diff --git a/crates/validation/src/materialization.rs b/crates/validation/src/materialization.rs
index 396ce4cf140..578e5b5aca4 100644
--- a/crates/validation/src/materialization.rs
+++ b/crates/validation/src/materialization.rs
@@ -114,7 +114,7 @@ async fn walk_materialization<C: Connectors>(
     let models::MaterializationDef {
         on_incompatible_schema_change,
         source: sources,
-        target_naming,
+        mut target_naming,
         endpoint,
         bindings: bindings_model,
         mut shards,
@@ -124,6 +124,23 @@ async fn walk_materialization<C: Connectors>(
         reset,
     } = model;
 
+    // Model fix: Promote source.target_naming == WithSchema to top-level
+    // MatchSourceStructure. These represent identical behavior, and this
+    // progressive upgrade lets us eventually remove the legacy field.
+    if target_naming.is_none() {
+        if let Some(source) = &sources {
+            if source.to_normalized_def().target_naming == models::TargetNaming::WithSchema {
+                target_naming = Some(models::TargetNamingStrategy::MatchSourceStructure {
+                    table_template: None,
+                    schema_template: None,
+                });
+                model_fixes.push(
+                    "promoted source.targetNaming 'withSchema' to top-level targetNaming 'matchSourceStructure'".to_string(),
+                );
+            }
+        }
+    }
+
     indexed::walk_name(
         scope,
         "materialization",
diff --git a/crates/validation/tests/snapshots/transition_tests__target_naming_no_promotion_when_set.snap b/crates/validation/tests/snapshots/transition_tests__target_naming_no_promotion_when_set.snap
new file mode 100644
index 00000000000..f9085e820d4
--- /dev/null
+++ b/crates/validation/tests/snapshots/transition_tests__target_naming_no_promotion_when_set.snap
@@ -0,0 +1,98 @@
+---
+source: crates/validation/tests/transition_tests.rs
+expression: "(&outcome.built_materializations[0].model,\n&outcome.built_materializations[0].model_fixes)"
+---
+(
+    Some(
+        MaterializationDef {
+            source: Some(
+                Configured(
+                    SourceDef {
+                        capture: Some(
+                            Capture(
+                                "the/capture",
+                            ),
+                        ),
+                        target_naming: WithSchema,
+                        delta_updates: false,
+                        fields_recommended: Bool(
+                            true,
+                        ),
+                    },
+                ),
+            ),
+            target_naming: Some(
+                SingleSchema {
+                    schema: "my_schema",
+                    table_template: None,
+                },
+            ),
+            on_incompatible_schema_change: Backfill,
+            endpoint: Connector(
+                ConnectorConfig {
+                    image: "other/image",
+                    config: RawValue(
+                        {"a":"config"},
+                    ),
+                },
+            ),
+            bindings: [
+                MaterializationBinding {
+                    resource: RawValue(
+                        {"_meta":{"path":["table","path"]},"table":"bar"},
+                    ),
+                    source: Collection(
+                        Collection(
+                            "the/collection",
+                        ),
+                    ),
+                    disable: false,
+                    priority: 0,
+                    fields: MaterializationFields {
+                        group_by: [],
+                        require: {
+                            Field(
+                                "F1",
+                            ): RawValue(
+                                {},
+                            ),
+                            Field(
+                                "f_two",
+                            ): RawValue(
+                                {},
+                            ),
+                        },
+                        exclude: [
+                            Field(
+                                "F2",
+                            ),
+                        ],
+                        recommended: Bool(
+                            true,
+                        ),
+                    },
+                    backfill: 0,
+                    on_incompatible_schema_change: None,
+                },
+            ],
+            shards: ShardTemplate {
+                disable: false,
+                min_txn_duration: None,
+                max_txn_duration: None,
+                hot_standbys: None,
+                ring_buffer_size: None,
+                read_channel_size: None,
+                log_level: None,
+                flags: {},
+            },
+            expect_pub_id: None,
+            triggers: None,
+            delete: false,
+            reset: false,
+        },
+    ),
+    [
+        "removed dropped exclude projection FY of source collection the/collection",
+        "removed dropped exclude projection does/not/exist of source collection the/collection",
+    ],
+)
diff --git a/crates/validation/tests/snapshots/transition_tests__target_naming_promotion.snap b/crates/validation/tests/snapshots/transition_tests__target_naming_promotion.snap
new file mode 100644
index 00000000000..82667fba5aa
--- /dev/null
+++ b/crates/validation/tests/snapshots/transition_tests__target_naming_promotion.snap
@@ -0,0 +1,99 @@
+---
+source: crates/validation/tests/transition_tests.rs
+expression: "(&outcome.built_materializations[0].model,\n&outcome.built_materializations[0].model_fixes)"
+---
+(
+    Some(
+        MaterializationDef {
+            source: Some(
+                Configured(
+                    SourceDef {
+                        capture: Some(
+                            Capture(
+                                "the/capture",
+                            ),
+                        ),
+                        target_naming: WithSchema,
+                        delta_updates: false,
+                        fields_recommended: Bool(
+                            true,
+                        ),
+                    },
+                ),
+            ),
+            target_naming: Some(
+                MatchSourceStructure {
+                    table_template: None,
+                    schema_template: None,
+                },
+            ),
+            on_incompatible_schema_change: Backfill,
+            endpoint: Connector(
+                ConnectorConfig {
+                    image: "other/image",
+                    config: RawValue(
+                        {"a":"config"},
+                    ),
+                },
+            ),
+            bindings: [
+                MaterializationBinding {
+                    resource: RawValue(
+                        {"_meta":{"path":["table","path"]},"table":"bar"},
+                    ),
+                    source: Collection(
+                        Collection(
+                            "the/collection",
+                        ),
+                    ),
+                    disable: false,
+                    priority: 0,
+                    fields: MaterializationFields {
+                        group_by: [],
+                        require: {
+                            Field(
+                                "F1",
+                            ): RawValue(
+                                {},
+                            ),
+                            Field(
+                                "f_two",
+                            ): RawValue(
+                                {},
+                            ),
+                        },
+                        exclude: [
+                            Field(
+                                "F2",
+                            ),
+                        ],
+                        recommended: Bool(
+                            true,
+                        ),
+                    },
+                    backfill: 0,
+                    on_incompatible_schema_change: None,
+                },
+            ],
+            shards: ShardTemplate {
+                disable: false,
+                min_txn_duration: None,
+                max_txn_duration: None,
+                hot_standbys: None,
+                ring_buffer_size: None,
+                read_channel_size: None,
+                log_level: None,
+                flags: {},
+            },
+            expect_pub_id: None,
+            triggers: None,
+            delete: false,
+            reset: false,
+        },
+    ),
+    [
+        "promoted source.targetNaming 'withSchema' to top-level targetNaming 'matchSourceStructure'",
+        "removed dropped exclude projection FY of source collection the/collection",
+        "removed dropped exclude projection does/not/exist of source collection the/collection",
+    ],
+)
diff --git a/crates/validation/tests/transition_tests.rs b/crates/validation/tests/transition_tests.rs
index 187b26ce32e..861295147fc 100644
--- a/crates/validation/tests/transition_tests.rs
+++ b/crates/validation/tests/transition_tests.rs
@@ -643,6 +643,51 @@ driver:
     ));
 }
 
+#[test]
+fn test_target_naming_promotion() {
+    // When source.targetNaming is "withSchema" and no top-level targetNaming is set,
+    // validation should promote it to MatchSourceStructure as a model fix.
+    let outcome = common::run(
+        MODEL_YAML,
+        r#"
+test://example/catalog.yaml:
+  materializations:
+    the/materialization:
+      source:
+        capture: the/capture
+        targetNaming: withSchema
+    "#,
+    );
+    insta::assert_debug_snapshot!((
+        &outcome.built_materializations[0].model,
+        &outcome.built_materializations[0].model_fixes
+    ));
+}
+
+#[test]
+fn test_target_naming_no_promotion_when_set() {
+    // When top-level targetNaming is already set, source.targetNaming should not
+    // trigger promotion (the top-level value takes precedence).
+    let outcome = common::run(
+        MODEL_YAML,
+        r#"
+test://example/catalog.yaml:
+  materializations:
+    the/materialization:
+      source:
+        capture: the/capture
+        targetNaming: withSchema
+      targetNaming:
+        strategy: singleSchema
+        schema: my_schema
+    "#,
+    );
+    insta::assert_debug_snapshot!((
+        &outcome.built_materializations[0].model,
+        &outcome.built_materializations[0].model_fixes
+    ));
+}
+
 #[test]
 fn test_manual_redact_salt_override() {
     // Test that manually specified redact_salt overrides existing salt