diff --git a/internal/diff/function.go b/internal/diff/function.go
index 4fa51ab6..d71cf46a 100644
--- a/internal/diff/function.go
+++ b/internal/diff/function.go
@@ -243,10 +243,17 @@ func generateFunctionSQL(function *ir.Function, targetSchema string) string {
 	// Note: Don't output PARALLEL UNSAFE (it's the default)
 
 	// Add SET search_path if specified
-	// Note: Output without outer quotes to handle multi-schema paths correctly
-	// e.g., "SET search_path = pg_catalog, public" not "SET search_path = 'pg_catalog, public'"
+	// Note: Multi-schema paths are output unquoted (e.g., "SET search_path = pg_catalog, public"),
+	// except for the empty search_path case which requires single quotes: SET search_path = ''
 	if function.SearchPath != "" {
-		stmt.WriteString(fmt.Sprintf("\nSET search_path = %s", function.SearchPath))
+		// PostgreSQL stores SET search_path = '' as search_path="" in proconfig.
+		// The extracted value is "" (two double-quote chars). Render as '' (single-quoted empty string).
+		// Only the whole-value empty case is handled; mixed paths (e.g. pg_catalog, "") are not expected.
+		if function.SearchPath == `""` {
+			stmt.WriteString("\nSET search_path = ''")
+		} else {
+			stmt.WriteString(fmt.Sprintf("\nSET search_path = %s", function.SearchPath))
+		}
 	}
 
 	// Add the function body
diff --git a/testdata/diff/create_function/issue_354_empty_search_path/diff.sql b/testdata/diff/create_function/issue_354_empty_search_path/diff.sql
new file mode 100644
index 00000000..b01d1a00
--- /dev/null
+++ b/testdata/diff/create_function/issue_354_empty_search_path/diff.sql
@@ -0,0 +1,12 @@
+CREATE OR REPLACE FUNCTION create_hello(
+    p_title text
+)
+RETURNS void
+LANGUAGE plpgsql
+VOLATILE
+SET search_path = ''
+AS $$
+BEGIN
+  INSERT INTO test (title) VALUES (p_title);
+END;
+$$;
diff --git a/testdata/diff/create_function/issue_354_empty_search_path/new.sql b/testdata/diff/create_function/issue_354_empty_search_path/new.sql
new file mode 100644
index 00000000..15d5c695
--- /dev/null
+++ b/testdata/diff/create_function/issue_354_empty_search_path/new.sql
@@ -0,0 +1,17 @@
+CREATE TABLE public.test (
+    id bigint GENERATED BY DEFAULT AS IDENTITY NOT NULL,
+    title text,
+    created_at timestamp with time zone DEFAULT now() NOT NULL,
+    CONSTRAINT test_pkey PRIMARY KEY (id)
+);
+
+CREATE OR REPLACE FUNCTION create_hello(p_title text)
+RETURNS void
+LANGUAGE plpgsql
+SECURITY INVOKER
+SET search_path = ''
+AS $$
+BEGIN
+  INSERT INTO public.test (title) VALUES (p_title);
+END;
+$$;
diff --git a/testdata/diff/create_function/issue_354_empty_search_path/old.sql b/testdata/diff/create_function/issue_354_empty_search_path/old.sql
new file mode 100644
index 00000000..466001a5
--- /dev/null
+++ b/testdata/diff/create_function/issue_354_empty_search_path/old.sql
@@ -0,0 +1,6 @@
+CREATE TABLE public.test (
+    id bigint GENERATED BY DEFAULT AS IDENTITY NOT NULL,
+    title text,
+    created_at timestamp with time zone DEFAULT now() NOT NULL,
+    CONSTRAINT test_pkey PRIMARY KEY (id)
+);
diff --git a/testdata/diff/create_function/issue_354_empty_search_path/plan.json b/testdata/diff/create_function/issue_354_empty_search_path/plan.json
new file mode 100644
index 00000000..674f3a36
--- /dev/null
+++ b/testdata/diff/create_function/issue_354_empty_search_path/plan.json
@@ -0,0 +1,20 @@
+{
+  "version": "1.0.0",
+  "pgschema_version": "1.7.4",
+  "created_at": "1970-01-01T00:00:00Z",
+  "source_fingerprint": {
+    "hash": "742d612cedabf2d80d87df6c7d9fac8911e008b29ef8e15d16a32d2edf43ddd9"
+  },
+  "groups": [
+    {
+      "steps": [
+        {
+          "sql": "CREATE OR REPLACE FUNCTION create_hello(\n    p_title text\n)\nRETURNS void\nLANGUAGE plpgsql\nVOLATILE\nSET search_path = ''\nAS $$\nBEGIN\n  INSERT INTO test (title) VALUES (p_title);\nEND;\n$$;",
+          "type": "function",
+          "operation": "create",
+          "path": "public.create_hello"
+        }
+      ]
+    }
+  ]
+}
diff --git a/testdata/diff/create_function/issue_354_empty_search_path/plan.sql b/testdata/diff/create_function/issue_354_empty_search_path/plan.sql
new file mode 100644
index 00000000..b01d1a00
--- /dev/null
+++ b/testdata/diff/create_function/issue_354_empty_search_path/plan.sql
@@ -0,0 +1,12 @@
+CREATE OR REPLACE FUNCTION create_hello(
+    p_title text
+)
+RETURNS void
+LANGUAGE plpgsql
+VOLATILE
+SET search_path = ''
+AS $$
+BEGIN
+  INSERT INTO test (title) VALUES (p_title);
+END;
+$$;
diff --git a/testdata/diff/create_function/issue_354_empty_search_path/plan.txt b/testdata/diff/create_function/issue_354_empty_search_path/plan.txt
new file mode 100644
index 00000000..1c1a2b22
--- /dev/null
+++ b/testdata/diff/create_function/issue_354_empty_search_path/plan.txt
@@ -0,0 +1,23 @@
+Plan: 1 to add.
+
+Summary by type:
+  functions: 1 to add
+
+Functions:
+  + create_hello
+
+DDL to be executed:
+--------------------------------------------------
+
+CREATE OR REPLACE FUNCTION create_hello(
+    p_title text
+)
+RETURNS void
+LANGUAGE plpgsql
+VOLATILE
+SET search_path = ''
+AS $$
+BEGIN
+  INSERT INTO test (title) VALUES (p_title);
+END;
+$$;