diff --git a/changelog.d/fixes/12173-lmstudio-multi-account.md b/changelog.d/fixes/12173-lmstudio-multi-account.md
new file mode 100644
index 0000000000..848be79448
--- /dev/null
+++ b/changelog.d/fixes/12173-lmstudio-multi-account.md
@@ -0,0 +1 @@
+- fix(db): scope local-provider apiKey dedup to matching base URL so LM Studio/Ollama-style connections support multiple accounts (#12173)
diff --git a/src/lib/db/providers.ts b/src/lib/db/providers.ts
index 1cb3f5a73a..01c53ec443 100644
--- a/src/lib/db/providers.ts
+++ b/src/lib/db/providers.ts
@@ -35,6 +35,7 @@ import {
   parseProviderSpecificData,
   isMatchingOauthIdentity,
 } from "./webSessionDedup";
+import { LOCAL_PROVIDERS } from "@/shared/constants/providers";
 import { pickCodexConnectionForUser } from "@/lib/oauth/utils/codexConnectionSelection";
 import { isMicrosoftDesignerWebRetiredProviderId } from "@/shared/constants/designerWebRetirement";
 import { reconcileCodexUsageHistory } from "./providers/usageIdentityReconciliation";
@@ -417,6 +418,28 @@ export function getProviderConnectionDisplayMetadata(
 // createProviderConnection to keep that function below the complexity baseline.
 // provider_specific_data is plaintext JSON, so the value is compared directly
 // without decryption.
+/**
+ * #12173 — the API-key-value dedup (#3023) matches purely on `provider +
+ * apiKey`, which is correct for hosted providers where the key alone is the
+ * account identity. Local/self-hosted providers (LM Studio, Ollama, vLLM,
+ * llama.cpp, ...) commonly ship an optional/cosmetic API key, so users
+ * legitimately reuse the same placeholder value (e.g. "lm-studio") across two
+ * physically distinct servers that are actually distinguished by base URL.
+ * Gate the extra baseUrl check to this provider set only — hosted-provider
+ * dedup must stay untouched.
+ */
+function isLocalProviderId(providerId: unknown): boolean {
+  return (
+    typeof providerId === "string" &&
+    Object.prototype.hasOwnProperty.call(LOCAL_PROVIDERS, providerId)
+  );
+}
+
+/** Trim + strip a trailing slash so cosmetic differences don't defeat the match. */
+function normalizeBaseUrlForDedup(value: unknown): string {
+  return typeof value === "string" ? value.trim().replace(/\/+$/, "") : "";
+}
+
 function findExistingCookieConnection(
   db: DbLike,
   provider: unknown,
@@ -551,15 +574,25 @@ export async function createProviderConnection(data: JsonRecord) {
     // plaintext (trimmed) instead.
     const newApiKey = typeof data.apiKey === "string" ? data.apiKey.trim() : "";
     if (!existing && newApiKey) {
+      const isLocal = isLocalProviderId(data.provider);
+      const newBaseUrl = normalizeBaseUrlForDedup(providerSpecificData.baseUrl);
       const apiKeyRows = db
         .prepare("SELECT * FROM provider_connections WHERE provider = ? AND auth_type = 'apikey'")
         .all(data.provider) as JsonRecord[];
       for (const row of apiKeyRows) {
         const decrypted = decryptConnectionFields(toRecord(rowToCamel(row)));
-        if (toStringOrNull(decrypted.apiKey)?.trim() === newApiKey) {
-          existing = row;
-          break;
+        if (toStringOrNull(decrypted.apiKey)?.trim() !== newApiKey) continue;
+        // #12173 — for local/self-hosted providers, a differing base URL means
+        // this is a different physical server, not the same account; fall
+        // through to inserting a new connection even though the apiKey matches.
+        if (isLocal) {
+          const existingBaseUrl = normalizeBaseUrlForDedup(
+            parseProviderSpecificData(row.provider_specific_data)?.baseUrl
+          );
+          if (existingBaseUrl !== newBaseUrl) continue;
         }
+        existing = row;
+        break;
       }
     }
   } else if (data.authType === "cookie") {
diff --git a/tests/unit/provider-connection-local-baseurl-dedup.test.ts b/tests/unit/provider-connection-local-baseurl-dedup.test.ts
new file mode 100644
index 0000000000..e801c9594d
--- /dev/null
+++ b/tests/unit/provider-connection-local-baseurl-dedup.test.ts
@@ -0,0 +1,107 @@
+import test from "node:test";
+import assert from "node:assert/strict";
+import fs from "node:fs";
+import os from "node:os";
+import path from "node:path";
+
+const TEST_DATA_DIR = fs.mkdtempSync(path.join(os.tmpdir(), "omniroute-lmstudio-multi-"));
+process.env.DATA_DIR = TEST_DATA_DIR;
+process.env.API_KEY_SECRET = process.env.API_KEY_SECRET || "lmstudio-multi-test-secret";
+
+const core = await import("../../src/lib/db/core.ts");
+const providersDb = await import("../../src/lib/db/providers.ts");
+
+async function resetStorage() {
+  core.resetDbInstance();
+  fs.rmSync(TEST_DATA_DIR, { recursive: true, force: true, maxRetries: 5, retryDelay: 100 });
+  fs.mkdirSync(TEST_DATA_DIR, { recursive: true });
+}
+
+test.beforeEach(resetStorage);
+
+test.after(() => {
+  core.resetDbInstance();
+  fs.rmSync(TEST_DATA_DIR, { recursive: true, force: true, maxRetries: 5, retryDelay: 100 });
+});
+
+function connectionId(connection: unknown): unknown {
+  return (connection as { id?: unknown })?.id;
+}
+
+async function apiKeyConnections(provider: string) {
+  const all = await providersDb.getProviderConnections({});
+  return (all as Array<Record<string, unknown>>).filter(
+    (c) => c.provider === provider && c.authType === "apikey"
+  );
+}
+
+// #12173 — two distinct local LM Studio servers (different name, different
+// providerSpecificData.baseUrl) that happen to share the same optional API
+// key value must NOT collapse into one connection. The apikey-value dedup
+// (#3023) was written for hosted providers where the key IS the account
+// identity; for local/self-hosted providers the key is optional and users
+// commonly reuse the same placeholder value across independent servers that
+// are actually distinguished by base URL.
+test("two LM Studio connections with different baseUrl but same optional API key stay separate (#12173)", async () => {
+  const first = await providersDb.createProviderConnection({
+    provider: "lm-studio",
+    authType: "apikey",
+    name: "lmstudio-main",
+    apiKey: "lm-studio",
+    providerSpecificData: { baseUrl: "http://localhost:1234/v1" },
+  });
+  const second = await providersDb.createProviderConnection({
+    provider: "lm-studio",
+    authType: "apikey",
+    name: "lmstudio-second",
+    apiKey: "lm-studio",
+    providerSpecificData: { baseUrl: "http://192.168.1.50:1234/v1" },
+  });
+
+  const conns = await apiKeyConnections("lm-studio");
+  assert.equal(conns.length, 2, "distinct-baseUrl local connections must not be deduped onto one row");
+  assert.notEqual(connectionId(second), connectionId(first), "the second add must create a new connection, not overwrite the first");
+});
+
+// Same baseUrl + same apiKey for a local provider must still dedup to 1 row
+// (re-adding the same server should update, not duplicate).
+test("two LM Studio connections with the same baseUrl and same API key still dedup to one row (#12173)", async () => {
+  await providersDb.createProviderConnection({
+    provider: "lm-studio",
+    authType: "apikey",
+    name: "lmstudio-main",
+    apiKey: "lm-studio",
+    providerSpecificData: { baseUrl: "http://localhost:1234/v1" },
+  });
+  await providersDb.createProviderConnection({
+    provider: "lm-studio",
+    authType: "apikey",
+    name: "lmstudio-main-renamed",
+    apiKey: "lm-studio",
+    providerSpecificData: { baseUrl: "http://localhost:1234/v1/" },
+  });
+
+  const conns = await apiKeyConnections("lm-studio");
+  assert.equal(conns.length, 1, "re-adding the same local server (same baseUrl, trailing slash aside) must dedup to one row");
+});
+
+// Hosted providers (#3023) must keep matching purely on apiKey value —
+// no baseUrl carve-out for non-local providers.
+test("hosted provider (openai) apiKey-value dedup is unaffected by baseUrl (#12173 regression guard)", async () => {
+  const first = await providersDb.createProviderConnection({
+    provider: "openai",
+    authType: "apikey",
+    name: "openai-main",
+    apiKey: "sk-shared-secret",
+  });
+  const second = await providersDb.createProviderConnection({
+    provider: "openai",
+    authType: "apikey",
+    name: "openai-second",
+    apiKey: "sk-shared-secret",
+  });
+
+  const conns = await apiKeyConnections("openai");
+  assert.equal(conns.length, 1, "hosted-provider apiKey dedup (#3023) must still collapse to one row");
+  assert.equal(connectionId(second), connectionId(first), "the second add must update the same hosted connection");
+});