diff --git a/wp-includes/taxonomy.php b/wp-includes/taxonomy.php
index c7a923e8da..92ec413728 100644
--- a/wp-includes/taxonomy.php
+++ b/wp-includes/taxonomy.php
@@ -2903,15 +2903,29 @@ function wp_insert_term( $term, $taxonomy, $args = array() ) {
 		}
 	}
 
-	// Terms with duplicate names are not allowed at the same level of a taxonomy hierarchy.
-	if ( $existing_term = get_term_by( 'name', $name, $taxonomy ) ) {
-		if ( is_taxonomy_hierarchical( $taxonomy ) ) {
-			$siblings = get_terms( $taxonomy, array( 'fields' => 'names', 'get' => 'all', 'parent' => $parent ) );
-			if ( in_array( $name, $siblings ) ) {
-				return new WP_Error( 'term_exists', __( 'A term with the name already exists with this parent.' ), $existing_term->term_id );
+	/*
+	 * Prevent the creation of terms with duplicate names at the same level of a taxonomy hierarchy,
+	 * unless a unique slug has been explicitly provided.
+	 */
+	if ( $name_match = get_term_by( 'name', $name, $taxonomy ) ) {
+		$slug_match = get_term_by( 'slug', $slug, $taxonomy );
+		if ( ! $slug_provided || $name_match->slug === $slug || $slug_match ) {
+			if ( is_taxonomy_hierarchical( $taxonomy ) ) {
+				$siblings = get_terms( $taxonomy, array( 'get' => 'all', 'parent' => $parent ) );
+
+				$existing_term = null;
+				if ( $name_match->slug === $slug && in_array( $name, wp_list_pluck( $siblings, 'name' ) ) ) {
+					$existing_term = $name_match;
+				} elseif ( $slug_match && in_array( $slug, wp_list_pluck( $siblings, 'slug' ) ) ) {
+					$existing_term = $slug_match;
+				}
+
+				if ( $existing_term ) {
+					return new WP_Error( 'term_exists', __( 'A term with the name already exists with this parent.' ), $existing_term->term_id );
+				}
+			} else {
+				return new WP_Error( 'term_exists', __( 'A term with the name already exists in this taxonomy.' ), $name_match->term_id );
 			}
-		} else {
-			return new WP_Error( 'term_exists', __( 'A term with the name already exists in this taxonomy.' ), $existing_term->term_id );
 		}
 	}
 
diff --git a/wp-includes/version.php b/wp-includes/version.php
index ee770cadc0..81c0ca5da4 100644
--- a/wp-includes/version.php
+++ b/wp-includes/version.php
@@ -4,7 +4,7 @@
  *
  * @global string $wp_version
  */
-$wp_version = '4.2-beta1-31791';
+$wp_version = '4.2-beta1-31792';
 
 /**
  * Holds the WordPress DB revision, increments when changes are made to the WordPress DB schema.