diff --git a/packages/rest/README.md b/packages/rest/README.md
index 6b7744b7804..b1fa1ec0419 100644
--- a/packages/rest/README.md
+++ b/packages/rest/README.md
@@ -57,7 +57,7 @@ Defines the separator string that is inserted before the action name in auto-gen
 
 ##### Target
 
-`Model | ModelProperty | Operation`
+`Operation | Interface | Namespace`
 
 ##### Parameters
 
diff --git a/packages/rest/generated-defs/TypeSpec.Rest.ts b/packages/rest/generated-defs/TypeSpec.Rest.ts
index 90f68ad386e..aa1d60c37c4 100644
--- a/packages/rest/generated-defs/TypeSpec.Rest.ts
+++ b/packages/rest/generated-defs/TypeSpec.Rest.ts
@@ -3,6 +3,7 @@ import type {
   Interface,
   Model,
   ModelProperty,
+  Namespace,
   Operation,
 } from "@typespec/compiler";
 
@@ -58,7 +59,7 @@ export type SegmentOfDecorator = (
  */
 export type ActionSeparatorDecorator = (
   context: DecoratorContext,
-  target: Model | ModelProperty | Operation,
+  target: Operation | Interface | Namespace,
   seperator: "/" | ":" | "/:",
 ) => void;
 
diff --git a/packages/rest/lib/rest-decorators.tsp b/packages/rest/lib/rest-decorators.tsp
index 6f1d96ea5f9..325ac383df0 100644
--- a/packages/rest/lib/rest-decorators.tsp
+++ b/packages/rest/lib/rest-decorators.tsp
@@ -41,7 +41,7 @@ extern dec segmentOf(target: Operation, type: Model);
  * @param seperator Seperator seperating the action segment from the rest of the url
  */
 extern dec actionSeparator(
-  target: Model | ModelProperty | Operation,
+  target: Operation | Interface | Namespace,
   seperator: valueof "/" | ":" | "/:"
 );
 
diff --git a/packages/rest/src/rest.ts b/packages/rest/src/rest.ts
index 82cae4b25f8..c92c9001536 100644
--- a/packages/rest/src/rest.ts
+++ b/packages/rest/src/rest.ts
@@ -5,6 +5,7 @@ import {
   Interface,
   Model,
   ModelProperty,
+  Namespace,
   Operation,
   Program,
   Scalar,
@@ -273,11 +274,11 @@ const actionSeparatorKey = createStateSymbol("actionSeparator");
  * `@actionSeparator` defines the separator string that is used to precede the action name
  *  in auto-generated actions.
  *
- * `@actionSeparator` can only be applied to model properties, operation parameters, or operations.
+ * `@actionSeparator` can only be applied to operations, interfaces, or namespaces.
  */
 export function $actionSeparator(
   context: DecoratorContext,
-  entity: Model | ModelProperty | Operation,
+  entity: Operation | Interface | Namespace,
   separator: "/" | ":" | "/:",
 ) {
   context.program.stateMap(actionSeparatorKey).set(entity, separator);
diff --git a/packages/rest/test/action-separator.test.ts b/packages/rest/test/action-separator.test.ts
new file mode 100644
index 00000000000..90fe5d71e90
--- /dev/null
+++ b/packages/rest/test/action-separator.test.ts
@@ -0,0 +1,121 @@
+import { expectDiagnostics } from "@typespec/compiler/testing";
+import { strictEqual } from "assert";
+import { describe, it } from "vitest";
+import { Tester, getRoutesFor } from "./test-host.js";
+
+describe("rest: @actionSeparator decorator", () => {
+  describe("valid targets", () => {
+    it("works on Operation and affects routing", async () => {
+      const routes = await getRoutesFor(`
+        @autoRoute
+        interface Things {
+          @action
+          @TypeSpec.Rest.actionSeparator(":")
+          @put op customAction(@segment("things") @path thingId: string): string;
+        }
+      `);
+
+      strictEqual(routes.length, 1);
+      strictEqual(routes[0].path, "/things/{thingId}:customAction");
+    });
+
+    it("accepts Interface as target without compilation errors", async () => {
+      // This test verifies that @actionSeparator can be applied to interfaces without errors
+      const diagnostics = await Tester.diagnose(`
+        @TypeSpec.Rest.actionSeparator(":")
+        interface TestInterface {
+          op test(): void;
+        }
+      `);
+
+      // No diagnostics means the decorator accepts interfaces as valid targets
+      strictEqual(diagnostics.length, 0);
+    });
+
+    it("accepts Namespace as target without compilation errors", async () => {
+      // This test verifies that @actionSeparator can be applied to namespaces without errors  
+      const diagnostics = await Tester.diagnose(`
+        @TypeSpec.Rest.actionSeparator(":")
+        namespace TestNamespace {
+          op test(): void;
+        }
+      `);
+
+      // No diagnostics means the decorator accepts namespaces as valid targets
+      strictEqual(diagnostics.length, 0);
+    });
+
+    it("supports all separator values in routing", async () => {
+      const routes = await getRoutesFor(`
+        @autoRoute
+        interface Things {
+          @action
+          @TypeSpec.Rest.actionSeparator("/")
+          @put op action1(@segment("things") @path thingId: string): string;
+
+          @action
+          @TypeSpec.Rest.actionSeparator(":")
+          @put op action2(@segment("things") @path thingId: string): string;
+
+          @action
+          @TypeSpec.Rest.actionSeparator("/:")
+          @put op action3(@segment("things") @path thingId: string): string;
+        }
+      `);
+
+      strictEqual(routes.length, 3);
+      strictEqual(routes[0].path, "/things/{thingId}/action1");
+      strictEqual(routes[1].path, "/things/{thingId}:action2");
+      strictEqual(routes[2].path, "/things/{thingId}/:action3");
+    });
+  });
+
+  describe("invalid targets", () => {
+    it("rejects Model", async () => {
+      const diagnostics = await Tester.diagnose(`
+        @TypeSpec.Rest.actionSeparator(":")
+        model TestModel {
+          id: string;
+        }
+      `);
+
+      expectDiagnostics(diagnostics, [
+        {
+          code: "decorator-wrong-target",
+          message:
+            "Cannot apply @actionSeparator decorator to TestModel since it is not assignable to Operation | Interface | Namespace",
+        },
+      ]);
+    });
+
+    it("rejects ModelProperty", async () => {
+      const diagnostics = await Tester.diagnose(`
+        model TestModel {
+          @TypeSpec.Rest.actionSeparator(":")
+          id: string;
+        }
+      `);
+
+      expectDiagnostics(diagnostics, [
+        {
+          code: "decorator-wrong-target",
+          message:
+            /Cannot apply @actionSeparator decorator to .* since it is not assignable to Operation \| Interface \| Namespace/,
+        },
+      ]);
+    });
+
+    it("rejects invalid separator values", async () => {
+      const diagnostics = await Tester.diagnose(`
+        @TypeSpec.Rest.actionSeparator("invalid")
+        op test(): void;
+      `);
+
+      expectDiagnostics(diagnostics, [
+        {
+          code: "invalid-argument",
+        },
+      ]);
+    });
+  });
+});
\ No newline at end of file