diff --git a/.changeset/preserve-otel-parent-context.md b/.changeset/preserve-otel-parent-context.md
new file mode 100644
index 00000000000..d436bd97150
--- /dev/null
+++ b/.changeset/preserve-otel-parent-context.md
@@ -0,0 +1,5 @@
+---
+"@effect/opentelemetry": patch
+---
+
+Preserve trace state and locality when adapting active OpenTelemetry parent contexts.
diff --git a/packages/opentelemetry/src/OtelTracer.ts b/packages/opentelemetry/src/OtelTracer.ts
index 8e34a0abb73..b161db8f176 100644
--- a/packages/opentelemetry/src/OtelTracer.ts
+++ b/packages/opentelemetry/src/OtelTracer.ts
@@ -518,18 +518,23 @@ export class OtelSpan implements Tracer.Span {
 const isSampled = (traceFlags: Otel.TraceFlags): boolean =>
   (traceFlags & Otel.TraceFlags.SAMPLED) === Otel.TraceFlags.SAMPLED
 
+class OtelParentSpanContext extends Context.Service<
+  OtelParentSpanContext,
+  Otel.SpanContext
+>()("@effect/opentelemetry/Tracer/OtelParentSpanContext") {}
+
 const getOtelParent = (
   tracer: Otel.TraceAPI,
   context: Otel.Context,
   annotations: Context.Context<never>
 ): Option.Option<Tracer.AnySpan> => {
-  const otelParent = tracer.getSpan(context)?.spanContext()
+  const otelParent = tracer.getSpanContext(context)
   if (!otelParent) return Option.none()
   return Option.some(Tracer.externalSpan({
     spanId: otelParent.spanId,
     traceId: otelParent.traceId,
-    sampled: (otelParent.traceFlags & 1) === 1,
-    annotations
+    sampled: isSampled(otelParent.traceFlags),
+    annotations: Context.add(annotations, OtelParentSpanContext, otelParent)
   }))
 }
 
@@ -537,6 +542,17 @@ const makeSpanContext = (
   span: Tracer.AnySpan,
   annotations?: Context.Context<never>
 ): Otel.SpanContext => {
+  const otelParent = Context.getOrUndefined(span.annotations, OtelParentSpanContext)
+  if (otelParent !== undefined) {
+    if (annotations === undefined) return otelParent
+    const traceFlags = extractTraceService(span, annotations, OtelTraceFlags)
+    const traceState = extractTraceService(span, annotations, OtelTraceState)
+    return {
+      ...otelParent,
+      traceFlags: traceFlags ?? otelParent.traceFlags,
+      traceState: traceState ?? otelParent.traceState!
+    }
+  }
   const traceFlags = makeTraceFlags(span, annotations)
   const traceState = makeTraceState(span, annotations)!
   return ({
diff --git a/packages/opentelemetry/test/OtelTracer.test.ts b/packages/opentelemetry/test/OtelTracer.test.ts
index d4f8df6f826..f6e010a27f9 100644
--- a/packages/opentelemetry/test/OtelTracer.test.ts
+++ b/packages/opentelemetry/test/OtelTracer.test.ts
@@ -5,7 +5,9 @@ import * as OtelApi from "@opentelemetry/api"
 import { AsyncHooksContextManager } from "@opentelemetry/context-async-hooks"
 import { InMemorySpanExporter, SimpleSpanProcessor } from "@opentelemetry/sdk-trace-base"
 import * as Cause from "effect/Cause"
+import * as EffectContext from "effect/Context"
 import * as Effect from "effect/Effect"
+import * as Option from "effect/Option"
 import * as EffectTracer from "effect/Tracer"
 
 const TracingLive = NodeSdk.layer(Effect.sync(() => ({
@@ -102,6 +104,52 @@ describe("Tracer", () => {
         Effect.provide(TracingLive)
       ))
 
+    it("preserves trace state and locality on an active OpenTelemetry parent", () => {
+      const parent: OtelApi.SpanContext = {
+        traceId: "1".repeat(32),
+        spanId: "2".repeat(16),
+        traceFlags: OtelApi.TraceFlags.SAMPLED,
+        traceState: OtelApi.createTraceState("vendor=value"),
+        isRemote: false
+      }
+      const active = OtelApi.trace.setSpanContext(OtelApi.ROOT_CONTEXT, parent)
+      let receivedParent: OtelApi.SpanContext | undefined
+      const tracer = {
+        startSpan(_name: string, _options: unknown, context: OtelApi.Context) {
+          receivedParent = OtelApi.trace.getSpanContext(context)
+          return {
+            spanContext: () => ({
+              traceId: "3".repeat(32),
+              spanId: "4".repeat(16),
+              traceFlags: OtelApi.TraceFlags.SAMPLED
+            })
+          } as OtelApi.Span
+        }
+      } as OtelApi.Tracer
+
+      const child = new OtelTracer.OtelSpan(
+        { active: () => active } as OtelApi.ContextAPI,
+        OtelApi.trace,
+        tracer,
+        {
+          name: "child",
+          parent: Option.none(),
+          annotations: EffectContext.empty(),
+          links: [],
+          startTime: 0n,
+          kind: "internal",
+          root: false,
+          sampled: true
+        }
+      )
+
+      assert.instanceOf(child, OtelTracer.OtelSpan)
+      assert.deepStrictEqual(
+        [receivedParent?.traceState?.serialize(), receivedParent?.isRemote],
+        ["vendor=value", false]
+      )
+    })
+
     it.effect("records every pretty error", () =>
       Effect.gen(function*() {
         const exporter = new InMemorySpanExporter()