diff --git a/homeassistant/components/proximity/__init__.py b/homeassistant/components/proximity/__init__.py
index a4520435161..07b5f931f79 100644
--- a/homeassistant/components/proximity/__init__.py
+++ b/homeassistant/components/proximity/__init__.py
@@ -70,22 +70,22 @@ def async_setup_proximity_component(
     ignored_zones: list[str] = config[CONF_IGNORED_ZONES]
     proximity_devices: list[str] = config[CONF_DEVICES]
     tolerance: int = config[CONF_TOLERANCE]
-    proximity_zone = name
+    proximity_zone = config[CONF_ZONE]
     unit_of_measurement: str = config.get(
         CONF_UNIT_OF_MEASUREMENT, hass.config.units.length_unit
     )
-    zone_id = f"zone.{config[CONF_ZONE]}"
+    zone_friendly_name = name
 
     proximity = Proximity(
         hass,
-        proximity_zone,
+        zone_friendly_name,
         DEFAULT_DIST_TO_ZONE,
         DEFAULT_DIR_OF_TRAVEL,
         DEFAULT_NEAREST,
         ignored_zones,
         proximity_devices,
         tolerance,
-        zone_id,
+        proximity_zone,
         unit_of_measurement,
     )
     proximity.entity_id = f"{DOMAIN}.{proximity_zone}"
@@ -171,7 +171,7 @@ class Proximity(Entity):
         devices_to_calculate = False
         devices_in_zone = ""
 
-        zone_state = self.hass.states.get(self.proximity_zone)
+        zone_state = self.hass.states.get(f"zone.{self.proximity_zone}")
         proximity_latitude = (
             zone_state.attributes.get(ATTR_LATITUDE) if zone_state else None
         )
@@ -189,7 +189,7 @@ class Proximity(Entity):
                 devices_to_calculate = True
 
             # Check the location of all devices.
-            if (device_state.state).lower() == (self.friendly_name).lower():
+            if (device_state.state).lower() == (self.proximity_zone).lower():
                 device_friendly = device_state.name
                 if devices_in_zone != "":
                     devices_in_zone = f"{devices_in_zone}, "
diff --git a/tests/components/proximity/test_init.py b/tests/components/proximity/test_init.py
index 34f87b5c261..0ec8765e604 100644
--- a/tests/components/proximity/test_init.py
+++ b/tests/components/proximity/test_init.py
@@ -13,7 +13,11 @@ async def test_proximities(hass: HomeAssistant) -> None:
                 "devices": ["device_tracker.test1", "device_tracker.test2"],
                 "tolerance": "1",
             },
-            "work": {"devices": ["device_tracker.test1"], "tolerance": "1"},
+            "work": {
+                "devices": ["device_tracker.test1"],
+                "tolerance": "1",
+                "zone": "work",
+            },
         }
     }
 
@@ -42,7 +46,7 @@ async def test_proximities_setup(hass: HomeAssistant) -> None:
                 "devices": ["device_tracker.test1", "device_tracker.test2"],
                 "tolerance": "1",
             },
-            "work": {"tolerance": "1"},
+            "work": {"tolerance": "1", "zone": "work"},
         }
     }