diff --git a/packages/opencode/src/effect/observability.ts b/packages/opencode/src/effect/observability.ts
index 7e3f1607d3..63f590c802 100644
--- a/packages/opencode/src/effect/observability.ts
+++ b/packages/opencode/src/effect/observability.ts
@@ -5,9 +5,7 @@ import { Flag } from "@/flag/flag"
 import { CHANNEL, VERSION } from "@/installation/meta"
 
 export namespace Observability {
-  const base = Flag.OPENCODE_DISABLE_OTLP
-    ? undefined
-    : (Flag.OPENCODE_OTLP_BASE_URL ?? (CHANNEL === "local" ? "http://127.0.0.1:27686" : undefined))
+  const base = Flag.OPENCODE_OTLP_BASE_URL?.trim() || undefined
 
   export const enabled = !!base
 
diff --git a/packages/opencode/src/flag/flag.ts b/packages/opencode/src/flag/flag.ts
index 0d67a64993..cf338f2e9c 100644
--- a/packages/opencode/src/flag/flag.ts
+++ b/packages/opencode/src/flag/flag.ts
@@ -45,7 +45,6 @@ export namespace Flag {
   export const OPENCODE_SERVER_USERNAME = process.env["OPENCODE_SERVER_USERNAME"]
   export const OPENCODE_ENABLE_QUESTION_TOOL = truthy("OPENCODE_ENABLE_QUESTION_TOOL")
   export const OPENCODE_OTLP_BASE_URL = process.env["OPENCODE_OTLP_BASE_URL"]
-  export const OPENCODE_DISABLE_OTLP = truthy("OPENCODE_DISABLE_OTLP")
 
   // Experimental
   export const OPENCODE_EXPERIMENTAL = truthy("OPENCODE_EXPERIMENTAL")
diff --git a/packages/opencode/test/preload.ts b/packages/opencode/test/preload.ts
index e6172c0940..0ddc797faf 100644
--- a/packages/opencode/test/preload.ts
+++ b/packages/opencode/test/preload.ts
@@ -33,7 +33,6 @@ process.env["XDG_DATA_HOME"] = path.join(dir, "share")
 process.env["XDG_CACHE_HOME"] = path.join(dir, "cache")
 process.env["XDG_CONFIG_HOME"] = path.join(dir, "config")
 process.env["XDG_STATE_HOME"] = path.join(dir, "state")
-process.env["OPENCODE_DISABLE_OTLP"] = "1"
 process.env["OPENCODE_MODELS_PATH"] = path.join(import.meta.dir, "tool", "fixtures", "models-api.json")
 
 // Set test home directory to isolate tests from user's actual home directory