diff --git a/datadog_lambda/cold_start.py b/datadog_lambda/cold_start.py
index e53341f4..c8862bf1 100644
--- a/datadog_lambda/cold_start.py
+++ b/datadog_lambda/cold_start.py
@@ -14,12 +14,10 @@ def set_cold_start():
 
 
 def is_cold_start():
-    """Returns the value of the global cold_start
-    """
+    """Returns the value of the global cold_start"""
     return _cold_start
 
 
 def get_cold_start_tag():
-    """Returns the cold start tag to be used in metrics
-    """
+    """Returns the cold start tag to be used in metrics"""
     return "cold_start:{}".format(str(is_cold_start()).lower())
diff --git a/datadog_lambda/metric.py b/datadog_lambda/metric.py
index 5eb1c2ac..62100464 100644
--- a/datadog_lambda/metric.py
+++ b/datadog_lambda/metric.py
@@ -9,13 +9,14 @@
 import base64
 import logging
 
+from botocore.exceptions import ClientError
 import boto3
 from datadog import api, initialize, statsd
 from datadog.threadstats import ThreadStats
 from datadog_lambda.extension import should_use_extension
 from datadog_lambda.tags import get_enhanced_metrics_tags, tag_dd_lambda_layer
 
-
+KMS_ENCRYPTION_CONTEXT_KEY = "LambdaFunctionName"
 ENHANCED_METRICS_NAMESPACE_PREFIX = "aws.lambda.enhanced"
 
 logger = logging.getLogger(__name__)
@@ -213,12 +214,52 @@ def submit_errors_metric(lambda_context):
     submit_enhanced_metric("errors", lambda_context)
 
 
-# Set API Key and Host in the module, so they only set once per container
+def decrypt_kms_api_key(kms_client, ciphertext):
+    """
+    Decodes and deciphers the base64-encoded ciphertext given as a parameter using KMS.
+    For this to work properly, the Lambda function must have the appropriate IAM permissions.
+
+    Args:
+        kms_client: The KMS client to use for decryption
+        ciphertext (string): The base64-encoded ciphertext to decrypt
+    """
+    decoded_bytes = base64.b64decode(ciphertext)
+
+    """
+    The Lambda console UI changed the way it encrypts environment variables. The current behavior
+    as of May 2021 is to encrypt environment variables using the function name as an encryption
+    context. Previously, the behavior was to encrypt environment variables without an encryption
+    context. We need to try both, as supplying the incorrect encryption context will cause
+    decryption to fail.
+    """
+    # Try with encryption context
+    function_name = os.environ.get("AWS_LAMBDA_FUNCTION_NAME")
+    try:
+        plaintext = kms_client.decrypt(
+            CiphertextBlob=decoded_bytes,
+            EncryptionContext={
+                KMS_ENCRYPTION_CONTEXT_KEY: function_name,
+            },
+        )["Plaintext"].decode("utf-8")
+    except ClientError:
+        logger.debug(
+            "Failed to decrypt ciphertext with encryption context, retrying without"
+        )
+        # Try without encryption context
+        plaintext = kms_client.decrypt(CiphertextBlob=decoded_bytes)[
+            "Plaintext"
+        ].decode("utf-8")
+
+    return plaintext
+
+
+# Set API Key
 if not api._api_key:
     DD_API_KEY_SECRET_ARN = os.environ.get("DD_API_KEY_SECRET_ARN", "")
     DD_API_KEY_SSM_NAME = os.environ.get("DD_API_KEY_SSM_NAME", "")
     DD_KMS_API_KEY = os.environ.get("DD_KMS_API_KEY", "")
     DD_API_KEY = os.environ.get("DD_API_KEY", os.environ.get("DATADOG_API_KEY", ""))
+
     if DD_API_KEY_SECRET_ARN:
         api._api_key = boto3.client("secretsmanager").get_secret_value(
             SecretId=DD_API_KEY_SECRET_ARN
@@ -228,11 +269,11 @@ def submit_errors_metric(lambda_context):
             Name=DD_API_KEY_SSM_NAME, WithDecryption=True
         )["Parameter"]["Value"]
     elif DD_KMS_API_KEY:
-        api._api_key = boto3.client("kms").decrypt(
-            CiphertextBlob=base64.b64decode(DD_KMS_API_KEY)
-        )["Plaintext"]
+        kms_client = boto3.client("kms")
+        api._api_key = decrypt_kms_api_key(kms_client, DD_KMS_API_KEY)
     else:
         api._api_key = DD_API_KEY
+
 logger.debug("Setting DATADOG_API_KEY of length %d", len(api._api_key))
 
 # Set DATADOG_HOST, to send data to a non-default Datadog datacenter
diff --git a/datadog_lambda/module_name.py b/datadog_lambda/module_name.py
index f018c5d6..9e4a93e5 100644
--- a/datadog_lambda/module_name.py
+++ b/datadog_lambda/module_name.py
@@ -1,4 +1,3 @@
 def modify_module_name(module_name):
-    """Returns a valid modified module to get imported
-    """
+    """Returns a valid modified module to get imported"""
     return ".".join(module_name.split("/"))
diff --git a/datadog_lambda/tags.py b/datadog_lambda/tags.py
index f21c8f92..2ba6ae72 100644
--- a/datadog_lambda/tags.py
+++ b/datadog_lambda/tags.py
@@ -69,8 +69,7 @@ def parse_lambda_tags_from_arn(lambda_context):
 
 
 def get_runtime_tag():
-    """Get the runtime tag from the current Python version
-    """
+    """Get the runtime tag from the current Python version"""
     major_version, minor_version, _ = python_version_tuple()
 
     return "runtime:python{major}.{minor}".format(
@@ -79,14 +78,12 @@ def get_runtime_tag():
 
 
 def get_library_version_tag():
-    """Get datadog lambda library tag
-    """
+    """Get datadog lambda library tag"""
     return "datadog_lambda:v{}".format(__version__)
 
 
 def get_enhanced_metrics_tags(lambda_context):
-    """Get the list of tags to apply to enhanced metrics
-    """
+    """Get the list of tags to apply to enhanced metrics"""
     return parse_lambda_tags_from_arn(lambda_context) + [
         get_cold_start_tag(),
         "memorysize:{}".format(lambda_context.memory_limit_in_mb),
@@ -96,7 +93,9 @@ def get_enhanced_metrics_tags(lambda_context):
 
 
 def check_if_number(alias):
-    """ Check if the alias is a version or number. Python 2 has no easy way to test this like Python 3
+    """
+    Check if the alias is a version or number.
+    Python 2 has no easy way to test this like Python 3
     """
     try:
         float(alias)
diff --git a/datadog_lambda/tracing.py b/datadog_lambda/tracing.py
index 4f528cc3..ae48a161 100644
--- a/datadog_lambda/tracing.py
+++ b/datadog_lambda/tracing.py
@@ -186,7 +186,11 @@ def extract_context_custom_extractor(extractor, event, lambda_context):
     Extract Datadog trace context using a custom trace extractor function
     """
     try:
-        (trace_id, parent_id, sampling_priority,) = extractor(event, lambda_context)
+        (
+            trace_id,
+            parent_id,
+            sampling_priority,
+        ) = extractor(event, lambda_context)
         return trace_id, parent_id, sampling_priority
     except Exception as e:
         logger.debug("The trace extractor returned with error %s", e)
@@ -205,9 +209,11 @@ def extract_dd_trace_context(event, lambda_context, extractor=None):
     trace_context_source = None
 
     if extractor is not None:
-        (trace_id, parent_id, sampling_priority,) = extract_context_custom_extractor(
-            extractor, event, lambda_context
-        )
+        (
+            trace_id,
+            parent_id,
+            sampling_priority,
+        ) = extract_context_custom_extractor(extractor, event, lambda_context)
     elif "headers" in event:
         (
             trace_id,
diff --git a/scripts/check_format.sh b/scripts/check_format.sh
index 7c38d48b..d616017e 100755
--- a/scripts/check_format.sh
+++ b/scripts/check_format.sh
@@ -6,7 +6,7 @@ if [ "$PYTHON_VERSION" = "2" ]; then
     echo "Skipping formatting, black not compatible with python 2"
     exit 0
 fi
-pip install -Iv black==19.10b0
+pip install -Iv black==21.5b2
 
 python -m black --check datadog_lambda/ --diff
 python -m black --check tests --diff
diff --git a/setup.py b/setup.py
index 921aab4c..820f320f 100644
--- a/setup.py
+++ b/setup.py
@@ -35,7 +35,7 @@
         # If building for Python 3, use the latest version of setuptools
         "setuptools>=54.2.0; python_version >= '3.0'",
         # If building for Python 2, use the latest version that supports Python 2
-        "setuptools>=44.1.1; python_version < '3.0'"
+        "setuptools>=44.1.1; python_version < '3.0'",
     ],
     extras_require={
         "dev": ["nose2==0.9.1", "flake8==3.7.9", "requests==2.22.0", "boto3==1.10.33"]
diff --git a/tests/test_metric.py b/tests/test_metric.py
index 848a9328..d22cf881 100644
--- a/tests/test_metric.py
+++ b/tests/test_metric.py
@@ -6,8 +6,14 @@
 except ImportError:
     from mock import patch, call
 
+from botocore.exceptions import ClientError as BotocoreClientError
 from datadog.api.exceptions import ClientError
-from datadog_lambda.metric import lambda_metric, ThreadStatsWriter
+from datadog_lambda.metric import (
+    decrypt_kms_api_key,
+    lambda_metric,
+    ThreadStatsWriter,
+    KMS_ENCRYPTION_CONTEXT_KEY,
+)
 from datadog_lambda.tags import _format_dd_lambda_layer_tag
 
 
@@ -58,3 +64,56 @@ def test_retry_on_remote_disconnected(self):
         )
         lambda_stats.flush()
         self.assertEqual(self.mock_threadstats_flush_distributions.call_count, 2)
+
+
+MOCK_FUNCTION_NAME = "myFunction"
+
+# An API key encrypted with KMS and encoded as a base64 string
+MOCK_ENCRYPTED_API_KEY_BASE64 = "MjIyMjIyMjIyMjIyMjIyMg=="
+
+# The encrypted API key after it has been decoded from base64
+MOCK_ENCRYPTED_API_KEY = "2222222222222222"
+
+# The true value of the API key after decryption by KMS
+EXPECTED_DECRYPTED_API_KEY = "1111111111111111"
+
+
+class TestDecryptKMSApiKey(unittest.TestCase):
+    def test_key_encrypted_with_encryption_context(self):
+        os.environ["AWS_LAMBDA_FUNCTION_NAME"] = MOCK_FUNCTION_NAME
+
+        class MockKMSClient:
+            def decrypt(self, CiphertextBlob=None, EncryptionContext={}):
+                if (
+                    EncryptionContext.get(KMS_ENCRYPTION_CONTEXT_KEY)
+                    != MOCK_FUNCTION_NAME
+                ):
+                    raise BotocoreClientError({}, "Decrypt")
+                if CiphertextBlob == MOCK_ENCRYPTED_API_KEY.encode("utf-8"):
+                    return {
+                        "Plaintext": EXPECTED_DECRYPTED_API_KEY.encode("utf-8"),
+                    }
+
+        mock_kms_client = MockKMSClient()
+        decrypted_key = decrypt_kms_api_key(
+            mock_kms_client, MOCK_ENCRYPTED_API_KEY_BASE64
+        )
+        self.assertEqual(decrypted_key, EXPECTED_DECRYPTED_API_KEY)
+
+        del os.environ["AWS_LAMBDA_FUNCTION_NAME"]
+
+    def test_key_encrypted_without_encryption_context(self):
+        class MockKMSClient:
+            def decrypt(self, CiphertextBlob=None, EncryptionContext={}):
+                if EncryptionContext.get(KMS_ENCRYPTION_CONTEXT_KEY) != None:
+                    raise BotocoreClientError({}, "Decrypt")
+                if CiphertextBlob == MOCK_ENCRYPTED_API_KEY.encode("utf-8"):
+                    return {
+                        "Plaintext": EXPECTED_DECRYPTED_API_KEY.encode("utf-8"),
+                    }
+
+        mock_kms_client = MockKMSClient()
+        decrypted_key = decrypt_kms_api_key(
+            mock_kms_client, MOCK_ENCRYPTED_API_KEY_BASE64
+        )
+        self.assertEqual(decrypted_key, EXPECTED_DECRYPTED_API_KEY)
diff --git a/tests/test_tracing.py b/tests/test_tracing.py
index b7365df4..431f339f 100644
--- a/tests/test_tracing.py
+++ b/tests/test_tracing.py
@@ -73,7 +73,8 @@ def test_without_datadog_trace_headers(self):
         ctx, source = extract_dd_trace_context({}, lambda_ctx)
         self.assertEqual(source, "xray")
         self.assertDictEqual(
-            ctx, {"trace-id": "4369", "parent-id": "65535", "sampling-priority": "2"},
+            ctx,
+            {"trace-id": "4369", "parent-id": "65535", "sampling-priority": "2"},
         )
         self.assertDictEqual(
             get_dd_trace_context(),
@@ -93,7 +94,8 @@ def test_with_incomplete_datadog_trace_headers(self):
         )
         self.assertEqual(source, "xray")
         self.assertDictEqual(
-            ctx, {"trace-id": "4369", "parent-id": "65535", "sampling-priority": "2"},
+            ctx,
+            {"trace-id": "4369", "parent-id": "65535", "sampling-priority": "2"},
         )
         self.assertDictEqual(
             get_dd_trace_context(),
@@ -118,7 +120,8 @@ def test_with_complete_datadog_trace_headers(self):
         )
         self.assertEqual(source, "event")
         self.assertDictEqual(
-            ctx, {"trace-id": "123", "parent-id": "321", "sampling-priority": "1"},
+            ctx,
+            {"trace-id": "123", "parent-id": "321", "sampling-priority": "1"},
         )
         self.assertDictEqual(
             get_dd_trace_context(),
@@ -160,7 +163,12 @@ def extractor_foo(event, context):
         )
         self.assertEquals(ctx_source, "event")
         self.assertDictEqual(
-            ctx, {"trace-id": "123", "parent-id": "321", "sampling-priority": "1",},
+            ctx,
+            {
+                "trace-id": "123",
+                "parent-id": "321",
+                "sampling-priority": "1",
+            },
         )
         self.assertDictEqual(
             get_dd_trace_context(),
@@ -189,7 +197,12 @@ def extractor_raiser(event, context):
         )
         self.assertEquals(ctx_source, "xray")
         self.assertDictEqual(
-            ctx, {"trace-id": "4369", "parent-id": "65535", "sampling-priority": "2",},
+            ctx,
+            {
+                "trace-id": "4369",
+                "parent-id": "65535",
+                "sampling-priority": "2",
+            },
         )
         self.assertDictEqual(
             get_dd_trace_context(),
@@ -235,7 +248,12 @@ def test_with_sqs_distributed_datadog_trace_data(self):
         ctx, source = extract_dd_trace_context(sqs_event, lambda_ctx)
         self.assertEqual(source, "event")
         self.assertDictEqual(
-            ctx, {"trace-id": "123", "parent-id": "321", "sampling-priority": "1",},
+            ctx,
+            {
+                "trace-id": "123",
+                "parent-id": "321",
+                "sampling-priority": "1",
+            },
         )
         self.assertDictEqual(
             get_dd_trace_context(),
@@ -267,7 +285,12 @@ def test_with_client_context_datadog_trace_data(self):
         ctx, source = extract_dd_trace_context({}, lambda_ctx)
         self.assertEqual(source, "event")
         self.assertDictEqual(
-            ctx, {"trace-id": "666", "parent-id": "777", "sampling-priority": "1",},
+            ctx,
+            {
+                "trace-id": "666",
+                "parent-id": "777",
+                "sampling-priority": "1",
+            },
         )
         self.assertDictEqual(
             get_dd_trace_context(),