diff --git a/modules/agent-engine/agent-managed.tf b/modules/agent-engine/agent-managed.tf
index 33afaa16a..5c02a6194 100644
--- a/modules/agent-engine/agent-managed.tf
+++ b/modules/agent-engine/agent-managed.tf
@@ -48,6 +48,7 @@ resource "google_vertex_ai_reasoning_engine" "managed" {
         var.agent_engine_config.max_instances != null ||
         var.agent_engine_config.min_instances != null ||
         var.agent_engine_config.resource_limits != null ||
+        var.networking_config != null ||
         length(var.agent_engine_config.environment_variables) > 0 ||
         length(var.agent_engine_config.secret_environment_variables) > 0
         ? { 1 = 1 }
@@ -72,7 +73,6 @@ resource "google_vertex_ai_reasoning_engine" "managed" {
         dynamic "psc_interface_config" {
           for_each = var.networking_config == null ? {} : { 1 = 1 }
 
-
           content {
             network_attachment = var.networking_config.network_attachment_id
 
@@ -80,12 +80,12 @@ resource "google_vertex_ai_reasoning_engine" "managed" {
               for_each = var.networking_config.dns_peering_configs
 
               content {
-                domain         = each.key
-                target_network = each.value.target_network_id
+                domain         = dns_peering_configs.key
+                target_network = dns_peering_configs.value.target_network_name
                 target_project = (
-                  each.value.target_project_id == null
+                  dns_peering_configs.value.target_project_id == null
                   ? var.project_id
-                  : each.value.target_project_id
+                  : dns_peering_configs.value.target_project_id
                 )
               }
             }
diff --git a/modules/agent-engine/agent-unmanaged.tf b/modules/agent-engine/agent-unmanaged.tf
index e2d681ab0..0353a3183 100644
--- a/modules/agent-engine/agent-unmanaged.tf
+++ b/modules/agent-engine/agent-unmanaged.tf
@@ -48,6 +48,7 @@ resource "google_vertex_ai_reasoning_engine" "unmanaged" {
         var.agent_engine_config.max_instances != null ||
         var.agent_engine_config.min_instances != null ||
         var.agent_engine_config.resource_limits != null ||
+        var.networking_config != null ||
         length(var.agent_engine_config.environment_variables) > 0 ||
         length(var.agent_engine_config.secret_environment_variables) > 0
         ? { 1 = 1 }
@@ -72,7 +73,6 @@ resource "google_vertex_ai_reasoning_engine" "unmanaged" {
         dynamic "psc_interface_config" {
           for_each = var.networking_config == null ? {} : { 1 = 1 }
 
-
           content {
             network_attachment = var.networking_config.network_attachment_id
 
@@ -80,12 +80,12 @@ resource "google_vertex_ai_reasoning_engine" "unmanaged" {
               for_each = var.networking_config.dns_peering_configs
 
               content {
-                domain         = each.key
-                target_network = each.value.target_network_id
+                domain         = dns_peering_configs.key
+                target_network = dns_peering_configs.value.target_network_name
                 target_project = (
-                  each.value.target_project_id == null
+                  dns_peering_configs.value.target_project_id == null
                   ? var.project_id
-                  : each.value.target_project_id
+                  : dns_peering_configs.value.target_project_id
                 )
               }
             }
diff --git a/tests/modules/agent_engine/examples/psc-i.yaml b/tests/modules/agent_engine/examples/psc-i.yaml
index 3de209afb..2b002b691 100644
--- a/tests/modules/agent_engine/examples/psc-i.yaml
+++ b/tests/modules/agent_engine/examples/psc-i.yaml
@@ -58,7 +58,17 @@ values:
     spec:
     - agent_framework: google-adk
       class_methods: null
-      deployment_spec: []
+      deployment_spec:
+      - env: []
+        psc_interface_config:
+        - dns_peering_configs:
+          - domain: example.com
+            target_network: my-vpc-1
+            target_project: project-id
+          - domain: my-company.local
+            target_network: my-vpc-2
+            target_project: my-other-project
+        secret_env: []
       package_spec: []
       service_account: my-agent@project-id.iam.gserviceaccount.com
       source_code_spec: