diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/agent_details.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/agent_details.py
index 53989833..b09aa67f 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/agent_details.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/agent_details.py
@@ -21,22 +21,25 @@ class AgentDetails:
     """A description of the AI agent's purpose or capabilities."""
 
     agent_auid: Optional[str] = None
-    """Optional Agent User ID for the agent."""
+    """Agentic User ID for the agent."""
 
     agent_upn: Optional[str] = None
-    """Optional User Principal Name (UPN) for the agent."""
+    """User Principal Name (UPN) for the agentic user."""
 
     agent_blueprint_id: Optional[str] = None
-    """Optional Blueprint/Application ID for the agent."""
+    """Blueprint/Application ID for the agent."""
 
     agent_type: Optional[AgentType] = None
     """The agent type."""
 
     tenant_id: Optional[str] = None
-    """Optional Tenant ID for the agent."""
+    """Tenant ID for the agent."""
 
     conversation_id: Optional[str] = None
     """Optional conversation ID for compatibility."""
 
     icon_uri: Optional[str] = None
     """Optional icon URI for the agent."""
+
+    agent_client_ip: Optional[str] = None
+    """Client IP address of the agent user."""
diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/constants.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/constants.py
index 823bc4c6..46634e5a 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/constants.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/constants.py
@@ -68,6 +68,7 @@
 GEN_AI_CALLER_ID_KEY = "gen_ai.caller.id"
 GEN_AI_CALLER_NAME_KEY = "gen_ai.caller.name"
 GEN_AI_CALLER_UPN_KEY = "gen_ai.caller.upn"
+GEN_AI_CALLER_CLIENT_IP_KEY = "gen_ai.caller.client.ip"
 
 # Agent to Agent caller agent dimensions
 GEN_AI_CALLER_AGENT_USER_ID_KEY = "gen_ai.caller.agent.userid"
@@ -77,6 +78,7 @@
 GEN_AI_CALLER_AGENT_ID_KEY = "gen_ai.caller.agent.id"
 GEN_AI_CALLER_AGENT_APPLICATION_ID_KEY = "gen_ai.caller.agent.applicationid"
 GEN_AI_CALLER_AGENT_TYPE_KEY = "gen_ai.caller.agent.type"
+GEN_AI_CALLER_AGENT_USER_CLIENT_IP = "gen_ai.caller.agent.user.client.ip"
 
 # Agent-specific dimensions
 AGENT_ID_KEY = "gen_ai.agent.id"
diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/agent365_exporter.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/agent365_exporter.py
index efe6c0e3..2824416e 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/agent365_exporter.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/agent365_exporter.py
@@ -23,6 +23,7 @@
     kind_name,
     partition_by_identity,
     status_name,
+    truncate_span,
 )
 
 # ---- Exporter ---------------------------------------------------------------
@@ -295,7 +296,7 @@ def _map_span(self, sp: ReadableSpan) -> dict[str, Any]:
         start_ns = sp.start_time
         end_ns = sp.end_time
 
-        return {
+        span_dict = {
             "traceId": hex_trace_id(ctx.trace_id),
             "spanId": hex_span_id(ctx.span_id),
             "parentSpanId": parent_span_id,
@@ -308,3 +309,6 @@ def _map_span(self, sp: ReadableSpan) -> dict[str, Any]:
             "links": links,
             "status": status,
         }
+
+        # Apply truncation if needed
+        return truncate_span(span_dict)
diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/utils.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/utils.py
index 2d57a607..3eda274f 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/utils.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/exporters/utils.py
@@ -1,5 +1,7 @@
 # Copyright (c) Microsoft. All rights reserved.
 
+import json
+import logging
 import os
 from collections.abc import Sequence
 from typing import Any
@@ -13,6 +15,11 @@
     TENANT_ID_KEY,
 )
 
+logger = logging.getLogger(__name__)
+
+# Maximum allowed span size in bytes (250KB)
+MAX_SPAN_SIZE_BYTES = 250 * 1024
+
 
 def hex_trace_id(value: int) -> str:
     # 128-bit -> 32 hex chars
@@ -46,6 +53,76 @@ def status_name(code: StatusCode) -> str:
         return str(code)
 
 
+def truncate_span(span_dict: dict[str, Any]) -> dict[str, Any]:
+    """
+    Truncate span attributes if the serialized span exceeds MAX_SPAN_SIZE_BYTES.
+
+    Args:
+        span_dict: The span dictionary to potentially truncate
+
+    Returns:
+        The potentially truncated span dictionary
+    """
+    try:
+        # Serialize the span to check its size
+        serialized = json.dumps(span_dict, separators=(",", ":"))
+        current_size = len(serialized.encode("utf-8"))
+
+        if current_size <= MAX_SPAN_SIZE_BYTES:
+            return span_dict
+
+        logger.warning(
+            f"Span size ({current_size} bytes) exceeds limit ({MAX_SPAN_SIZE_BYTES} bytes). "
+            "Truncating large payload attributes."
+        )
+
+        # Create a deep copy to modify (shallow copy would still reference original attributes)
+        truncated_span = span_dict.copy()
+        if "attributes" in truncated_span:
+            truncated_span["attributes"] = truncated_span["attributes"].copy()
+        attributes = truncated_span.get("attributes", {})
+
+        # Track what was truncated for logging
+        truncated_keys = []
+
+        # Sort attributes by size (largest first) and truncate until size is acceptable
+        if attributes:
+            # Calculate size of each attribute value when serialized
+            attr_sizes = []
+            for key, value in attributes.items():
+                try:
+                    value_size = len(json.dumps(value, separators=(",", ":")).encode("utf-8"))
+                    attr_sizes.append((key, value_size))
+                except Exception:
+                    # If we can't serialize the value, assume it's small
+                    attr_sizes.append((key, 0))
+
+            # Sort by size (descending - largest first)
+            attr_sizes.sort(key=lambda x: x[1], reverse=True)
+
+            # Truncate largest attributes first until size is acceptable
+            for key, _ in attr_sizes:
+                if key in attributes:
+                    attributes[key] = "TRUNCATED"
+                    truncated_keys.append(key)
+
+                    # Check size after truncation
+                    serialized = json.dumps(truncated_span, separators=(",", ":"))
+                    current_size = len(serialized.encode("utf-8"))
+
+                    if current_size <= MAX_SPAN_SIZE_BYTES:
+                        break
+
+        if truncated_keys:
+            logger.info(f"Truncated attributes: {', '.join(truncated_keys)}")
+
+        return truncated_span
+
+    except Exception as e:
+        logger.error(f"Error during span truncation: {e}")
+        return span_dict
+
+
 def partition_by_identity(
     spans: Sequence[ReadableSpan],
 ) -> dict[tuple[str, str], list[ReadableSpan]]:
diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/invoke_agent_scope.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/invoke_agent_scope.py
index b0d6fa2b..9dc30067 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/invoke_agent_scope.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/invoke_agent_scope.py
@@ -3,6 +3,8 @@
 
 # Invoke agent scope for tracing agent invocation.
 
+import logging
+
 from .agent_details import AgentDetails
 from .constants import (
     GEN_AI_CALLER_AGENT_APPLICATION_ID_KEY,
@@ -10,6 +12,7 @@
     GEN_AI_CALLER_AGENT_NAME_KEY,
     GEN_AI_CALLER_AGENT_TENANT_ID_KEY,
     GEN_AI_CALLER_AGENT_UPN_KEY,
+    GEN_AI_CALLER_AGENT_USER_CLIENT_IP,
     GEN_AI_CALLER_AGENT_USER_ID_KEY,
     GEN_AI_CALLER_ID_KEY,
     GEN_AI_CALLER_NAME_KEY,
@@ -31,7 +34,9 @@
 from .opentelemetry_scope import OpenTelemetryScope
 from .request import Request
 from .tenant_details import TenantDetails
-from .utils import safe_json_dumps
+from .utils import safe_json_dumps, validate_and_normalize_ip
+
+logger = logging.getLogger(__name__)
 
 
 class InvokeAgentScope(OpenTelemetryScope):
@@ -139,6 +144,11 @@ def __init__(
             self.set_tag_maybe(GEN_AI_CALLER_AGENT_USER_ID_KEY, caller_agent_details.agent_auid)
             self.set_tag_maybe(GEN_AI_CALLER_AGENT_UPN_KEY, caller_agent_details.agent_upn)
             self.set_tag_maybe(GEN_AI_CALLER_AGENT_TENANT_ID_KEY, caller_agent_details.tenant_id)
+            # Validate and set caller agent client IP
+            self.set_tag_maybe(
+                GEN_AI_CALLER_AGENT_USER_CLIENT_IP,
+                validate_and_normalize_ip(caller_agent_details.agent_client_ip),
+            )
 
     def record_response(self, response: str) -> None:
         """Record response information for telemetry tracking.
diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/middleware/baggage_builder.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/middleware/baggage_builder.py
index b321306d..9736dd16 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/middleware/baggage_builder.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/middleware/baggage_builder.py
@@ -2,6 +2,7 @@
 
 # Per request baggage builder for OpenTelemetry context propagation.
 
+import logging
 from typing import Any
 
 from opentelemetry import baggage, context
@@ -14,6 +15,7 @@
     GEN_AI_AGENT_ID_KEY,
     GEN_AI_AGENT_NAME_KEY,
     GEN_AI_AGENT_UPN_KEY,
+    GEN_AI_CALLER_CLIENT_IP_KEY,
     GEN_AI_CALLER_ID_KEY,
     GEN_AI_CALLER_NAME_KEY,
     GEN_AI_CALLER_UPN_KEY,
@@ -28,9 +30,11 @@
     TENANT_ID_KEY,
 )
 from ..models.operation_source import OperationSource
-from ..utils import deprecated
+from ..utils import deprecated, validate_and_normalize_ip
 from .turn_context_baggage import from_turn_context
 
+logger = logging.getLogger(__name__)
+
 
 class BaggageBuilder:
     """Per request baggage builder.
@@ -183,6 +187,11 @@ def caller_upn(self, value: str | None) -> "BaggageBuilder":
         self._set(GEN_AI_CALLER_UPN_KEY, value)
         return self
 
+    def caller_client_ip(self, value: str | None) -> "BaggageBuilder":
+        """Set the caller client IP baggage value."""
+        self._set(GEN_AI_CALLER_CLIENT_IP_KEY, validate_and_normalize_ip(value))
+        return self
+
     def conversation_id(self, value: str | None) -> "BaggageBuilder":
         """Set the conversation ID baggage value."""
         self._set(GEN_AI_CONVERSATION_ID_KEY, value)
@@ -193,11 +202,6 @@ def conversation_item_link(self, value: str | None) -> "BaggageBuilder":
         self._set(GEN_AI_CONVERSATION_ITEM_LINK_KEY, value)
         return self
 
-    @deprecated("This is a no-op. Use channel_name() or channel_links() instead.")
-    def source_metadata_id(self, value: str | None) -> "BaggageBuilder":
-        """Set the execution source metadata ID (e.g., channel ID)."""
-        return self
-
     @deprecated("Use channel_name() instead")
     def source_metadata_name(self, value: str | None) -> "BaggageBuilder":
         """Set the execution source metadata name (e.g., channel name)."""
diff --git a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/utils.py b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/utils.py
index b1461b3f..73622815 100644
--- a/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/utils.py
+++ b/libraries/microsoft-agents-a365-observability-core/microsoft_agents_a365/observability/core/utils.py
@@ -9,6 +9,7 @@
 import warnings
 from collections.abc import Callable, Hashable, Iterable, Iterator, Mapping
 from enum import Enum
+from ipaddress import AddressValueError, ip_address
 from threading import RLock
 from typing import Any, Generic, TypeVar, cast
 
@@ -173,3 +174,27 @@ def wrapper(*args, **kwargs):
         return wrapper
 
     return decorator
+
+
+def validate_and_normalize_ip(ip_string: str | None) -> str | None:
+    """Validate and normalize an IP address string.
+
+    Args:
+        ip_string: The IP address string to validate (IPv4 or IPv6)
+
+    Returns:
+        The normalized IP address string if valid, None if invalid or None input
+
+    Logs:
+        Error message if the IP address is invalid
+    """
+    if ip_string is None:
+        return None
+
+    try:
+        # Validate and normalize IP address
+        ip_obj = ip_address(ip_string)
+        return str(ip_obj)
+    except (ValueError, AddressValueError):
+        logger.error(f"Invalid IP address: '{ip_string}'")
+        return None
diff --git a/tests/observability/core/exporters/test_utils.py b/tests/observability/core/exporters/test_utils.py
new file mode 100644
index 00000000..9bdeedba
--- /dev/null
+++ b/tests/observability/core/exporters/test_utils.py
@@ -0,0 +1,68 @@
+# Copyright (c) Microsoft Corporation.
+# Licensed under the MIT License.
+
+import unittest
+
+from microsoft_agents_a365.observability.core.exporters.utils import (
+    truncate_span,
+)
+
+
+class TestUtils(unittest.TestCase):
+    """Unit tests for utility functions."""
+
+    def test_truncate_span_if_needed(self):
+        """Test truncate_span_if_needed with various span sizes."""
+        # Small span - should return unchanged
+        small_span = {
+            "traceId": "abc123",
+            "spanId": "def456",
+            "name": "small_span",
+            "attributes": {"key1": "value1", "key2": "value2"},
+        }
+        result = truncate_span(small_span)
+        self.assertIsNotNone(result)
+        self.assertEqual(result["name"], "small_span")
+        self.assertEqual(result["attributes"]["key1"], "value1")
+
+        # Large span with large payload attributes - should truncate attributes
+        large_span = {
+            "traceId": "abc123",
+            "spanId": "def456",
+            "name": "large_span",
+            "attributes": {
+                "gen_ai.system": "openai",
+                "gen_ai.request.model": "gpt-4",
+                "gen_ai.response.model": "gpt-4",
+                "gen_ai.input.messages": "x" * 150000,  # Large payload
+                "gen_ai.output.messages": "y" * 150000,  # Large payload
+                "gen_ai.sample.attribute": "x" * 250000,  # Large payload
+                "small_attr": "small_value",
+            },
+        }
+        result = truncate_span(large_span)
+        self.assertIsNotNone(result)
+        # The largest attributes should be truncated first
+        self.assertEqual(result["attributes"]["gen_ai.input.messages"], "TRUNCATED")
+        self.assertEqual(result["attributes"]["small_attr"], "small_value")  # Unchanged
+        self.assertEqual(result["attributes"]["gen_ai.sample.attribute"], "TRUNCATED")
+
+        # Extremely large span - should return truncated span even if still large
+        extreme_span = {
+            "traceId": "abc123",
+            "spanId": "def456",
+            "name": "extreme_span",
+            "attributes": {f"attr_{i}": "x" * 10000 for i in range(100)},  # Many large attributes
+            "events": [
+                {"name": f"event_{i}", "attributes": {"data": "y" * 10000}} for i in range(50)
+            ],
+        }
+        result = truncate_span(extreme_span)
+        self.assertIsNotNone(result)  # Should always return a span, even if still large
+        # All attributes should be truncated due to size
+        for key in result["attributes"]:
+            self.assertEqual(result["attributes"][key], "TRUNCATED")
+
+
+if __name__ == "__main__":
+    unittest.main()
diff --git a/tests/observability/core/test_baggage_builder.py b/tests/observability/core/test_baggage_builder.py
index df0bbe9b..196a2414 100644
--- a/tests/observability/core/test_baggage_builder.py
+++ b/tests/observability/core/test_baggage_builder.py
@@ -10,6 +10,7 @@
     GEN_AI_AGENT_BLUEPRINT_ID_KEY,
     GEN_AI_AGENT_ID_KEY,
     GEN_AI_AGENT_UPN_KEY,
+    GEN_AI_CALLER_CLIENT_IP_KEY,
     GEN_AI_CALLER_ID_KEY,
     GEN_AI_EXECUTION_SOURCE_DESCRIPTION_KEY,
     GEN_AI_EXECUTION_SOURCE_NAME_KEY,
@@ -94,6 +95,7 @@ def test_all_baggage_keys(self):
             .agent_blueprint_id("blueprint-1")
             .correlation_id("corr-1")
             .caller_id("caller-1")
+            .caller_client_ip("192.168.1.100")
             .hiring_manager_id("manager-1")
             .build()
         ):
@@ -106,6 +108,7 @@ def test_all_baggage_keys(self):
             self.assertEqual(current_baggage.get(GEN_AI_AGENT_BLUEPRINT_ID_KEY), "blueprint-1")
             self.assertEqual(current_baggage.get(CORRELATION_ID_KEY), "corr-1")
             self.assertEqual(current_baggage.get(GEN_AI_CALLER_ID_KEY), "caller-1")
+            self.assertEqual(current_baggage.get(GEN_AI_CALLER_CLIENT_IP_KEY), "192.168.1.100")
             self.assertEqual(current_baggage.get(HIRING_MANAGER_ID_KEY), "manager-1")
         print("✅ All baggage keys work correctly!")
 
@@ -363,6 +366,33 @@ def test_channel_links_method(self):
                 "https://teams.microsoft.com/channel/123",
             )
 
+    def test_caller_client_ip_method(self):
+        """Test caller_client_ip method sets client IP baggage with validation."""
+        # Should exist and be callable
+        self.assertTrue(hasattr(self.builder, "caller_client_ip"))
+        self.assertTrue(callable(self.builder.caller_client_ip))
+
+        # Test valid IPv4 address
+        with BaggageBuilder().caller_client_ip("192.168.1.100").build():
+            current_baggage = baggage.get_all()
+            self.assertEqual(current_baggage.get(GEN_AI_CALLER_CLIENT_IP_KEY), "192.168.1.100")
+
+        # Test valid IPv6 address
+        with BaggageBuilder().caller_client_ip("2001:db8::1").build():
+            current_baggage = baggage.get_all()
+            self.assertEqual(current_baggage.get(GEN_AI_CALLER_CLIENT_IP_KEY), "2001:db8::1")
+
+        # Test None value (should not set baggage)
+        with BaggageBuilder().caller_client_ip(None).build():
+            current_baggage = baggage.get_all()
+            self.assertIsNone(current_baggage.get(GEN_AI_CALLER_CLIENT_IP_KEY))
+
+        # Test invalid IP address (should be handled gracefully now)
+        with BaggageBuilder().caller_client_ip("not.an.ip.address").build():
+            current_baggage = baggage.get_all()
+            # Should be None due to proper exception handling
+            self.assertIsNone(current_baggage.get(GEN_AI_CALLER_CLIENT_IP_KEY))
+
 
 if __name__ == "__main__":
     unittest.main()
diff --git a/tests/observability/core/test_invoke_agent_scope.py b/tests/observability/core/test_invoke_agent_scope.py
index 14fbda96..924d469d 100644
--- a/tests/observability/core/test_invoke_agent_scope.py
+++ b/tests/observability/core/test_invoke_agent_scope.py
@@ -14,18 +14,19 @@
     TenantDetails,
     configure,
 )
+from microsoft_agents_a365.observability.core.constants import (
+    GEN_AI_CALLER_AGENT_USER_CLIENT_IP,
+    GEN_AI_EXECUTION_SOURCE_DESCRIPTION_KEY,
+    GEN_AI_EXECUTION_SOURCE_NAME_KEY,
+    GEN_AI_EXECUTION_TYPE_KEY,
+    GEN_AI_INPUT_MESSAGES_KEY,
+)
 from microsoft_agents_a365.observability.core.models.caller_details import CallerDetails
 from opentelemetry import trace
 from opentelemetry.sdk.trace import TracerProvider
 from opentelemetry.sdk.trace.export import SimpleSpanProcessor
 from opentelemetry.sdk.trace.export.in_memory_span_exporter import InMemorySpanExporter
 
-# Constants for span attribute keys
-GEN_AI_EXECUTION_SOURCE_NAME_KEY = "gen_ai.channel.name"
-GEN_AI_EXECUTION_SOURCE_DESCRIPTION_KEY = "gen_ai.channel.link"
-GEN_AI_EXECUTION_TYPE_KEY = "gen_ai.execution.type"
-GEN_AI_INPUT_MESSAGES_KEY = "gen_ai.input.messages"
-
 
 class TestInvokeAgentScope(unittest.TestCase):
     """Unit tests for InvokeAgentScope and its methods."""
@@ -85,6 +86,7 @@ def setUpClass(cls):
             agent_auid="auid-123",
             agent_upn="agent@contoso.com",
             tenant_id="tenant-789",
+            agent_client_ip="192.168.1.100",
         )
 
     def test_record_response_method_exists(self):
@@ -173,6 +175,38 @@ def test_request_attributes_set_on_span(self):
                     input_messages,
                 )
 
+    def test_caller_agent_client_ip_in_scope(self):
+        """Test that caller agent client IP is properly handled when creating InvokeAgentScope."""
+        # Set up tracer to capture spans
+        span_exporter = InMemorySpanExporter()
+        tracer_provider = TracerProvider()
+        tracer_provider.add_span_processor(SimpleSpanProcessor(span_exporter))
+        trace.set_tracer_provider(tracer_provider)
+
+        # Create scope with caller agent details that include client IP
+        scope = InvokeAgentScope.start(
+            invoke_agent_details=self.invoke_details,
+            tenant_details=self.tenant_details,
+            caller_agent_details=self.caller_agent_details,  # Contains agent_client_ip="192.168.1.100"
+        )
+
+        if scope is not None:
+            # Verify the caller agent details contain the expected IP
+            self.assertEqual(self.caller_agent_details.agent_client_ip, "192.168.1.100")
+            scope.dispose()
+
+        # Verify the IP is set as a span attribute
+        finished_spans = span_exporter.get_finished_spans()
+        if finished_spans:
+            span = finished_spans[-1]
+            span_attributes = getattr(span, "attributes", {}) or {}
+
+            # Verify the caller agent client IP is set as a span attribute
+            if GEN_AI_CALLER_AGENT_USER_CLIENT_IP in span_attributes:
+                self.assertEqual(
+                    span_attributes[GEN_AI_CALLER_AGENT_USER_CLIENT_IP], "192.168.1.100"
+                )
+
 
 if __name__ == "__main__":
     unittest.main(verbosity=2)
diff --git a/tests/observability/core/test_utils.py b/tests/observability/core/test_utils.py
new file mode 100644
index 00000000..b82d6d71
--- /dev/null
+++ b/tests/observability/core/test_utils.py
@@ -0,0 +1,32 @@
+# Copyright (c) Microsoft Corporation.
+# Licensed under the MIT License.
+
+import unittest
+
+from microsoft_agents_a365.observability.core.utils import validate_and_normalize_ip
+
+
+class TestUtils(unittest.TestCase):
+    """Unit tests for utility functions."""
+
+    def test_validate_and_normalize_ip(self):
+        """Test validate_and_normalize_ip with various IP address scenarios."""
+        # Valid IPv4 and IPv6 addresses
+        self.assertEqual(validate_and_normalize_ip("192.168.1.1"), "192.168.1.1")
+        self.assertEqual(validate_and_normalize_ip("2001:db8::1"), "2001:db8::1")
+
+        # IPv6 normalization
+        self.assertEqual(
+            validate_and_normalize_ip("2001:0db8:0000:0000:0000:0000:0000:0001"), "2001:db8::1"
+        )
+
+        # Invalid IP addresses and edge cases
+        self.assertIsNone(validate_and_normalize_ip("256.1.1.1"))
+        self.assertIsNone(validate_and_normalize_ip("not.an.ip.address"))
+        self.assertIsNone(validate_and_normalize_ip("2001:db8::g1"))
+        self.assertIsNone(validate_and_normalize_ip(None))
+        self.assertIsNone(validate_and_normalize_ip(""))
+
+
+if __name__ == "__main__":
+    unittest.main()