diff --git a/framework/address/validation.go b/framework/address/validation.go
index 4e2b38a..a165adc 100644
--- a/framework/address/validation.go
+++ b/framework/address/validation.go
@@ -20,6 +20,8 @@ package address
 
 import (
 	"strings"
+
+	"golang.org/x/net/idna"
 )
 
 /*
@@ -109,17 +111,23 @@ func ValidMailboxName(mbox string) bool {
 
 // ValidDomain checks whether the specified string is a valid DNS domain.
 func ValidDomain(domain string) bool {
-	if len(domain) > 255 {
+	if len(domain) > 255 || len(domain) == 0 {
 		return false
 	}
-	if strings.HasPrefix(domain, ".") || strings.HasSuffix(domain, ".") {
+	if strings.HasPrefix(domain, ".") {
 		return false
 	}
 	if strings.Contains(domain, "..") {
 		return false
 	}
 
-	labels := strings.Split(domain, ".")
+	// Length checks are to be applied to A-labels form.
+	// maddy uses U-labels representation across the code (for lookups, etc).
+	domainASCII, err := idna.ToASCII(domain)
+	if err != nil {
+		return false
+	}
+	labels := strings.Split(domainASCII, ".")
 	for _, label := range labels {
 		if len(label) > 64 {
 			return false
diff --git a/framework/address/validation_test.go b/framework/address/validation_test.go
index 9416e55..fdac834 100644
--- a/framework/address/validation_test.go
+++ b/framework/address/validation_test.go
@@ -1,6 +1,7 @@
 package address_test
 
 import (
+	"strings"
 	"testing"
 
 	"github.com/foxcpp/maddy/framework/address"
@@ -11,3 +12,22 @@ func TestValidMailboxName(t *testing.T) {
 		t.Error("caddy.bug should be valid mailbox name")
 	}
 }
+
+func TestValidDomain(t *testing.T) {
+	for _, c := range []struct {
+		Domain string
+		Valid  bool
+	}{
+		{Domain: "maddy.email", Valid: true},
+		{Domain: "", Valid: false},
+		{Domain: "maddy.email.", Valid: true},
+		{Domain: "..", Valid: false},
+		{Domain: strings.Repeat("a", 256), Valid: false},
+		{Domain: "äõäoaõoäaõaäõaoäaoaäõoaäooaoaoiuaiauäõiuüõaõäiauõaaa.tld", Valid: true},            // https://github.com/foxcpp/maddy/issues/554
+		{Domain: "xn--oaoaaaoaoaoaooaoaoiuaiauiuaiauaaa-f1cadccdcmd01eddchqcbe07a.tld", Valid: true}, // https://github.com/foxcpp/maddy/issues/554
+	} {
+		if actual := address.ValidDomain(c.Domain); actual != c.Valid {
+			t.Errorf("expected domain %v to be valid=%v, but got %v", c.Domain, c.Valid, actual)
+		}
+	}
+}