diff --git a/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdBuilderExtensions.cs b/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdBuilderExtensions.cs
index 30c7b58ea..ed3cef28c 100644
--- a/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdBuilderExtensions.cs
+++ b/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdBuilderExtensions.cs
@@ -35,6 +35,7 @@ public static IResourceBuilder<FlagdResource> AddFlagd(
 
         return builder.AddResource(resource)
             .WithImage(FlagdContainerImageTags.Image, FlagdContainerImageTags.Tag)
+            .WithOtlpExporter()
             .WithImageRegistry(FlagdContainerImageTags.Registry)
             .WithHttpEndpoint(port: port, targetPort: FlagdPort, name: FlagdResource.HttpEndpointName)
             .WithHttpEndpoint(null, HealthCheckPort, FlagdResource.HealthCheckEndpointName)
diff --git a/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdContainerImageTags.cs b/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdContainerImageTags.cs
index 07452bd30..9958e5da9 100644
--- a/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdContainerImageTags.cs
+++ b/src/CommunityToolkit.Aspire.Hosting.Flagd/FlagdContainerImageTags.cs
@@ -6,6 +6,6 @@ internal static class FlagdContainerImageTags
     public const string Registry = "ghcr.io";
     /// <summary>open-feature/flagd</summary>
     public const string Image = "open-feature/flagd";
-    /// <summary>v0.12.9</summary>
-    public const string Tag = "v0.12.9";
+    /// <summary>v0.13.1</summary>
+    public const string Tag = "v0.13.1";
 }
diff --git a/tests/CommunityToolkit.Aspire.Hosting.Flagd.Tests/AddFlagdTests.cs b/tests/CommunityToolkit.Aspire.Hosting.Flagd.Tests/AddFlagdTests.cs
index 7a78df912..bdda1ebd8 100644
--- a/tests/CommunityToolkit.Aspire.Hosting.Flagd.Tests/AddFlagdTests.cs
+++ b/tests/CommunityToolkit.Aspire.Hosting.Flagd.Tests/AddFlagdTests.cs
@@ -75,7 +75,24 @@ public void AddFlagdSetsCorrectContainerImage()
 
         Assert.Equal("ghcr.io", containerAnnotation.Registry);
         Assert.Equal("open-feature/flagd", containerAnnotation.Image);
-        Assert.Equal("v0.12.9", containerAnnotation.Tag);
+        Assert.Equal("v0.13.1", containerAnnotation.Tag);
+    }
+
+    [Fact]
+    public void AddFlagdAddsOtelAnnotation()
+    {
+        var builder = DistributedApplication.CreateBuilder();
+
+        builder.AddFlagd(FlagdName);
+
+        using var app = builder.Build();
+
+        var appModel = app.Services.GetRequiredService<DistributedApplicationModel>();
+        var resource = Assert.Single(appModel.Resources.OfType<FlagdResource>());
+
+        // Verify that OtlpExporterAnnotation is present (added by WithOtlpExporter)
+        // This annotation marks the resource as an OTEL exporter
+        Assert.True(resource.HasAnnotationOfType<OtlpExporterAnnotation>());
     }
 
     [Fact]