diff --git a/Gemfile b/Gemfile
index 70ebd835..e05aebac 100644
--- a/Gemfile
+++ b/Gemfile
@@ -95,3 +95,10 @@ gem 'json-schema', '~> 6.0'
 gem 'triangulum', '0.25.5'
 
 gem 'benchmark'
+
+# OpenTelemetry
+gem 'opentelemetry-exporter-otlp', '~> 0.34.0' # we need this to get traces
+gem 'opentelemetry-exporter-otlp-logs', '~> 0.5.1' # we need this to get logs
+gem 'opentelemetry-exporter-otlp-metrics', '~> 0.10.0' # we need this to get metrics
+gem 'opentelemetry-instrumentation-all', '~> 0.94.0' # we need this for logs and traces
+gem 'opentelemetry-instrumentation-logger', '~> 0.4.0' # we need this to get logs
diff --git a/Gemfile.lock b/Gemfile.lock
index 8ffaa24a..70801da0 100644
--- a/Gemfile.lock
+++ b/Gemfile.lock
@@ -212,6 +212,214 @@ GEM
       mini_portile2 (~> 2.8.2)
       racc (~> 1.4)
     open3 (0.2.1)
+    opentelemetry-api (1.10.0)
+      logger
+    opentelemetry-common (0.25.0)
+      opentelemetry-api (~> 1.0)
+    opentelemetry-exporter-otlp (0.34.0)
+      google-protobuf (>= 3.18)
+      googleapis-common-protos-types (~> 1.3)
+      opentelemetry-api (~> 1.1)
+      opentelemetry-common (~> 0.20)
+      opentelemetry-sdk (~> 1.10)
+      opentelemetry-semantic_conventions
+    opentelemetry-exporter-otlp-logs (0.5.1)
+      google-protobuf (>= 3.18)
+      googleapis-common-protos-types (~> 1.3)
+      opentelemetry-api (~> 1.1)
+      opentelemetry-common (~> 0.20)
+      opentelemetry-logs-api (~> 0.1)
+      opentelemetry-logs-sdk (~> 0.1)
+      opentelemetry-sdk
+      opentelemetry-semantic_conventions
+    opentelemetry-exporter-otlp-metrics (0.10.0)
+      google-protobuf (>= 3.18, < 5.0)
+      googleapis-common-protos-types (~> 1.3)
+      opentelemetry-api (~> 1.1)
+      opentelemetry-common (~> 0.20)
+      opentelemetry-metrics-api (~> 0.2)
+      opentelemetry-metrics-sdk (~> 0.5)
+      opentelemetry-sdk (~> 1.2)
+      opentelemetry-semantic_conventions
+    opentelemetry-helpers-mysql (0.6.0)
+      opentelemetry-api (~> 1.7)
+      opentelemetry-common (~> 0.21)
+    opentelemetry-helpers-sql (0.4.0)
+      opentelemetry-api (~> 1.7)
+    opentelemetry-helpers-sql-processor (0.5.0)
+      opentelemetry-api (~> 1.0)
+      opentelemetry-common (~> 0.21)
+    opentelemetry-instrumentation-action_mailer (0.8.1)
+      opentelemetry-instrumentation-active_support (~> 0.10)
+    opentelemetry-instrumentation-action_pack (0.18.0)
+      opentelemetry-instrumentation-rack (~> 0.29)
+    opentelemetry-instrumentation-action_view (0.13.0)
+      opentelemetry-instrumentation-active_support (~> 0.10)
+    opentelemetry-instrumentation-active_job (0.13.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-active_model_serializers (0.25.0)
+      opentelemetry-instrumentation-active_support (>= 0.7.0)
+    opentelemetry-instrumentation-active_record (0.13.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-active_storage (0.5.1)
+      opentelemetry-instrumentation-active_support (~> 0.10)
+    opentelemetry-instrumentation-active_support (0.12.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-all (0.94.0)
+      opentelemetry-instrumentation-active_model_serializers (~> 0.25.0)
+      opentelemetry-instrumentation-anthropic (~> 0.5.0)
+      opentelemetry-instrumentation-aws_lambda (~> 0.7.0)
+      opentelemetry-instrumentation-aws_sdk (~> 0.12.0)
+      opentelemetry-instrumentation-bunny (~> 0.25.0)
+      opentelemetry-instrumentation-concurrent_ruby (~> 0.25.0)
+      opentelemetry-instrumentation-dalli (~> 0.30.0)
+      opentelemetry-instrumentation-delayed_job (~> 0.26.0)
+      opentelemetry-instrumentation-ethon (~> 0.29.0)
+      opentelemetry-instrumentation-excon (~> 0.29.0)
+      opentelemetry-instrumentation-faraday (~> 0.33.0)
+      opentelemetry-instrumentation-grape (~> 0.7.0)
+      opentelemetry-instrumentation-graphql (~> 0.32.0)
+      opentelemetry-instrumentation-grpc (~> 0.5.0)
+      opentelemetry-instrumentation-gruf (~> 0.6.0)
+      opentelemetry-instrumentation-http (~> 0.30.0)
+      opentelemetry-instrumentation-http_client (~> 0.29.0)
+      opentelemetry-instrumentation-httpx (~> 0.8.0)
+      opentelemetry-instrumentation-koala (~> 0.24.0)
+      opentelemetry-instrumentation-lmdb (~> 0.26.0)
+      opentelemetry-instrumentation-mongo (~> 0.26.0)
+      opentelemetry-instrumentation-mysql2 (~> 0.34.0)
+      opentelemetry-instrumentation-net_http (~> 0.29.0)
+      opentelemetry-instrumentation-pg (~> 0.36.0)
+      opentelemetry-instrumentation-que (~> 0.13.0)
+      opentelemetry-instrumentation-racecar (~> 0.7.0)
+      opentelemetry-instrumentation-rack (~> 0.31.0)
+      opentelemetry-instrumentation-rails (~> 0.42.0)
+      opentelemetry-instrumentation-rake (~> 0.6.0)
+      opentelemetry-instrumentation-rdkafka (~> 0.10.0)
+      opentelemetry-instrumentation-redis (~> 0.29.0)
+      opentelemetry-instrumentation-resque (~> 0.9.0)
+      opentelemetry-instrumentation-restclient (~> 0.28.0)
+      opentelemetry-instrumentation-ruby_kafka (~> 0.25.0)
+      opentelemetry-instrumentation-sidekiq (~> 0.29.0)
+      opentelemetry-instrumentation-sinatra (~> 0.30.0)
+      opentelemetry-instrumentation-trilogy (~> 0.69.0)
+    opentelemetry-instrumentation-anthropic (0.5.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-aws_lambda (0.7.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-aws_sdk (0.12.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-base (0.26.1)
+      opentelemetry-api (~> 1.7)
+      opentelemetry-common (~> 0.21)
+      opentelemetry-registry (~> 0.1)
+    opentelemetry-instrumentation-bunny (0.25.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-concurrent_ruby (0.25.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-dalli (0.30.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-delayed_job (0.26.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-ethon (0.29.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-excon (0.29.1)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-faraday (0.33.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-grape (0.7.0)
+      opentelemetry-instrumentation-rack (~> 0.29)
+    opentelemetry-instrumentation-graphql (0.32.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-grpc (0.5.1)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-gruf (0.6.1)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-http (0.30.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-http_client (0.29.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-httpx (0.8.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-koala (0.24.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-lmdb (0.26.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-logger (0.4.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+      opentelemetry-logs-api (~> 0.1)
+    opentelemetry-instrumentation-mongo (0.26.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-mysql2 (0.34.0)
+      opentelemetry-helpers-mysql
+      opentelemetry-helpers-sql
+      opentelemetry-helpers-sql-processor
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-net_http (0.29.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-pg (0.36.0)
+      opentelemetry-helpers-sql
+      opentelemetry-helpers-sql-processor
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-que (0.13.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-racecar (0.7.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-rack (0.31.1)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-rails (0.42.0)
+      opentelemetry-instrumentation-action_mailer (~> 0.7)
+      opentelemetry-instrumentation-action_pack (~> 0.17)
+      opentelemetry-instrumentation-action_view (~> 0.12)
+      opentelemetry-instrumentation-active_job (~> 0.11)
+      opentelemetry-instrumentation-active_record (~> 0.12)
+      opentelemetry-instrumentation-active_storage (~> 0.4)
+      opentelemetry-instrumentation-active_support (~> 0.11)
+      opentelemetry-instrumentation-concurrent_ruby (~> 0.25)
+    opentelemetry-instrumentation-rake (0.6.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-rdkafka (0.10.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-redis (0.29.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-resque (0.9.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-restclient (0.28.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-ruby_kafka (0.25.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-sidekiq (0.29.0)
+      opentelemetry-instrumentation-base (~> 0.25)
+    opentelemetry-instrumentation-sinatra (0.30.0)
+      opentelemetry-instrumentation-rack (~> 0.29)
+    opentelemetry-instrumentation-trilogy (0.69.0)
+      opentelemetry-helpers-mysql
+      opentelemetry-helpers-sql
+      opentelemetry-helpers-sql-processor
+      opentelemetry-instrumentation-base (~> 0.25)
+      opentelemetry-semantic_conventions (>= 1.8.0)
+    opentelemetry-logs-api (0.4.0)
+      opentelemetry-api (~> 1.0)
+    opentelemetry-logs-sdk (0.6.0)
+      opentelemetry-api (~> 1.2)
+      opentelemetry-logs-api (~> 0.1)
+      opentelemetry-sdk (~> 1.3)
+    opentelemetry-metrics-api (0.6.0)
+      opentelemetry-api (~> 1.0)
+    opentelemetry-metrics-sdk (0.15.0)
+      opentelemetry-api (~> 1.1)
+      opentelemetry-metrics-api (~> 0.2)
+      opentelemetry-sdk (~> 1.2)
+    opentelemetry-registry (0.6.0)
+      opentelemetry-api (~> 1.1)
+    opentelemetry-sdk (1.12.0)
+      logger
+      opentelemetry-api (~> 1.1)
+      opentelemetry-common (~> 0.20)
+      opentelemetry-registry (~> 0.2)
+      opentelemetry-semantic_conventions
+    opentelemetry-semantic_conventions (1.41.0)
+      opentelemetry-api (~> 1.0)
     parallel (1.28.0)
     parser (3.3.11.1)
       ast (~> 2.4.1)
@@ -429,6 +637,11 @@ DEPENDENCIES
   image_processing (>= 1.2)
   json-schema (~> 6.0)
   lograge (~> 0.14.0)
+  opentelemetry-exporter-otlp (~> 0.34.0)
+  opentelemetry-exporter-otlp-logs (~> 0.5.1)
+  opentelemetry-exporter-otlp-metrics (~> 0.10.0)
+  opentelemetry-instrumentation-all (~> 0.94.0)
+  opentelemetry-instrumentation-logger (~> 0.4.0)
   pg (~> 1.1)
   pry (~> 0.16.0)
   pry-byebug (~> 3.10)
diff --git a/app/grpc/concerns/grpc_stream_handler.rb b/app/grpc/concerns/grpc_stream_handler.rb
index a617dbcb..672475cc 100644
--- a/app/grpc/concerns/grpc_stream_handler.rb
+++ b/app/grpc/concerns/grpc_stream_handler.rb
@@ -4,6 +4,10 @@ module GrpcStreamHandler
   include Code0::ZeroTrack::Loggable
   extend ActiveSupport::Concern
 
+  StreamItem = Struct.new(:data, :otel_context, keyword_init: true)
+
+  Tracer = ::OpenTelemetry.tracer_provider.tracer('sagittarius-grpc-stream')
+
   class_methods do
     def grpc_stream(method)
       define_method(method) do |_, call|
@@ -17,17 +21,23 @@ def grpc_stream(method)
                                       grpc_object: grpc_object)
 
         encoded_data = send('encoders')[method].call(grpc_object)
-        encoded_data64 = Base64.encode64(encoded_data)
+        encoded_data64 = Base64.encode64(encoded_data).delete("\n")
 
         GrpcStreamHandler.logger.info(message: 'Encoded data', runtime_id: runtime_id, method: method,
                                       encoded_data: encoded_data64)
 
+        carrier = {}
+        OpenTelemetry.propagation.inject(carrier)
+        trace_context64 = Base64.encode64(carrier.to_json).delete("\n")
+
+        notification_payload = "#{self},#{method},#{runtime_id},#{encoded_data64},#{trace_context64}"
+
         ActiveRecord::Base.connection.raw_connection
-                          .exec("NOTIFY grpc_streams, '#{self},#{method},#{runtime_id},#{encoded_data64}'")
+                          .exec("NOTIFY grpc_streams, '#{notification_payload}'")
       end
       define_singleton_method("end_#{method}") do |runtime_id|
         ActiveRecord::Base.connection.raw_connection
-                          .exec("NOTIFY grpc_streams, '#{self},#{method},#{runtime_id},end'")
+                          .exec("NOTIFY grpc_streams, '#{self},#{method},#{runtime_id},end,'")
       end
     end
   end
@@ -48,11 +58,18 @@ def self.listen!
 
         conn.wait_for_notify(1) do |_, _, payload|
           logger.info(message: 'Received notification', payload: payload)
-          class_name, method_name, runtime_id, encoded_data64 = payload.split(',')
+          parts = payload.split(',')
+          class_name = parts[0]
+          method_name = parts[1]
+          runtime_id = parts[2]
+          encoded_data64 = parts[3]
+          trace_context64 = parts[4]
 
           clazz = class_name.constantize
           method_name = method_name.to_sym
 
+          otel_context = extract_otel_context(trace_context64)
+
           if encoded_data64 == 'end'
             decoded_data = :end
           else
@@ -62,7 +79,7 @@ def self.listen!
 
           queues = GrpcStreamHandler.yielders.dig(clazz, method_name, runtime_id.to_i)
           queues&.each do |queue|
-            queue << decoded_data
+            queue << StreamItem.new(data: decoded_data, otel_context: otel_context)
           rescue StandardError => e
             logger.error(message: 'Error while yielding data', error: e.message, backtrace: e.backtrace)
           end
@@ -73,6 +90,15 @@ def self.listen!
     end
   end
 
+  def self.extract_otel_context(trace_context64)
+    return nil if trace_context64.blank?
+
+    carrier = JSON.parse(Base64.decode64(trace_context64))
+    OpenTelemetry.propagation.extract(carrier)
+  rescue StandardError
+    nil
+  end
+
   def create_enumerator(clazz, method, runtime_id, _call)
     logger.debug(message: 'Creating enumerator', runtime_id: runtime_id, clazz: clazz, method: method)
 
@@ -82,7 +108,7 @@ def create_enumerator(clazz, method, runtime_id, _call)
     method_queues = queues[method] ||= {}
     runtime_queues = method_queues[runtime_id] ||= []
 
-    runtime_queues.each { |existing_queue| existing_queue << :end }
+    runtime_queues.each { |existing_queue| existing_queue << StreamItem.new(data: :end, otel_context: nil) }
     runtime_queues.clear
     runtime_queues << queue
 
@@ -92,12 +118,17 @@ def create_enumerator(clazz, method, runtime_id, _call)
       loop do
         item = queue.pop(timeout: 1)
         next if item.nil?
-        break if item == :end
+        break if item.data == :end
 
         begin
-          y << item
-          ApplicationRecord.connection_pool.with_connection do
-            Runtime.update(runtime_id, last_heartbeat: Time.zone.now)
+          otel_context = item.otel_context || OpenTelemetry::Context.current
+          OpenTelemetry::Context.with_current(otel_context) do
+            Tracer.in_span("grpc_stream.send/#{method}") do
+              y << item.data
+            end
+            ApplicationRecord.connection_pool.with_connection do
+              Runtime.update(runtime_id, last_heartbeat: Time.zone.now)
+            end
           end
         rescue ActiveRecord::ActiveRecordError => e
           logger.warn(message: 'Failed to update runtime heartbeat', exception: e.message, backtrace: e.backtrace)
diff --git a/app/grpc/execution_handler.rb b/app/grpc/execution_handler.rb
index 7e473680..48b3e411 100644
--- a/app/grpc/execution_handler.rb
+++ b/app/grpc/execution_handler.rb
@@ -38,7 +38,7 @@ def test(requests, call)
     rescue StandardError => e
       logger.error(message: 'Error reading execution stream', error: e.message,
                    backtrace: e.backtrace)
-      outbound_queue << :end if outbound_queue
+      outbound_queue << GrpcStreamHandler::StreamItem.new(data: :end, otel_context: nil) if outbound_queue
     ensure
       logger.info(message: 'Execution runtime request stream closed')
     end
diff --git a/config/initializers/opentelemetry.rb b/config/initializers/opentelemetry.rb
new file mode 100644
index 00000000..dcc94dec
--- /dev/null
+++ b/config/initializers/opentelemetry.rb
@@ -0,0 +1,48 @@
+# frozen_string_literal: true
+
+otel_config = Sagittarius::Configuration.config[:opentelemetry]
+return unless otel_config[:enabled]
+
+require 'opentelemetry-metrics-sdk'
+require 'opentelemetry/sdk'
+
+require_relative '../../lib/sagittarius/open_telemetry/encoding_sanitizer'
+
+begin
+  OpenTelemetry.logger.formatter = Code0::ZeroTrack::Logs::JsonFormatter.new
+
+  resource_conventions = OpenTelemetry::SemanticConventions::Resource
+  otel_resource = OpenTelemetry::SDK::Resources::Resource.create(
+    resource_conventions::DEPLOYMENT_ENVIRONMENT => Rails.env.to_s,
+    resource_conventions::SERVICE_NAME => otel_config[:service_name],
+    resource_conventions::SERVICE_VERSION => Sagittarius::Version
+  )
+
+  OpenTelemetry::SDK.configure do |c|
+    c.resource = otel_resource
+    c.use_all({
+                'OpenTelemetry::Instrumentation::ActiveJob' => {
+                  propagation_style: :child,
+                  span_naming: :job_class,
+                },
+              })
+  end
+
+  if defined?(OpenTelemetry::Exporter::OTLP::Exporter)
+    OpenTelemetry::Exporter::OTLP::Exporter.prepend(Sagittarius::OpenTelemetry::EncodingSanitizer)
+  end
+  if defined?(OpenTelemetry::Exporter::OTLP::Metrics::Util)
+    OpenTelemetry::Exporter::OTLP::Metrics::Util.prepend(Sagittarius::OpenTelemetry::EncodingSanitizer)
+  end
+  if defined?(OpenTelemetry::Exporter::OTLP::Logs::LogsExporter)
+    OpenTelemetry::Exporter::OTLP::Logs::LogsExporter.prepend(Sagittarius::OpenTelemetry::EncodingSanitizer)
+  end
+
+  metrics_exporter = OpenTelemetry::Exporter::OTLP::Metrics::MetricsExporter.new(
+    endpoint: otel_config[:metrics_endpoint]
+  )
+  metric_reader = OpenTelemetry::SDK::Metrics::Export::PeriodicMetricReader.new(exporter: metrics_exporter)
+  OpenTelemetry.meter_provider.add_metric_reader(metric_reader)
+rescue StandardError => e
+  Code0::ZeroTrack::Loggable.logger.warn(message: 'Failed to configure OpenTelemetry', exception: e)
+end
diff --git a/config/sagittarius.example.yml b/config/sagittarius.example.yml
index 3a2576e4..abe82e00 100644
--- a/config/sagittarius.example.yml
+++ b/config/sagittarius.example.yml
@@ -33,4 +33,11 @@ velorum:
   jwt_secret:
   jwt_ttl_minutes: 8
 
+opentelemetry:
+  enabled: false
+  service_name: sagittarius
+  logs_endpoint:
+  metrics_endpoint:
+  traces_endpoint:
+
 application_setting_overrides: {}
diff --git a/lib/sagittarius/configuration.rb b/lib/sagittarius/configuration.rb
index aee9f800..d1ba0fda 100644
--- a/lib/sagittarius/configuration.rb
+++ b/lib/sagittarius/configuration.rb
@@ -72,6 +72,13 @@ def self.defaults
           jwt_secret: nil,
           jwt_ttl_minutes: 8,
         },
+        opentelemetry: {
+          enabled: false,
+          service_name: 'sagittarius',
+          logs_endpoint: nil,
+          metrics_endpoint: nil,
+          traces_endpoint: nil,
+        },
         application_setting_overrides: {},
       }
     end
diff --git a/lib/sagittarius/grpc/launcher.rb b/lib/sagittarius/grpc/launcher.rb
index 905fc85f..f980558c 100644
--- a/lib/sagittarius/grpc/launcher.rb
+++ b/lib/sagittarius/grpc/launcher.rb
@@ -10,6 +10,7 @@ class Launcher
       def create_server
         # grpc handles interceptors in opposite order. Reversing so we can list them in top-to-bottom order
         @server = GRPC::RpcServer.new(interceptors: [
+          Sagittarius::Middleware::Grpc::OpenTelemetry.new,
           Sagittarius::Middleware::Grpc::Context.new,
           Sagittarius::Middleware::Grpc::Logger.new,
           Sagittarius::Middleware::Grpc::Authentication.new
diff --git a/lib/sagittarius/middleware/grpc/open_telemetry.rb b/lib/sagittarius/middleware/grpc/open_telemetry.rb
new file mode 100644
index 00000000..22d31ec0
--- /dev/null
+++ b/lib/sagittarius/middleware/grpc/open_telemetry.rb
@@ -0,0 +1,37 @@
+# frozen_string_literal: true
+
+module Sagittarius
+  module Middleware
+    module Grpc
+      class OpenTelemetry < Grpc::AllMethodServerInterceptor
+        Tracer = ::OpenTelemetry.tracer_provider.tracer('sagittarius-grpc')
+
+        def execute(method:, call:, **_, &block)
+          service_name = method.owner.service_name
+          found_method, = method.owner
+                                .rpc_descs
+                                .find { |k, _| ::GRPC::GenericService.underscore(k.to_s) == method.name.to_s }
+
+          method_name = found_method&.to_s || '(unknown)'
+
+          links = extract_remote_span_links(call)
+
+          Tracer.in_span("/#{service_name}/#{method_name}", links: links, &block)
+        end
+
+        private
+
+        def extract_remote_span_links(call)
+          extracted_context = ::OpenTelemetry.propagation.extract(call.metadata)
+          remote_span_context = ::OpenTelemetry::Trace.current_span(extracted_context).context
+
+          return [] unless remote_span_context.valid?
+
+          [::OpenTelemetry::Trace::Link.new(remote_span_context)]
+        rescue StandardError
+          []
+        end
+      end
+    end
+  end
+end
diff --git a/lib/sagittarius/open_telemetry/encoding_sanitizer.rb b/lib/sagittarius/open_telemetry/encoding_sanitizer.rb
new file mode 100644
index 00000000..52c5ca0c
--- /dev/null
+++ b/lib/sagittarius/open_telemetry/encoding_sanitizer.rb
@@ -0,0 +1,25 @@
+# frozen_string_literal: true
+
+# Workaround for https://github.com/open-telemetry/opentelemetry-ruby/issues/1649
+# Rack delivers HTTP headers as ASCII-8BIT strings. When these contain non-UTF-8
+# bytes (e.g. malicious user agents), the OTLP protobuf serializer raises
+# Encoding::UndefinedConversionError. This patch sanitizes strings to valid UTF-8
+# before they reach protobuf. Remove once the upstream issue is resolved.
+module Sagittarius
+  module OpenTelemetry
+    module EncodingSanitizer
+      def self.sanitize(value)
+        return value unless value.is_a?(String)
+        return value if value.encoding == Encoding::UTF_8 && value.valid_encoding?
+
+        value.encode('UTF-8', invalid: :replace, undef: :replace)
+      end
+
+      private
+
+      def as_otlp_any_value(value)
+        super(EncodingSanitizer.sanitize(value))
+      end
+    end
+  end
+end
diff --git a/spec/grpc/execution_handler_spec.rb b/spec/grpc/execution_handler_spec.rb
index 027554db..bf3f2f09 100644
--- a/spec/grpc/execution_handler_spec.rb
+++ b/spec/grpc/execution_handler_spec.rb
@@ -44,7 +44,7 @@
         queues = GrpcStreamHandler.yielders.dig(described_class, :test, runtime.id)
         expect(queues.size).to eq(1)
 
-        queues.each { |queue| queue << :end }
+        queues.each { |queue| queue << GrpcStreamHandler::StreamItem.new(data: :end, otel_context: nil) }
       end
     end
 
@@ -60,7 +60,7 @@
 
         expect(Timeout.timeout(1) { first_enumerator.to_a }).to eq([])
 
-        GrpcStreamHandler.yielders.dig(described_class, :test, runtime.id).each { |queue| queue << :end }
+        GrpcStreamHandler.yielders.dig(described_class, :test, runtime.id).each { |queue| queue << GrpcStreamHandler::StreamItem.new(data: :end, otel_context: nil) }
       end
     end
   end
diff --git a/spec/lib/sagittarius/middleware/grpc/open_telemetry_spec.rb b/spec/lib/sagittarius/middleware/grpc/open_telemetry_spec.rb
new file mode 100644
index 00000000..a689e0c0
--- /dev/null
+++ b/spec/lib/sagittarius/middleware/grpc/open_telemetry_spec.rb
@@ -0,0 +1,164 @@
+# frozen_string_literal: true
+
+require 'rails_helper'
+require 'google/protobuf/well_known_types'
+
+RSpec.describe Sagittarius::Middleware::Grpc::OpenTelemetry do
+  let(:rpc_class) do
+    Class.new do
+      include GRPC::GenericService
+
+      self.marshal_class_method = :encode
+      self.unmarshal_class_method = :decode
+      self.service_name = 'test.Test'
+
+      rpc :Test, Google::Protobuf::Value, Google::Protobuf::Value
+    end
+  end
+
+  let(:service_class) do
+    Class.new(rpc_class) do
+      def test(_msg, _call)
+        # Do nothing
+      end
+    end
+  end
+
+  let(:method) { service_class.new.method(:test) }
+  let(:request) { double }
+  let(:metadata) { {} }
+  let(:call) { instance_double(GRPC::ActiveCall::SingleReqView, peer: '', metadata: metadata) }
+
+  let(:interceptor) { described_class.new }
+
+  describe '#request_response' do
+    context 'when no trace context is present in metadata' do
+      it 'yields control' do
+        expect { |b| interceptor.request_response(request: request, call: call, method: method, &b) }
+          .to yield_control
+      end
+
+      it 'creates a span with no links' do
+        span = nil
+
+        interceptor.request_response(request: request, call: call, method: method) do
+          span = OpenTelemetry::Trace.current_span
+        end
+
+        expect(span).not_to be_nil
+      end
+    end
+
+    context 'when valid trace context is present in metadata' do
+      let(:metadata) do
+        { 'traceparent' => '00-0af7651916cd43dd8448eb211c80319c-b7ad6b7169203331-01' }
+      end
+
+      it 'yields control' do
+        expect { |b| interceptor.request_response(request: request, call: call, method: method, &b) }
+          .to yield_control
+      end
+
+      it 'creates a span linked to the remote context' do
+        span = nil
+
+        interceptor.request_response(request: request, call: call, method: method) do
+          span = OpenTelemetry::Trace.current_span
+        end
+
+        expect(span).not_to be_nil
+      end
+    end
+
+    context 'when invalid trace context is present in metadata' do
+      let(:metadata) do
+        { 'traceparent' => 'garbage-value' }
+      end
+
+      it 'yields control without raising' do
+        expect { |b| interceptor.request_response(request: request, call: call, method: method, &b) }
+          .to yield_control
+      end
+    end
+  end
+
+  describe '#bidi_streamer' do
+    context 'when no trace context is present in metadata' do
+      it 'yields control' do
+        expect { |b| interceptor.bidi_streamer(request: request, call: call, method: method, &b) }
+          .to yield_control
+      end
+    end
+
+    context 'when valid trace context is present in metadata' do
+      let(:metadata) do
+        { 'traceparent' => '00-0af7651916cd43dd8448eb211c80319c-b7ad6b7169203331-01' }
+      end
+
+      it 'yields control' do
+        expect { |b| interceptor.bidi_streamer(request: request, call: call, method: method, &b) }
+          .to yield_control
+      end
+    end
+  end
+
+  describe 'span attributes' do
+    it 'names the span after the service and method' do
+      spans = []
+
+      allow(described_class::Tracer).to receive(:in_span).and_wrap_original do |original, name, **kwargs, &blk|
+        spans << { name: name, links: kwargs[:links] }
+        original.call(name, **kwargs, &blk)
+      end
+
+      # rubocop:disable Lint/EmptyBlock -- the block is part of the api and needs to be given
+      interceptor.request_response(request: request, call: call, method: method) {}
+      # rubocop:enable Lint/EmptyBlock
+
+      expect(spans.size).to eq(1)
+      expect(spans.first[:name]).to eq('/test.Test/Test')
+    end
+
+    context 'when valid trace context is present' do
+      let(:metadata) do
+        { 'traceparent' => '00-0af7651916cd43dd8448eb211c80319c-b7ad6b7169203331-01' }
+      end
+
+      it 'passes a link to the remote span context' do
+        spans = []
+
+        allow(described_class::Tracer).to receive(:in_span).and_wrap_original do |original, name, **kwargs, &blk|
+          spans << { name: name, links: kwargs[:links] }
+          original.call(name, **kwargs, &blk)
+        end
+
+        # rubocop:disable Lint/EmptyBlock -- the block is part of the api and needs to be given
+        interceptor.request_response(request: request, call: call, method: method) {}
+        # rubocop:enable Lint/EmptyBlock
+
+        expect(spans.first[:links].size).to eq(1)
+
+        link = spans.first[:links].first
+        expect(link.span_context.hex_trace_id).to eq('0af7651916cd43dd8448eb211c80319c')
+        expect(link.span_context.hex_span_id).to eq('b7ad6b7169203331')
+      end
+    end
+
+    context 'when no trace context is present' do
+      it 'passes no links' do
+        spans = []
+
+        allow(described_class::Tracer).to receive(:in_span).and_wrap_original do |original, name, **kwargs, &blk|
+          spans << { name: name, links: kwargs[:links] }
+          original.call(name, **kwargs, &blk)
+        end
+
+        # rubocop:disable Lint/EmptyBlock -- the block is part of the api and needs to be given
+        interceptor.request_response(request: request, call: call, method: method) {}
+        # rubocop:enable Lint/EmptyBlock
+
+        expect(spans.first[:links]).to be_empty
+      end
+    end
+  end
+end