diff --git a/packages/aws-lambda/src/wrapper.js b/packages/aws-lambda/src/wrapper.js
index 5caa081219..8fc6cb4749 100644
--- a/packages/aws-lambda/src/wrapper.js
+++ b/packages/aws-lambda/src/wrapper.js
@@ -68,7 +68,11 @@ function shimmedHandler(originalHandler, originalThis, originalArgs, _config) {
   const lambdaCallback = originalArgs[2];
 
   const arnInfo = arnParser(context);
-  init(event, arnInfo, _config);
+  const tracingEnabled = init(event, arnInfo, _config);
+
+  if (!tracingEnabled) {
+    return originalHandler.apply(originalThis, originalArgs);
+  }
 
   // The AWS lambda runtime does not seem to inspect the number of arguments the handler function expects. Instead, it
   // always call the handler with three arguments (event, context, callback), no matter if the handler will use the
@@ -248,6 +252,10 @@ function init(event, arnInfo, _config) {
   //         - we always renormalize unconditionally to ensure safety.
   config = normalizeConfig(config, logger);
 
+  if (!config.tracing.enabled) {
+    return false;
+  }
+
   const useLambdaExtension = shouldUseLambdaExtension();
   if (useLambdaExtension) {
     logger.info('@instana/aws-lambda will use the Instana Lambda extension to send data to the Instana back end.');
@@ -282,6 +290,8 @@ function init(event, arnInfo, _config) {
   metrics.init(config);
   metrics.activate();
   tracing.activate();
+
+  return true;
 }
 
 function registerTimeoutDetection(context, entrySpan) {
diff --git a/packages/aws-lambda/test/integration_test/test_definition.js b/packages/aws-lambda/test/integration_test/test_definition.js
index 28e84a063d..a271d98dd6 100644
--- a/packages/aws-lambda/test/integration_test/test_definition.js
+++ b/packages/aws-lambda/test/integration_test/test_definition.js
@@ -57,6 +57,9 @@ function prelude(opts) {
   if (opts.instanaEndpointUrlMissing) {
     env.INSTANA_ENDPOINT_URL = '';
   }
+  if (opts.instanaTracingDisabled) {
+    env.INSTANA_DISABLE_TRACING = 'true';
+  }
   if (opts.instanaAgentKey) {
     env.INSTANA_AGENT_KEY = opts.instanaAgentKey;
   }
@@ -988,6 +991,42 @@ function registerTests(handlerDefinitionPath, reduced) {
     });
   });
 
+  describeOrSkipIfReduced()('when INSTANA_DISABLE_TRACING is set', function () {
+    // - INSTANA_ENDPOINT_URL is missing
+    // - lambda function ends with success
+    const env = prelude.bind(this)({
+      handlerDefinitionPath,
+      instanaAgentKey,
+      instanaTracingDisabled: true
+    });
+
+    let control;
+
+    before(async () => {
+      control = new Control({
+        faasRuntimePath: path.join(__dirname, '../runtime_mock'),
+        handlerDefinitionPath,
+        startBackend: true,
+        env
+      });
+
+      await control.start();
+    });
+
+    beforeEach(async () => {
+      await control.reset();
+      await control.resetBackendSpansAndMetrics();
+    });
+
+    after(async () => {
+      await control.stop();
+    });
+
+    it('expect no tracing data', () => {
+      return verify(control, { error: false, expectMetrics: false, expectSpans: false });
+    });
+  });
+
   describeOrSkipIfReduced(reduced)(
     'when the back end becomes responsive again after a timeout in a previous handler run',
     function () {