.Second)
-		err = db.Ping()
+func isValidNamespace(namespace string) error {
+	if len(namespace) == 0 || len(namespace) > MAX_NAMESPACE_LENGTH {
+		return fmt.Errorf(
+			"namespace length must be between 1 and %d characters",
+			MAX_NAMESPACE_LENGTH,
+		)
+	}
+	// PostgreSQL identifiers must start with a letter or underscore
+	if !allowedNamespaceRe.MatchString(namespace) {
+		return fmt.Errorf(
+			"namespace must start with a letter or underscore and contain only letters, numbers, and underscores",
+		)
+	}
+	return nil
+}
+
+// Creates a new database with the given namespace if it doesn't exist
+func createNamespace(
+	ctx context.Context,
+	config *pgxpool.Config,
+	namespace string,
+	waitForDB time.Duration,
+) error {
+	if err := isValidNamespace(namespace); err != nil {
+		return err
+	}
+
+	// Make a copy of the config so we don't dirty it
+	config = config.Copy()
+	// Change the database to postgres so we are able to create new DBs
+	config.ConnConfig.Database = "postgres"
+
+	// Create a temporary connection to the postgres DB
+	adminConn, err := pgxpool.NewWithConfig(ctx, config)
+	if err != nil {
+		return fmt.Errorf("failed to connect to postgres: %w", err)
 	}
+	defer adminConn.Close()
 
-	return db, err
+	if err = waitUntilDBReady(ctx, adminConn, waitForDB); err != nil {
+		return err
+	}
+
+	// Create database if it doesn't exist
+	_, err = adminConn.Exec(ctx, fmt.Sprintf(`CREATE DATABASE "%s"`, namespace))
+	if err != nil {
+		// Ignore error if database already exists
+		var pgErr *pgconn.PgError
+		// Error code 42P04 is for "duplicate database"
+		// https://www.postgresql.org/docs/current/errcodes-appendix.html
+		if errors.As(err, &pgErr) && pgErr.Code == "42P04" {
+			return nil
+		}
+
+		return fmt.Errorf("failed to create database: %w", err)
+	}
+
+	return nil
+}
+
+// Creates a new database with the given namespace if it doesn't exist and returns the full DSN for the new database.
+func NewNamespacedDB(
+	ctx context.Context,
+	dsn string,
+	namespace string,
+	waitForDB, statementTimeout time.Duration,
+) (*sql.DB, error) {
+	// Parse the DSN to get the config
+	config, err := parseConfig(dsn, statementTimeout)
+	if err != nil {
+		return nil, fmt.Errorf("failed to parse DSN: %w", err)
+	}
+
+	if err = createNamespace(ctx, config, namespace, waitForDB); err != nil {
+		return nil, err
+	}
+
+	config.ConnConfig.Database = namespace
+
+	db, err := newPGXDB(ctx, config, waitForDB)
+	if err != nil {
+		return nil, err
+	}
+
+	err = migrations.Migrate(ctx, db)
+	if err != nil {
+		return nil, err
+	}
+
+	return db, nil
 }
 
 func NewDB(
@@ -48,7 +158,12 @@ func NewDB(
 	dsn string,
 	waitForDB, statementTimeout time.Duration,
 ) (*sql.DB, error) {
-	db, err := newPGXDB(ctx, dsn, waitForDB, statementTimeout)
+	config, err := parseConfig(dsn, statementTimeout)
+	if err != nil {
+		return nil, err
+	}
+
+	db, err := newPGXDB(ctx, config, waitForDB)
 	if err != nil {
 		return nil, err
 	}
diff --git a/pkg/db/pgx_test.go b/pkg/db/pgx_test.go
new file mode 100644
index 00000000..cb7c33b9
--- /dev/null
+++ b/pkg/db/pgx_test.go
@@ -0,0 +1,85 @@
+package db
+
+import (
+	"context"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/require"
+	"github.com/xmtp/xmtpd/pkg/testutils"
+)
+
+func TestNamespacedDB(t *testing.T) {
+	startingDsn := testutils.LocalTestDBDSNPrefix + "/foo" + testutils.LocalTestDBDSNSuffix
+	newDBName := "xmtp_" + testutils.RandomString(24)
+	// Create namespaced DB
+	namespacedDB, err := NewNamespacedDB(
+		context.Background(),
+		startingDsn,
+		newDBName,
+		time.Second,
+		time.Second,
+	)
+	t.Cleanup(func() { namespacedDB.Close() })
+	require.NoError(t, err)
+
+	result, err := namespacedDB.Query("SELECT current_database();")
+	require.NoError(t, err)
+	defer result.Close()
+
+	require.True(t, result.Next())
+	var dbName string
+	err = result.Scan(&dbName)
+	require.NoError(t, err)
+	require.Equal(t, newDBName, dbName)
+}
+
+func TestNamespaceRepeat(t *testing.T) {
+	startingDsn := testutils.LocalTestDBDSNPrefix + "/foo" + testutils.LocalTestDBDSNSuffix
+	newDBName := "xmtp_" + testutils.RandomString(24)
+	// Create namespaced DB
+	db1, err := NewNamespacedDB(
+		context.Background(),
+		startingDsn,
+		newDBName,
+		time.Second,
+		time.Second,
+	)
+	require.NoError(t, err)
+	require.NotNil(t, db1)
+	t.Cleanup(func() { db1.Close() })
+
+	// Create again with the same name
+	db2, err := NewNamespacedDB(
+		context.Background(),
+		startingDsn,
+		newDBName,
+		time.Second,
+		time.Second,
+	)
+	require.NoError(t, err)
+	require.NotNil(t, db2)
+	t.Cleanup(func() { db2.Close() })
+}
+
+func TestNamespacedDBInvalidName(t *testing.T) {
+	_, err := NewNamespacedDB(
+		context.Background(),
+		testutils.LocalTestDBDSNPrefix+"/foo"+testutils.LocalTestDBDSNSuffix,
+		"invalid/name",
+		time.Second,
+		time.Second,
+	)
+	require.Error(t, err)
+}
+
+func TestNamespacedDBInvalidDSN(t *testing.T) {
+	_, err := NewNamespacedDB(
+		context.Background(),
+		"invalid-dsn",
+		"dbname",
+		time.Second,
+		time.Second,
+	)
+	require.Error(t, err)
+}
diff --git a/pkg/testutils/store.go b/pkg/testutils/store.go
index e9d1f6b5..44d108a0 100644
--- a/pkg/testutils/store.go
+++ b/pkg/testutils/store.go
@@ -13,8 +13,8 @@ import (
 )
 
 const (
-	localTestDBDSNPrefix = "postgres://postgres:xmtp@localhost:8765"
-	localTestDBDSNSuffix = "?sslmode=disable"
+	LocalTestDBDSNPrefix = "postgres://postgres:xmtp@localhost:8765"
+	LocalTestDBDSNSuffix = "?sslmode=disable"
 )
 
 func openDB(t testing.TB, dsn string) (*sql.DB, string, func()) {
@@ -28,7 +28,7 @@ func openDB(t testing.TB, dsn string) (*sql.DB, string, func()) {
 }
 
 func newCtlDB(t testing.TB) (*sql.DB, string, func()) {
-	return openDB(t, localTestDBDSNPrefix+localTestDBDSNSuffix)
+	return openDB(t, LocalTestDBDSNPrefix+LocalTestDBDSNSuffix)
 }
 
 func newInstanceDB(t testing.TB, ctx context.Context, ctlDB *sql.DB) (*sql.DB, string, func()) {
@@ -36,7 +36,7 @@ func newInstanceDB(t testing.TB, ctx context.Context, ctlDB *sql.DB) (*sql.DB, s
 	_, err := ctlDB.Exec("CREATE DATABASE " + dbName)
 	require.NoError(t, err)
 
-	db, dsn, cleanup := openDB(t, localTestDBDSNPrefix+"/"+dbName+localTestDBDSNSuffix)
+	db, dsn, cleanup := openDB(t, LocalTestDBDSNPrefix+"/"+dbName+LocalTestDBDSNSuffix)
 	require.NoError(t, migrations.Migrate(ctx, db))
 
 	return db, dsn, func() {