diff --git a/Dockerfile b/Dockerfile
index 65abb8f0c..14650051d 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -64,7 +64,8 @@ ENV LETTA_ENVIRONMENT=${LETTA_ENVIRONMENT} \
     POSTGRES_USER=letta \
     POSTGRES_PASSWORD=letta \
     POSTGRES_DB=letta \
-    COMPOSIO_DISABLE_VERSION_CHECK=true
+    COMPOSIO_DISABLE_VERSION_CHECK=true \
+    LETTA_OTEL_EXPORTER_OTLP_ENDPOINT="http://localhost:4317"
 
 WORKDIR /app
 
diff --git a/letta/settings.py b/letta/settings.py
index 52edde9b3..bd0b11f9a 100644
--- a/letta/settings.py
+++ b/letta/settings.py
@@ -179,7 +179,7 @@ class Settings(BaseSettings):
 
     # telemetry logging
     verbose_telemetry_logging: bool = False
-    otel_exporter_otlp_endpoint: str = "http://localhost:4317"
+    otel_exporter_otlp_endpoint: Optional[str] = None  # otel default: "http://localhost:4317"
     disable_tracing: bool = False
 
     # uvicorn settings