diff --git a/python/packages/main/agent_framework/telemetry.py b/python/packages/main/agent_framework/telemetry.py
index 0c276ed2c7..5382d413db 100644
--- a/python/packages/main/agent_framework/telemetry.py
+++ b/python/packages/main/agent_framework/telemetry.py
@@ -22,6 +22,7 @@ from ._pydantic import AFBaseSettings
 from .exceptions import AgentInitializationError, ChatClientInitializationError
 
 if TYPE_CHECKING:  # pragma: no cover
+    from azure.core.credentials import TokenCredential
     from opentelemetry.metrics import Histogram
     from opentelemetry.sdk.resources import Resource
     from opentelemetry.util._decorator import _AgnosticContextManager  # type: ignore[reportPrivateUsage]
@@ -413,10 +414,13 @@ class OtelSettings(AFBaseSettings):
         """Check if the setup has been executed."""
         return self._executed_setup
 
-    def setup_telemetry(self) -> None:
+    def setup_telemetry(self, credential: "TokenCredential | None" = None) -> None:
         """Setup telemetry based on the settings.
 
         If both connection_string and otlp_endpoint both will be used.
+
+        Args:
+            credential: The credential to use for Azure Monitor Entra ID authentication. Default is None.
         """
         if not self.ENABLED or self._executed_setup:
             return
@@ -438,6 +442,7 @@ class OtelSettings(AFBaseSettings):
 
             configure_azure_monitor(
                 connection_string=self.application_insights_connection_string,
+                credential=credential,
                 logger_name="agent_framework",
                 resource=resource,
                 enable_live_metrics=self.application_insights_live_metrics,
@@ -458,6 +463,7 @@ def setup_telemetry(
     enable_sensitive_data: bool | None = None,
     otlp_endpoint: str | None = None,
     application_insights_connection_string: str | None = None,
+    credential: "TokenCredential | None" = None,
     enable_live_metrics: bool | None = None,
 ) -> None:
     """Setup telemetry with optionally provided settings.
@@ -472,6 +478,8 @@ def setup_telemetry(
         enable_sensitive_data: Enable OpenTelemetry sensitive events. Default is False.
         otlp_endpoint:  The OpenTelemetry Protocol (OTLP) endpoint. Default is None.
         application_insights_connection_string: The Azure Monitor connection string. Default is None.
+        credential: The credential to use for Azure Monitor Entra ID authentication.
+            Default is None.
         enable_live_metrics: Enable Azure Monitor live metrics. Default is False.
 
     """
@@ -486,7 +494,7 @@ def setup_telemetry(
         OTEL_SETTINGS.application_insights_connection_string = application_insights_connection_string
     if enable_live_metrics is not None:
         OTEL_SETTINGS.application_insights_live_metrics = enable_live_metrics
-    OTEL_SETTINGS.setup_telemetry()
+    OTEL_SETTINGS.setup_telemetry(credential=credential)
 
 
 # region Chat Client Telemetry
diff --git a/python/samples/getting_started/telemetry/README.md b/python/samples/getting_started/telemetry/README.md
index b574aa4251..53d309aad1 100644
--- a/python/samples/getting_started/telemetry/README.md
+++ b/python/samples/getting_started/telemetry/README.md
@@ -79,6 +79,18 @@ This sample shows how to setup telemetry when using the Agent Framework's workfl
 
 ## Application Insights/Azure Monitor
 
+### Authentication
+
+You can connect to your Application Insights instance using a connection string. You can also authenticate using Entra ID by passing a [TokenCredential](https://learn.microsoft.com/en-us/python/api/azure-core/azure.core.credentials.tokencredential?view=azure-python) to the `setup_telemetry()` function used in the samples above.
+
+```python
+from azure.identity import DefaultAzureCredential
+
+setup_telemetry(credential=DefaultAzureCredential())
+```
+
+It is recommended to use [DefaultAzureCredential](https://learn.microsoft.com/en-us/python/api/azure-identity/azure.identity.defaultazurecredential?view=azure-python) for local development and [ManagedIdentityCredential](https://learn.microsoft.com/en-us/python/api/azure-identity/azure.identity.managedidentitycredential?view=azure-python) for production environments.
+
 ### Logs and traces
 
 Go to your Application Insights instance, click on _Transaction search_ on the left menu. Use the operation id output by the program to search for the logs and traces associated with the operation. Click on any of the search result to view the end-to-end transaction details. Read more [here](https://learn.microsoft.com/en-us/azure/azure-monitor/app/transaction-search-and-diagnostics?tabs=transaction-search).