diff --git a/README.md b/README.md
index ab37cde1..fd85db80 100644
--- a/README.md
+++ b/README.md
@@ -7,9 +7,11 @@ AzureOpenAI-compatible RESTful APIs for Amazon Bedrock.
 This is a fork project from [Bedrock Access Gateway](https://github.com/aws-samples/bedrock-access-gateway), with the dedicated support for **AzureOpenAI** client instead of **OpenAI** client.
 
 **Enhanced Features:**
+
 - [x] AzureOpenAI client
 - [x] Deployment on Amazon EKS
 - [x] [JSON mode](https://learn.microsoft.com/sv-se/azure/ai-services/openai/how-to/json-mode?tabs=python) response format
+- [x] [AWS Distro for OpenTelemetry](https://aws-otel.github.io/) support, helps on debugging and observability.
 
 ## Setup
 ### Happy path for testing
@@ -42,7 +44,7 @@ make build
 
 Make sure to update the image of the k8s deployment under `deployment/k8s/manifest.yaml`, and run `make deploy` to deploy again.
 
-> [!INFO]
+> [!TIP]
 > Feel free to change the region within the `scripts/push-to-ecr.sh` if you want to change the target ECR repo name and region.
 
 ### Verification
@@ -330,4 +332,4 @@ See [CONTRIBUTING](CONTRIBUTING.md#security-issue-notifications) for more inform
 
 ## License
 
-This library is licensed under the MIT-0 License. See the LICENSE file.
+This library is licensed under the MIT-0 License. See the LICENSE file.
\ No newline at end of file
diff --git a/docker-compose.yaml b/docker-compose.yaml
index 084087df..729ba96f 100644
--- a/docker-compose.yaml
+++ b/docker-compose.yaml
@@ -1,18 +1,47 @@
-version: '3'
+# version: '3'
 services:
   gateway:
     build:
       context: ./src
-      dockerfile: Dockerfile
+      dockerfile: Dockerfile_otel
     ports:
       - 8000:80
     volumes:
       - ./src/:/app/
       - ~/.aws:/root/.aws # If not provide AWS credentials from .env, just load your local AWS credentails
-    command: ["uvicorn", "api.app:app", "--host", "0.0.0.0", "--port", "80", "--reload"]
+    # command: ["opentelemetry-instrument","uvicorn","api.app:app","--port","8000","--host","0.0.0.0", "--reload"] # reload is not working with Otel instrumented app
+    command: ["opentelemetry-instrument","uvicorn","api.app:app","--port","8000","--host","0.0.0.0"]
     env_file:
     - .env
     environment:
     - DEBUG=true
     - AWS_REGION=us-east-1
-    - AWS_PROFILE=account-b-us
\ No newline at end of file
+    - AWS_PROFILE=bedrock
+    - OTEL_EXPORTER_OTLP_ENDPOINT=http://otel-collector:4317
+    depends_on:
+    - otel-collector
+    networks:
+      - app-network
+  otel-collector:
+    image: public.ecr.aws/aws-observability/aws-otel-collector:latest
+    command: ["--config=/etc/otel-collector-config.yaml"]
+    volumes:
+      - ./otel-collector-config.yaml:/etc/otel-collector-config.yaml
+      - ~/.aws:/home/aoc/.aws
+    ports:
+      - "4317:4317"   # OTLP gRPC receiver
+      - "4318:4318"   # OTLP HTTP receiver
+      - "8888:8888"   # Prometheus metrics exposed by the collector
+      - "8889:8889"   # Prometheus exporter metrics
+      - "13133:13133" # Health check extension
+    environment:
+      - AWS_REGION=us-west-2
+      - AWS_PROFILE=default
+      - AWS_SDK_LOAD_CONFIG=1
+      - AWS_CONFIG_FILE=/home/aoc/.aws/config
+      - AWS_SHARED_CREDENTIALS_FILE=/home/aoc/.aws/credentials
+    networks:
+      - app-network
+networks:
+  app-network:
+    driver: bridge
diff --git a/otel-collector-config.yaml b/otel-collector-config.yaml
new file mode 100644
index 00000000..7510cf14
--- /dev/null
+++ b/otel-collector-config.yaml
@@ -0,0 +1,27 @@
+receivers:
+  otlp:
+    protocols:
+      grpc:
+        endpoint: 0.0.0.0:4317
+      http:
+        endpoint: 0.0.0.0:4318
+
+processors:
+  batch:
+
+exporters:
+  awsxray:
+    region: "us-west-2"
+  logging:
+    verbosity: detailed
+
+service:
+  pipelines:
+    traces:
+      receivers: [otlp]
+      processors: [batch]
+      exporters: [awsxray]
+    metrics:
+      receivers: [otlp]
+      processors: [batch]
+      exporters: [logging]
diff --git a/src/Dockerfile_otel b/src/Dockerfile_otel
new file mode 100644
index 00000000..7b2a413e
--- /dev/null
+++ b/src/Dockerfile_otel
@@ -0,0 +1,13 @@
+FROM python:3.12-slim
+
+WORKDIR /app
+
+COPY ./requirements-otel.txt /app/requirements-otel.txt
+
+RUN pip install --no-cache-dir --upgrade -r /app/requirements-otel.txt
+
+COPY ./api /app/api
+
+RUN opentelemetry-bootstrap --action=install
+
+CMD ["uvicorn", "api.app:app", "--host", "0.0.0.0", "--port", "8000"]
\ No newline at end of file
diff --git a/src/requirements-otel.txt b/src/requirements-otel.txt
new file mode 100644
index 00000000..8123dbba
--- /dev/null
+++ b/src/requirements-otel.txt
@@ -0,0 +1,14 @@
+fastapi==0.111.0
+pydantic==2.7.1
+uvicorn==0.29.0
+mangum==0.17.0
+tiktoken==0.6.0
+requests==2.32.3
+numpy==1.26.4
+boto3==1.35.17
+botocore==1.35.17
+opentelemetry-api==1.27.0
+opentelemetry-sdk==1.27.0
+opentelemetry-sdk-extension-aws==2.0.2
+opentelemetry-propagator-aws-xray==1.0.2
+opentelemetry-distro[otlp]