diff --git a/CHANGELOG.md b/CHANGELOG.md
index 8a1933499..cabed4055 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,6 +1,7 @@
 # Changelog
 
 ## Unreleased
+- [Fix `DisableTelemetry` not disabling metrics export: `OTEL_SDK_DISABLED` was set in IConfiguration too late (during options callback) after the OTel MeterProvider had already been constructed. Moved the check to a hosted service that runs before OpenTelemetry's TelemetryHostedService.](https://github.com/microsoft/ApplicationInsights-dotnet/pull/3156)
 - [Fix `TrackAvailability` ignoring user-specified `Timestamp` on `AvailabilityTelemetry`. The timestamp is now emitted as `microsoft.availability.testTimestamp` so downstream exporters can use the correct event time.](https://github.com/microsoft/ApplicationInsights-dotnet/pull/3153)
 - [Added `netstandard2.0` target framework to `Microsoft.ApplicationInsights` package to support customers with shared libraries targeting netstandard2.0.](https://github.com/microsoft/ApplicationInsights-dotnet/pull/3142)
 - [Fix `TelemetryClient.Context.Cloud.RoleName` set after construction now applies to all telemetry.](https://github.com/microsoft/ApplicationInsights-dotnet/pull/3129)
diff --git a/NETCORE/src/Microsoft.ApplicationInsights.AspNetCore/Extensions/ApplicationInsightsExtensions.cs b/NETCORE/src/Microsoft.ApplicationInsights.AspNetCore/Extensions/ApplicationInsightsExtensions.cs
index 1380c6942..41ec09716 100644
--- a/NETCORE/src/Microsoft.ApplicationInsights.AspNetCore/Extensions/ApplicationInsightsExtensions.cs
+++ b/NETCORE/src/Microsoft.ApplicationInsights.AspNetCore/Extensions/ApplicationInsightsExtensions.cs
@@ -205,12 +205,6 @@ internal static IOpenTelemetryBuilder UseApplicationInsightsTelemetry(this IOpen
                 {
                     var serviceOptions = aiOptions.Value;
 
-                    // Set OTEL_SDK_DISABLED in configuration if DisableTelemetry is true
-                    if (telemetryConfig.DisableTelemetry)
-                    {
-                        config["OTEL_SDK_DISABLED"] = "true";
-                    }
-
                     if (!string.IsNullOrEmpty(telemetryConfig.StorageDirectory))
                     {
                         exporterOptions.StorageDirectory = telemetryConfig.StorageDirectory;
diff --git a/NETCORE/src/Microsoft.ApplicationInsights.WorkerService/ApplicationInsightsExtensions.cs b/NETCORE/src/Microsoft.ApplicationInsights.WorkerService/ApplicationInsightsExtensions.cs
index 34a3c0506..d8cdfd494 100644
--- a/NETCORE/src/Microsoft.ApplicationInsights.WorkerService/ApplicationInsightsExtensions.cs
+++ b/NETCORE/src/Microsoft.ApplicationInsights.WorkerService/ApplicationInsightsExtensions.cs
@@ -200,12 +200,6 @@ internal static IOpenTelemetryBuilder UseApplicationInsightsTelemetry(this IOpen
                 {
                     var serviceOptions = aiOptions.Value;
 
-                    // Set OTEL_SDK_DISABLED in configuration if DisableTelemetry is true
-                    if (telemetryConfig.DisableTelemetry)
-                    {
-                        config["OTEL_SDK_DISABLED"] = "true";
-                    }
-
                     if (!string.IsNullOrEmpty(telemetryConfig.StorageDirectory))
                     {
                         exporterOptions.StorageDirectory = telemetryConfig.StorageDirectory;
diff --git a/NETCORE/src/Shared/Extensions/ApplicationInsightsExtensions.cs b/NETCORE/src/Shared/Extensions/ApplicationInsightsExtensions.cs
index c494d4231..919df48a8 100644
--- a/NETCORE/src/Shared/Extensions/ApplicationInsightsExtensions.cs
+++ b/NETCORE/src/Shared/Extensions/ApplicationInsightsExtensions.cs
@@ -91,7 +91,7 @@ private static bool IsApplicationInsightsAdded(IServiceCollection services)
         private static void AddTelemetryConfigAndClient(IServiceCollection services, string extensionVersion)
         {
             services.AddOptions();
-            
+
             // Register TelemetryConfiguration singleton with factory that creates it for DI scenarios
             // We use a factory to ensure skipDefaultBuilderConfiguration: true is passed
             services.AddSingleton<TelemetryConfiguration>(provider =>
@@ -121,7 +121,18 @@ private static void AddTelemetryConfigAndClient(IServiceCollection services, str
                 {
                     postConfigure.PostConfigure(Options.DefaultName, configuration);
                 }
-                
+
+                // Set OTEL_SDK_DISABLED in IConfiguration so the OTel SDK's MeterProvider/TracerProvider
+                // factories see it when they check IsOtelSdkDisabled(). This must happen here (during
+                // TelemetryConfiguration resolution) rather than in a hosted service, because the
+                // MeterProvider singleton factory can be triggered during the DI build phase
+                // (e.g., via UseAzureMonitorExporter -> options resolution) before any hosted service runs.
+                if (configuration.DisableTelemetry)
+                {
+                    var iconfig = provider.GetRequiredService<IConfiguration>();
+                    iconfig["OTEL_SDK_DISABLED"] = "true";
+                }
+
                 return configuration;
             });