diff --git a/api/core/workflow/graph_engine/graph_engine.py b/api/core/workflow/graph_engine/graph_engine.py
index a4b2df2a8c..2e8b8f345f 100644
--- a/api/core/workflow/graph_engine/graph_engine.py
+++ b/api/core/workflow/graph_engine/graph_engine.py
@@ -140,6 +140,10 @@ class GraphEngine:
         pause_handler = PauseCommandHandler()
         self._command_processor.register_handler(PauseCommand, pause_handler)
 
+        # === Extensibility ===
+        # Layers allow plugins to extend engine functionality
+        self._layers: list[GraphEngineLayer] = []
+
         # === Worker Pool Setup ===
         # Capture Flask app context for worker threads
         flask_app: Flask | None = None
@@ -158,6 +162,7 @@ class GraphEngine:
             ready_queue=self._ready_queue,
             event_queue=self._event_queue,
             graph=self._graph,
+            layers=self._layers,
             flask_app=flask_app,
             context_vars=context_vars,
             min_workers=self._min_workers,
@@ -196,10 +201,6 @@ class GraphEngine:
             event_emitter=self._event_manager,
         )
 
-        # === Extensibility ===
-        # Layers allow plugins to extend engine functionality
-        self._layers: list[GraphEngineLayer] = []
-
         # === Validation ===
         # Ensure all nodes share the same GraphRuntimeState instance
         self._validate_graph_state_consistency()
diff --git a/api/core/workflow/graph_engine/layers/__init__.py b/api/core/workflow/graph_engine/layers/__init__.py
index 0a29a52993..772433e48c 100644
--- a/api/core/workflow/graph_engine/layers/__init__.py
+++ b/api/core/workflow/graph_engine/layers/__init__.py
@@ -8,9 +8,11 @@ with middleware-like components that can observe events and interact with execut
 from .base import GraphEngineLayer
 from .debug_logging import DebugLoggingLayer
 from .execution_limits import ExecutionLimitsLayer
+from .observability import ObservabilityLayer
 
 __all__ = [
     "DebugLoggingLayer",
     "ExecutionLimitsLayer",
     "GraphEngineLayer",
+    "ObservabilityLayer",
 ]
diff --git a/api/core/workflow/graph_engine/layers/base.py b/api/core/workflow/graph_engine/layers/base.py
index 24c12c2934..780f92a0f4 100644
--- a/api/core/workflow/graph_engine/layers/base.py
+++ b/api/core/workflow/graph_engine/layers/base.py
@@ -9,6 +9,7 @@ from abc import ABC, abstractmethod
 
 from core.workflow.graph_engine.protocols.command_channel import CommandChannel
 from core.workflow.graph_events import GraphEngineEvent
+from core.workflow.nodes.base.node import Node
 from core.workflow.runtime import ReadOnlyGraphRuntimeState
 
 
@@ -83,3 +84,29 @@ class GraphEngineLayer(ABC):
             error: The exception that caused execution to fail, or None if successful
         """
         pass
+
+    def on_node_run_start(self, node: Node) -> None:  # noqa: B027
+        """
+        Called immediately before a node begins execution.
+
+        Layers can override to inject behavior (e.g., start spans) prior to node execution.
+        The node's execution ID is available via `node._node_execution_id` and will be
+        consistent with all events emitted by this node execution.
+
+        Args:
+            node: The node instance about to be executed
+        """
+        pass
+
+    def on_node_run_end(self, node: Node, error: Exception | None) -> None:  # noqa: B027
+        """
+        Called after a node finishes execution.
+
+        The node's execution ID is available via `node._node_execution_id` and matches
+        the `id` field in all events emitted by this node execution.
+
+        Args:
+            node: The node instance that just finished execution
+            error: Exception instance if the node failed, otherwise None
+        """
+        pass
diff --git a/api/core/workflow/graph_engine/layers/node_parsers.py b/api/core/workflow/graph_engine/layers/node_parsers.py
new file mode 100644
index 0000000000..b6bac794df
--- /dev/null
+++ b/api/core/workflow/graph_engine/layers/node_parsers.py
@@ -0,0 +1,61 @@
+"""
+Node-level OpenTelemetry parser interfaces and defaults.
+"""
+
+import json
+from typing import Protocol
+
+from opentelemetry.trace import Span
+from opentelemetry.trace.status import Status, StatusCode
+
+from core.workflow.nodes.base.node import Node
+from core.workflow.nodes.tool.entities import ToolNodeData
+
+
+class NodeOTelParser(Protocol):
+    """Parser interface for node-specific OpenTelemetry enrichment."""
+
+    def parse(self, *, node: Node, span: "Span", error: Exception | None) -> None: ...
+
+
+class DefaultNodeOTelParser:
+    """Fallback parser used when no node-specific parser is registered."""
+
+    def parse(self, *, node: Node, span: "Span", error: Exception | None) -> None:
+        span.set_attribute("node.id", node.id)
+        if node.execution_id:
+            span.set_attribute("node.execution_id", node.execution_id)
+        if hasattr(node, "node_type") and node.node_type:
+            span.set_attribute("node.type", node.node_type.value)
+
+        if error:
+            span.record_exception(error)
+            span.set_status(Status(StatusCode.ERROR, str(error)))
+        else:
+            span.set_status(Status(StatusCode.OK))
+
+
+class ToolNodeOTelParser:
+    """Parser for tool nodes that captures tool-specific metadata."""
+
+    def __init__(self) -> None:
+        self._delegate = DefaultNodeOTelParser()
+
+    def parse(self, *, node: Node, span: "Span", error: Exception | None) -> None:
+        self._delegate.parse(node=node, span=span, error=error)
+
+        tool_data = getattr(node, "_node_data", None)
+        if not isinstance(tool_data, ToolNodeData):
+            return
+
+        span.set_attribute("tool.provider.id", tool_data.provider_id)
+        span.set_attribute("tool.provider.type", tool_data.provider_type.value)
+        span.set_attribute("tool.provider.name", tool_data.provider_name)
+        span.set_attribute("tool.name", tool_data.tool_name)
+        span.set_attribute("tool.label", tool_data.tool_label)
+        if tool_data.plugin_unique_identifier:
+            span.set_attribute("tool.plugin.id", tool_data.plugin_unique_identifier)
+        if tool_data.credential_id:
+            span.set_attribute("tool.credential.id", tool_data.credential_id)
+        if tool_data.tool_configurations:
+            span.set_attribute("tool.config", json.dumps(tool_data.tool_configurations, ensure_ascii=False))
diff --git a/api/core/workflow/graph_engine/layers/observability.py b/api/core/workflow/graph_engine/layers/observability.py
new file mode 100644
index 0000000000..a674816884
--- /dev/null
+++ b/api/core/workflow/graph_engine/layers/observability.py
@@ -0,0 +1,169 @@
+"""
+Observability layer for GraphEngine.
+
+This layer creates OpenTelemetry spans for node execution, enabling distributed
+tracing of workflow execution. It establishes OTel context during node execution
+so that automatic instrumentation (HTTP requests, DB queries, etc.) automatically
+associates with the node span.
+"""
+
+import logging
+from dataclasses import dataclass
+from typing import cast, final
+
+from opentelemetry import context as context_api
+from opentelemetry.trace import Span, SpanKind, Tracer, get_tracer, set_span_in_context
+from typing_extensions import override
+
+from configs import dify_config
+from core.workflow.enums import NodeType
+from core.workflow.graph_engine.layers.base import GraphEngineLayer
+from core.workflow.graph_engine.layers.node_parsers import (
+    DefaultNodeOTelParser,
+    NodeOTelParser,
+    ToolNodeOTelParser,
+)
+from core.workflow.nodes.base.node import Node
+from extensions.otel.runtime import is_instrument_flag_enabled
+
+logger = logging.getLogger(__name__)
+
+
+@dataclass(slots=True)
+class _NodeSpanContext:
+    span: "Span"
+    token: object
+
+
+@final
+class ObservabilityLayer(GraphEngineLayer):
+    """
+    Layer that creates OpenTelemetry spans for node execution.
+
+    This layer:
+    - Creates a span when a node starts execution
+    - Establishes OTel context so automatic instrumentation associates with the span
+    - Sets complete attributes and status when node execution ends
+    """
+
+    def __init__(self) -> None:
+        super().__init__()
+        self._node_contexts: dict[str, _NodeSpanContext] = {}
+        self._parsers: dict[NodeType, NodeOTelParser] = {}
+        self._default_parser: NodeOTelParser = cast(NodeOTelParser, DefaultNodeOTelParser())
+        self._is_disabled: bool = False
+        self._tracer: Tracer | None = None
+        self._build_parser_registry()
+        self._init_tracer()
+
+    def _init_tracer(self) -> None:
+        """Initialize OpenTelemetry tracer in constructor."""
+        if not (dify_config.ENABLE_OTEL or is_instrument_flag_enabled()):
+            self._is_disabled = True
+            return
+
+        try:
+            self._tracer = get_tracer(__name__)
+        except Exception as e:
+            logger.warning("Failed to get OpenTelemetry tracer: %s", e)
+            self._is_disabled = True
+
+    def _build_parser_registry(self) -> None:
+        """Initialize parser registry for node types."""
+        self._parsers = {
+            NodeType.TOOL: ToolNodeOTelParser(),
+        }
+
+    def _get_parser(self, node: Node) -> NodeOTelParser:
+        node_type = getattr(node, "node_type", None)
+        if isinstance(node_type, NodeType):
+            return self._parsers.get(node_type, self._default_parser)
+        return self._default_parser
+
+    @override
+    def on_graph_start(self) -> None:
+        """Called when graph execution starts."""
+        self._node_contexts.clear()
+
+    @override
+    def on_node_run_start(self, node: Node) -> None:
+        """
+        Called when a node starts execution.
+
+        Creates a span and establishes OTel context for automatic instrumentation.
+        """
+        if self._is_disabled:
+            return
+
+        try:
+            if not self._tracer:
+                return
+
+            execution_id = node.execution_id
+            if not execution_id:
+                return
+
+            parent_context = context_api.get_current()
+            span = self._tracer.start_span(
+                f"{node.title}",
+                kind=SpanKind.INTERNAL,
+                context=parent_context,
+            )
+
+            new_context = set_span_in_context(span)
+            token = context_api.attach(new_context)
+
+            self._node_contexts[execution_id] = _NodeSpanContext(span=span, token=token)
+
+        except Exception as e:
+            logger.warning("Failed to create OpenTelemetry span for node %s: %s", node.id, e)
+
+    @override
+    def on_node_run_end(self, node: Node, error: Exception | None) -> None:
+        """
+        Called when a node finishes execution.
+
+        Sets complete attributes, records exceptions, and ends the span.
+        """
+        if self._is_disabled:
+            return
+
+        try:
+            execution_id = node.execution_id
+            if not execution_id:
+                return
+            node_context = self._node_contexts.get(execution_id)
+            if not node_context:
+                return
+
+            span = node_context.span
+            parser = self._get_parser(node)
+            try:
+                parser.parse(node=node, span=span, error=error)
+                span.end()
+            finally:
+                token = node_context.token
+                if token is not None:
+                    try:
+                        context_api.detach(token)
+                    except Exception:
+                        logger.warning("Failed to detach OpenTelemetry token: %s", token)
+                self._node_contexts.pop(execution_id, None)
+
+        except Exception as e:
+            logger.warning("Failed to end OpenTelemetry span for node %s: %s", node.id, e)
+
+    @override
+    def on_event(self, event) -> None:
+        """Not used in this layer."""
+        pass
+
+    @override
+    def on_graph_end(self, error: Exception | None) -> None:
+        """Called when graph execution ends."""
+        if self._node_contexts:
+            logger.warning(
+                "ObservabilityLayer: %d node spans were not properly ended",
+                len(self._node_contexts),
+            )
+            self._node_contexts.clear()
diff --git a/api/core/workflow/graph_engine/worker.py b/api/core/workflow/graph_engine/worker.py
index 73e59ee298..e37a08ae47 100644
--- a/api/core/workflow/graph_engine/worker.py
+++ b/api/core/workflow/graph_engine/worker.py
@@ -9,6 +9,7 @@ import contextvars
 import queue
 import threading
 import time
+from collections.abc import Sequence
 from datetime import datetime
 from typing import final
 from uuid import uuid4
@@ -17,6 +18,7 @@ from flask import Flask
 from typing_extensions import override
 
 from core.workflow.graph import Graph
+from core.workflow.graph_engine.layers.base import GraphEngineLayer
 from core.workflow.graph_events import GraphNodeEventBase, NodeRunFailedEvent
 from core.workflow.nodes.base.node import Node
 from libs.flask_utils import preserve_flask_contexts
@@ -39,6 +41,7 @@ class Worker(threading.Thread):
         ready_queue: ReadyQueue,
         event_queue: queue.Queue[GraphNodeEventBase],
         graph: Graph,
+        layers: Sequence[GraphEngineLayer],
         worker_id: int = 0,
         flask_app: Flask | None = None,
         context_vars: contextvars.Context | None = None,
@@ -50,6 +53,7 @@ class Worker(threading.Thread):
             ready_queue: Ready queue containing node IDs ready for execution
             event_queue: Queue for pushing execution events
             graph: Graph containing nodes to execute
+            layers: Graph engine layers for node execution hooks
             worker_id: Unique identifier for this worker
             flask_app: Optional Flask application for context preservation
             context_vars: Optional context variables to preserve in worker thread
@@ -63,6 +67,7 @@ class Worker(threading.Thread):
         self._context_vars = context_vars
         self._stop_event = threading.Event()
         self._last_task_time = time.time()
+        self._layers = layers if layers is not None else []
 
     def stop(self) -> None:
         """Signal the worker to stop processing."""
@@ -122,20 +127,51 @@ class Worker(threading.Thread):
         Args:
             node: The node instance to execute
         """
-        # Execute the node with preserved context if Flask app is provided
+        node.ensure_execution_id()
+
+        error: Exception | None = None
+
         if self._flask_app and self._context_vars:
             with preserve_flask_contexts(
                 flask_app=self._flask_app,
                 context_vars=self._context_vars,
             ):
-                # Execute the node
+                self._invoke_node_run_start_hooks(node)
+                try:
+                    node_events = node.run()
+                    for event in node_events:
+                        self._event_queue.put(event)
+                except Exception as exc:
+                    error = exc
+                    raise
+                finally:
+                    self._invoke_node_run_end_hooks(node, error)
+        else:
+            self._invoke_node_run_start_hooks(node)
+            try:
                 node_events = node.run()
                 for event in node_events:
-                    # Forward event to dispatcher immediately for streaming
                     self._event_queue.put(event)
-        else:
-            # Execute without context preservation
-            node_events = node.run()
-            for event in node_events:
-                # Forward event to dispatcher immediately for streaming
-                self._event_queue.put(event)
+            except Exception as exc:
+                error = exc
+                raise
+            finally:
+                self._invoke_node_run_end_hooks(node, error)
+
+    def _invoke_node_run_start_hooks(self, node: Node) -> None:
+        """Invoke on_node_run_start hooks for all layers."""
+        for layer in self._layers:
+            try:
+                layer.on_node_run_start(node)
+            except Exception:
+                # Silently ignore layer errors to prevent disrupting node execution
+                continue
+
+    def _invoke_node_run_end_hooks(self, node: Node, error: Exception | None) -> None:
+        """Invoke on_node_run_end hooks for all layers."""
+        for layer in self._layers:
+            try:
+                layer.on_node_run_end(node, error)
+            except Exception:
+                # Silently ignore layer errors to prevent disrupting node execution
+                continue
diff --git a/api/core/workflow/graph_engine/worker_management/worker_pool.py b/api/core/workflow/graph_engine/worker_management/worker_pool.py
index a9aada9ea5..5b9234586b 100644
--- a/api/core/workflow/graph_engine/worker_management/worker_pool.py
+++ b/api/core/workflow/graph_engine/worker_management/worker_pool.py
@@ -14,6 +14,7 @@ from configs import dify_config
 from core.workflow.graph import Graph
 from core.workflow.graph_events import GraphNodeEventBase
 
+from ..layers.base import GraphEngineLayer
 from ..ready_queue import ReadyQueue
 from ..worker import Worker
 
@@ -39,6 +40,7 @@ class WorkerPool:
         ready_queue: ReadyQueue,
         event_queue: queue.Queue[GraphNodeEventBase],
         graph: Graph,
+        layers: list[GraphEngineLayer],
         flask_app: "Flask | None" = None,
         context_vars: "Context | None" = None,
         min_workers: int | None = None,
@@ -53,6 +55,7 @@ class WorkerPool:
             ready_queue: Ready queue for nodes ready for execution
             event_queue: Queue for worker events
             graph: The workflow graph
+            layers: Graph engine layers for node execution hooks
             flask_app: Optional Flask app for context preservation
             context_vars: Optional context variables
             min_workers: Minimum number of workers
@@ -65,6 +68,7 @@ class WorkerPool:
         self._graph = graph
         self._flask_app = flask_app
         self._context_vars = context_vars
+        self._layers = layers
 
         # Scaling parameters with defaults
         self._min_workers = min_workers or dify_config.GRAPH_ENGINE_MIN_WORKERS
@@ -144,6 +148,7 @@ class WorkerPool:
             ready_queue=self._ready_queue,
             event_queue=self._event_queue,
             graph=self._graph,
+            layers=self._layers,
             worker_id=worker_id,
             flask_app=self._flask_app,
             context_vars=self._context_vars,
diff --git a/api/core/workflow/nodes/base/node.py b/api/core/workflow/nodes/base/node.py
index c2e1105971..8ebba3659c 100644
--- a/api/core/workflow/nodes/base/node.py
+++ b/api/core/workflow/nodes/base/node.py
@@ -244,6 +244,15 @@ class Node(Generic[NodeDataT]):
     def graph_init_params(self) -> "GraphInitParams":
         return self._graph_init_params
 
+    @property
+    def execution_id(self) -> str:
+        return self._node_execution_id
+
+    def ensure_execution_id(self) -> str:
+        if not self._node_execution_id:
+            self._node_execution_id = str(uuid4())
+        return self._node_execution_id
+
     def _hydrate_node_data(self, data: Mapping[str, Any]) -> NodeDataT:
         return cast(NodeDataT, self._node_data_type.model_validate(data))
 
@@ -256,14 +265,12 @@ class Node(Generic[NodeDataT]):
         raise NotImplementedError
 
     def run(self) -> Generator[GraphNodeEventBase, None, None]:
-        # Generate a single node execution ID to use for all events
-        if not self._node_execution_id:
-            self._node_execution_id = str(uuid4())
+        execution_id = self.ensure_execution_id()
         self._start_at = naive_utc_now()
 
         # Create and push start event with required fields
         start_event = NodeRunStartedEvent(
-            id=self._node_execution_id,
+            id=execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.title,
@@ -321,7 +328,7 @@ class Node(Generic[NodeDataT]):
                 if isinstance(event, NodeEventBase):  # pyright: ignore[reportUnnecessaryIsInstance]
                     yield self._dispatch(event)
                 elif isinstance(event, GraphNodeEventBase) and not event.in_iteration_id and not event.in_loop_id:  # pyright: ignore[reportUnnecessaryIsInstance]
-                    event.id = self._node_execution_id
+                    event.id = self.execution_id
                     yield event
                 else:
                     yield event
@@ -333,7 +340,7 @@ class Node(Generic[NodeDataT]):
                 error_type="WorkflowNodeError",
             )
             yield NodeRunFailedEvent(
-                id=self._node_execution_id,
+                id=self.execution_id,
                 node_id=self._node_id,
                 node_type=self.node_type,
                 start_at=self._start_at,
@@ -512,7 +519,7 @@ class Node(Generic[NodeDataT]):
         match result.status:
             case WorkflowNodeExecutionStatus.FAILED:
                 return NodeRunFailedEvent(
-                    id=self._node_execution_id,
+                    id=self.execution_id,
                     node_id=self.id,
                     node_type=self.node_type,
                     start_at=self._start_at,
@@ -521,7 +528,7 @@ class Node(Generic[NodeDataT]):
                 )
             case WorkflowNodeExecutionStatus.SUCCEEDED:
                 return NodeRunSucceededEvent(
-                    id=self._node_execution_id,
+                    id=self.execution_id,
                     node_id=self.id,
                     node_type=self.node_type,
                     start_at=self._start_at,
@@ -537,7 +544,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: StreamChunkEvent) -> NodeRunStreamChunkEvent:
         return NodeRunStreamChunkEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             selector=event.selector,
@@ -550,7 +557,7 @@ class Node(Generic[NodeDataT]):
         match event.node_run_result.status:
             case WorkflowNodeExecutionStatus.SUCCEEDED:
                 return NodeRunSucceededEvent(
-                    id=self._node_execution_id,
+                    id=self.execution_id,
                     node_id=self._node_id,
                     node_type=self.node_type,
                     start_at=self._start_at,
@@ -558,7 +565,7 @@ class Node(Generic[NodeDataT]):
                 )
             case WorkflowNodeExecutionStatus.FAILED:
                 return NodeRunFailedEvent(
-                    id=self._node_execution_id,
+                    id=self.execution_id,
                     node_id=self._node_id,
                     node_type=self.node_type,
                     start_at=self._start_at,
@@ -573,7 +580,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: PauseRequestedEvent) -> NodeRunPauseRequestedEvent:
         return NodeRunPauseRequestedEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_run_result=NodeRunResult(status=WorkflowNodeExecutionStatus.PAUSED),
@@ -583,7 +590,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: AgentLogEvent) -> NodeRunAgentLogEvent:
         return NodeRunAgentLogEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             message_id=event.message_id,
@@ -599,7 +606,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: LoopStartedEvent) -> NodeRunLoopStartedEvent:
         return NodeRunLoopStartedEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -612,7 +619,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: LoopNextEvent) -> NodeRunLoopNextEvent:
         return NodeRunLoopNextEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -623,7 +630,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: LoopSucceededEvent) -> NodeRunLoopSucceededEvent:
         return NodeRunLoopSucceededEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -637,7 +644,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: LoopFailedEvent) -> NodeRunLoopFailedEvent:
         return NodeRunLoopFailedEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -652,7 +659,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: IterationStartedEvent) -> NodeRunIterationStartedEvent:
         return NodeRunIterationStartedEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -665,7 +672,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: IterationNextEvent) -> NodeRunIterationNextEvent:
         return NodeRunIterationNextEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -676,7 +683,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: IterationSucceededEvent) -> NodeRunIterationSucceededEvent:
         return NodeRunIterationSucceededEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -690,7 +697,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: IterationFailedEvent) -> NodeRunIterationFailedEvent:
         return NodeRunIterationFailedEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             node_title=self.node_data.title,
@@ -705,7 +712,7 @@ class Node(Generic[NodeDataT]):
     @_dispatch.register
     def _(self, event: RunRetrieverResourceEvent) -> NodeRunRetrieverResourceEvent:
         return NodeRunRetrieverResourceEvent(
-            id=self._node_execution_id,
+            id=self.execution_id,
             node_id=self._node_id,
             node_type=self.node_type,
             retriever_resources=event.retriever_resources,
diff --git a/api/core/workflow/workflow_entry.py b/api/core/workflow/workflow_entry.py
index d4ec29518a..ddf545bb34 100644
--- a/api/core/workflow/workflow_entry.py
+++ b/api/core/workflow/workflow_entry.py
@@ -14,7 +14,7 @@ from core.workflow.errors import WorkflowNodeRunFailedError
 from core.workflow.graph import Graph
 from core.workflow.graph_engine import GraphEngine
 from core.workflow.graph_engine.command_channels import InMemoryChannel
-from core.workflow.graph_engine.layers import DebugLoggingLayer, ExecutionLimitsLayer
+from core.workflow.graph_engine.layers import DebugLoggingLayer, ExecutionLimitsLayer, ObservabilityLayer
 from core.workflow.graph_engine.protocols.command_channel import CommandChannel
 from core.workflow.graph_events import GraphEngineEvent, GraphNodeEventBase, GraphRunFailedEvent
 from core.workflow.nodes import NodeType
@@ -23,6 +23,7 @@ from core.workflow.nodes.node_mapping import NODE_TYPE_CLASSES_MAPPING
 from core.workflow.runtime import GraphRuntimeState, VariablePool
 from core.workflow.system_variable import SystemVariable
 from core.workflow.variable_loader import DUMMY_VARIABLE_LOADER, VariableLoader, load_into_variable_pool
+from extensions.otel.runtime import is_instrument_flag_enabled
 from factories import file_factory
 from models.enums import UserFrom
 from models.workflow import Workflow
@@ -98,6 +99,10 @@ class WorkflowEntry:
         )
         self.graph_engine.layer(limits_layer)
 
+        # Add observability layer when OTel is enabled
+        if dify_config.ENABLE_OTEL or is_instrument_flag_enabled():
+            self.graph_engine.layer(ObservabilityLayer())
+
     def run(self) -> Generator[GraphEngineEvent, None, None]:
         graph_engine = self.graph_engine
 
diff --git a/api/extensions/otel/decorators/base.py b/api/extensions/otel/decorators/base.py
index 9604a3b6d5..14221d24dd 100644
--- a/api/extensions/otel/decorators/base.py
+++ b/api/extensions/otel/decorators/base.py
@@ -1,5 +1,4 @@
 import functools
-import os
 from collections.abc import Callable
 from typing import Any, TypeVar, cast
 
@@ -7,22 +6,13 @@ from opentelemetry.trace import get_tracer
 
 from configs import dify_config
 from extensions.otel.decorators.handler import SpanHandler
+from extensions.otel.runtime import is_instrument_flag_enabled
 
 T = TypeVar("T", bound=Callable[..., Any])
 
 _HANDLER_INSTANCES: dict[type[SpanHandler], SpanHandler] = {SpanHandler: SpanHandler()}
 
 
-def _is_instrument_flag_enabled() -> bool:
-    """
-    Check if external instrumentation is enabled via environment variable.
-
-    Third-party non-invasive instrumentation agents set this flag to coordinate
-    with Dify's manual OpenTelemetry instrumentation.
-    """
-    return os.getenv("ENABLE_OTEL_FOR_INSTRUMENT", "").strip().lower() == "true"
-
-
 def _get_handler_instance(handler_class: type[SpanHandler]) -> SpanHandler:
     """Get or create a singleton instance of the handler class."""
     if handler_class not in _HANDLER_INSTANCES:
@@ -43,7 +33,7 @@ def trace_span(handler_class: type[SpanHandler] | None = None) -> Callable[[T],
     def decorator(func: T) -> T:
         @functools.wraps(func)
         def wrapper(*args: Any, **kwargs: Any) -> Any:
-            if not (dify_config.ENABLE_OTEL or _is_instrument_flag_enabled()):
+            if not (dify_config.ENABLE_OTEL or is_instrument_flag_enabled()):
                 return func(*args, **kwargs)
 
             handler = _get_handler_instance(handler_class or SpanHandler)
diff --git a/api/extensions/otel/runtime.py b/api/extensions/otel/runtime.py
index 16f5ccf488..a7181d2683 100644
--- a/api/extensions/otel/runtime.py
+++ b/api/extensions/otel/runtime.py
@@ -1,4 +1,5 @@
 import logging
+import os
 import sys
 from typing import Union
 
@@ -71,3 +72,13 @@ def init_celery_worker(*args, **kwargs):
         if dify_config.DEBUG:
             logger.info("Initializing OpenTelemetry for Celery worker")
         CeleryInstrumentor(tracer_provider=tracer_provider, meter_provider=metric_provider).instrument()
+
+
+def is_instrument_flag_enabled() -> bool:
+    """
+    Check if external instrumentation is enabled via environment variable.
+
+    Third-party non-invasive instrumentation agents set this flag to coordinate
+    with Dify's manual OpenTelemetry instrumentation.
+    """
+    return os.getenv("ENABLE_OTEL_FOR_INSTRUMENT", "").strip().lower() == "true"
diff --git a/api/tests/unit_tests/core/workflow/graph_engine/layers/__init__.py b/api/tests/unit_tests/core/workflow/graph_engine/layers/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/api/tests/unit_tests/core/workflow/graph_engine/layers/conftest.py b/api/tests/unit_tests/core/workflow/graph_engine/layers/conftest.py
new file mode 100644
index 0000000000..b18a3369e9
--- /dev/null
+++ b/api/tests/unit_tests/core/workflow/graph_engine/layers/conftest.py
@@ -0,0 +1,101 @@
+"""
+Shared fixtures for ObservabilityLayer tests.
+"""
+
+from unittest.mock import MagicMock, patch
+
+import pytest
+from opentelemetry.sdk.trace import TracerProvider
+from opentelemetry.sdk.trace.export import SimpleSpanProcessor
+from opentelemetry.sdk.trace.export.in_memory_span_exporter import InMemorySpanExporter
+from opentelemetry.trace import set_tracer_provider
+
+from core.workflow.enums import NodeType
+
+
+@pytest.fixture
+def memory_span_exporter():
+    """Provide an in-memory span exporter for testing."""
+    return InMemorySpanExporter()
+
+
+@pytest.fixture
+def tracer_provider_with_memory_exporter(memory_span_exporter):
+    """Provide a TracerProvider configured with memory exporter."""
+    import opentelemetry.trace as trace_api
+
+    trace_api._TRACER_PROVIDER = None
+    trace_api._TRACER_PROVIDER_SET_ONCE._done = False
+
+    provider = TracerProvider()
+    processor = SimpleSpanProcessor(memory_span_exporter)
+    provider.add_span_processor(processor)
+    set_tracer_provider(provider)
+
+    yield provider
+
+    provider.force_flush()
+
+
+@pytest.fixture
+def mock_start_node():
+    """Create a mock Start Node."""
+    node = MagicMock()
+    node.id = "test-start-node-id"
+    node.title = "Start Node"
+    node.execution_id = "test-start-execution-id"
+    node.node_type = NodeType.START
+    return node
+
+
+@pytest.fixture
+def mock_llm_node():
+    """Create a mock LLM Node."""
+    node = MagicMock()
+    node.id = "test-llm-node-id"
+    node.title = "LLM Node"
+    node.execution_id = "test-llm-execution-id"
+    node.node_type = NodeType.LLM
+    return node
+
+
+@pytest.fixture
+def mock_tool_node():
+    """Create a mock Tool Node with tool-specific attributes."""
+    from core.tools.entities.tool_entities import ToolProviderType
+    from core.workflow.nodes.tool.entities import ToolNodeData
+
+    node = MagicMock()
+    node.id = "test-tool-node-id"
+    node.title = "Test Tool Node"
+    node.execution_id = "test-tool-execution-id"
+    node.node_type = NodeType.TOOL
+
+    tool_data = ToolNodeData(
+        title="Test Tool Node",
+        desc=None,
+        provider_id="test-provider-id",
+        provider_type=ToolProviderType.BUILT_IN,
+        provider_name="test-provider",
+        tool_name="test-tool",
+        tool_label="Test Tool",
+        tool_configurations={},
+        tool_parameters={},
+    )
+    node._node_data = tool_data
+
+    return node
+
+
+@pytest.fixture
+def mock_is_instrument_flag_enabled_false():
+    """Mock is_instrument_flag_enabled to return False."""
+    with patch("core.workflow.graph_engine.layers.observability.is_instrument_flag_enabled", return_value=False):
+        yield
+
+
+@pytest.fixture
+def mock_is_instrument_flag_enabled_true():
+    """Mock is_instrument_flag_enabled to return True."""
+    with patch("core.workflow.graph_engine.layers.observability.is_instrument_flag_enabled", return_value=True):
+        yield
diff --git a/api/tests/unit_tests/core/workflow/graph_engine/layers/test_observability.py b/api/tests/unit_tests/core/workflow/graph_engine/layers/test_observability.py
new file mode 100644
index 0000000000..458cf2cc67
--- /dev/null
+++ b/api/tests/unit_tests/core/workflow/graph_engine/layers/test_observability.py
@@ -0,0 +1,219 @@
+"""
+Tests for ObservabilityLayer.
+
+Test coverage:
+- Initialization and enable/disable logic
+- Node span lifecycle (start, end, error handling)
+- Parser integration (default and tool-specific)
+- Graph lifecycle management
+- Disabled mode behavior
+"""
+
+from unittest.mock import patch
+
+import pytest
+from opentelemetry.trace import StatusCode
+
+from core.workflow.enums import NodeType
+from core.workflow.graph_engine.layers.observability import ObservabilityLayer
+
+
+class TestObservabilityLayerInitialization:
+    """Test ObservabilityLayer initialization logic."""
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_initialization_when_otel_enabled(self, tracer_provider_with_memory_exporter):
+        """Test that layer initializes correctly when OTel is enabled."""
+        layer = ObservabilityLayer()
+        assert not layer._is_disabled
+        assert layer._tracer is not None
+        assert NodeType.TOOL in layer._parsers
+        assert layer._default_parser is not None
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", False)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_true")
+    def test_initialization_when_instrument_flag_enabled(self, tracer_provider_with_memory_exporter):
+        """Test that layer enables when instrument flag is enabled."""
+        layer = ObservabilityLayer()
+        assert not layer._is_disabled
+        assert layer._tracer is not None
+        assert NodeType.TOOL in layer._parsers
+        assert layer._default_parser is not None
+
+
+class TestObservabilityLayerNodeSpanLifecycle:
+    """Test node span creation and lifecycle management."""
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_node_span_created_and_ended(
+        self, tracer_provider_with_memory_exporter, memory_span_exporter, mock_llm_node
+    ):
+        """Test that span is created on node start and ended on node end."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_start(mock_llm_node)
+        layer.on_node_run_end(mock_llm_node, None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 1
+        assert spans[0].name == mock_llm_node.title
+        assert spans[0].status.status_code == StatusCode.OK
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_node_error_recorded_in_span(
+        self, tracer_provider_with_memory_exporter, memory_span_exporter, mock_llm_node
+    ):
+        """Test that node execution errors are recorded in span."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        error = ValueError("Test error")
+        layer.on_node_run_start(mock_llm_node)
+        layer.on_node_run_end(mock_llm_node, error)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 1
+        assert spans[0].status.status_code == StatusCode.ERROR
+        assert len(spans[0].events) > 0
+        assert any("exception" in event.name.lower() for event in spans[0].events)
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_node_end_without_start_handled_gracefully(
+        self, tracer_provider_with_memory_exporter, memory_span_exporter, mock_llm_node
+    ):
+        """Test that ending a node without start doesn't crash."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_end(mock_llm_node, None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 0
+
+
+class TestObservabilityLayerParserIntegration:
+    """Test parser integration for different node types."""
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_default_parser_used_for_regular_node(
+        self, tracer_provider_with_memory_exporter, memory_span_exporter, mock_start_node
+    ):
+        """Test that default parser is used for non-tool nodes."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_start(mock_start_node)
+        layer.on_node_run_end(mock_start_node, None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 1
+        attrs = spans[0].attributes
+        assert attrs["node.id"] == mock_start_node.id
+        assert attrs["node.execution_id"] == mock_start_node.execution_id
+        assert attrs["node.type"] == mock_start_node.node_type.value
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_tool_parser_used_for_tool_node(
+        self, tracer_provider_with_memory_exporter, memory_span_exporter, mock_tool_node
+    ):
+        """Test that tool parser is used for tool nodes."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_start(mock_tool_node)
+        layer.on_node_run_end(mock_tool_node, None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 1
+        attrs = spans[0].attributes
+        assert attrs["node.id"] == mock_tool_node.id
+        assert attrs["tool.provider.id"] == mock_tool_node._node_data.provider_id
+        assert attrs["tool.provider.type"] == mock_tool_node._node_data.provider_type.value
+        assert attrs["tool.name"] == mock_tool_node._node_data.tool_name
+
+
+class TestObservabilityLayerGraphLifecycle:
+    """Test graph lifecycle management."""
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_on_graph_start_clears_contexts(self, tracer_provider_with_memory_exporter, mock_llm_node):
+        """Test that on_graph_start clears node contexts."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_start(mock_llm_node)
+        assert len(layer._node_contexts) == 1
+
+        layer.on_graph_start()
+        assert len(layer._node_contexts) == 0
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_on_graph_end_with_no_unfinished_spans(
+        self, tracer_provider_with_memory_exporter, memory_span_exporter, mock_llm_node
+    ):
+        """Test that on_graph_end handles normal completion."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_start(mock_llm_node)
+        layer.on_node_run_end(mock_llm_node, None)
+        layer.on_graph_end(None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 1
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", True)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_on_graph_end_with_unfinished_spans_logs_warning(
+        self, tracer_provider_with_memory_exporter, mock_llm_node, caplog
+    ):
+        """Test that on_graph_end logs warning for unfinished spans."""
+        layer = ObservabilityLayer()
+        layer.on_graph_start()
+
+        layer.on_node_run_start(mock_llm_node)
+        assert len(layer._node_contexts) == 1
+
+        layer.on_graph_end(None)
+
+        assert len(layer._node_contexts) == 0
+        assert "node spans were not properly ended" in caplog.text
+
+
+class TestObservabilityLayerDisabledMode:
+    """Test behavior when layer is disabled."""
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", False)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_disabled_mode_skips_node_start(self, memory_span_exporter, mock_start_node):
+        """Test that disabled layer doesn't create spans on node start."""
+        layer = ObservabilityLayer()
+        assert layer._is_disabled
+
+        layer.on_graph_start()
+        layer.on_node_run_start(mock_start_node)
+        layer.on_node_run_end(mock_start_node, None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 0
+
+    @patch("core.workflow.graph_engine.layers.observability.dify_config.ENABLE_OTEL", False)
+    @pytest.mark.usefixtures("mock_is_instrument_flag_enabled_false")
+    def test_disabled_mode_skips_node_end(self, memory_span_exporter, mock_llm_node):
+        """Test that disabled layer doesn't process node end."""
+        layer = ObservabilityLayer()
+        assert layer._is_disabled
+
+        layer.on_node_run_end(mock_llm_node, None)
+
+        spans = memory_span_exporter.get_finished_spans()
+        assert len(spans) == 0