diff --git a/packages/opentelemetry-node/src/constants.ts b/packages/opentelemetry-node/src/constants.ts
index 5c179dc5335b..55f386f2b39f 100644
--- a/packages/opentelemetry-node/src/constants.ts
+++ b/packages/opentelemetry-node/src/constants.ts
@@ -1,3 +1,9 @@
+import { createContextKey } from '@opentelemetry/api';
+
 export const SENTRY_TRACE_HEADER = 'sentry-trace';
 
 export const SENTRY_BAGGAGE_HEADER = 'baggage';
+
+export const SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY = createContextKey('SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY');
+
+export const SENTRY_TRACE_PARENT_CONTEXT_KEY = createContextKey('SENTRY_TRACE_PARENT_CONTEXT_KEY');
diff --git a/packages/opentelemetry-node/src/propagator.ts b/packages/opentelemetry-node/src/propagator.ts
index ab85a2f08d23..e028377a2dfa 100644
--- a/packages/opentelemetry-node/src/propagator.ts
+++ b/packages/opentelemetry-node/src/propagator.ts
@@ -8,9 +8,18 @@ import {
   TraceFlags,
 } from '@opentelemetry/api';
 import { isTracingSuppressed } from '@opentelemetry/core';
-import { dynamicSamplingContextToSentryBaggageHeader } from '@sentry/utils';
+import {
+  baggageHeaderToDynamicSamplingContext,
+  dynamicSamplingContextToSentryBaggageHeader,
+  extractTraceparentData,
+} from '@sentry/utils';
 
-import { SENTRY_BAGGAGE_HEADER, SENTRY_TRACE_HEADER } from './constants';
+import {
+  SENTRY_BAGGAGE_HEADER,
+  SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY,
+  SENTRY_TRACE_HEADER,
+  SENTRY_TRACE_PARENT_CONTEXT_KEY,
+} from './constants';
 import { SENTRY_SPAN_PROCESSOR_MAP } from './spanprocessor';
 
 /**
@@ -44,8 +53,31 @@ export class SentryPropagator implements TextMapPropagator {
   /**
    * @inheritDoc
    */
-  public extract(context: Context, _carrier: unknown, _getter: TextMapGetter): Context {
-    return context;
+  public extract(context: Context, carrier: unknown, getter: TextMapGetter): Context {
+    let newContext = context;
+
+    const maybeSentryTraceHeader: string | string[] | undefined = getter.get(carrier, SENTRY_TRACE_HEADER);
+    if (maybeSentryTraceHeader) {
+      const header = Array.isArray(maybeSentryTraceHeader) ? maybeSentryTraceHeader[0] : maybeSentryTraceHeader;
+      const traceparentData = extractTraceparentData(header);
+      newContext = newContext.setValue(SENTRY_TRACE_PARENT_CONTEXT_KEY, traceparentData);
+      if (traceparentData) {
+        const traceFlags = traceparentData.parentSampled ? TraceFlags.SAMPLED : TraceFlags.NONE;
+        const spanContext = {
+          traceId: traceparentData.traceId || '',
+          spanId: traceparentData.parentSpanId || '',
+          isRemote: true,
+          traceFlags,
+        };
+        newContext = trace.setSpanContext(newContext, spanContext);
+      }
+    }
+
+    const maybeBaggageHeader = getter.get(carrier, SENTRY_BAGGAGE_HEADER);
+    const dynamicSamplingContext = baggageHeaderToDynamicSamplingContext(maybeBaggageHeader);
+    newContext = newContext.setValue(SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY, dynamicSamplingContext);
+
+    return newContext;
   }
 
   /**
diff --git a/packages/opentelemetry-node/src/spanprocessor.ts b/packages/opentelemetry-node/src/spanprocessor.ts
index de5f39b3a7fc..197a17587327 100644
--- a/packages/opentelemetry-node/src/spanprocessor.ts
+++ b/packages/opentelemetry-node/src/spanprocessor.ts
@@ -2,9 +2,10 @@ import { Context } from '@opentelemetry/api';
 import { Span as OtelSpan, SpanProcessor as OtelSpanProcessor } from '@opentelemetry/sdk-trace-base';
 import { getCurrentHub, withScope } from '@sentry/core';
 import { Transaction } from '@sentry/tracing';
-import { Span as SentrySpan, TransactionContext } from '@sentry/types';
+import { DynamicSamplingContext, Span as SentrySpan, TraceparentData, TransactionContext } from '@sentry/types';
 import { logger } from '@sentry/utils';
 
+import { SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY, SENTRY_TRACE_PARENT_CONTEXT_KEY } from './constants';
 import { isSentryRequestSpan } from './utils/is-sentry-request';
 import { mapOtelStatus } from './utils/map-otel-status';
 import { parseSpanDescription } from './utils/parse-otel-span-description';
@@ -22,7 +23,7 @@ export class SentrySpanProcessor implements OtelSpanProcessor {
   /**
    * @inheritDoc
    */
-  public onStart(otelSpan: OtelSpan, _parentContext: Context): void {
+  public onStart(otelSpan: OtelSpan, parentContext: Context): void {
     const hub = getCurrentHub();
     if (!hub) {
       __DEBUG_BUILD__ && logger.error('SentrySpanProcessor has triggered onStart before a hub has been setup.');
@@ -51,7 +52,7 @@ export class SentrySpanProcessor implements OtelSpanProcessor {
 
       SENTRY_SPAN_PROCESSOR_MAP.set(otelSpanId, sentryChildSpan);
     } else {
-      const traceCtx = getTraceData(otelSpan);
+      const traceCtx = getTraceData(otelSpan, parentContext);
       const transaction = hub.startTransaction({
         name: otelSpan.name,
         ...traceCtx,
@@ -117,13 +118,27 @@ export class SentrySpanProcessor implements OtelSpanProcessor {
   }
 }
 
-function getTraceData(otelSpan: OtelSpan): Partial<TransactionContext> {
+function getTraceData(otelSpan: OtelSpan, parentContext: Context): Partial<TransactionContext> {
   const spanContext = otelSpan.spanContext();
   const traceId = spanContext.traceId;
   const spanId = spanContext.spanId;
 
   const parentSpanId = otelSpan.parentSpanId;
-  return { spanId, traceId, parentSpanId };
+  const traceparentData = parentContext.getValue(SENTRY_TRACE_PARENT_CONTEXT_KEY) as TraceparentData | undefined;
+  const dynamicSamplingContext = parentContext.getValue(SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY) as
+    | Partial<DynamicSamplingContext>
+    | undefined;
+
+  return {
+    spanId,
+    traceId,
+    parentSpanId,
+    metadata: {
+      // only set dynamic sampling context if sentry-trace header was set
+      dynamicSamplingContext: traceparentData && !dynamicSamplingContext ? {} : dynamicSamplingContext,
+      source: 'custom',
+    },
+  };
 }
 
 function finishTransactionWithContextFromOtelData(transaction: Transaction, otelSpan: OtelSpan): void {
diff --git a/packages/opentelemetry-node/test/propagator.test.ts b/packages/opentelemetry-node/test/propagator.test.ts
index fd8369ea9fd0..3e85a76033cf 100644
--- a/packages/opentelemetry-node/test/propagator.test.ts
+++ b/packages/opentelemetry-node/test/propagator.test.ts
@@ -1,10 +1,15 @@
-import { defaultTextMapSetter, ROOT_CONTEXT, trace, TraceFlags } from '@opentelemetry/api';
+import { defaultTextMapGetter, defaultTextMapSetter, ROOT_CONTEXT, trace, TraceFlags } from '@opentelemetry/api';
 import { suppressTracing } from '@opentelemetry/core';
 import { Hub, makeMain } from '@sentry/core';
 import { addExtensionMethods, Transaction } from '@sentry/tracing';
 import { TransactionContext } from '@sentry/types';
 
-import { SENTRY_BAGGAGE_HEADER, SENTRY_TRACE_HEADER } from '../src/constants';
+import {
+  SENTRY_BAGGAGE_HEADER,
+  SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY,
+  SENTRY_TRACE_HEADER,
+  SENTRY_TRACE_PARENT_CONTEXT_KEY,
+} from '../src/constants';
 import { SentryPropagator } from '../src/propagator';
 import { SENTRY_SPAN_PROCESSOR_MAP } from '../src/spanprocessor';
 
@@ -204,4 +209,57 @@ describe('SentryPropagator', () => {
       });
     });
   });
+
+  describe('extract', () => {
+    it('sets sentry span context on the context', () => {
+      const sentryTraceHeader = 'd4cda95b652f4a1592b449d5929fda1b-6e0c63257de34c92-1';
+      carrier[SENTRY_TRACE_HEADER] = sentryTraceHeader;
+      const context = propagator.extract(ROOT_CONTEXT, carrier, defaultTextMapGetter);
+      expect(trace.getSpanContext(context)).toEqual({
+        isRemote: true,
+        spanId: '6e0c63257de34c92',
+        traceFlags: TraceFlags.SAMPLED,
+        traceId: 'd4cda95b652f4a1592b449d5929fda1b',
+      });
+    });
+
+    it('sets defined sentry trace header on context', () => {
+      const sentryTraceHeader = 'd4cda95b652f4a1592b449d5929fda1b-6e0c63257de34c92-1';
+      carrier[SENTRY_TRACE_HEADER] = sentryTraceHeader;
+      const context = propagator.extract(ROOT_CONTEXT, carrier, defaultTextMapGetter);
+      expect(context.getValue(SENTRY_TRACE_PARENT_CONTEXT_KEY)).toEqual({
+        parentSampled: true,
+        parentSpanId: '6e0c63257de34c92',
+        traceId: 'd4cda95b652f4a1592b449d5929fda1b',
+      });
+    });
+
+    it('sets undefined sentry trace header on context', () => {
+      const sentryTraceHeader = undefined;
+      carrier[SENTRY_TRACE_HEADER] = sentryTraceHeader;
+      const context = propagator.extract(ROOT_CONTEXT, carrier, defaultTextMapGetter);
+      expect(context.getValue(SENTRY_TRACE_PARENT_CONTEXT_KEY)).toEqual(undefined);
+    });
+
+    it('sets defined dynamic sampling context on context', () => {
+      const baggage =
+        'sentry-environment=production,sentry-release=1.0.0,sentry-transaction=dsc-transaction,sentry-public_key=abc,sentry-trace_id=d4cda95b652f4a1592b449d5929fda1b';
+      carrier[SENTRY_BAGGAGE_HEADER] = baggage;
+      const context = propagator.extract(ROOT_CONTEXT, carrier, defaultTextMapGetter);
+      expect(context.getValue(SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY)).toEqual({
+        environment: 'production',
+        public_key: 'abc',
+        release: '1.0.0',
+        trace_id: 'd4cda95b652f4a1592b449d5929fda1b',
+        transaction: 'dsc-transaction',
+      });
+    });
+
+    it('sets undefined dynamic sampling context on context', () => {
+      const baggage = '';
+      carrier[SENTRY_BAGGAGE_HEADER] = baggage;
+      const context = propagator.extract(ROOT_CONTEXT, carrier, defaultTextMapGetter);
+      expect(context.getValue(SENTRY_DYNAMIC_SAMPLING_CONTEXT_KEY)).toEqual(undefined);
+    });
+  });
 });