Hi @Alexander Butz ,
I'm glad that you were able to resolve your issue and thank you for posting your solution so that others experiencing the same thing can easily reference this!
Since the Microsoft Q&A community has a policy that "The question author cannot accept their own answer. They can only accept answers by others", I'll repost your solution in case you'd like to Accept the answer.
Issue:
When attempting to access a Service Bus Namespace (Premium) via Private Endpoint from a VNet-integrated APIM instance, DNS resolution was not returning the private IP.
Despite having correct configurations for Private DNS Zones and Private Endpoints (all showing Approved and Succeeded states), DNS queries resolved to the public IP rather than the private one. The issue persisted even after verifying route tables, NSGs, and the correctness of DNS zone names and records.
Solution:
The root cause was traced to a Private DNS Resolver that was connected to a peered VNet. According to Azure Support, if this DNS Resolver is not configured correctly, it can interfere with private DNS resolution, even in other connected VNets.
Once this misconfigured DNS Resolver was identified, it became clear why the correct private IPs were not being returned for specific services (like Service Bus), while others (like Key Vault) were resolving correctly.
Please click Accept Answer and kindly upvote it so that other people who faces similar issue may get benefitted from it.