diff --git a/TUnit.AspNetCore.Core/Http/TUnitHttpClientFilter.cs b/TUnit.AspNetCore.Core/Http/TUnitHttpClientFilter.cs
new file mode 100644
index 0000000000..b98c6ee75f
--- /dev/null
+++ b/TUnit.AspNetCore.Core/Http/TUnitHttpClientFilter.cs
@@ -0,0 +1,43 @@
+using Microsoft.Extensions.Http;
+
+namespace TUnit.AspNetCore.Http;
+
+/// <summary>
+/// Prepends <see cref="ActivityPropagationHandler"/> and <see cref="TUnitTestIdHandler"/>
+/// to every <see cref="System.Net.Http.IHttpClientFactory"/> handler pipeline built in the SUT.
+/// Ensures outbound HTTP calls made via <c>AddHttpClient&lt;T&gt;()</c>, named, or typed clients
+/// carry the current test's <c>traceparent</c>, <c>baggage</c>, and <c>X-TUnit-TestId</c> headers.
+/// <para>
+/// Both handler types must remain stateless and thread-safe: <see cref="System.Net.Http.IHttpClientFactory"/>
+/// caches the built pipeline and shares the same handler instances across every request on a given
+/// named client, including concurrent requests from parallel tests. Per-test correlation comes from
+/// <see cref="TUnit.Core.TestContext.Current"/> and <see cref="System.Diagnostics.Activity.Current"/>,
+/// which are async-local — do not add instance fields capturing per-request state to either handler.
+/// </para>
+/// </summary>
+internal sealed class TUnitHttpClientFilter : IHttpMessageHandlerBuilderFilter
+{
+    public Action<HttpMessageHandlerBuilder> Configure(Action<HttpMessageHandlerBuilder> next) =>
+        builder =>
+        {
+            next(builder);
+            // Insert at outermost positions so TUnit headers are emitted before any
+            // SUT-registered handler can run. Order must stay ActivityPropagationHandler
+            // first (writes traceparent/baggage) then TUnitTestIdHandler (writes X-TUnit-TestId).
+            builder.AdditionalHandlers.Insert(0, new ActivityPropagationHandler());
+            builder.AdditionalHandlers.Insert(1, new TUnitTestIdHandler());
+        };
+
+    /// <summary>
+    /// Returns the TUnit propagation handlers followed by the caller-supplied handlers,
+    /// in the order they should be passed to <c>WebApplicationFactory.CreateDefaultClient</c>.
+    /// </summary>
+    internal static DelegatingHandler[] PrependPropagationHandlers(DelegatingHandler[] handlers)
+    {
+        var all = new DelegatingHandler[handlers.Length + 2];
+        all[0] = new ActivityPropagationHandler();
+        all[1] = new TUnitTestIdHandler();
+        Array.Copy(handlers, 0, all, 2, handlers.Length);
+        return all;
+    }
+}
diff --git a/TUnit.AspNetCore.Core/Http/TUnitTestIdHandler.cs b/TUnit.AspNetCore.Core/Http/TUnitTestIdHandler.cs
index 7afd6ee513..d7f13b15b3 100644
--- a/TUnit.AspNetCore.Core/Http/TUnitTestIdHandler.cs
+++ b/TUnit.AspNetCore.Core/Http/TUnitTestIdHandler.cs
@@ -38,7 +38,7 @@ public TUnitTestIdHandler(HttpMessageHandler innerHandler) : base(innerHandler)
     protected override Task<HttpResponseMessage> SendAsync(
         HttpRequestMessage request, CancellationToken cancellationToken)
     {
-        if ((_testContext ?? TestContext.Current) is { } ctx)
+        if ((_testContext ?? TestContext.Current) is { } ctx && !request.Headers.Contains(HeaderName))
         {
             request.Headers.TryAddWithoutValidation(HeaderName, ctx.Id);
         }
diff --git a/TUnit.AspNetCore.Core/TestWebApplicationFactory.cs b/TUnit.AspNetCore.Core/TestWebApplicationFactory.cs
index 1a3c33542e..3bc0e810c3 100644
--- a/TUnit.AspNetCore.Core/TestWebApplicationFactory.cs
+++ b/TUnit.AspNetCore.Core/TestWebApplicationFactory.cs
@@ -3,8 +3,11 @@
 using Microsoft.AspNetCore.TestHost;
 using Microsoft.Extensions.Configuration;
 using Microsoft.Extensions.DependencyInjection;
+using Microsoft.Extensions.DependencyInjection.Extensions;
 using Microsoft.Extensions.Hosting;
+using Microsoft.Extensions.Http;
 using TUnit.AspNetCore.Extensions;
+using TUnit.AspNetCore.Http;
 using TUnit.AspNetCore.Interception;
 using TUnit.AspNetCore.Logging;
 using TUnit.Core;
@@ -41,6 +44,12 @@ public WebApplicationFactory<TEntryPoint> GetIsolatedFactory(
                     configureIsolatedServices(services);
                     services.AddSingleton(testContext);
                     services.AddTUnitLogging(testContext);
+
+                    if (options.AutoPropagateHttpClientFactory)
+                    {
+                        services.TryAddEnumerable(
+                            ServiceDescriptor.Singleton<IHttpMessageHandlerBuilderFilter, TUnitHttpClientFilter>());
+                    }
                 });
 
             if (options.EnableHttpExchangeCapture)
@@ -173,11 +182,7 @@ private static ServiceDescriptor WrapHostedServiceDescriptor(ServiceDescriptor d
     /// </summary>
     public new HttpClient CreateDefaultClient(params DelegatingHandler[] handlers)
     {
-        var all = new DelegatingHandler[handlers.Length + 2];
-        all[0] = new ActivityPropagationHandler();
-        all[1] = new TUnitTestIdHandler();
-        Array.Copy(handlers, 0, all, 2, handlers.Length);
-        return base.CreateDefaultClient(all);
+        return base.CreateDefaultClient(TUnitHttpClientFilter.PrependPropagationHandlers(handlers));
     }
 
     /// <inheritdoc cref="CreateDefaultClient(DelegatingHandler[])"/>
diff --git a/TUnit.AspNetCore.Core/TracedWebApplicationFactory.cs b/TUnit.AspNetCore.Core/TracedWebApplicationFactory.cs
index 55658086b8..6d549a3b39 100644
--- a/TUnit.AspNetCore.Core/TracedWebApplicationFactory.cs
+++ b/TUnit.AspNetCore.Core/TracedWebApplicationFactory.cs
@@ -1,5 +1,6 @@
 using Microsoft.AspNetCore.Mvc.Testing;
 using Microsoft.AspNetCore.TestHost;
+using TUnit.AspNetCore.Http;
 
 namespace TUnit.AspNetCore;
 
@@ -41,7 +42,7 @@ public TracedWebApplicationFactory(WebApplicationFactory<TEntryPoint> inner)
     /// Creates an <see cref="HttpClient"/> with activity tracing and test context propagation.
     /// </summary>
     public HttpClient CreateClient() =>
-        _inner.CreateDefaultClient(new ActivityPropagationHandler(), new TUnitTestIdHandler());
+        _inner.CreateDefaultClient(TUnitHttpClientFilter.PrependPropagationHandlers([]));
 
     /// <summary>
     /// Creates an <see cref="HttpClient"/> with the specified delegating handlers, plus
@@ -49,11 +50,7 @@ public HttpClient CreateClient() =>
     /// </summary>
     public HttpClient CreateDefaultClient(params DelegatingHandler[] handlers)
     {
-        var all = new DelegatingHandler[handlers.Length + 2];
-        all[0] = new ActivityPropagationHandler();
-        all[1] = new TUnitTestIdHandler();
-        Array.Copy(handlers, 0, all, 2, handlers.Length);
-        return _inner.CreateDefaultClient(all);
+        return _inner.CreateDefaultClient(TUnitHttpClientFilter.PrependPropagationHandlers(handlers));
     }
 
     /// <summary>
diff --git a/TUnit.AspNetCore.Core/WebApplicationTestOptions.cs b/TUnit.AspNetCore.Core/WebApplicationTestOptions.cs
index bfeff23e64..91050dd0fc 100644
--- a/TUnit.AspNetCore.Core/WebApplicationTestOptions.cs
+++ b/TUnit.AspNetCore.Core/WebApplicationTestOptions.cs
@@ -8,4 +8,18 @@ public record WebApplicationTestOptions
     /// Default is false.
     /// </summary>
     public bool EnableHttpExchangeCapture { get; set; } = false;
+
+    /// <summary>
+    /// Gets or sets a value indicating whether outbound HTTP calls made by the SUT through
+    /// <see cref="System.Net.Http.IHttpClientFactory"/> (including <c>AddHttpClient&lt;T&gt;()</c>,
+    /// named clients, and typed clients) should automatically carry the test's
+    /// <c>traceparent</c>, <c>baggage</c>, and <c>X-TUnit-TestId</c> headers.
+    /// Default is <c>true</c>.
+    /// <para>
+    /// Set to <c>false</c> when the SUT already instruments its outbound HTTP calls
+    /// (for example via the OpenTelemetry HttpClient instrumentation) and you do not want
+    /// TUnit to prepend its handlers to every factory pipeline.
+    /// </para>
+    /// </summary>
+    public bool AutoPropagateHttpClientFactory { get; set; } = true;
 }
diff --git a/TUnit.AspNetCore.Tests.WebApp/Program.cs b/TUnit.AspNetCore.Tests.WebApp/Program.cs
index 03abeda9f9..3e2f4e2fa7 100644
--- a/TUnit.AspNetCore.Tests.WebApp/Program.cs
+++ b/TUnit.AspNetCore.Tests.WebApp/Program.cs
@@ -1,5 +1,8 @@
 var builder = WebApplication.CreateBuilder(args);
 
+builder.Services.AddHttpClient("downstream")
+    .ConfigurePrimaryHttpMessageHandler(() => new HeaderEchoHandler());
+
 var app = builder.Build();
 
 var logger = app.Services.GetRequiredService<ILoggerFactory>().CreateLogger("Endpoints");
@@ -15,6 +18,29 @@
 
 app.MapGet("/ping", () => "pong");
 
+// Outbound call through IHttpClientFactory. The downstream pipeline's primary
+// handler echoes request headers back in the response body so tests can assert
+// which headers the SUT-side HttpClient actually emitted.
+app.MapGet("/proxy", async (IHttpClientFactory factory) =>
+{
+    var client = factory.CreateClient("downstream");
+    var response = await client.GetAsync("http://downstream.test/");
+    var body = await response.Content.ReadAsStringAsync();
+    return Results.Content(body, "text/plain");
+});
+
 app.Run();
 
 public partial class Program;
+
+internal sealed class HeaderEchoHandler : HttpMessageHandler
+{
+    protected override Task<HttpResponseMessage> SendAsync(HttpRequestMessage request, CancellationToken cancellationToken)
+    {
+        var dump = string.Join("\n", request.Headers.SelectMany(h => h.Value.Select(v => $"{h.Key}: {v}")));
+        return Task.FromResult(new HttpResponseMessage(System.Net.HttpStatusCode.OK)
+        {
+            Content = new StringContent(dump)
+        });
+    }
+}
diff --git a/TUnit.AspNetCore.Tests/IHttpClientFactoryPropagationTests.cs b/TUnit.AspNetCore.Tests/IHttpClientFactoryPropagationTests.cs
new file mode 100644
index 0000000000..ff193e3bc3
--- /dev/null
+++ b/TUnit.AspNetCore.Tests/IHttpClientFactoryPropagationTests.cs
@@ -0,0 +1,56 @@
+using System.Diagnostics;
+using TUnit.AspNetCore;
+using TUnit.Core;
+
+namespace TUnit.AspNetCore.Tests;
+
+/// <summary>
+/// Coverage for thomhurst/TUnit#5590 — the SUT's <see cref="IHttpClientFactory"/> pipelines
+/// must automatically carry the test's trace context when
+/// <see cref="WebApplicationTestOptions.AutoPropagateHttpClientFactory"/> is <c>true</c>.
+/// </summary>
+public class IHttpClientFactoryPropagationTests : WebApplicationTest<TestWebAppFactory, Program>
+{
+    [Test]
+    public async Task SutHttpClientFactory_Propagates_TestContextHeaders()
+    {
+        using var activity = new Activity("outer-test-span").Start();
+
+        using var client = Factory.CreateClient();
+
+        var response = await client.GetAsync("/proxy");
+        response.EnsureSuccessStatusCode();
+
+        var echoed = await response.Content.ReadAsStringAsync();
+
+        await Assert.That(echoed).Contains("traceparent:");
+        await Assert.That(echoed).Contains(TUnitTestIdHandler.HeaderName + ": " + TestContext.Current!.Id);
+        await Assert.That(echoed).Contains("baggage:");
+        await Assert.That(echoed).Contains(activity.TraceId.ToString());
+    }
+}
+
+public class IHttpClientFactoryPropagationOptOutTests : WebApplicationTest<TestWebAppFactory, Program>
+{
+    protected override void ConfigureTestOptions(WebApplicationTestOptions options)
+    {
+        options.AutoPropagateHttpClientFactory = false;
+    }
+
+    [Test]
+    public async Task SutHttpClientFactory_DoesNotPropagate_WhenAutoPropagationDisabled()
+    {
+        using var activity = new Activity("outer-test-span").Start();
+
+        using var client = Factory.CreateClient();
+
+        var response = await client.GetAsync("/proxy");
+        response.EnsureSuccessStatusCode();
+
+        var echoed = await response.Content.ReadAsStringAsync();
+
+        await Assert.That(echoed).DoesNotContain(TUnitTestIdHandler.HeaderName);
+        await Assert.That(echoed).DoesNotContain("traceparent:");
+        await Assert.That(echoed).DoesNotContain("baggage:");
+    }
+}
diff --git a/docs/docs/examples/aspnet.md b/docs/docs/examples/aspnet.md
index 5e57287721..c58e88bb21 100644
--- a/docs/docs/examples/aspnet.md
+++ b/docs/docs/examples/aspnet.md
@@ -82,6 +82,13 @@ public class TodoApiTests : TestsBase
 }
 ```
 
+`TestWebApplicationFactory<T>` wires up these behaviors automatically:
+
+- **Client-side tracing**: `CreateClient()` / `CreateDefaultClient()` return an `HttpClient` that propagates `traceparent`, `baggage`, and `X-TUnit-TestId` headers to the SUT.
+- **SUT `IHttpClientFactory` tracing**: Every pipeline built inside the SUT via `AddHttpClient<T>()`, named clients, or typed clients also gets those headers prepended — outbound calls from your app to downstream services correlate with the originating test. Opt out per-test with `WebApplicationTestOptions.AutoPropagateHttpClientFactory = false`.
+- **Correlated logging**: Server-side `ILogger` output is routed to the test that triggered the request.
+- **Hosted-service context hygiene**: `IHostedService.StartAsync` runs under `ExecutionContext.SuppressFlow()` so background work doesn't inherit the first test's `Activity.Current`.
+
 ## Core Concepts
 
 ### Why Test Isolation Matters
diff --git a/docs/docs/examples/opentelemetry.md b/docs/docs/examples/opentelemetry.md
index b4b20aec22..e8cde82e32 100644
--- a/docs/docs/examples/opentelemetry.md
+++ b/docs/docs/examples/opentelemetry.md
@@ -333,7 +333,7 @@ var client = traced.CreateClient();
 
 Both attach the trace propagation handler automatically. See [ASP.NET Core integration](./aspnet.md) for full setup.
 
-For HTTP calls the SUT itself makes through `IHttpClientFactory`, today you have to add the handler manually (`.AddHttpMessageHandler<ActivityPropagationHandler>()`). Tracking automation: [#5590](https://github.com/thomhurst/TUnit/issues/5590).
+Outbound HTTP calls the SUT itself makes through `IHttpClientFactory` (`AddHttpClient<T>()`, named clients, typed clients) are also auto-instrumented by `TestWebApplicationFactory<T>`. Opt out per-test via `WebApplicationTestOptions.AutoPropagateHttpClientFactory = false` when the SUT already owns its outbound tracing.
 
 ### "No spans show up in my exporter at all"
 
diff --git a/docs/docs/guides/distributed-tracing.md b/docs/docs/guides/distributed-tracing.md
index 019a8a84b3..87a8694aa3 100644
--- a/docs/docs/guides/distributed-tracing.md
+++ b/docs/docs/guides/distributed-tracing.md
@@ -135,15 +135,17 @@ Use [`TestWebApplicationFactory<T>`](/docs/examples/aspnet) or wrap with `Traced
 
 ### `IHttpClientFactory` clients in the SUT
 
-Outbound HTTP calls the SUT itself makes (e.g. to a downstream service) are not auto-instrumented yet. Add the handler manually:
+`TestWebApplicationFactory<T>` auto-registers an `IHttpMessageHandlerBuilderFilter` that prepends the TUnit tracing and test-id handlers to every `IHttpClientFactory` pipeline built in the SUT. Outbound calls from `AddHttpClient<T>()`, named clients, and typed clients all carry `traceparent`, `baggage`, and `X-TUnit-TestId` automatically — no manual `.AddHttpMessageHandler<>()` wiring required.
+
+Opt out per-test when the SUT already instruments its own outbound HTTP (for example via the OpenTelemetry HttpClient instrumentation) by setting `WebApplicationTestOptions.AutoPropagateHttpClientFactory = false`:
 
 ```csharp
-services.AddHttpClient<IDownstreamApi, DownstreamApi>()
-    .AddHttpMessageHandler<ActivityPropagationHandler>();
+protected override void ConfigureTestOptions(WebApplicationTestOptions options)
+{
+    options.AutoPropagateHttpClientFactory = false;
+}
 ```
 
-Tracking automation: [#5590](https://github.com/thomhurst/TUnit/issues/5590).
-
 ### Raw `HttpClient`
 
 `new HttpClient()` can't be intercepted. Either route through `IHttpClientFactory` or set the `traceparent` header manually.