diff --git a/package-lock.json b/package-lock.json
index 5cf96414d5f1..eeef54684fdf 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -52,7 +52,7 @@
         "date-fns-tz": "^2.0.0",
         "dom-serializer": "^0.2.2",
         "domhandler": "^4.3.0",
-        "expensify-common": "git+ssh://git@github.com/Expensify/expensify-common.git#a8ed0f8e1be3a1e09016e07a74cfd13c85bbc167",
+        "expensify-common": "git+ssh://git@github.com/Expensify/expensify-common.git#ee0f33865e3a27245e5cf01ed0c62cf88d44bb10",
         "expo": "^50.0.3",
         "expo-av": "~13.10.4",
         "expo-image": "1.10.1",
@@ -30570,8 +30570,8 @@
     },
     "node_modules/expensify-common": {
       "version": "1.0.0",
-      "resolved": "git+ssh://git@github.com/Expensify/expensify-common.git#a8ed0f8e1be3a1e09016e07a74cfd13c85bbc167",
-      "integrity": "sha512-3d/JHWgeS+LFPRahCAXdLwnBYQk4XUYybtgCm7VsdmMDtCeGUTksLsEY7F1Zqm+ULqZjmCtYwAi8IPKy0fsSOw==",
+      "resolved": "git+ssh://git@github.com/Expensify/expensify-common.git#ee0f33865e3a27245e5cf01ed0c62cf88d44bb10",
+      "integrity": "sha512-1w2PmSG12JxHxG6hYfBrGoJz3WqQGI9QgTVmRb9lDdy482ZH6ZtgOR8LURlPB0x6FjT+IKs6zbKQqE1eNXzE/g==",
       "license": "MIT",
       "dependencies": {
         "classnames": "2.5.0",
diff --git a/package.json b/package.json
index 717a13e1c110..d5e733efdbd3 100644
--- a/package.json
+++ b/package.json
@@ -103,7 +103,7 @@
     "date-fns-tz": "^2.0.0",
     "dom-serializer": "^0.2.2",
     "domhandler": "^4.3.0",
-    "expensify-common": "git+ssh://git@github.com/Expensify/expensify-common.git#a8ed0f8e1be3a1e09016e07a74cfd13c85bbc167",
+    "expensify-common": "git+ssh://git@github.com/Expensify/expensify-common.git#ee0f33865e3a27245e5cf01ed0c62cf88d44bb10",
     "expo": "^50.0.3",
     "expo-av": "~13.10.4",
     "expo-image": "1.10.1",
diff --git a/src/components/HTMLEngineProvider/HTMLRenderers/MentionUserRenderer.tsx b/src/components/HTMLEngineProvider/HTMLRenderers/MentionUserRenderer.tsx
index 5d8c0f6ef81e..0327b6bc6f56 100644
--- a/src/components/HTMLEngineProvider/HTMLRenderers/MentionUserRenderer.tsx
+++ b/src/components/HTMLEngineProvider/HTMLRenderers/MentionUserRenderer.tsx
@@ -1,3 +1,4 @@
+import Str from 'expensify-common/lib/str';
 import cloneDeep from 'lodash/cloneDeep';
 import isEmpty from 'lodash/isEmpty';
 import React from 'react';
@@ -65,10 +66,11 @@ function MentionUserRenderer({style, tnode, TDefaultRenderer, currentUserPersona
         // We need to remove the LTR unicode and leading @ from data as it is not part of the login
         displayNameOrLogin = tnodeClone.data.replace(CONST.UNICODE.LTR, '').slice(1);
         // We need to replace tnode.data here because we will pass it to TNodeChildrenRenderer below
-        asMutable(tnodeClone).data = tnodeClone.data.replace(displayNameOrLogin, getMentionDisplayText(displayNameOrLogin, htmlAttributeAccountID));
+        asMutable(tnodeClone).data = tnodeClone.data.replace(displayNameOrLogin, Str.removeSMSDomain(getMentionDisplayText(displayNameOrLogin, htmlAttributeAccountID)));
 
         accountID = PersonalDetailsUtils.getAccountIDsByLogins([displayNameOrLogin])?.[0];
         navigationRoute = ROUTES.DETAILS.getRoute(displayNameOrLogin);
+        displayNameOrLogin = Str.removeSMSDomain(displayNameOrLogin);
     } else {
         // If neither an account ID or email is provided, don't render anything
         return null;
diff --git a/src/components/SelectionList/UserListItem.tsx b/src/components/SelectionList/UserListItem.tsx
index 882ca56076bd..2a3a8dd04a79 100644
--- a/src/components/SelectionList/UserListItem.tsx
+++ b/src/components/SelectionList/UserListItem.tsx
@@ -1,3 +1,4 @@
+import Str from 'expensify-common/lib/str';
 import React from 'react';
 import {View} from 'react-native';
 import MultipleAvatars from '@components/MultipleAvatars';
@@ -81,7 +82,7 @@ function UserListItem({
                     <View style={[styles.flex1, styles.flexColumn, styles.justifyContentCenter, styles.alignItemsStretch, styles.optionRow]}>
                         <TextWithTooltip
                             shouldShowTooltip={showTooltip}
-                            text={item.text ?? ''}
+                            text={Str.removeSMSDomain(item.text ?? '')}
                             style={[
                                 styles.optionDisplayName,
                                 isFocused ? styles.sidebarLinkActiveText : styles.sidebarLinkText,
@@ -93,7 +94,7 @@ function UserListItem({
                         {!!item.alternateText && (
                             <TextWithTooltip
                                 shouldShowTooltip={showTooltip}
-                                text={item.alternateText}
+                                text={Str.removeSMSDomain(item.alternateText ?? '')}
                                 style={[styles.textLabelSupporting, styles.lh16, styles.pre]}
                             />
                         )}
diff --git a/src/libs/PersonalDetailsUtils.ts b/src/libs/PersonalDetailsUtils.ts
index 9dd60eeebcef..65aadd440010 100644
--- a/src/libs/PersonalDetailsUtils.ts
+++ b/src/libs/PersonalDetailsUtils.ts
@@ -26,6 +26,13 @@ Onyx.connect({
 
 function getDisplayNameOrDefault(passedPersonalDetails?: Partial<PersonalDetails> | null, defaultValue = '', shouldFallbackToHidden = true, shouldAddCurrentUserPostfix = false): string {
     let displayName = passedPersonalDetails?.displayName ? passedPersonalDetails.displayName.replace(CONST.REGEX.MERGED_ACCOUNT_PREFIX, '') : '';
+
+    // If the displayName is not set by the user, the backend sets the diplayName same as the login so
+    // we need to remove the sms domain from the displayName if it is an sms login.
+    if (displayName === passedPersonalDetails?.login && Str.isSMSLogin(passedPersonalDetails?.login)) {
+        displayName = Str.removeSMSDomain(displayName);
+    }
+
     if (shouldAddCurrentUserPostfix && !!displayName) {
         displayName = `${displayName} (${Localize.translateLocal('common.you').toLowerCase()})`;
     }
diff --git a/src/libs/SidebarUtils.ts b/src/libs/SidebarUtils.ts
index ff1b96601951..7bf163416054 100644
--- a/src/libs/SidebarUtils.ts
+++ b/src/libs/SidebarUtils.ts
@@ -304,7 +304,8 @@ function getOptionData({
     const lastActorDisplayName = OptionsListUtils.getLastActorDisplayName(lastActorDetails, hasMultipleParticipants);
     const lastMessageTextFromReport = OptionsListUtils.getLastMessageTextForReport(report, lastActorDetails, policy);
 
-    let lastMessageText = lastMessageTextFromReport;
+    // We need to remove sms domain in case the last message text has a phone number mention with sms domain.
+    let lastMessageText = Str.removeSMSDomain(lastMessageTextFromReport);
 
     const lastAction = visibleReportActionItems[report.reportID];