befreundet sein mit
to be friends with
To have a friendly relationship with someone.
Anna und ich sind schon seit dem Kindergarten miteinander befreundet.
Anna and I have been friends with each other since kindergarten.

friends with / friendly
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to be friends with
To have a friendly relationship with someone.
Anna und ich sind schon seit dem Kindergarten miteinander befreundet.
Anna and I have been friends with each other since kindergarten.

'Befreundet' (friends with / friendly) is the past participle form of the verb 'befreunden' (to befriend). Today it is used almost exclusively like an adjective and describes the state of being someone's friend.
Wir sind seit unserer Kindheit eng befreundet.
We have been close friends since our childhood.
The word is not conjugated like a normal verb. You do not say 'ich befreunde'. The correct construction is always with the verb 'sein' (to be): 'ich bin befreundet' (I am friends with), 'wir sind befreundet' (we are friends).
Sie ist mit meiner Schwester befreundet.
She is friends with my sister.
When saying who you are friends with, the preposition 'mit' (with) and the dative are always used. Another common form is 'miteinander befreundet sein' (to be friends with each other).
Er ist mit dem neuen Kollegen gut befreundet.
He is good friends with the new colleague.
When 'befreundet' (friendly) comes before a noun, it describes a person or group with whom the subject of the sentence has a friendly relationship.
Ein befreundeter Arzt hat mir einen guten Rat gegeben.
A doctor friend gave me some good advice.
known
'bekannt' and 'befreundet' can both describe relationships between people. Here, 'bekannt' means that you know someone or have had contact with them before. However, the relationship may be very casual. 'befreundet' means that there is a friendship. Learners may confuse the words because, of course, you are also acquainted with your friends. But not every person you know is a friend. For a casual acquaintance, 'bekannt' fits; for a real friendship, 'befreundet' fits.

Wir sind seit der Schulzeit eng befreundet.
We have been close friends since our school days.
Anna ist mir aus dem Sprachkurs bekannt.
Anna is familiar to me from the language course.