diff --git a/benchmark/streams/finished.js b/benchmark/streams/finished.js
new file mode 100644
index 00000000000000..5fd2820549cd91
--- /dev/null
+++ b/benchmark/streams/finished.js
@@ -0,0 +1,33 @@
+'use strict';
+
+const common = require('../common');
+const { Readable, Writable } = require('stream');
+const { finished } = require('stream/promises');
+
+const bench = common.createBenchmark(main, {
+  n: [1e7],
+  streamType: ['readable', 'writable'],
+});
+
+async function main({ n, streamType }) {
+  bench.start();
+
+  for (let i = 0; i < n; i++) {
+    let stream;
+
+    switch (streamType) {
+      case 'readable':
+        stream = new Readable({ read() { this.push(null); } });
+        stream.resume();
+        break;
+      case 'writable':
+        stream = new Writable({ write(chunk, enc, cb) { cb(); } });
+        stream.end();
+        break;
+    }
+
+    await finished(stream);
+  }
+
+  bench.end(n);
+}
diff --git a/lib/internal/streams/end-of-stream.js b/lib/internal/streams/end-of-stream.js
index 850d4314139afd..99587ae254ddd5 100644
--- a/lib/internal/streams/end-of-stream.js
+++ b/lib/internal/streams/end-of-stream.js
@@ -44,6 +44,9 @@ const {
   kIsClosedPromise,
 } = require('internal/streams/utils');
 
+const { getHookArrays } = require('internal/async_hooks');
+const AsyncContextFrame = require('internal/async_context_frame');
+
 // Lazy load
 let AsyncResource;
 let addAbortListener;
@@ -74,9 +77,14 @@ function eos(stream, options, callback) {
   validateFunction(callback, 'callback');
   validateAbortSignal(options.signal, 'options.signal');
 
-  // Avoid AsyncResource.bind() because it calls ObjectDefineProperties which
-  // is a bottleneck here.
-  callback = once(bindAsyncResource(callback, 'STREAM_END_OF_STREAM'));
+  if (AsyncContextFrame.current() ||
+      getHookArrays()[0].length > 0) {
+    // Avoid AsyncResource.bind() because it calls ObjectDefineProperties which
+    // is a bottleneck here.
+    callback = once(bindAsyncResource(callback, 'STREAM_END_OF_STREAM'));
+  } else {
+    callback = once(callback);
+  }
 
   if (isReadableStream(stream) || isWritableStream(stream)) {
     return eosWeb(stream, options, callback);
diff --git a/test/parallel/test-stream-finished-async-local-storage.js b/test/parallel/test-stream-finished-async-local-storage.js
new file mode 100644
index 00000000000000..1440d2bb0ac991
--- /dev/null
+++ b/test/parallel/test-stream-finished-async-local-storage.js
@@ -0,0 +1,24 @@
+// Flags: --expose-internals
+'use strict';
+
+const common = require('../common');
+const { Readable, finished } = require('stream');
+const { AsyncLocalStorage } = require('async_hooks');
+const { strictEqual } = require('assert');
+const AsyncContextFrame = require('internal/async_context_frame');
+const internalAsyncHooks = require('internal/async_hooks');
+
+// This test verifies that ALS context is preserved when using stream.finished()
+
+const als = new AsyncLocalStorage();
+const readable = new Readable();
+
+als.run('test-context-1', () => {
+  finished(readable, common.mustCall(() => {
+    strictEqual(AsyncContextFrame.enabled || internalAsyncHooks.getHookArrays()[0].length > 0,
+                true, 'One of AsyncContextFrame or async hooks criteria should be met');
+    strictEqual(als.getStore(), 'test-context-1', 'ALS context should be preserved');
+  }));
+});
+
+readable.destroy();
diff --git a/test/parallel/test-stream-finished-bindAsyncResource-path.js b/test/parallel/test-stream-finished-bindAsyncResource-path.js
new file mode 100644
index 00000000000000..6bec9587e3ad11
--- /dev/null
+++ b/test/parallel/test-stream-finished-bindAsyncResource-path.js
@@ -0,0 +1,35 @@
+// Flags: --expose-internals
+'use strict';
+
+const common = require('../common');
+const { Readable, finished } = require('stream');
+const { createHook, executionAsyncId } = require('async_hooks');
+const { strictEqual } = require('assert');
+const internalAsyncHooks = require('internal/async_hooks');
+
+// This test verifies that when there are active async hooks, stream.finished() uses
+// the bindAsyncResource path
+
+createHook({
+  init(asyncId, type, triggerAsyncId) {
+    if (type === 'STREAM_END_OF_STREAM') {
+      const parentContext = contextMap.get(triggerAsyncId);
+      contextMap.set(asyncId, parentContext);
+    }
+  }
+}).enable();
+
+const contextMap = new Map();
+const asyncId = executionAsyncId();
+contextMap.set(asyncId, 'abc-123');
+const readable = new Readable();
+
+finished(readable, common.mustCall(() => {
+  const currentAsyncId = executionAsyncId();
+  const ctx = contextMap.get(currentAsyncId);
+  strictEqual(internalAsyncHooks.getHookArrays()[0].length > 0,
+              true, 'Should have active user async hook');
+  strictEqual(ctx, 'abc-123', 'Context should be preserved');
+}));
+
+readable.destroy();
diff --git a/test/parallel/test-stream-finished-default-path.js b/test/parallel/test-stream-finished-default-path.js
new file mode 100644
index 00000000000000..31fcd8d175a3fd
--- /dev/null
+++ b/test/parallel/test-stream-finished-default-path.js
@@ -0,0 +1,21 @@
+// Flags: --expose-internals --no-async-context-frame
+'use strict';
+
+const common = require('../common');
+const { Readable, finished } = require('stream');
+const { strictEqual } = require('assert');
+const AsyncContextFrame = require('internal/async_context_frame');
+const internalAsyncHooks = require('internal/async_hooks');
+
+// This test verifies that when there are no active async hooks, stream.finished() uses the default callback path
+
+const readable = new Readable();
+
+finished(readable, common.mustCall(() => {
+  strictEqual(internalAsyncHooks.getHookArrays()[0].length === 0,
+              true, 'Should not have active user async hook');
+  strictEqual(AsyncContextFrame.current() || internalAsyncHooks.getHookArrays()[0].length > 0,
+              false, 'Default callback path should be used');
+}));
+
+readable.destroy();