diff --git a/binders/kafka-binder/spring-cloud-stream-binder-kafka-core/src/main/java/org/springframework/cloud/stream/binder/kafka/properties/KafkaBinderConfigurationProperties.java b/binders/kafka-binder/spring-cloud-stream-binder-kafka-core/src/main/java/org/springframework/cloud/stream/binder/kafka/properties/KafkaBinderConfigurationProperties.java
index 969b805ac..91d36ae69 100644
--- a/binders/kafka-binder/spring-cloud-stream-binder-kafka-core/src/main/java/org/springframework/cloud/stream/binder/kafka/properties/KafkaBinderConfigurationProperties.java
+++ b/binders/kafka-binder/spring-cloud-stream-binder-kafka-core/src/main/java/org/springframework/cloud/stream/binder/kafka/properties/KafkaBinderConfigurationProperties.java
@@ -139,6 +139,11 @@ public class KafkaBinderConfigurationProperties {
 	 */
 	private String certificateStoreDirectory;
 
+	/**
+	 * Enable Micrometer observation registry across all the bindings in the binder.
+	 */
+	private boolean enableObservation;
+
 	public KafkaBinderConfigurationProperties(KafkaProperties kafkaProperties) {
 		Assert.notNull(kafkaProperties, "'kafkaProperties' cannot be null");
 		this.kafkaProperties = kafkaProperties;
@@ -477,6 +482,14 @@ public class KafkaBinderConfigurationProperties {
 		this.certificateStoreDirectory = certificateStoreDirectory;
 	}
 
+	public boolean isEnableObservation() {
+		return this.enableObservation;
+	}
+
+	public void setEnableObservation(boolean enableObservation) {
+		this.enableObservation = enableObservation;
+	}
+
 	/**
 	 * Domain class that models transaction capabilities in Kafka.
 	 */
diff --git a/binders/kafka-binder/spring-cloud-stream-binder-kafka/pom.xml b/binders/kafka-binder/spring-cloud-stream-binder-kafka/pom.xml
index 49864bf9d..0f5883a5d 100644
--- a/binders/kafka-binder/spring-cloud-stream-binder-kafka/pom.xml
+++ b/binders/kafka-binder/spring-cloud-stream-binder-kafka/pom.xml
@@ -61,6 +61,11 @@
 			<artifactId>awaitility</artifactId>
 			<scope>test</scope>
 		</dependency>
+		<dependency>
+			<groupId>io.micrometer</groupId>
+			<artifactId>micrometer-observation-test</artifactId>
+			<scope>test</scope>
+		</dependency>
 	</dependencies>
 
 </project>
diff --git a/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/main/java/org/springframework/cloud/stream/binder/kafka/KafkaMessageChannelBinder.java b/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/main/java/org/springframework/cloud/stream/binder/kafka/KafkaMessageChannelBinder.java
index 455669284..ed3e5a175 100644
--- a/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/main/java/org/springframework/cloud/stream/binder/kafka/KafkaMessageChannelBinder.java
+++ b/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/main/java/org/springframework/cloud/stream/binder/kafka/KafkaMessageChannelBinder.java
@@ -51,6 +51,7 @@ import org.apache.kafka.common.header.internals.RecordHeader;
 import org.apache.kafka.common.header.internals.RecordHeaders;
 
 import org.springframework.beans.factory.DisposableBean;
+import org.springframework.beans.factory.SmartInitializingSingleton;
 import org.springframework.cloud.stream.binder.AbstractMessageChannelBinder;
 import org.springframework.cloud.stream.binder.BinderHeaders;
 import org.springframework.cloud.stream.binder.BinderSpecificPropertiesProvider;
@@ -502,9 +503,21 @@ public class KafkaMessageChannelBinder extends
 
 		}
 		handler.setHeaderMapper(mapper);
+
+		if (this.configurationProperties.isEnableObservation()) {
+			kafkaTemplate.setObservationEnabled(true);
+		}
+		kafkaTemplate.setApplicationContext(getApplicationContext());
+
 		return handler;
 	}
 
+	@Override
+	@SuppressWarnings("rawtypes")
+	protected void customizeProducerMessageHandler(MessageHandler producerMessageHandler, String destinationName) {
+		super.customizeProducerMessageHandler(producerMessageHandler, destinationName);
+		((KafkaProducerMessageHandler) producerMessageHandler).getKafkaTemplate().afterSingletonsInstantiated();
+	}
 
 	@Override
 	protected void postProcessOutputChannel(MessageChannel outputChannel,
@@ -619,6 +632,11 @@ public class KafkaMessageChannelBinder extends
 								? new ContainerProperties(Pattern.compile(topics[0]))
 								: new ContainerProperties(topics)
 						: new ContainerProperties(topicPartitionOffsets);
+
+		if (this.configurationProperties.isEnableObservation()) {
+			containerProperties.setObservationEnabled(true);
+		}
+
 		KafkaAwareTransactionManager<byte[], byte[]> transMan = transactionManager(
 				extendedConsumerProperties.getExtension().getTransactionManager());
 		if (transMan != null) {
diff --git a/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/test/java/org/springframework/cloud/stream/binder/kafka/KafkaBinderTests.java b/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/test/java/org/springframework/cloud/stream/binder/kafka/KafkaBinderTests.java
index 150cc26c1..f819b62d3 100644
--- a/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/test/java/org/springframework/cloud/stream/binder/kafka/KafkaBinderTests.java
+++ b/binders/kafka-binder/spring-cloud-stream-binder-kafka/src/test/java/org/springframework/cloud/stream/binder/kafka/KafkaBinderTests.java
@@ -38,6 +38,8 @@ import java.util.concurrent.atomic.AtomicReference;
 import java.util.stream.IntStream;
 
 import com.fasterxml.jackson.databind.ObjectMapper;
+import io.micrometer.observation.ObservationRegistry;
+import io.micrometer.observation.tck.TestObservationRegistry;
 import org.apache.kafka.clients.admin.AdminClient;
 import org.apache.kafka.clients.admin.AdminClientConfig;
 import org.apache.kafka.clients.admin.CreateTopicsResult;
@@ -98,6 +100,7 @@ import org.springframework.cloud.stream.binder.kafka.utils.DlqPartitionFunction;
 import org.springframework.cloud.stream.binder.kafka.utils.KafkaTopicUtils;
 import org.springframework.cloud.stream.binding.MessageConverterConfigurer.PartitioningInterceptor;
 import org.springframework.cloud.stream.config.BindingProperties;
+import org.springframework.cloud.stream.config.ProducerMessageHandlerCustomizer;
 import org.springframework.cloud.stream.provisioning.ProvisioningException;
 import org.springframework.context.ApplicationContext;
 import org.springframework.context.ConfigurableApplicationContext;
@@ -3889,6 +3892,59 @@ public class KafkaBinderTests extends
 				.withCauseExactlyInstanceOf(IllegalStateException.class);
 	}
 
+	@Test
+	void testObservationEnabledOnTheBinder() throws Exception {
+		KafkaBinderConfigurationProperties kafkaBinderConfigurationProperties = createConfigurationProperties();
+		kafkaBinderConfigurationProperties.setEnableObservation(true);
+		AbstractKafkaTestBinder binder = getBinder(kafkaBinderConfigurationProperties);
+
+		setupBindingAndAssert("enable-observation.1", binder);
+	}
+
+	@SuppressWarnings("rawtypes")
+	@Test
+	void testObservationEnabledThroughProducerMessageHandlerCustomizer() throws Exception {
+		AbstractKafkaTestBinder binder = getBinder();
+		KafkaMessageChannelBinder kafkaMessageChannelBinder = binder.getCoreBinder();
+		kafkaMessageChannelBinder.setProducerMessageHandlerCustomizer(
+			(ProducerMessageHandlerCustomizer<KafkaProducerMessageHandler>) (handler, destinationName) ->
+				handler.getKafkaTemplate().setObservationEnabled(true));
+
+		setupBindingAndAssert("enable-observation.2", binder);
+	}
+
+	private void setupBindingAndAssert(String bindingName, AbstractKafkaTestBinder binder) throws Exception {
+		ConfigurableApplicationContext applicationContext = (ConfigurableApplicationContext) binder.getApplicationContext();
+		TestObservationRegistry observationRegistry = TestObservationRegistry.create();
+
+		applicationContext.getBeanFactory().registerSingleton("test-registry", observationRegistry);
+
+		DirectChannel moduleOutputChannel = createBindableChannel("output",
+			new BindingProperties());
+		ExtendedProducerProperties<KafkaProducerProperties> producerProps = new ExtendedProducerProperties<>(
+			new KafkaProducerProperties());
+		Binding<MessageChannel> producerBinding = binder.bindProducer(bindingName,
+			moduleOutputChannel, producerProps);
+
+		assertionsOnKafkaTemplate(observationRegistry, producerBinding);
+	}
+
+	@SuppressWarnings("rawtypes")
+	private static void assertionsOnKafkaTemplate(TestObservationRegistry observationRegistry, Binding<MessageChannel> producerBinding) {
+		KafkaProducerMessageHandler endpoint = TestUtils.getPropertyValue(producerBinding,
+			"lifecycle", KafkaProducerMessageHandler.class);
+
+		final KafkaTemplate kafkaTemplate = (KafkaTemplate) new DirectFieldAccessor(endpoint).getPropertyValue("kafkaTemplate");
+		assertThat(kafkaTemplate).isNotNull();
+		Boolean observationEnabled = (Boolean) new DirectFieldAccessor(kafkaTemplate).getPropertyValue("observationEnabled");
+		assertThat(observationEnabled).isTrue();
+
+		ObservationRegistry observationRegistry1 = (ObservationRegistry) new DirectFieldAccessor(kafkaTemplate).getPropertyValue("observationRegistry");
+		assertThat(observationRegistry).isSameAs(observationRegistry1);
+
+		producerBinding.unbind();
+	}
+
 	private final class FailingInvocationCountingMessageHandler
 			implements MessageHandler {
 
diff --git a/core/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binder/AbstractMessageChannelBinder.java b/core/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binder/AbstractMessageChannelBinder.java
index 252e087f1..014022c50 100644
--- a/core/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binder/AbstractMessageChannelBinder.java
+++ b/core/spring-cloud-stream/src/main/java/org/springframework/cloud/stream/binder/AbstractMessageChannelBinder.java
@@ -355,7 +355,7 @@ public abstract class AbstractMessageChannelBinder<C extends ConsumerProperties,
 		return binding;
 	}
 
-	private void customizeProducerMessageHandler(MessageHandler producerMessageHandler, String destinationName) {
+	protected void customizeProducerMessageHandler(MessageHandler producerMessageHandler, String destinationName) {
 		this.handlerCustomizer.configure(producerMessageHandler, destinationName);
 	}
 
diff --git a/docs/src/main/asciidoc/kafka/kafka_overview.adoc b/docs/src/main/asciidoc/kafka/kafka_overview.adoc
index 2bca5cc3e..fa20c9f9c 100644
--- a/docs/src/main/asciidoc/kafka/kafka_overview.adoc
+++ b/docs/src/main/asciidoc/kafka/kafka_overview.adoc
@@ -174,6 +174,11 @@ computation is taking too long.
 +
 Default: 60 seconds
 
+spring.cloud.stream.kafka.binder.enableObservation::
+Enable Micrometer observation registry on all the bindings in this binder.
++
+Default: false
+
 [[kafka-consumer-properties]]
 ==== Kafka Consumer Properties
 
@@ -345,6 +350,7 @@ This is a handy way to express error handlers, if the application does not want
 +
 Default: none.
 
+
 [[reset-offsets]]
 ==== Resetting Offsets