diff --git a/homeassistant/components/esphome/entity.py b/homeassistant/components/esphome/entity.py
index 313785fd2df..b442eaebb65 100644
--- a/homeassistant/components/esphome/entity.py
+++ b/homeassistant/components/esphome/entity.py
@@ -224,7 +224,16 @@ class EsphomeEntity(Entity, Generic[_InfoT, _StateT]):
         self._attr_device_info = DeviceInfo(
             connections={(dr.CONNECTION_NETWORK_MAC, device_info.mac_address)}
         )
-        self.entity_id = f"{domain}.{device_info.name}_{entity_info.object_id}"
+        if entity_info.name:
+            self.entity_id = f"{domain}.{device_info.name}_{entity_info.object_id}"
+        else:
+            # https://github.com/home-assistant/core/issues/132532
+            # If name is not set, ESPHome will use the sanitized friendly name
+            # as the name, however we want to use the original object_id
+            # as the entity_id before it is sanitized since the sanitizer
+            # is not utf-8 aware. In this case, its always going to be
+            # an empty string so we drop the object_id.
+            self.entity_id = f"{domain}.{device_info.name}"
 
     async def async_added_to_hass(self) -> None:
         """Register callbacks."""
@@ -260,7 +269,12 @@ class EsphomeEntity(Entity, Generic[_InfoT, _StateT]):
         self._static_info = static_info
         self._attr_unique_id = build_unique_id(device_info.mac_address, static_info)
         self._attr_entity_registry_enabled_default = not static_info.disabled_by_default
-        self._attr_name = static_info.name
+        # https://github.com/home-assistant/core/issues/132532
+        # If the name is "", we need to set it to None since otherwise
+        # the friendly_name will be "{friendly_name} " with a trailing
+        # space. ESPHome uses protobuf under the hood, and an empty field
+        # gets a default value of "".
+        self._attr_name = static_info.name if static_info.name else None
         if entity_category := static_info.entity_category:
             self._attr_entity_category = ENTITY_CATEGORIES.from_esphome(entity_category)
         else:
diff --git a/tests/components/esphome/test_entity.py b/tests/components/esphome/test_entity.py
index 5c82337e71b..290b1871cd7 100644
--- a/tests/components/esphome/test_entity.py
+++ b/tests/components/esphome/test_entity.py
@@ -17,6 +17,7 @@ from aioesphomeapi import (
 )
 
 from homeassistant.const import (
+    ATTR_FRIENDLY_NAME,
     ATTR_RESTORED,
     EVENT_HOMEASSISTANT_STOP,
     STATE_OFF,
@@ -503,3 +504,40 @@ async def test_esphome_device_without_friendly_name(
     state = hass.states.get("binary_sensor.test_mybinary_sensor")
     assert state is not None
     assert state.state == STATE_ON
+
+
+async def test_entity_without_name_device_with_friendly_name(
+    hass: HomeAssistant,
+    mock_client: APIClient,
+    hass_storage: dict[str, Any],
+    mock_esphome_device: Callable[
+        [APIClient, list[EntityInfo], list[UserService], list[EntityState]],
+        Awaitable[MockESPHomeDevice],
+    ],
+) -> None:
+    """Test name and entity_id for a device a friendly name and an entity without a name."""
+    entity_info = [
+        BinarySensorInfo(
+            object_id="mybinary_sensor",
+            key=1,
+            name="",
+            unique_id="my_binary_sensor",
+        ),
+    ]
+    states = [
+        BinarySensorState(key=1, state=True, missing_state=False),
+    ]
+    user_service = []
+    await mock_esphome_device(
+        mock_client=mock_client,
+        entity_info=entity_info,
+        user_service=user_service,
+        states=states,
+        device_info={"friendly_name": "The Best Mixer", "name": "mixer"},
+    )
+    state = hass.states.get("binary_sensor.mixer")
+    assert state is not None
+    assert state.state == STATE_ON
+    # Make sure we have set the name to `None` as otherwise
+    # the friendly_name will be "The Best Mixer "
+    assert state.attributes[ATTR_FRIENDLY_NAME] == "The Best Mixer"