diff --git a/.chloggen/fix_dd-app-version.yaml b/.chloggen/fix_dd-app-version.yaml
new file mode 100755
index 000000000000..4272a90755c3
--- /dev/null
+++ b/.chloggen/fix_dd-app-version.yaml
@@ -0,0 +1,27 @@
+# Use this changelog template to create an entry for release notes.
+
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: bug_fix
+
+# The name of the component, or a single word describing the area of concern, (e.g. filelogreceiver)
+component: datadogreceiver
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: Set AppVersion to allow Datadog version property to transform properly to service.version resource attribute
+
+# Mandatory: One or more tracking issues related to the change. You can use the PR number here if no issue exists.
+issues: [30225]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext:
+
+# If your change doesn't affect end users or the exported elements of any package,
+# you should instead start your pull request title with [chore] or use the "Skip Changelog" label.
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: []
diff --git a/receiver/datadogreceiver/translator.go b/receiver/datadogreceiver/translator.go
index 0eda02b1174e..113b25841cc3 100644
--- a/receiver/datadogreceiver/translator.go
+++ b/receiver/datadogreceiver/translator.go
@@ -230,11 +230,15 @@ func handlePayload(req *http.Request) (tp []*pb.TracerPayload, err error) {
 			return nil, err
 		}
 
+		traceChunks := traceChunksFromTraces(traces)
+		appVersion := appVersionFromTraceChunks(traceChunks)
+
 		tracerPayload := &pb.TracerPayload{
 			LanguageName:    req.Header.Get("Datadog-Meta-Lang"),
 			LanguageVersion: req.Header.Get("Datadog-Meta-Lang-Version"),
 			TracerVersion:   req.Header.Get("Datadog-Meta-Tracer-Version"),
-			Chunks:          traceChunksFromTraces(traces),
+			Chunks:          traceChunks,
+			AppVersion:      appVersion,
 		}
 		tracerPayloads = append(tracerPayloads, tracerPayload)
 
@@ -269,11 +273,14 @@ func handlePayload(req *http.Request) (tp []*pb.TracerPayload, err error) {
 		if err = decodeRequest(req, &traces); err != nil {
 			return nil, err
 		}
+		traceChunks := traceChunksFromTraces(traces)
+		appVersion := appVersionFromTraceChunks(traceChunks)
 		tracerPayload := &pb.TracerPayload{
 			LanguageName:    req.Header.Get("Datadog-Meta-Lang"),
 			LanguageVersion: req.Header.Get("Datadog-Meta-Lang-Version"),
 			TracerVersion:   req.Header.Get("Datadog-Meta-Tracer-Version"),
-			Chunks:          traceChunksFromTraces(traces),
+			Chunks:          traceChunks,
+			AppVersion:      appVersion,
 		}
 		tracerPayloads = append(tracerPayloads, tracerPayload)
 	}
@@ -342,6 +349,19 @@ func traceChunksFromTraces(traces pb.Traces) []*pb.TraceChunk {
 	return traceChunks
 }
 
+func appVersionFromTraceChunks(traces []*pb.TraceChunk) string {
+	appVersion := ""
+	for _, trace := range traces {
+		for _, span := range trace.Spans {
+			if span != nil && span.Meta["version"] != "" {
+				appVersion = span.Meta["version"]
+				return appVersion
+			}
+		}
+	}
+	return appVersion
+}
+
 func getMediaType(req *http.Request) string {
 	mt, _, err := mime.ParseMediaType(req.Header.Get("Content-Type"))
 	if err != nil {
diff --git a/receiver/datadogreceiver/translator_test.go b/receiver/datadogreceiver/translator_test.go
index f15d84a55aa9..c65f876d30d7 100644
--- a/receiver/datadogreceiver/translator_test.go
+++ b/receiver/datadogreceiver/translator_test.go
@@ -33,6 +33,8 @@ var data = [2]any{
 		9:  "value whatever",
 		10: "sql",
 		11: "service.name",
+		12: "1.0.1",
+		13: "version",
 	},
 	1: [][][12]any{
 		{
@@ -51,6 +53,7 @@ var data = [2]any{
 					0:  1,
 					2:  3,
 					11: 6,
+					13: 12,
 				},
 				map[any]float64{
 					5: 1.2,
@@ -89,11 +92,13 @@ func TestTracePayloadV05Unmarshalling(t *testing.T) {
 	assert.Equal(t, 1, translated.SpanCount(), "Span Count wrong")
 	span := translated.ResourceSpans().At(0).ScopeSpans().At(0).Spans().At(0)
 	assert.NotNil(t, span)
-	assert.Equal(t, 7, span.Attributes().Len(), "missing attributes")
+	assert.Equal(t, 8, span.Attributes().Len(), "missing attributes")
 	value, exists := span.Attributes().Get("service.name")
+	serviceVersionValue, _ := span.Attributes().Get("service.version")
 	assert.True(t, exists, "service.name missing")
 	assert.Equal(t, "my-service", value.AsString(), "service.name attribute value incorrect")
 	assert.Equal(t, "my-name", span.Name())
+	assert.Equal(t, "1.0.1", serviceVersionValue.AsString())
 	spanResource, _ := span.Attributes().Get("dd.span.Resource")
 	assert.Equal(t, "my-resource", spanResource.Str())
 }
@@ -115,7 +120,7 @@ func TestTracePayloadV07Unmarshalling(t *testing.T) {
 	translated := translatedPayloads[0]
 	span := translated.GetChunks()[0].GetSpans()[0]
 	assert.NotNil(t, span)
-	assert.Equal(t, 4, len(span.GetMeta()), "missing attributes")
+	assert.Equal(t, 5, len(span.GetMeta()), "missing attributes")
 	value, exists := span.GetMeta()["service.name"]
 	assert.True(t, exists, "service.name missing")
 	assert.Equal(t, "my-service", value, "service.name attribute value incorrect")
@@ -155,7 +160,7 @@ func TestTracePayloadApiV02Unmarshalling(t *testing.T) {
 		span := translated.Chunks[0].Spans[0]
 
 		assert.NotNil(t, span)
-		assert.Equal(t, 4, len(span.Meta), "missing attributes")
+		assert.Equal(t, 5, len(span.Meta), "missing attributes")
 		assert.Equal(t, "my-service", span.Meta["service.name"])
 		assert.Equal(t, "my-name", span.Name)
 		assert.Equal(t, "my-resource", span.Resource)