diff --git a/phpstan-baseline.neon b/phpstan-baseline.neon
index e4ce16ef5..7f2eb603b 100644
--- a/phpstan-baseline.neon
+++ b/phpstan-baseline.neon
@@ -260,11 +260,6 @@ parameters:
 			count: 1
 			path: src/Options.php
 
-		-
-			message: "#^Method Sentry\\\\Options\\:\\:isStrictTracePropagationEnabled\\(\\) should return bool but returns mixed\\.$#"
-			count: 1
-			path: src/Options.php
-
 		-
 			message: "#^Method Sentry\\\\Options\\:\\:shouldAttachMetricCodeLocations\\(\\) should return bool but returns mixed\\.$#"
 			count: 1
diff --git a/src/Options.php b/src/Options.php
index 3f75ad897..5138b6489 100644
--- a/src/Options.php
+++ b/src/Options.php
@@ -61,6 +61,12 @@ public function __construct(array $options = [])
 
         $this->configureOptions($this->resolver);
 
+        // Migrate `strict_trace_propagation` over to `strict_trace_continuation` if not set.
+        // If both are set, then `strict_trace_continuation` will take precedence.
+        if (isset($options['strict_trace_propagation']) && !isset($options['strict_trace_continuation'])) {
+            $options['strict_trace_continuation'] = $options['strict_trace_propagation'];
+        }
+
         $this->options = $this->resolver->resolve($options);
 
         if ($this->options['enable_tracing'] === true && $this->options['traces_sample_rate'] === null) {
@@ -775,25 +781,50 @@ public function setTracePropagationTargets(array $tracePropagationTargets): self
     }
 
     /**
-     * Returns whether strict trace propagation is enabled or not.
+     * Returns whether strict trace continuation is enabled or not.
      */
-    public function isStrictTracePropagationEnabled(): bool
+    public function isStrictTraceContinuationEnabled(): bool
     {
-        return $this->options['strict_trace_propagation'];
+        /**
+         * @var bool $result
+         */
+        $result = $this->options['strict_trace_continuation'];
+
+        return $result;
     }
 
     /**
-     * Sets if strict trace propagation should be enabled or not.
+     * Sets if strict trace continuation should be enabled or not.
      */
-    public function enableStrictTracePropagation(bool $strictTracePropagation): self
+    public function enableStrictTraceContinuation(bool $strictTraceContinuation): self
     {
-        $options = array_merge($this->options, ['strict_trace_propagation' => $strictTracePropagation]);
+        $options = array_merge($this->options, ['strict_trace_continuation' => $strictTraceContinuation]);
 
         $this->options = $this->resolver->resolve($options);
 
         return $this;
     }
 
+    /**
+     * Returns whether strict trace propagation is enabled or not.
+     *
+     * @deprecated since version 4.21. To be removed in version 5.0. Use `isStrictTraceContinuationEnabled` instead.
+     */
+    public function isStrictTracePropagationEnabled(): bool
+    {
+        return $this->isStrictTraceContinuationEnabled();
+    }
+
+    /**
+     * Sets if strict trace propagation should be enabled or not.
+     *
+     * @deprecated since version 4.21. To be removed in version 5.0. Use `enableStrictTraceContinuation` instead.
+     */
+    public function enableStrictTracePropagation(bool $strictTracePropagation): self
+    {
+        return $this->enableStrictTraceContinuation($strictTracePropagation);
+    }
+
     /**
      * Gets a list of default tags for events.
      *
@@ -1352,6 +1383,7 @@ private function configureOptions(OptionsResolver $resolver): void
                 return $metric;
             },
             'trace_propagation_targets' => null,
+            'strict_trace_continuation' => false,
             'strict_trace_propagation' => false,
             'tags' => [],
             'error_types' => null,
@@ -1406,6 +1438,7 @@ private function configureOptions(OptionsResolver $resolver): void
         $resolver->setAllowedTypes('ignore_exceptions', 'string[]');
         $resolver->setAllowedTypes('ignore_transactions', 'string[]');
         $resolver->setAllowedTypes('trace_propagation_targets', ['null', 'string[]']);
+        $resolver->setAllowedTypes('strict_trace_continuation', 'bool');
         $resolver->setAllowedTypes('strict_trace_propagation', 'bool');
         $resolver->setAllowedTypes('tags', 'string[]');
         $resolver->setAllowedTypes('error_types', ['null', 'int']);
diff --git a/src/Tracing/DynamicSamplingContext.php b/src/Tracing/DynamicSamplingContext.php
index 0304504ce..abea31a83 100644
--- a/src/Tracing/DynamicSamplingContext.php
+++ b/src/Tracing/DynamicSamplingContext.php
@@ -167,22 +167,7 @@ public static function fromTransaction(Transaction $transaction, HubInterface $h
         $client = $hub->getClient();
 
         if ($client !== null) {
-            $options = $client->getOptions();
-
-            if ($options->getDsn() !== null && $options->getDsn()->getPublicKey() !== null) {
-                $samplingContext->set('public_key', $options->getDsn()->getPublicKey());
-            }
-            if ($options->getDsn() !== null && $options->getDsn()->getOrgId() !== null) {
-                $samplingContext->set('org_id', (string) $options->getDsn()->getOrgId());
-            }
-
-            if ($options->getRelease() !== null) {
-                $samplingContext->set('release', $options->getRelease());
-            }
-
-            if ($options->getEnvironment() !== null) {
-                $samplingContext->set('environment', $options->getEnvironment());
-            }
+            self::setOrgOptions($client->getOptions(), $samplingContext);
         }
 
         if ($transaction->getSampled() !== null) {
@@ -208,11 +193,22 @@ public static function fromOptions(Options $options, Scope $scope): self
             $samplingContext->set('sample_rate', (string) $options->getTracesSampleRate());
         }
 
+        self::setOrgOptions($options, $samplingContext);
+
+        $samplingContext->freeze();
+
+        return $samplingContext;
+    }
+
+    private static function setOrgOptions(Options $options, DynamicSamplingContext $samplingContext): void
+    {
         if ($options->getDsn() !== null && $options->getDsn()->getPublicKey() !== null) {
             $samplingContext->set('public_key', $options->getDsn()->getPublicKey());
         }
 
-        if ($options->getDsn() !== null && $options->getDsn()->getOrgId() !== null) {
+        if ($options->getOrgId() !== null) {
+            $samplingContext->set('org_id', (string) $options->getOrgId());
+        } elseif ($options->getDsn() !== null && $options->getDsn()->getOrgId() !== null) {
             $samplingContext->set('org_id', (string) $options->getDsn()->getOrgId());
         }
 
@@ -223,10 +219,6 @@ public static function fromOptions(Options $options, Scope $scope): self
         if ($options->getEnvironment() !== null) {
             $samplingContext->set('environment', $options->getEnvironment());
         }
-
-        $samplingContext->freeze();
-
-        return $samplingContext;
     }
 
     /**
diff --git a/src/Tracing/Traits/TraceHeaderParserTrait.php b/src/Tracing/Traits/TraceHeaderParserTrait.php
index dd30c29a5..1a5c0f7c0 100644
--- a/src/Tracing/Traits/TraceHeaderParserTrait.php
+++ b/src/Tracing/Traits/TraceHeaderParserTrait.php
@@ -4,6 +4,7 @@
 
 namespace Sentry\Tracing\Traits;
 
+use Sentry\SentrySdk;
 use Sentry\Tracing\DynamicSamplingContext;
 use Sentry\Tracing\SpanId;
 use Sentry\Tracing\TraceId;
@@ -65,6 +66,14 @@ protected static function parseTraceAndBaggageHeaders(string $sentryTrace, strin
 
         $samplingContext = DynamicSamplingContext::fromHeader($baggage);
 
+        if ($hasSentryTrace && !self::shouldContinueTrace($samplingContext)) {
+            $result['traceId'] = null;
+            $result['parentSpanId'] = null;
+            $result['parentSampled'] = null;
+
+            return $result;
+        }
+
         if ($hasSentryTrace) {
             // The request comes from an old SDK which does not support Dynamic Sampling.
             // Propagate the Dynamic Sampling Context as is, but frozen, even without sentry-* entries.
@@ -102,4 +111,51 @@ protected static function parseTraceAndBaggageHeaders(string $sentryTrace, strin
 
         return $result;
     }
+
+    private static function shouldContinueTrace(DynamicSamplingContext $samplingContext): bool
+    {
+        $hub = SentrySdk::getCurrentHub();
+        $client = $hub->getClient();
+
+        if ($client === null) {
+            return true;
+        }
+
+        $options = $client->getOptions();
+        $clientOrgId = $options->getOrgId();
+        if ($clientOrgId === null && $options->getDsn() !== null) {
+            $clientOrgId = $options->getDsn()->getOrgId();
+        }
+
+        $baggageOrgId = $samplingContext->get('org_id');
+        $logger = $options->getLoggerOrNullLogger();
+
+        // both org IDs are set but are not equals
+        if ($clientOrgId !== null && $baggageOrgId !== null && ((string) $clientOrgId !== $baggageOrgId)) {
+            $logger->debug(
+                \sprintf(
+                    "Starting a new trace because org IDs don't match (incoming baggage org_id: %s, SDK org_id: %s)",
+                    $baggageOrgId,
+                    $clientOrgId
+                )
+            );
+
+            return false;
+        }
+
+        // One org ID is not set and strict trace continuation is enabled
+        if ($options->isStrictTraceContinuationEnabled() && ($clientOrgId === null) !== ($baggageOrgId === null)) {
+            $logger->debug(
+                \sprintf(
+                    'Starting a new trace because strict trace continuation is enabled and one org ID is missing (incoming baggage org_id: %s, SDK org_id: %s)',
+                    $baggageOrgId !== null ? $baggageOrgId : 'none',
+                    $clientOrgId !== null ? (string) $clientOrgId : 'none'
+                )
+            );
+
+            return false;
+        }
+
+        return true;
+    }
 }
diff --git a/src/functions.php b/src/functions.php
index 02b32c430..f146aa44c 100644
--- a/src/functions.php
+++ b/src/functions.php
@@ -62,7 +62,7 @@
  *     server_name?: string,
  *     spotlight?: bool,
  *     spotlight_url?: string,
- *     strict_trace_propagation?: bool,
+ *     strict_trace_continuation?: bool,
  *     tags?: array<string>,
  *     trace_propagation_targets?: array<string>|null,
  *     traces_sample_rate?: float|int|null,
@@ -389,13 +389,32 @@ function getBaggage(): string
  */
 function continueTrace(string $sentryTrace, string $baggage): TransactionContext
 {
+    // With the new `strict_trace_continuation`, it's possible that we start two new
+    // traces if we parse the TransactionContext and PropagationContext from the same
+    // headers. To make sure the trace is the same, we will create one transaction
+    // context from headers and copy relevant information over.
+    $transactionContext = TransactionContext::fromHeaders($sentryTrace, $baggage);
+    $propagationContext = PropagationContext::fromDefaults();
+    $metadata = $transactionContext->getMetadata();
+
+    $traceId = $transactionContext->getTraceId() ?? $propagationContext->getTraceId();
+    $transactionContext->setTraceId($traceId);
+    $propagationContext->setTraceId($traceId);
+
+    $propagationContext->setParentSpanId($transactionContext->getParentSpanId());
+    $propagationContext->setSampleRand($metadata->getSampleRand());
+
+    $dynamicSamplingContext = $metadata->getDynamicSamplingContext();
+    if ($dynamicSamplingContext !== null) {
+        $propagationContext->setDynamicSamplingContext($dynamicSamplingContext);
+    }
+
     $hub = SentrySdk::getCurrentHub();
-    $hub->configureScope(static function (Scope $scope) use ($sentryTrace, $baggage) {
-        $propagationContext = PropagationContext::fromHeaders($sentryTrace, $baggage);
+    $hub->configureScope(static function (Scope $scope) use ($propagationContext): void {
         $scope->setPropagationContext($propagationContext);
     });
 
-    return TransactionContext::fromHeaders($sentryTrace, $baggage);
+    return $transactionContext;
 }
 
 /**
diff --git a/tests/FunctionsTest.php b/tests/FunctionsTest.php
index 060b89d7c..b92926d2b 100644
--- a/tests/FunctionsTest.php
+++ b/tests/FunctionsTest.php
@@ -637,4 +637,77 @@ public function testContinueTrace(): void
             $this->assertTrue($dynamicSamplingContext->isFrozen());
         });
     }
+
+    public function testContinueTraceWhenOrgMismatch(): void
+    {
+        $client = $this->createMock(ClientInterface::class);
+        $client->expects($this->once())
+            ->method('getOptions')
+            ->willReturn(new Options([
+                'strict_trace_continuation' => true,
+                'org_id' => 1,
+            ]));
+
+        $hub = new Hub($client);
+        SentrySdk::setCurrentHub($hub);
+
+        $transactionContext = continueTrace(
+            '566e3688a61d4bc888951642d6f14a19-566e3688a61d4bc8-1',
+            'sentry-org_id=2'
+        );
+
+        $newTraceId = (string) $transactionContext->getTraceId();
+        $newSampleRand = $transactionContext->getMetadata()->getSampleRand();
+
+        $this->assertNotSame('566e3688a61d4bc888951642d6f14a19', $newTraceId);
+        $this->assertNotEmpty($newTraceId);
+        $this->assertNull($transactionContext->getParentSpanId());
+        $this->assertNull($transactionContext->getParentSampled());
+        $this->assertNull($transactionContext->getMetadata()->getDynamicSamplingContext());
+        $this->assertNotNull($newSampleRand);
+
+        configureScope(function (Scope $scope) use ($newTraceId, $newSampleRand): void {
+            $propagationContext = $scope->getPropagationContext();
+
+            $this->assertSame($newTraceId, (string) $propagationContext->getTraceId());
+            $this->assertNull($propagationContext->getParentSpanId());
+            $this->assertNull($propagationContext->getDynamicSamplingContext());
+            $this->assertSame($newSampleRand, $propagationContext->getSampleRand());
+        });
+    }
+
+    public function testContinueTraceWhenOrgMatch(): void
+    {
+        $client = $this->createMock(ClientInterface::class);
+        $client->expects($this->once())
+            ->method('getOptions')
+            ->willReturn(new Options([
+                'strict_trace_continuation' => true,
+                'org_id' => 1,
+            ]));
+
+        $hub = new Hub($client);
+        SentrySdk::setCurrentHub($hub);
+
+        $transactionContext = continueTrace(
+            '566e3688a61d4bc888951642d6f14a19-566e3688a61d4bc8-1',
+            'sentry-org_id=1'
+        );
+
+        $this->assertSame('566e3688a61d4bc888951642d6f14a19', (string) $transactionContext->getTraceId());
+        $this->assertSame('566e3688a61d4bc8', (string) $transactionContext->getParentSpanId());
+        $this->assertTrue($transactionContext->getParentSampled());
+
+        configureScope(function (Scope $scope): void {
+            $propagationContext = $scope->getPropagationContext();
+
+            $this->assertSame('566e3688a61d4bc888951642d6f14a19', (string) $propagationContext->getTraceId());
+            $this->assertSame('566e3688a61d4bc8', (string) $propagationContext->getParentSpanId());
+
+            $dynamicSamplingContext = $propagationContext->getDynamicSamplingContext();
+
+            $this->assertNotNull($dynamicSamplingContext);
+            $this->assertSame('1', $dynamicSamplingContext->get('org_id'));
+        });
+    }
 }
diff --git a/tests/OptionsTest.php b/tests/OptionsTest.php
index 860b88d5a..5c9e49822 100644
--- a/tests/OptionsTest.php
+++ b/tests/OptionsTest.php
@@ -289,6 +289,13 @@ static function (): void {},
             'setTracePropagationTargets',
         ];
 
+        yield [
+            'strict_trace_continuation',
+            true,
+            'isStrictTraceContinuationEnabled',
+            'enableStrictTraceContinuation',
+        ];
+
         yield [
             'strict_trace_propagation',
             true,
diff --git a/tests/Tracing/DynamicSamplingContextTest.php b/tests/Tracing/DynamicSamplingContextTest.php
index 90ded1369..ebbb05080 100644
--- a/tests/Tracing/DynamicSamplingContextTest.php
+++ b/tests/Tracing/DynamicSamplingContextTest.php
@@ -153,6 +153,64 @@ public function testFromOptions(): void
         $this->assertTrue($samplingContext->isFrozen());
     }
 
+    public function testFromOptionsUsesConfiguredOrgIdOverDsnOrgId(): void
+    {
+        $options = new Options([
+            'dsn' => 'http://public@o1.example.com/1',
+            'org_id' => 2,
+        ]);
+
+        $scope = new Scope();
+        $samplingContext = DynamicSamplingContext::fromOptions($options, $scope);
+
+        $this->assertSame('2', $samplingContext->get('org_id'));
+    }
+
+    public function testFromOptionsFallsBackToDsnOrgId(): void
+    {
+        $options = new Options([
+            'dsn' => 'http://public@o1.example.com/1',
+        ]);
+
+        $scope = new Scope();
+        $samplingContext = DynamicSamplingContext::fromOptions($options, $scope);
+
+        $this->assertSame('1', $samplingContext->get('org_id'));
+    }
+
+    public function testFromTransactionUsesConfiguredOrgIdOverDsnOrgId(): void
+    {
+        $client = $this->createMock(ClientInterface::class);
+        $client->expects($this->once())
+            ->method('getOptions')
+            ->willReturn(new Options([
+                'dsn' => 'http://public@o1.example.com/1',
+                'org_id' => 2,
+            ]));
+
+        $hub = new Hub($client);
+        $transaction = new Transaction(new TransactionContext(), $hub);
+        $samplingContext = DynamicSamplingContext::fromTransaction($transaction, $hub);
+
+        $this->assertSame('2', $samplingContext->get('org_id'));
+    }
+
+    public function testFromTransactionFallsBackToDsnOrgId(): void
+    {
+        $client = $this->createMock(ClientInterface::class);
+        $client->expects($this->once())
+            ->method('getOptions')
+            ->willReturn(new Options([
+                'dsn' => 'http://public@o1.example.com/1',
+            ]));
+
+        $hub = new Hub($client);
+        $transaction = new Transaction(new TransactionContext(), $hub);
+        $samplingContext = DynamicSamplingContext::fromTransaction($transaction, $hub);
+
+        $this->assertSame('1', $samplingContext->get('org_id'));
+    }
+
     /**
      * @dataProvider getEntriesDataProvider
      */
diff --git a/tests/Tracing/StrictTraceContinuationTest.php b/tests/Tracing/StrictTraceContinuationTest.php
new file mode 100644
index 000000000..a92a1eab7
--- /dev/null
+++ b/tests/Tracing/StrictTraceContinuationTest.php
@@ -0,0 +1,214 @@
+<?php
+
+declare(strict_types=1);
+
+namespace Sentry\Tests\Tracing;
+
+use PHPUnit\Framework\TestCase;
+use Sentry\ClientInterface;
+use Sentry\Options;
+use Sentry\SentrySdk;
+use Sentry\State\Hub;
+use Sentry\Tracing\PropagationContext;
+use Sentry\Tracing\TransactionContext;
+
+final class StrictTraceContinuationTest extends TestCase
+{
+    private const SENTRY_TRACE_HEADER = '566e3688a61d4bc888951642d6f14a19-566e3688a61d4bc8-1';
+
+    protected function setUp(): void
+    {
+        parent::setUp();
+
+        SentrySdk::setCurrentHub(new Hub());
+    }
+
+    /**
+     * @dataProvider strictTraceContinuationDataProvider
+     */
+    public function testPropagationContext(Options $options, string $baggage, bool $expectedContinueTrace): void
+    {
+        $client = $this->createMock(ClientInterface::class);
+        $client->expects($this->exactly(2))
+            ->method('getOptions')
+            ->willReturn($options);
+
+        SentrySdk::setCurrentHub(new Hub($client));
+
+        $contexts = [
+            PropagationContext::fromHeaders(self::SENTRY_TRACE_HEADER, $baggage),
+            PropagationContext::fromEnvironment(self::SENTRY_TRACE_HEADER, $baggage),
+        ];
+
+        foreach ($contexts as $context) {
+            if ($expectedContinueTrace) {
+                $this->assertSame('566e3688a61d4bc888951642d6f14a19', (string) $context->getTraceId());
+                $this->assertSame('566e3688a61d4bc8', (string) $context->getParentSpanId());
+            } else {
+                $this->assertNotSame('566e3688a61d4bc888951642d6f14a19', (string) $context->getTraceId());
+                $this->assertNotEmpty((string) $context->getTraceId());
+                $this->assertNull($context->getParentSpanId());
+                $this->assertNull($context->getDynamicSamplingContext());
+            }
+        }
+    }
+
+    /**
+     * @dataProvider strictTraceContinuationDataProvider
+     */
+    public function testTransactionContext(Options $options, string $baggage, bool $expectedContinueTrace): void
+    {
+        $client = $this->createMock(ClientInterface::class);
+        $client->expects($this->exactly(2))
+            ->method('getOptions')
+            ->willReturn($options);
+
+        SentrySdk::setCurrentHub(new Hub($client));
+
+        $contexts = [
+            TransactionContext::fromHeaders(self::SENTRY_TRACE_HEADER, $baggage),
+            TransactionContext::fromEnvironment(self::SENTRY_TRACE_HEADER, $baggage),
+        ];
+
+        foreach ($contexts as $context) {
+            if ($expectedContinueTrace) {
+                $this->assertSame('566e3688a61d4bc888951642d6f14a19', (string) $context->getTraceId());
+                $this->assertSame('566e3688a61d4bc8', (string) $context->getParentSpanId());
+                $this->assertTrue($context->getParentSampled());
+            } else {
+                $this->assertNotSame('566e3688a61d4bc888951642d6f14a19', (string) $context->getTraceId());
+                $this->assertNull($context->getParentSpanId());
+                $this->assertNull($context->getParentSampled());
+                $this->assertNull($context->getMetadata()->getDynamicSamplingContext());
+            }
+        }
+    }
+
+    public static function strictTraceContinuationDataProvider(): \Generator
+    {
+        // First 10 Test cases are modelled after: https://develop.sentry.dev/sdk/telemetry/traces/#stricttracecontinuation
+        yield [
+            new Options([
+                'strict_trace_continuation' => false,
+                'org_id' => 1,
+            ]),
+            'sentry-org_id=1',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => false,
+                'org_id' => 1,
+            ]),
+            '',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => false,
+            ]),
+            'sentry-org_id=1',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => false,
+            ]),
+            '',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => false,
+                'org_id' => 2,
+            ]),
+            'sentry-org_id=1',
+            false,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+                'org_id' => 1,
+            ]),
+            'sentry-org_id=1',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+                'org_id' => 1,
+            ]),
+            '',
+            false,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+            ]),
+            'sentry-org_id=1',
+            false,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+            ]),
+            '',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+                'org_id' => 2,
+            ]),
+            'sentry-org_id=1',
+            false,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+                'dsn' => 'http://public@o1.example.com/1',
+            ]),
+            'sentry-org_id=1',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+                'dsn' => 'http://public@o1.example.com/1',
+                'org_id' => 2,
+            ]),
+            'sentry-org_id=1',
+            false,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => true,
+                'dsn' => 'http://public@o1.example.com/1',
+                'org_id' => 2,
+            ]),
+            'sentry-org_id=2',
+            true,
+        ];
+
+        yield [
+            new Options([
+                'strict_trace_continuation' => false,
+                'org_id' => 1,
+            ]),
+            'sentry-org_id=01',
+            false,
+        ];
+    }
+}