diff --git a/backend/build.gradle.kts b/backend/build.gradle.kts
index dfed056..09b0cfe 100644
--- a/backend/build.gradle.kts
+++ b/backend/build.gradle.kts
@@ -42,6 +42,19 @@ dependencies {
     implementation(mn.jackson.databind)
     implementation(mn.jackson.datatype.jsr310)
 
+    // Distributed tracing (OpenTelemetry). Spans/export are only active when
+    // OTEL_TRACES_EXPORTER=otlp is set (prod/Docker) — see application.yml.
+    implementation(mn.micronaut.tracing.opentelemetry.http)
+    implementation(mn.micronaut.tracing.opentelemetry.jdbc)
+    implementation(libs.opentelemetry.exporter.otlp)
+
+    // Structured JSON logging for Grafana Loki + trace/log correlation.
+    // logstash encoder renders JSON; the OTel MDC appender injects trace_id/span_id.
+    implementation(libs.logstash.logback.encoder)
+    implementation(libs.opentelemetry.logback.mdc)
+    // Enables the <if>/<then>/<else> conditional in logback.xml.
+    runtimeOnly(libs.janino)
+
     testImplementation(mn.micronaut.test.rest.assured)
     testImplementation(mn.junit.jupiter.api)
     testImplementation(mn.junit.jupiter.params)
@@ -76,7 +89,9 @@ micronaut {
         optimizeClassLoading = true
         deduceEnvironment = true
         optimizeNetty = true
-        replaceLogbackXml = true
+        // Keep logback.xml parsed at runtime so the env-driven JSON/plain switch
+        // and ${...} substitutions work in the optimized (Docker/prod) jar.
+        replaceLogbackXml = false
     }
 }
 
diff --git a/backend/src/main/resources/application.yml b/backend/src/main/resources/application.yml
index 7b4c913..7697a95 100644
--- a/backend/src/main/resources/application.yml
+++ b/backend/src/main/resources/application.yml
@@ -21,6 +21,29 @@ jpa:
           auto: update
         show_sql: false
 
+# OpenTelemetry — tracing is disabled unless OTEL_TRACES_EXPORTER=otlp is set
+# (do this in the Docker/prod container). Metrics stay on Prometheus/Micrometer.
+otel:
+  service:
+    name: ${OTEL_SERVICE_NAME:otis}
+  traces:
+    exporter: ${OTEL_TRACES_EXPORTER:none}
+  metrics:
+    exporter: none
+  logs:
+    exporter: none
+  exporter:
+    otlp:
+      protocol: grpc
+      endpoint: ${OTEL_EXPORTER_OTLP_ENDPOINT:`http://localhost:4317`}
+  exclusions:
+    - /health
+    - /health/.*
+    - /prometheus
+    - /swagger
+    - /swagger/.*
+    - /swagger-ui/.*
+
 # OpenAPI
 router:
   static-resources:
diff --git a/backend/src/main/resources/logback.xml b/backend/src/main/resources/logback.xml
index 546c784..1bbeb63 100644
--- a/backend/src/main/resources/logback.xml
+++ b/backend/src/main/resources/logback.xml
@@ -1,10 +1,34 @@
 <configuration>
-    <appender name="STDOUT" class="ch.qos.logback.core.ConsoleAppender">
-        <encoder>
-            <pattern>%d{yyyy-MM-dd HH:mm:ss} [%thread] %-5level %logger{36} - %msg%n</pattern>
-        </encoder>
+    <property name="LOG_JSON" value="${LOG_JSON:-false}"/>
+
+    <if condition='"true".equalsIgnoreCase(property("LOG_JSON"))'>
+        <then>
+            <appender name="STDOUT" class="ch.qos.logback.core.ConsoleAppender">
+                <encoder class="net.logstash.logback.encoder.LogstashEncoder">
+                    <fieldNames>
+                        <timestamp>timestamp</timestamp>
+                        <message>message</message>
+                        <logger>logger</logger>
+                        <thread>thread</thread>
+                        <level>level</level>
+                    </fieldNames>
+                </encoder>
+            </appender>
+        </then>
+        <else>
+            <appender name="STDOUT" class="ch.qos.logback.core.ConsoleAppender">
+                <encoder>
+                    <pattern>%d{yyyy-MM-dd HH:mm:ss} [%thread] %-5level %logger{36} - %msg%n</pattern>
+                </encoder>
+            </appender>
+        </else>
+    </if>
+
+    <appender name="OTEL" class="io.opentelemetry.instrumentation.logback.mdc.v1_0.OpenTelemetryAppender">
+        <appender-ref ref="STDOUT"/>
     </appender>
+
     <root level="INFO">
-        <appender-ref ref="STDOUT" />
+        <appender-ref ref="OTEL"/>
     </root>
 </configuration>
\ No newline at end of file
diff --git a/settings.gradle.kts b/settings.gradle.kts
index e7b6d30..5ebf888 100644
--- a/settings.gradle.kts
+++ b/settings.gradle.kts
@@ -19,6 +19,10 @@ dependencyResolutionManagement {
             version("jackson", "2.22.0")
             version("jakarta-annotation", "3.0.0")
 
+            version("logstash-logback-encoder", "8.1")
+            version("opentelemetry-instrumentation-alpha", "2.20.1-alpha")
+            version("janino", "3.1.12")
+
             library(
                 "jetbrains.annotations",
                 "org.jetbrains",
@@ -39,6 +43,13 @@ dependencyResolutionManagement {
             library("jackson-databind-nullable", "org.openapitools", "jackson-databind-nullable").version("0.2.10")
             library("jakarta-annotation-api", "jakarta.annotation", "jakarta.annotation-api").versionRef("jakarta-annotation")
 
+            // Observability — JSON logging + OpenTelemetry (see backend/build.gradle.kts).
+            // Version managed by the Micronaut platform BOM (opentelemetry-bom).
+            library("opentelemetry-exporter-otlp", "io.opentelemetry", "opentelemetry-exporter-otlp").withoutVersion()
+            library("logstash-logback-encoder", "net.logstash.logback", "logstash-logback-encoder").versionRef("logstash-logback-encoder")
+            library("opentelemetry-logback-mdc", "io.opentelemetry.instrumentation", "opentelemetry-logback-mdc-1.0").versionRef("opentelemetry-instrumentation-alpha")
+            library("janino", "org.codehaus.janino", "janino").versionRef("janino")
+
 
             plugin("micronaut.application", "io.micronaut.application").versionRef("micronaut")
             plugin("micronaut.aot", "io.micronaut.aot").versionRef("micronaut")