diff --git a/src/Components/Aspire.OpenAI/Aspire.OpenAI.csproj b/src/Components/Aspire.OpenAI/Aspire.OpenAI.csproj
index 418225a47c1..836c1d9d11c 100644
--- a/src/Components/Aspire.OpenAI/Aspire.OpenAI.csproj
+++ b/src/Components/Aspire.OpenAI/Aspire.OpenAI.csproj
@@ -13,6 +13,7 @@
   </PropertyGroup>
 
   <ItemGroup>
+    <Compile Include="..\Common\AITelemetryHelpers.cs" Link="AITelemetryHelpers.cs" />
     <Compile Include="..\Common\ConfigurationSchemaAttributes.cs" Link="ConfigurationSchemaAttributes.cs" />
   </ItemGroup>
 
diff --git a/src/Components/Aspire.OpenAI/OpenAISettings.cs b/src/Components/Aspire.OpenAI/OpenAISettings.cs
index 8dd4cc5c570..1f9b80f8c93 100644
--- a/src/Components/Aspire.OpenAI/OpenAISettings.cs
+++ b/src/Components/Aspire.OpenAI/OpenAISettings.cs
@@ -40,13 +40,16 @@ public sealed class OpenAISettings
     /// <value>
     /// <see langword="true"/> if potentially sensitive information should be included in telemetry;
     /// <see langword="false"/> if telemetry shouldn't include raw inputs and outputs.
-    /// The default value is <see langword="false"/>.
+    /// The default value is <see langword="false"/>, unless the <c>OTEL_INSTRUMENTATION_GENAI_CAPTURE_MESSAGE_CONTENT</c>
+    /// environment variable is set to "true" (case-insensitive).
     /// </value>
     /// <remarks>
     /// By default, telemetry includes metadata, such as token counts, but not raw inputs
     /// and outputs, such as message content, function call arguments, and function call results.
+    /// The default value can be overridden by setting the <c>OTEL_INSTRUMENTATION_GENAI_CAPTURE_MESSAGE_CONTENT</c>
+    /// environment variable to "true". Explicitly setting this property will override the environment variable.
     /// </remarks>
-    public bool EnableSensitiveTelemetryData { get; set; }
+    public bool EnableSensitiveTelemetryData { get; set; } = TelemetryHelpers.EnableSensitiveDataDefault;
 
     internal void ParseConnectionString(string? connectionString)
     {
diff --git a/tests/Aspire.OpenAI.Tests/AspireOpenAIExtensionsTests.cs b/tests/Aspire.OpenAI.Tests/AspireOpenAIExtensionsTests.cs
index 9afff0932d9..586b8762f9b 100644
--- a/tests/Aspire.OpenAI.Tests/AspireOpenAIExtensionsTests.cs
+++ b/tests/Aspire.OpenAI.Tests/AspireOpenAIExtensionsTests.cs
@@ -230,4 +230,46 @@ public void BindsToNamedClientOptions()
         Assert.NotNull(options);
         Assert.Equal("myproject2", options.ProjectId);
     }
+
+    [Fact]
+    public void EnableSensitiveTelemetryData_DefaultsToEnvironmentVariable()
+    {
+        var builder = Host.CreateEmptyApplicationBuilder(null);
+        builder.Configuration.AddInMemoryCollection([
+            new KeyValuePair<string, string?>("ConnectionStrings:openai", ConnectionString)
+        ]);
+
+        OpenAISettings? localSettings = null;
+
+        builder.AddOpenAIClient("openai", settings =>
+        {
+            localSettings = settings;
+        });
+
+        Assert.NotNull(localSettings);
+        // The default should be based on TelemetryHelpers.EnableSensitiveDataDefault
+        // which reads from OTEL_INSTRUMENTATION_GENAI_CAPTURE_MESSAGE_CONTENT environment variable
+        // In test environment without the env var set, it should default to false
+        Assert.False(localSettings.EnableSensitiveTelemetryData);
+    }
+
+    [Fact]
+    public void EnableSensitiveTelemetryData_CanBeOverriddenByConfiguration()
+    {
+        var builder = Host.CreateEmptyApplicationBuilder(null);
+        builder.Configuration.AddInMemoryCollection([
+            new KeyValuePair<string, string?>("ConnectionStrings:openai", ConnectionString),
+            new KeyValuePair<string, string?>("Aspire:OpenAI:EnableSensitiveTelemetryData", "true")
+        ]);
+
+        OpenAISettings? localSettings = null;
+
+        builder.AddOpenAIClient("openai", settings =>
+        {
+            localSettings = settings;
+        });
+
+        Assert.NotNull(localSettings);
+        Assert.True(localSettings.EnableSensitiveTelemetryData);
+    }
 }