diff --git a/clientapi/routing/directory.go b/clientapi/routing/directory.go
index b23dfbfb..ab85e86a 100644
--- a/clientapi/routing/directory.go
+++ b/clientapi/routing/directory.go
@@ -117,12 +117,16 @@ func SetLocalAlias(
 	// 1. The new method for checking for things matching an AS's namespace
 	// 2. Using an overall Regex object for all AS's just like we did for usernames
 	for _, appservice := range cfg.Derived.ApplicationServices {
-		if aliasNamespaces, ok := appservice.NamespaceMap["aliases"]; ok {
-			for _, namespace := range aliasNamespaces {
-				if namespace.Exclusive && namespace.RegexpObject.MatchString(alias) {
-					return util.JSONResponse{
-						Code: http.StatusBadRequest,
-						JSON: jsonerror.ASExclusive("Alias is reserved by an application service"),
+		// Don't prevent AS from creating aliases in its own namespace
+		// Note that Dendrite uses SenderLocalpart as UserID for AS users
+		if device.UserID != appservice.SenderLocalpart {
+			if aliasNamespaces, ok := appservice.NamespaceMap["aliases"]; ok {
+				for _, namespace := range aliasNamespaces {
+					if namespace.Exclusive && namespace.RegexpObject.MatchString(alias) {
+						return util.JSONResponse{
+							Code: http.StatusBadRequest,
+							JSON: jsonerror.ASExclusive("Alias is reserved by an application service"),
+						}
 					}
 				}
 			}