diff --git a/crates/world/src/conversions.rs b/crates/world/src/conversions.rs
index c254fc267..d232263f7 100644
--- a/crates/world/src/conversions.rs
+++ b/crates/world/src/conversions.rs
@@ -256,6 +256,16 @@ mod observe {
         }
     }
 
+    impl From<opentelemetry::trace::TraceFlags> for traces::TraceFlags {
+        fn from(flags: opentelemetry::trace::TraceFlags) -> Self {
+            if flags.is_sampled() {
+                traces::TraceFlags::SAMPLED
+            } else {
+                traces::TraceFlags::empty()
+            }
+        }
+    }
+
     impl TryFrom<traces::SpanContext> for opentelemetry::trace::SpanContext {
         type Error = wasmtime::Error;
 
@@ -286,7 +296,7 @@ mod observe {
                     ((whole >> 64) as u64, whole as u64)
                 },
                 span_id: u64::from_le_bytes(sc.span_id().to_bytes()),
-                trace_flags: traces::TraceFlags::all(), // TODO(Caleb): This is broken
+                trace_flags: sc.trace_flags().into(),
                 is_remote: sc.is_remote(),
                 trace_state: sc
                     .trace_state()