diff --git a/agent/connect/sni_test.go b/agent/connect/sni_test.go
index 26fae1da7..59e9f41fc 100644
--- a/agent/connect/sni_test.go
+++ b/agent/connect/sni_test.go
@@ -178,20 +178,43 @@ func TestQuerySNI(t *testing.T) {
 func TestTargetSNI(t *testing.T) {
 	// empty namespace, empty subset
 	require.Equal(t, "api.default.foo."+testTrustDomainSuffix1,
-		TargetSNI(structs.NewDiscoveryTarget("api", "", "", "default", "foo"), testTrustDomain1))
+		TargetSNI(structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:    "api",
+			Partition:  "default",
+			Datacenter: "foo",
+		}), testTrustDomain1))
 
 	require.Equal(t, "api.default.foo."+testTrustDomainSuffix1,
-		TargetSNI(structs.NewDiscoveryTarget("api", "", "", "", "foo"), testTrustDomain1))
+		TargetSNI(structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:    "api",
+			Datacenter: "foo",
+		}), testTrustDomain1))
 
 	// set namespace, empty subset
 	require.Equal(t, "api.neighbor.foo."+testTrustDomainSuffix2,
-		TargetSNI(structs.NewDiscoveryTarget("api", "", "neighbor", "default", "foo"), testTrustDomain2))
+		TargetSNI(structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:    "api",
+			Namespace:  "neighbor",
+			Partition:  "default",
+			Datacenter: "foo",
+		}), testTrustDomain2))
 
 	// empty namespace, set subset
 	require.Equal(t, "v2.api.default.foo."+testTrustDomainSuffix1,
-		TargetSNI(structs.NewDiscoveryTarget("api", "v2", "", "default", "foo"), testTrustDomain1))
+		TargetSNI(structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:       "api",
+			ServiceSubset: "v2",
+			Partition:     "default",
+			Datacenter:    "foo",
+		}), testTrustDomain1))
 
 	// set namespace, set subset
 	require.Equal(t, "canary.api.neighbor.foo."+testTrustDomainSuffix2,
-		TargetSNI(structs.NewDiscoveryTarget("api", "canary", "neighbor", "default", "foo"), testTrustDomain2))
+		TargetSNI(structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:       "api",
+			ServiceSubset: "canary",
+			Namespace:     "neighbor",
+			Partition:     "default",
+			Datacenter:    "foo",
+		}), testTrustDomain2))
 }
diff --git a/agent/consul/discovery_chain_endpoint_test.go b/agent/consul/discovery_chain_endpoint_test.go
index 21c34aa86..c1ad0fef3 100644
--- a/agent/consul/discovery_chain_endpoint_test.go
+++ b/agent/consul/discovery_chain_endpoint_test.go
@@ -56,8 +56,17 @@ func TestDiscoveryChainEndpoint_Get(t *testing.T) {
 		return &resp, nil
 	}
 
-	newTarget := func(service, serviceSubset, namespace, partition, datacenter string) *structs.DiscoveryTarget {
-		t := structs.NewDiscoveryTarget(service, serviceSubset, namespace, partition, datacenter)
+	newTarget := func(opts structs.DiscoveryTargetOpts) *structs.DiscoveryTarget {
+		if opts.Namespace == "" {
+			opts.Namespace = "default"
+		}
+		if opts.Partition == "" {
+			opts.Partition = "default"
+		}
+		if opts.Datacenter == "" {
+			opts.Datacenter = "dc1"
+		}
+		t := structs.NewDiscoveryTarget(opts)
 		t.SNI = connect.TargetSNI(t, connect.TestClusterID+".consul")
 		t.Name = t.SNI
 		t.ConnectTimeout = 5 * time.Second // default
@@ -119,7 +128,7 @@ func TestDiscoveryChainEndpoint_Get(t *testing.T) {
 				},
 			},
 			Targets: map[string]*structs.DiscoveryTarget{
-				"web.default.default.dc1": newTarget("web", "", "default", "default", "dc1"),
+				"web.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "web"}),
 			},
 		},
 	}
@@ -245,7 +254,7 @@ func TestDiscoveryChainEndpoint_Get(t *testing.T) {
 				},
 				Targets: map[string]*structs.DiscoveryTarget{
 					"web.default.default.dc1": targetWithConnectTimeout(
-						newTarget("web", "", "default", "default", "dc1"),
+						newTarget(structs.DiscoveryTargetOpts{Service: "web"}),
 						33*time.Second,
 					),
 				},
diff --git a/agent/consul/discoverychain/compile.go b/agent/consul/discoverychain/compile.go
index ed664878b..3a9a1f0ed 100644
--- a/agent/consul/discoverychain/compile.go
+++ b/agent/consul/discoverychain/compile.go
@@ -8,6 +8,7 @@ import (
 	"github.com/mitchellh/hashstructure"
 	"github.com/mitchellh/mapstructure"
 
+	"github.com/hashicorp/consul/acl"
 	"github.com/hashicorp/consul/agent/configentry"
 	"github.com/hashicorp/consul/agent/connect"
 	"github.com/hashicorp/consul/agent/structs"
@@ -576,7 +577,10 @@ func (c *compiler) assembleChain() error {
 	if router == nil {
 		// If no router is configured, move on down the line to the next hop of
 		// the chain.
-		node, err := c.getSplitterOrResolverNode(c.newTarget(c.serviceName, "", "", "", ""))
+		node, err := c.getSplitterOrResolverNode(c.newTarget(structs.DiscoveryTargetOpts{
+			Service: c.serviceName,
+		}))
+
 		if err != nil {
 			return err
 		}
@@ -626,11 +630,20 @@ func (c *compiler) assembleChain() error {
 		)
 		if dest.ServiceSubset == "" {
 			node, err = c.getSplitterOrResolverNode(
-				c.newTarget(svc, "", destNamespace, destPartition, ""),
-			)
+				c.newTarget(structs.DiscoveryTargetOpts{
+					Service:   svc,
+					Namespace: destNamespace,
+					Partition: destPartition,
+				},
+				))
 		} else {
 			node, err = c.getResolverNode(
-				c.newTarget(svc, dest.ServiceSubset, destNamespace, destPartition, ""),
+				c.newTarget(structs.DiscoveryTargetOpts{
+					Service:       svc,
+					ServiceSubset: dest.ServiceSubset,
+					Namespace:     destNamespace,
+					Partition:     destPartition,
+				}),
 				false,
 			)
 		}
@@ -642,7 +655,12 @@ func (c *compiler) assembleChain() error {
 
 	// If we have a router, we'll add a catch-all route at the end to send
 	// unmatched traffic to the next hop in the chain.
-	defaultDestinationNode, err := c.getSplitterOrResolverNode(c.newTarget(router.Name, "", router.NamespaceOrDefault(), router.PartitionOrDefault(), ""))
+	opts := structs.DiscoveryTargetOpts{
+		Service:   router.Name,
+		Namespace: router.NamespaceOrDefault(),
+		Partition: router.PartitionOrDefault(),
+	}
+	defaultDestinationNode, err := c.getSplitterOrResolverNode(c.newTarget(opts))
 	if err != nil {
 		return err
 	}
@@ -674,26 +692,36 @@ func newDefaultServiceRoute(serviceName, namespace, partition string) *structs.S
 	}
 }
 
-func (c *compiler) newTarget(service, serviceSubset, namespace, partition, datacenter string) *structs.DiscoveryTarget {
-	if service == "" {
+func (c *compiler) newTarget(opts structs.DiscoveryTargetOpts) *structs.DiscoveryTarget {
+	if opts.Service == "" {
 		panic("newTarget called with empty service which makes no sense")
 	}
 
-	t := structs.NewDiscoveryTarget(
-		service,
-		serviceSubset,
-		defaultIfEmpty(namespace, c.evaluateInNamespace),
-		defaultIfEmpty(partition, c.evaluateInPartition),
-		defaultIfEmpty(datacenter, c.evaluateInDatacenter),
-	)
+	if opts.Peer == "" {
+		opts.Datacenter = defaultIfEmpty(opts.Datacenter, c.evaluateInDatacenter)
+		opts.Namespace = defaultIfEmpty(opts.Namespace, c.evaluateInNamespace)
+		opts.Partition = defaultIfEmpty(opts.Partition, c.evaluateInPartition)
+	} else {
+		// Don't allow Peer and Datacenter.
+		opts.Datacenter = ""
+		// Peer and Partition cannot both be set.
+		opts.Partition = acl.PartitionOrDefault("")
+		// Default to "default" rather than c.evaluateInNamespace.
+		opts.Namespace = acl.PartitionOrDefault(opts.Namespace)
+	}
 
-	// Set default connect SNI. This will be overridden later if the service
-	// has an explicit SNI value configured in service-defaults.
-	t.SNI = connect.TargetSNI(t, c.evaluateInTrustDomain)
+	t := structs.NewDiscoveryTarget(opts)
 
-	// Use the same representation for the name. This will NOT be overridden
-	// later.
-	t.Name = t.SNI
+	// We don't have the peer's trust domain yet so we can't construct the SNI.
+	if opts.Peer == "" {
+		// Set default connect SNI. This will be overridden later if the service
+		// has an explicit SNI value configured in service-defaults.
+		t.SNI = connect.TargetSNI(t, c.evaluateInTrustDomain)
+
+		// Use the same representation for the name. This will NOT be overridden
+		// later.
+		t.Name = t.SNI
+	}
 
 	prev, ok := c.loadedTargets[t.ID]
 	if ok {
@@ -703,34 +731,30 @@ func (c *compiler) newTarget(service, serviceSubset, namespace, partition, datac
 	return t
 }
 
-func (c *compiler) rewriteTarget(t *structs.DiscoveryTarget, service, serviceSubset, partition, namespace, datacenter string) *structs.DiscoveryTarget {
-	var (
-		service2       = t.Service
-		serviceSubset2 = t.ServiceSubset
-		partition2     = t.Partition
-		namespace2     = t.Namespace
-		datacenter2    = t.Datacenter
-	)
+func (c *compiler) rewriteTarget(t *structs.DiscoveryTarget, opts structs.DiscoveryTargetOpts) *structs.DiscoveryTarget {
+	mergedOpts := t.ToDiscoveryTargetOpts()
 
-	if service != "" && service != service2 {
-		service2 = service
+	if opts.Service != "" && opts.Service != mergedOpts.Service {
+		mergedOpts.Service = opts.Service
 		// Reset the chosen subset if we reference a service other than our own.
-		serviceSubset2 = ""
+		mergedOpts.ServiceSubset = ""
 	}
-	if serviceSubset != "" {
-		serviceSubset2 = serviceSubset
+	if opts.ServiceSubset != "" {
+		mergedOpts.ServiceSubset = opts.ServiceSubset
 	}
-	if partition != "" {
-		partition2 = partition
+	if opts.Partition != "" {
+		mergedOpts.Partition = opts.Partition
 	}
-	if namespace != "" {
-		namespace2 = namespace
+	// Only use explicit Namespace with Peer
+	if opts.Namespace != "" || opts.Peer != "" {
+		mergedOpts.Namespace = opts.Namespace
 	}
-	if datacenter != "" {
-		datacenter2 = datacenter
+	if opts.Datacenter != "" {
+		mergedOpts.Datacenter = opts.Datacenter
 	}
+	mergedOpts.Peer = opts.Peer
 
-	return c.newTarget(service2, serviceSubset2, namespace2, partition2, datacenter2)
+	return c.newTarget(mergedOpts)
 }
 
 func (c *compiler) getSplitterOrResolverNode(target *structs.DiscoveryTarget) (*structs.DiscoveryGraphNode, error) {
@@ -803,10 +827,13 @@ func (c *compiler) getSplitterNode(sid structs.ServiceID) (*structs.DiscoveryGra
 			// fall through to group-resolver
 		}
 
-		node, err := c.getResolverNode(
-			c.newTarget(splitID.ID, split.ServiceSubset, splitID.NamespaceOrDefault(), splitID.PartitionOrDefault(), ""),
-			false,
-		)
+		opts := structs.DiscoveryTargetOpts{
+			Service:       splitID.ID,
+			ServiceSubset: split.ServiceSubset,
+			Namespace:     splitID.NamespaceOrDefault(),
+			Partition:     splitID.PartitionOrDefault(),
+		}
+		node, err := c.getResolverNode(c.newTarget(opts), false)
 		if err != nil {
 			return nil, err
 		}
@@ -881,11 +908,7 @@ RESOLVE_AGAIN:
 
 		redirectedTarget := c.rewriteTarget(
 			target,
-			redirect.Service,
-			redirect.ServiceSubset,
-			redirect.Partition,
-			redirect.Namespace,
-			redirect.Datacenter,
+			redirect.ToDiscoveryTargetOpts(),
 		)
 		if redirectedTarget.ID != target.ID {
 			target = redirectedTarget
@@ -895,14 +918,9 @@ RESOLVE_AGAIN:
 
 	// Handle default subset.
 	if target.ServiceSubset == "" && resolver.DefaultSubset != "" {
-		target = c.rewriteTarget(
-			target,
-			"",
-			resolver.DefaultSubset,
-			"",
-			"",
-			"",
-		)
+		target = c.rewriteTarget(target, structs.DiscoveryTargetOpts{
+			ServiceSubset: resolver.DefaultSubset,
+		})
 		goto RESOLVE_AGAIN
 	}
 
@@ -1027,56 +1045,54 @@ RESOLVE_AGAIN:
 			failover, ok = f["*"]
 		}
 
-		if ok {
-			// Determine which failover definitions apply.
-			var failoverTargets []*structs.DiscoveryTarget
-			if len(failover.Datacenters) > 0 {
-				for _, dc := range failover.Datacenters {
-					// Rewrite the target as per the failover policy.
-					failoverTarget := c.rewriteTarget(
-						target,
-						failover.Service,
-						failover.ServiceSubset,
-						target.Partition,
-						failover.Namespace,
-						dc,
-					)
-					if failoverTarget.ID != target.ID { // don't failover to yourself
-						failoverTargets = append(failoverTargets, failoverTarget)
-					}
-				}
-			} else {
+		if !ok {
+			return node, nil
+		}
+
+		// Determine which failover definitions apply.
+		var failoverTargets []*structs.DiscoveryTarget
+		if len(failover.Datacenters) > 0 {
+			opts := failover.ToDiscoveryTargetOpts()
+			for _, dc := range failover.Datacenters {
 				// Rewrite the target as per the failover policy.
-				failoverTarget := c.rewriteTarget(
-					target,
-					failover.Service,
-					failover.ServiceSubset,
-					target.Partition,
-					failover.Namespace,
-					"",
-				)
+				opts.Datacenter = dc
+				failoverTarget := c.rewriteTarget(target, opts)
 				if failoverTarget.ID != target.ID { // don't failover to yourself
 					failoverTargets = append(failoverTargets, failoverTarget)
 				}
 			}
-
-			// If we filtered everything out then no point in having a failover.
-			if len(failoverTargets) > 0 {
-				df := &structs.DiscoveryFailover{}
-				node.Resolver.Failover = df
-
-				// Take care of doing any redirects or configuration loading
-				// related to targets by cheating a bit and recursing into
-				// ourselves.
-				for _, target := range failoverTargets {
-					failoverResolveNode, err := c.getResolverNode(target, true)
-					if err != nil {
-						return nil, err
-					}
-					failoverTarget := failoverResolveNode.Resolver.Target
-					df.Targets = append(df.Targets, failoverTarget)
+		} else if len(failover.Targets) > 0 {
+			for _, t := range failover.Targets {
+				// Rewrite the target as per the failover policy.
+				failoverTarget := c.rewriteTarget(target, t.ToDiscoveryTargetOpts())
+				if failoverTarget.ID != target.ID { // don't failover to yourself
+					failoverTargets = append(failoverTargets, failoverTarget)
 				}
 			}
+		} else {
+			// Rewrite the target as per the failover policy.
+			failoverTarget := c.rewriteTarget(target, failover.ToDiscoveryTargetOpts())
+			if failoverTarget.ID != target.ID { // don't failover to yourself
+				failoverTargets = append(failoverTargets, failoverTarget)
+			}
+		}
+
+		// If we filtered everything out then no point in having a failover.
+		if len(failoverTargets) > 0 {
+			df := &structs.DiscoveryFailover{}
+			node.Resolver.Failover = df
+
+			// Take care of doing any redirects or configuration loading
+			// related to targets by cheating a bit and recursing into
+			// ourselves.
+			for _, target := range failoverTargets {
+				failoverResolveNode, err := c.getResolverNode(target, true)
+				if err != nil {
+					return nil, err
+				}
+				failoverTarget := failoverResolveNode.Resolver.Target
+				df.Targets = append(df.Targets, failoverTarget)
+			}
 		}
 	}
 
diff --git a/agent/consul/discoverychain/compile_test.go b/agent/consul/discoverychain/compile_test.go
index 221ac757f..6505fdb9e 100644
--- a/agent/consul/discoverychain/compile_test.go
+++ b/agent/consul/discoverychain/compile_test.go
@@ -46,6 +46,7 @@ func TestCompile(t *testing.T) {
 		"service and subset failover":                      testcase_ServiceAndSubsetFailover(),
 		"datacenter failover":                              testcase_DatacenterFailover(),
 		"datacenter failover with mesh gateways":           testcase_DatacenterFailover_WithMeshGateways(),
+		"target failover":                                  testcase_Failover_Targets(),
 		"noop split to resolver with default subset":       testcase_NoopSplit_WithDefaultSubset(),
 		"resolver with default subset":                     testcase_Resolve_WithDefaultSubset(),
 		"default resolver with external sni":               testcase_DefaultResolver_ExternalSNI(),
@@ -182,7 +183,7 @@ func testcase_JustRouterWithDefaults() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 
@@ -244,7 +245,7 @@ func testcase_JustRouterWithNoDestination() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 
@@ -294,7 +295,7 @@ func testcase_RouterWithDefaults_NoSplit_WithResolver() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			"main.default.default.dc1": targetWithConnectTimeout(
-				newTarget("main", "", "default", "default", "dc1", nil),
+				newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 				33*time.Second,
 			),
 		},
@@ -361,7 +362,7 @@ func testcase_RouterWithDefaults_WithNoopSplit_DefaultResolver() compileTestCase
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 
@@ -426,7 +427,10 @@ func testcase_NoopSplit_DefaultResolver_ProtocolFromProxyDefaults() compileTestC
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc1",
+			}, nil),
 		},
 	}
 
@@ -498,7 +502,7 @@ func testcase_RouterWithDefaults_WithNoopSplit_WithResolver() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			"main.default.default.dc1": targetWithConnectTimeout(
-				newTarget("main", "", "default", "default", "dc1", nil),
+				newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 				33*time.Second,
 			),
 		},
@@ -584,8 +588,11 @@ func testcase_RouteBypassesSplit() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
-			"bypass.other.default.default.dc1": newTarget("other", "bypass", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
+			"bypass.other.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "other",
+				ServiceSubset: "bypass",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == bypass",
 				}
@@ -638,7 +645,7 @@ func testcase_NoopSplit_DefaultResolver() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 
@@ -694,7 +701,7 @@ func testcase_NoopSplit_WithResolver() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			"main.default.default.dc1": targetWithConnectTimeout(
-				newTarget("main", "", "default", "default", "dc1", nil),
+				newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 				33*time.Second,
 			),
 		},
@@ -776,12 +783,19 @@ func testcase_SubsetSplit() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"v2.main.default.default.dc1": newTarget("main", "v2", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+
+			"v2.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v2",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 2",
 				}
 			}),
-			"v1.main.default.default.dc1": newTarget("main", "v1", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v1.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v1",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 1",
 				}
@@ -855,8 +869,8 @@ func testcase_ServiceSplit() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"foo.default.default.dc1": newTarget("foo", "", "default", "default", "dc1", nil),
-			"bar.default.default.dc1": newTarget("bar", "", "default", "default", "dc1", nil),
+			"foo.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "foo"}, nil),
+			"bar.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "bar"}, nil),
 		},
 	}
 
@@ -935,7 +949,10 @@ func testcase_SplitBypassesSplit() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"bypassed.next.default.default.dc1": newTarget("next", "bypassed", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"bypassed.next.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "next",
+				ServiceSubset: "bypassed",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == bypass",
 				}
@@ -973,7 +990,7 @@ func testcase_ServiceRedirect() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"other.default.default.dc1": newTarget("other", "", "default", "default", "dc1", nil),
+			"other.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "other"}, nil),
 		},
 	}
 
@@ -1019,7 +1036,10 @@ func testcase_ServiceAndSubsetRedirect() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"v2.other.default.default.dc1": newTarget("other", "v2", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v2.other.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "other",
+				ServiceSubset: "v2",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 2",
 				}
@@ -1055,7 +1075,10 @@ func testcase_DatacenterRedirect() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc9": newTarget("main", "", "default", "default", "dc9", nil),
+			"main.default.default.dc9": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc9",
+			}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect}
@@ -1095,7 +1118,10 @@ func testcase_DatacenterRedirect_WithMeshGateways() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc9": newTarget("main", "", "default", "default", "dc9", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc9": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc9",
+			}, func(t *structs.DiscoveryTarget) {
 				t.MeshGateway = structs.MeshGatewayConfig{
 					Mode: structs.MeshGatewayModeRemote,
 				}
@@ -1134,8 +1160,8 @@ func testcase_ServiceFailover() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1":   newTarget("main", "", "default", "default", "dc1", nil),
-			"backup.default.default.dc1": newTarget("backup", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1":   newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
+			"backup.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "backup"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect}
@@ -1177,8 +1203,8 @@ func testcase_ServiceFailoverThroughRedirect() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1":   newTarget("main", "", "default", "default", "dc1", nil),
-			"actual.default.default.dc1": newTarget("actual", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1":   newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
+			"actual.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "actual"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect}
@@ -1220,8 +1246,8 @@ func testcase_Resolver_CircularFailover() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1":   newTarget("main", "", "default", "default", "dc1", nil),
-			"backup.default.default.dc1": newTarget("backup", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1":   newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
+			"backup.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "backup"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect}
@@ -1261,8 +1287,11 @@ func testcase_ServiceAndSubsetFailover() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
-			"backup.main.default.default.dc1": newTarget("main", "backup", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
+			"backup.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "backup",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == backup",
 				}
@@ -1301,9 +1330,15 @@ func testcase_DatacenterFailover() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
-			"main.default.default.dc2": newTarget("main", "", "default", "default", "dc2", nil),
-			"main.default.default.dc4": newTarget("main", "", "default", "default", "dc4", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
+			"main.default.default.dc2": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc2",
+			}, nil),
+			"main.default.default.dc4": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc4",
+			}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect}
@@ -1350,17 +1385,105 @@ func testcase_DatacenterFailover_WithMeshGateways() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, func(t *structs.DiscoveryTarget) {
 				t.MeshGateway = structs.MeshGatewayConfig{
 					Mode: structs.MeshGatewayModeRemote,
 				}
 			}),
-			"main.default.default.dc2": newTarget("main", "", "default", "default", "dc2", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc2": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc2",
+			}, func(t *structs.DiscoveryTarget) {
 				t.MeshGateway = structs.MeshGatewayConfig{
 					Mode: structs.MeshGatewayModeRemote,
 				}
 			}),
-			"main.default.default.dc4": newTarget("main", "", "default", "default", "dc4", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc4": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc4",
+			}, func(t *structs.DiscoveryTarget) {
+				t.MeshGateway = structs.MeshGatewayConfig{
+					Mode: structs.MeshGatewayModeRemote,
+				}
+			}),
+		},
+	}
+	return compileTestCase{entries: entries, expect: expect}
+}
+
+func testcase_Failover_Targets() compileTestCase {
+	entries := newEntries()
+
+	entries.AddProxyDefaults(&structs.ProxyConfigEntry{
+		Kind: structs.ProxyDefaults,
+		Name: structs.ProxyConfigGlobal,
+		MeshGateway: structs.MeshGatewayConfig{
+			Mode: structs.MeshGatewayModeRemote,
+		},
+	})
+
+	entries.AddResolvers(
+		&structs.ServiceResolverConfigEntry{
+			Kind: "service-resolver",
+			Name: "main",
+			Failover: map[string]structs.ServiceResolverFailover{
+				"*": {
+					Targets: []structs.ServiceResolverFailoverTarget{
+						{Datacenter: "dc3"},
+						{Service: "new-main"},
+						{Peer: "cluster-01"},
+					},
+				},
+			},
+		},
+	)
+
+	expect := &structs.CompiledDiscoveryChain{
+		Protocol:  "tcp",
+		StartNode: "resolver:main.default.default.dc1",
+		Nodes: map[string]*structs.DiscoveryGraphNode{
+			"resolver:main.default.default.dc1": {
+				Type: structs.DiscoveryGraphNodeTypeResolver,
+				Name: "main.default.default.dc1",
+				Resolver: &structs.DiscoveryResolver{
+					ConnectTimeout: 5 * time.Second,
+					Target:         "main.default.default.dc1",
+					Failover: &structs.DiscoveryFailover{
+						Targets: []string{
+							"main.default.default.dc3",
+							"new-main.default.default.dc1",
+							"main.default.default.external.cluster-01",
+						},
+					},
+				},
+			},
+		},
+		Targets: map[string]*structs.DiscoveryTarget{
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, func(t *structs.DiscoveryTarget) {
+				t.MeshGateway = structs.MeshGatewayConfig{
+					Mode: structs.MeshGatewayModeRemote,
+				}
+			}),
+			"main.default.default.dc3": newTarget(structs.DiscoveryTargetOpts{
+				Service:    "main",
+				Datacenter: "dc3",
+			}, func(t *structs.DiscoveryTarget) {
+				t.MeshGateway = structs.MeshGatewayConfig{
+					Mode: structs.MeshGatewayModeRemote,
+				}
+			}),
+			"new-main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "new-main"}, func(t *structs.DiscoveryTarget) {
+				t.MeshGateway = structs.MeshGatewayConfig{
+					Mode: structs.MeshGatewayModeRemote,
+				}
+			}),
+			"main.default.default.external.cluster-01": newTarget(structs.DiscoveryTargetOpts{
+				Service: "main",
+				Peer:    "cluster-01",
+			}, func(t *structs.DiscoveryTarget) {
+				t.SNI = ""
+				t.Name = ""
+				t.Datacenter = ""
 				t.MeshGateway = structs.MeshGatewayConfig{
 					Mode: structs.MeshGatewayModeRemote,
 				}
@@ -1422,7 +1545,10 @@ func testcase_NoopSplit_WithDefaultSubset() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"v2.main.default.default.dc1": newTarget("main", "v2", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v2.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v2",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 2",
 				}
@@ -1452,7 +1578,7 @@ func testcase_DefaultResolver() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			// TODO-TARGET
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect}
@@ -1488,7 +1614,7 @@ func testcase_DefaultResolver_WithProxyDefaults() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, func(t *structs.DiscoveryTarget) {
 				t.MeshGateway = structs.MeshGatewayConfig{
 					Mode: structs.MeshGatewayModeRemote,
 				}
@@ -1530,7 +1656,7 @@ func testcase_ServiceMetaProjection() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 
@@ -1588,7 +1714,7 @@ func testcase_ServiceMetaProjectionWithRedirect() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"other.default.default.dc1": newTarget("other", "", "default", "default", "dc1", nil),
+			"other.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "other"}, nil),
 		},
 	}
 
@@ -1623,7 +1749,7 @@ func testcase_RedirectToDefaultResolverIsNotDefaultChain() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"other.default.default.dc1": newTarget("other", "", "default", "default", "dc1", nil),
+			"other.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "other"}, nil),
 		},
 	}
 
@@ -1658,7 +1784,10 @@ func testcase_Resolve_WithDefaultSubset() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"v2.main.default.default.dc1": newTarget("main", "v2", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v2.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v2",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 2",
 				}
@@ -1692,7 +1821,7 @@ func testcase_DefaultResolver_ExternalSNI() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, func(t *structs.DiscoveryTarget) {
 				t.SNI = "main.some.other.service.mesh"
 				t.External = true
 			}),
@@ -1857,11 +1986,17 @@ func testcase_MultiDatacenterCanary() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			"main.default.default.dc2": targetWithConnectTimeout(
-				newTarget("main", "", "default", "default", "dc2", nil),
+				newTarget(structs.DiscoveryTargetOpts{
+					Service:    "main",
+					Datacenter: "dc2",
+				}, nil),
 				33*time.Second,
 			),
 			"main.default.default.dc3": targetWithConnectTimeout(
-				newTarget("main", "", "default", "default", "dc3", nil),
+				newTarget(structs.DiscoveryTargetOpts{
+					Service:    "main",
+					Datacenter: "dc3",
+				}, nil),
 				33*time.Second,
 			),
 		},
@@ -2155,27 +2290,42 @@ func testcase_AllBellsAndWhistles() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"prod.redirected.default.default.dc1": newTarget("redirected", "prod", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"prod.redirected.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "redirected",
+				ServiceSubset: "prod",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "ServiceMeta.env == prod",
 				}
 			}),
-			"v1.main.default.default.dc1": newTarget("main", "v1", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v1.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v1",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 1",
 				}
 			}),
-			"v2.main.default.default.dc1": newTarget("main", "v2", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v2.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v2",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 2",
 				}
 			}),
-			"v3.main.default.default.dc1": newTarget("main", "v3", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"v3.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "v3",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{
 					Filter: "Service.Meta.version == 3",
 				}
 			}),
-			"default-subset.main.default.default.dc1": newTarget("main", "default-subset", "default", "default", "dc1", func(t *structs.DiscoveryTarget) {
+			"default-subset.main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{
+				Service:       "main",
+				ServiceSubset: "default-subset",
+			}, func(t *structs.DiscoveryTarget) {
 				t.Subset = structs.ServiceResolverSubset{OnlyPassing: true}
 			}),
 		},
@@ -2379,7 +2529,7 @@ func testcase_ResolverProtocolOverride() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			// TODO-TARGET
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect,
@@ -2413,7 +2563,7 @@ func testcase_ResolverProtocolOverrideIgnored() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			// TODO-TARGET
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect,
@@ -2451,7 +2601,7 @@ func testcase_RouterIgnored_ResolverProtocolOverride() compileTestCase {
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
 			// TODO-TARGET
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 	return compileTestCase{entries: entries, expect: expect,
@@ -2685,9 +2835,9 @@ func testcase_LBSplitterAndResolver() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"foo.default.default.dc1": newTarget("foo", "", "default", "default", "dc1", nil),
-			"bar.default.default.dc1": newTarget("bar", "", "default", "default", "dc1", nil),
-			"baz.default.default.dc1": newTarget("baz", "", "default", "default", "dc1", nil),
+			"foo.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "foo"}, nil),
+			"bar.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "bar"}, nil),
+			"baz.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "baz"}, nil),
 		},
 	}
 
@@ -2743,7 +2893,7 @@ func testcase_LBResolver() compileTestCase {
 			},
 		},
 		Targets: map[string]*structs.DiscoveryTarget{
-			"main.default.default.dc1": newTarget("main", "", "default", "default", "dc1", nil),
+			"main.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "main"}, nil),
 		},
 	}
 
@@ -2791,8 +2941,17 @@ func newEntries() *configentry.DiscoveryChainSet {
 	}
 }
 
-func newTarget(service, serviceSubset, namespace, partition, datacenter string, modFn func(t *structs.DiscoveryTarget)) *structs.DiscoveryTarget {
-	t := structs.NewDiscoveryTarget(service, serviceSubset, namespace, partition, datacenter)
+func newTarget(opts structs.DiscoveryTargetOpts, modFn func(t *structs.DiscoveryTarget)) *structs.DiscoveryTarget {
+	if opts.Namespace == "" {
+		opts.Namespace = "default"
+	}
+	if opts.Partition == "" {
+		opts.Partition = "default"
+	}
+	if opts.Datacenter == "" {
+		opts.Datacenter = "dc1"
+	}
+	t := structs.NewDiscoveryTarget(opts)
 	t.SNI = connect.TargetSNI(t, "trustdomain.consul")
 	t.Name = t.SNI
 	t.ConnectTimeout = 5 * time.Second // default
diff --git a/agent/consul/state/peering_test.go b/agent/consul/state/peering_test.go
index b48e4f80d..bfce75295 100644
--- a/agent/consul/state/peering_test.go
+++ b/agent/consul/state/peering_test.go
@@ -1461,7 +1461,13 @@ func TestStateStore_ExportedServicesForPeer(t *testing.T) {
 	}
 
 	newTarget := func(service, serviceSubset, datacenter string) *structs.DiscoveryTarget {
-		t := structs.NewDiscoveryTarget(service, serviceSubset, "default", "default", datacenter)
+		t := structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:       service,
+			ServiceSubset: serviceSubset,
+			Partition:     "default",
+			Namespace:     "default",
+			Datacenter:    datacenter,
+		})
 		t.SNI = connect.TargetSNI(t, connect.TestTrustDomain)
 		t.Name = t.SNI
 		t.ConnectTimeout = 5 * time.Second // default
diff --git a/agent/discovery_chain_endpoint_test.go b/agent/discovery_chain_endpoint_test.go
index 8b4a7e272..42c082591 100644
--- a/agent/discovery_chain_endpoint_test.go
+++ b/agent/discovery_chain_endpoint_test.go
@@ -27,8 +27,17 @@ func TestDiscoveryChainRead(t *testing.T) {
 	defer a.Shutdown()
 	testrpc.WaitForTestAgent(t, a.RPC, "dc1")
 
-	newTarget := func(service, serviceSubset, namespace, partition, datacenter string) *structs.DiscoveryTarget {
-		t := structs.NewDiscoveryTarget(service, serviceSubset, namespace, partition, datacenter)
+	newTarget := func(opts structs.DiscoveryTargetOpts) *structs.DiscoveryTarget {
+		if opts.Namespace == "" {
+			opts.Namespace = "default"
+		}
+		if opts.Partition == "" {
+			opts.Partition = "default"
+		}
+		if opts.Datacenter == "" {
+			opts.Datacenter = "dc1"
+		}
+		t := structs.NewDiscoveryTarget(opts)
 		t.SNI = connect.TargetSNI(t, connect.TestClusterID+".consul")
 		t.Name = t.SNI
 		t.ConnectTimeout = 5 * time.Second // default
@@ -99,7 +108,7 @@ func TestDiscoveryChainRead(t *testing.T) {
 					},
 				},
 				Targets: map[string]*structs.DiscoveryTarget{
-					"web.default.default.dc1": newTarget("web", "", "default", "default", "dc1"),
+					"web.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "web"}),
 				},
 			}
 			require.Equal(t, expect, value.Chain)
@@ -144,7 +153,7 @@ func TestDiscoveryChainRead(t *testing.T) {
 					},
 				},
 				Targets: map[string]*structs.DiscoveryTarget{
-					"web.default.default.dc2": newTarget("web", "", "default", "default", "dc2"),
+					"web.default.default.dc2": newTarget(structs.DiscoveryTargetOpts{Service: "web", Datacenter: "dc2"}),
 				},
 			}
 			require.Equal(t, expect, value.Chain)
@@ -198,7 +207,7 @@ func TestDiscoveryChainRead(t *testing.T) {
 					},
 				},
 				Targets: map[string]*structs.DiscoveryTarget{
-					"web.default.default.dc1": newTarget("web", "", "default", "default", "dc1"),
+					"web.default.default.dc1": newTarget(structs.DiscoveryTargetOpts{Service: "web"}),
 				},
 			}
 			require.Equal(t, expect, value.Chain)
@@ -264,11 +273,11 @@ func TestDiscoveryChainRead(t *testing.T) {
 				},
 				Targets: map[string]*structs.DiscoveryTarget{
 					"web.default.default.dc1": targetWithConnectTimeout(
-						newTarget("web", "", "default", "default", "dc1"),
+						newTarget(structs.DiscoveryTargetOpts{Service: "web"}),
 						33*time.Second,
 					),
 					"web.default.default.dc2": targetWithConnectTimeout(
-						newTarget("web", "", "default", "default", "dc2"),
+						newTarget(structs.DiscoveryTargetOpts{Service: "web", Datacenter: "dc2"}),
 						33*time.Second,
 					),
 				},
@@ -280,7 +289,7 @@ func TestDiscoveryChainRead(t *testing.T) {
 	}))
 
 	expectTarget_DC1 := targetWithConnectTimeout(
-		newTarget("web", "", "default", "default", "dc1"),
+		newTarget(structs.DiscoveryTargetOpts{Service: "web"}),
 		22*time.Second,
 	)
 	expectTarget_DC1.MeshGateway = structs.MeshGatewayConfig{
@@ -288,7 +297,7 @@ func TestDiscoveryChainRead(t *testing.T) {
 	}
 
 	expectTarget_DC2 := targetWithConnectTimeout(
-		newTarget("web", "", "default", "default", "dc2"),
+		newTarget(structs.DiscoveryTargetOpts{Service: "web", Datacenter: "dc2"}),
 		22*time.Second,
 	)
 	expectTarget_DC2.MeshGateway = structs.MeshGatewayConfig{
diff --git a/agent/proxycfg/naming.go b/agent/proxycfg/naming.go
index 3bb0854b0..08ff216ed 100644
--- a/agent/proxycfg/naming.go
+++ b/agent/proxycfg/naming.go
@@ -63,22 +63,29 @@ func NewUpstreamIDFromServiceID(sid structs.ServiceID) UpstreamID {
 	return id
 }
 
-// TODO(peering): confirm we don't need peername here
 func NewUpstreamIDFromTargetID(tid string) UpstreamID {
-	// Drop the leading subset if one is present in the target ID.
-	separators := strings.Count(tid, ".")
-	if separators > 3 {
-		prefix := tid[:strings.Index(tid, ".")+1]
-		tid = strings.TrimPrefix(tid, prefix)
+	var id UpstreamID
+	split := strings.Split(tid, ".")
+
+	switch {
+	case split[len(split)-2] == "external":
+		id = UpstreamID{
+			Name:           split[0],
+			EnterpriseMeta: acl.NewEnterpriseMetaWithPartition(split[2], split[1]),
+			Peer:           split[4],
+		}
+	case len(split) == 5:
+		// Drop the leading subset if one is present in the target ID.
+		split = split[1:]
+		fallthrough
+	default:
+		id = UpstreamID{
+			Name:           split[0],
+			EnterpriseMeta: acl.NewEnterpriseMetaWithPartition(split[2], split[1]),
+			Datacenter:     split[3],
+		}
 	}
 
-	split := strings.SplitN(tid, ".", 4)
-
-	id := UpstreamID{
-		Name:           split[0],
-		EnterpriseMeta: acl.NewEnterpriseMetaWithPartition(split[2], split[1]),
-		Datacenter:     split[3],
-	}
 	id.normalize()
 	return id
 }
diff --git a/agent/proxycfg/naming_test.go b/agent/proxycfg/naming_test.go
index 23ff24165..2c4f5173a 100644
--- a/agent/proxycfg/naming_test.go
+++ b/agent/proxycfg/naming_test.go
@@ -35,6 +35,13 @@ func TestUpstreamIDFromTargetID(t *testing.T) {
 				Datacenter: "dc2",
 			},
 		},
+		"peered": {
+			tid: "foo.default.default.external.cluster-01",
+			expect: UpstreamID{
+				Name: "foo",
+				Peer: "cluster-01",
+			},
+		},
 	}
 
 	for name, tc := range cases {
diff --git a/agent/structs/config_entry_discoverychain.go b/agent/structs/config_entry_discoverychain.go
index 8bc0305b0..0ea260955 100644
--- a/agent/structs/config_entry_discoverychain.go
+++ b/agent/structs/config_entry_discoverychain.go
@@ -1233,6 +1233,16 @@ type ServiceResolverRedirect struct {
 	Datacenter string `json:",omitempty"`
 }
 
+func (r *ServiceResolverRedirect) ToDiscoveryTargetOpts() DiscoveryTargetOpts {
+	return DiscoveryTargetOpts{
+		Service:       r.Service,
+		ServiceSubset: r.ServiceSubset,
+		Namespace:     r.Namespace,
+		Partition:     r.Partition,
+		Datacenter:    r.Datacenter,
+	}
+}
+
 // There are some restrictions on what is allowed in here:
 //
 // - Service, ServiceSubset, Namespace, Datacenters, and Targets cannot all be
@@ -1275,6 +1285,14 @@ type ServiceResolverFailover struct {
 	Targets []ServiceResolverFailoverTarget `json:",omitempty"`
 }
 
+func (t *ServiceResolverFailover) ToDiscoveryTargetOpts() DiscoveryTargetOpts {
+	return DiscoveryTargetOpts{
+		Service:       t.Service,
+		ServiceSubset: t.ServiceSubset,
+		Namespace:     t.Namespace,
+	}
+}
+
 func (f *ServiceResolverFailover) isEmpty() bool {
 	return f.Service == "" && f.ServiceSubset == "" && f.Namespace == "" && len(f.Datacenters) == 0 && len(f.Targets) == 0
 }
@@ -1299,6 +1317,17 @@ type ServiceResolverFailoverTarget struct {
 	Peer string `json:",omitempty"`
 }
 
+func (t *ServiceResolverFailoverTarget) ToDiscoveryTargetOpts() DiscoveryTargetOpts {
+	return DiscoveryTargetOpts{
+		Service:       t.Service,
+		ServiceSubset: t.ServiceSubset,
+		Namespace:     t.Namespace,
+		Partition:     t.Partition,
+		Datacenter:    t.Datacenter,
+		Peer:          t.Peer,
+	}
+}
+
 // LoadBalancer determines the load balancing policy and configuration for services
 // issuing requests to this upstream service.
 type LoadBalancer struct {
diff --git a/agent/structs/discovery_chain.go b/agent/structs/discovery_chain.go
index 2bbe88f9e..ca64d070d 100644
--- a/agent/structs/discovery_chain.go
+++ b/agent/structs/discovery_chain.go
@@ -56,7 +56,12 @@ type CompiledDiscoveryChain struct {
 // ID returns an ID that encodes the service, namespace, partition, and datacenter.
 // This ID allows us to compare a discovery chain target to the chain upstream itself.
 func (c *CompiledDiscoveryChain) ID() string {
-	return chainID("", c.ServiceName, c.Namespace, c.Partition, c.Datacenter)
+	return chainID(DiscoveryTargetOpts{
+		Service:    c.ServiceName,
+		Namespace:  c.Namespace,
+		Partition:  c.Partition,
+		Datacenter: c.Datacenter,
+	})
 }
 
 func (c *CompiledDiscoveryChain) CompoundServiceName() ServiceName {
@@ -185,6 +190,7 @@ type DiscoveryTarget struct {
 	Namespace     string `json:",omitempty"`
 	Partition     string `json:",omitempty"`
 	Datacenter    string `json:",omitempty"`
+	Peer          string `json:",omitempty"`
 
 	MeshGateway MeshGatewayConfig     `json:",omitempty"`
 	Subset      ServiceResolverSubset `json:",omitempty"`
@@ -240,28 +246,52 @@ func (t *DiscoveryTarget) UnmarshalJSON(data []byte) error {
 	return nil
 }
 
-func NewDiscoveryTarget(service, serviceSubset, namespace, partition, datacenter string) *DiscoveryTarget {
+type DiscoveryTargetOpts struct {
+	Service       string
+	ServiceSubset string
+	Namespace     string
+	Partition     string
+	Datacenter    string
+	Peer          string
+}
+
+func NewDiscoveryTarget(opts DiscoveryTargetOpts) *DiscoveryTarget {
 	t := &DiscoveryTarget{
-		Service:       service,
-		ServiceSubset: serviceSubset,
-		Namespace:     namespace,
-		Partition:     partition,
-		Datacenter:    datacenter,
+		Service:       opts.Service,
+		ServiceSubset: opts.ServiceSubset,
+		Namespace:     opts.Namespace,
+		Partition:     opts.Partition,
+		Datacenter:    opts.Datacenter,
+		Peer:          opts.Peer,
 	}
 	t.setID()
 	return t
 }
 
-func chainID(subset, service, namespace, partition, dc string) string {
-	// NOTE: this format is similar to the SNI syntax for simplicity
-	if subset == "" {
-		return fmt.Sprintf("%s.%s.%s.%s", service, namespace, partition, dc)
+func (t *DiscoveryTarget) ToDiscoveryTargetOpts() DiscoveryTargetOpts {
+	return DiscoveryTargetOpts{
+		Service:       t.Service,
+		ServiceSubset: t.ServiceSubset,
+		Namespace:     t.Namespace,
+		Partition:     t.Partition,
+		Datacenter:    t.Datacenter,
+		Peer:          t.Peer,
 	}
-	return fmt.Sprintf("%s.%s.%s.%s.%s", subset, service, namespace, partition, dc)
+}
+
+func chainID(opts DiscoveryTargetOpts) string {
+	// NOTE: this format is similar to the SNI syntax for simplicity
+	if opts.Peer != "" {
+		return fmt.Sprintf("%s.%s.default.external.%s", opts.Service, opts.Namespace, opts.Peer)
+	}
+	if opts.ServiceSubset == "" {
+		return fmt.Sprintf("%s.%s.%s.%s", opts.Service, opts.Namespace, opts.Partition, opts.Datacenter)
+	}
+	return fmt.Sprintf("%s.%s.%s.%s.%s", opts.ServiceSubset, opts.Service, opts.Namespace, opts.Partition, opts.Datacenter)
 }
 
 func (t *DiscoveryTarget) setID() {
-	t.ID = chainID(t.ServiceSubset, t.Service, t.Namespace, t.Partition, t.Datacenter)
+	t.ID = chainID(t.ToDiscoveryTargetOpts())
 }
 
 func (t *DiscoveryTarget) String() string {
diff --git a/agent/xds/failover_math_test.go b/agent/xds/failover_math_test.go
index 29ac17ffe..296d1cc77 100644
--- a/agent/xds/failover_math_test.go
+++ b/agent/xds/failover_math_test.go
@@ -15,15 +15,40 @@ func TestFirstHealthyTarget(t *testing.T) {
 	warning := proxycfg.TestUpstreamNodesInStatus(t, "warning")
 	critical := proxycfg.TestUpstreamNodesInStatus(t, "critical")
 
-	warnOnlyPassingTarget := structs.NewDiscoveryTarget("all-warn", "", "default", "default", "dc1")
+	warnOnlyPassingTarget := structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+		Service:    "all-warn",
+		Namespace:  "default",
+		Partition:  "default",
+		Datacenter: "dc1",
+	})
 	warnOnlyPassingTarget.Subset.OnlyPassing = true
-	failOnlyPassingTarget := structs.NewDiscoveryTarget("all-fail", "", "default", "default", "dc1")
+	failOnlyPassingTarget := structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+		Service:    "all-fail",
+		Namespace:  "default",
+		Partition:  "default",
+		Datacenter: "dc1",
+	})
 	failOnlyPassingTarget.Subset.OnlyPassing = true
 
 	targets := map[string]*structs.DiscoveryTarget{
-		"all-ok.default.dc1":               structs.NewDiscoveryTarget("all-ok", "", "default", "default", "dc1"),
-		"all-warn.default.dc1":             structs.NewDiscoveryTarget("all-warn", "", "default", "default", "dc1"),
-		"all-fail.default.default.dc1":     structs.NewDiscoveryTarget("all-fail", "", "default", "default", "dc1"),
+		"all-ok.default.dc1": structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:    "all-ok",
+			Namespace:  "default",
+			Partition:  "default",
+			Datacenter: "dc1",
+		}),
+		"all-warn.default.dc1": structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:    "all-warn",
+			Namespace:  "default",
+			Partition:  "default",
+			Datacenter: "dc1",
+		}),
+		"all-fail.default.default.dc1": structs.NewDiscoveryTarget(structs.DiscoveryTargetOpts{
+			Service:    "all-fail",
+			Namespace:  "default",
+			Partition:  "default",
+			Datacenter: "dc1",
+		}),
 		"all-warn-onlypassing.default.dc1": warnOnlyPassingTarget,
 		"all-fail-onlypassing.default.dc1": failOnlyPassingTarget,
 	}