diff --git a/compose.tracing.yaml b/compose.tracing.yaml
index 80d6a3c1..169ab517 100644
--- a/compose.tracing.yaml
+++ b/compose.tracing.yaml
@@ -1,6 +1,7 @@
 services:
   letta_server:
     environment:
+      - ENV_NAME=${ENV_NAME} # optional service name
       - OTEL_EXPORTER_OTLP_ENDPOINT=http://otel-collector:4317
 
   otel-collector:
diff --git a/letta/server/rest_api/app.py b/letta/server/rest_api/app.py
index d6a4ff60..246711bc 100644
--- a/letta/server/rest_api/app.py
+++ b/letta/server/rest_api/app.py
@@ -235,12 +235,14 @@ def create_application() -> "FastAPI":
     endpoint = os.getenv("OTEL_EXPORTER_OTLP_ENDPOINT")
     if endpoint:
         print(f"▶ Using OTLP tracing with endpoint: {endpoint}")
+        env_name_suffix = os.getenv("ENV_NAME")
+        service_name = f"letta-server-{env_name_suffix.lower()}" if env_name_suffix else "letta-server"
         from letta.tracing import setup_tracing
 
         setup_tracing(
             endpoint=endpoint,
             app=app,
-            service_name="memgpt-server",
+            service_name=service_name,
         )
 
     for route in v1_routes: