diff --git a/scripts/init_serverless_sdk.py b/scripts/init_serverless_sdk.py
index 33a85be4b0..c3ad427936 100644
--- a/scripts/init_serverless_sdk.py
+++ b/scripts/init_serverless_sdk.py
@@ -23,6 +23,7 @@
     dsn=os.environ["SENTRY_DSN"],
     integrations=[AwsLambdaIntegration(timeout_warning=True)],
     traces_sample_rate=float(os.environ["SENTRY_TRACES_SAMPLE_RATE"]),
+    trace_lifecycle="stream",
 )
 
 
diff --git a/sentry_sdk/integrations/aws_lambda.py b/sentry_sdk/integrations/aws_lambda.py
index 09e3d62409..3c69a20535 100644
--- a/sentry_sdk/integrations/aws_lambda.py
+++ b/sentry_sdk/integrations/aws_lambda.py
@@ -9,7 +9,6 @@
 from urllib.parse import urlencode
 
 import sentry_sdk
-from sentry_sdk.api import continue_trace
 from sentry_sdk.consts import OP
 from sentry_sdk.data_collection import _apply_key_value_collection_filtering
 from sentry_sdk.integrations import Integration
@@ -20,8 +19,6 @@
 )
 from sentry_sdk.scope import Scope, should_send_default_pii
 from sentry_sdk.traces import SegmentNameSource
-from sentry_sdk.tracing import TransactionSource
-from sentry_sdk.tracing_utils import has_span_streaming_enabled
 from sentry_sdk.utils import (
     AnnotatedValue,
     TimeoutThread,
@@ -45,6 +42,24 @@
 MILLIS_TO_SECONDS = 1000.0
 
 
+def _get_user_from_event(aws_event: "dict[str, Any]") -> "dict[str, Any]":
+    identity = aws_event.get("requestContext", {}).get("identity")
+    if identity is None:
+        return {}
+
+    user_info: "dict[str, Any]" = {}
+
+    user_arn = identity.get("userArn")
+    if user_arn is not None:
+        user_info["id"] = user_arn
+
+    ip = identity.get("sourceIp")
+    if ip is not None:
+        user_info["ip_address"] = ip
+
+    return user_info
+
+
 def _wrap_init_error(init_error: "F") -> "F":
     @ensure_integration_enabled(AwsLambdaIntegration, init_error)
     def sentry_init_error(*args: "Any", **kwargs: "Any") -> "Any":
@@ -177,6 +192,17 @@ def sentry_handler(
                     elif should_send_default_pii():
                         additional_attributes["url.query"] = urlencode(qs)
 
+            if not scope._user:
+                if has_data_collection_enabled(client.options):
+                    if client.options["data_collection"]["user_info"]:
+                        user_info = _get_user_from_event(request_data)
+                        if user_info:
+                            scope.set_user(user_info)
+                elif should_send_default_pii():
+                    user_info = _get_user_from_event(request_data)
+                    if user_info:
+                        scope.set_user(user_info)
+
             sampling_context = {
                 "aws_event": aws_event,
                 "aws_context": aws_context,
@@ -184,45 +210,31 @@ def sentry_handler(
 
             function_name = aws_context.function_name
 
-            if has_span_streaming_enabled(client.options):
-                sentry_sdk.traces.continue_trace(headers)
-                Scope.set_custom_sampling_context(sampling_context)
-                span_ctx = sentry_sdk.traces.start_span(
-                    name=function_name,
-                    parent_span=None,
-                    attributes={
-                        "sentry.op": OP.FUNCTION_AWS,
-                        "sentry.origin": AwsLambdaIntegration.origin,
-                        "sentry.segment.name.source": SegmentNameSource.COMPONENT,
-                        "cloud.region": aws_region,
-                        "cloud.resource_id": aws_context.invoked_function_arn,
-                        "cloud.platform": CLOUD_PLATFORM.AWS_LAMBDA,
-                        "cloud.provider": CLOUD_PROVIDER.AWS,
-                        "faas.name": function_name,
-                        "faas.invocation_id": aws_context.aws_request_id,
-                        "faas.version": aws_context.function_version,
-                        "aws.lambda.invoked_arn": aws_context.invoked_function_arn,
-                        "aws.log.group.names": [aws_context.log_group_name],
-                        "aws.log.stream.names": [aws_context.log_stream_name],
-                        "messaging.batch.message_count": batch_size,
-                        **header_attributes,
-                        **additional_attributes,
-                    },
-                )
-            else:
-                transaction = continue_trace(
-                    headers,
-                    op=OP.FUNCTION_AWS,
-                    name=function_name,
-                    source=TransactionSource.COMPONENT,
-                    origin=AwsLambdaIntegration.origin,
-                )
-
-                span_ctx = sentry_sdk.start_transaction(
-                    transaction, custom_sampling_context=sampling_context
-                )
-
-            with span_ctx:
+            sentry_sdk.traces.continue_trace(headers)
+            Scope.set_custom_sampling_context(sampling_context)
+
+            with sentry_sdk.traces.start_span(
+                name=function_name,
+                parent_span=None,
+                attributes={
+                    "sentry.op": OP.FUNCTION_AWS,
+                    "sentry.origin": AwsLambdaIntegration.origin,
+                    "sentry.segment.name.source": SegmentNameSource.COMPONENT,
+                    "cloud.region": aws_region,
+                    "cloud.resource_id": aws_context.invoked_function_arn,
+                    "cloud.platform": CLOUD_PLATFORM.AWS_LAMBDA,
+                    "cloud.provider": CLOUD_PROVIDER.AWS,
+                    "faas.name": function_name,
+                    "faas.invocation_id": aws_context.aws_request_id,
+                    "faas.version": aws_context.function_version,
+                    "aws.lambda.invoked_arn": aws_context.invoked_function_arn,
+                    "aws.log.group.names": [aws_context.log_group_name],
+                    "aws.log.stream.names": [aws_context.log_stream_name],
+                    "messaging.batch.message_count": batch_size,
+                    **header_attributes,
+                    **additional_attributes,
+                },
+            ):
                 try:
                     return handler(aws_event, aws_context, *args, **kwargs)
                 except Exception:
@@ -402,38 +414,22 @@ def event_processor(
         client_options = sentry_sdk.get_client().options
         if has_data_collection_enabled(client_options):
             if client_options["data_collection"]["user_info"]:
-                user_info = sentry_event.setdefault("user", {})
-
-                identity = aws_event.get("requestContext", {}).get("identity")
-                if identity is None:
-                    identity = {}
-
-                id = identity.get("userArn")
-                if id is not None:
-                    user_info.setdefault("id", id)
-
-                ip = identity.get("sourceIp")
-                if ip is not None:
-                    user_info.setdefault("ip_address", ip)
+                extracted_user = _get_user_from_event(aws_event)
+                if extracted_user:
+                    user_info = sentry_event.setdefault("user", {})
+                    for key, value in extracted_user.items():
+                        user_info.setdefault(key, value)
 
             if "incoming_request" in client_options["data_collection"]["http_bodies"]:
                 if "body" in aws_event:
                     request["data"] = aws_event.get("body", "")
 
         elif should_send_default_pii():
-            user_info = sentry_event.setdefault("user", {})
-
-            identity = aws_event.get("requestContext", {}).get("identity")
-            if identity is None:
-                identity = {}
-
-            id = identity.get("userArn")
-            if id is not None:
-                user_info.setdefault("id", id)
-
-            ip = identity.get("sourceIp")
-            if ip is not None:
-                user_info.setdefault("ip_address", ip)
+            extracted_user = _get_user_from_event(aws_event)
+            if extracted_user:
+                user_info = sentry_event.setdefault("user", {})
+                for key, value in extracted_user.items():
+                    user_info.setdefault(key, value)
 
             if "body" in aws_event:
                 request["data"] = aws_event.get("body", "")
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionAllowlist/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionAllowlist/index.py
index a79e1a03a7..d3ee76d93f 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionAllowlist/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionAllowlist/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "http_headers": {
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionDenylist/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionDenylist/index.py
index 4c59de9cb4..c8020cffe9 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionDenylist/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionDenylist/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "http_headers": {
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionOff/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionOff/index.py
index 6f3a7a8126..1dbdd4feed 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionOff/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionOff/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "http_headers": {
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryAllowlist/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryAllowlist/index.py
index 67ed8be6e3..9efbc997fc 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryAllowlist/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryAllowlist/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "url_query_params": {
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryDenylist/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryDenylist/index.py
index 389d7890ea..2b6a20afde 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryDenylist/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryDenylist/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "url_query_params": {
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryOff/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryOff/index.py
index 02446562d9..3cfb298345 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryOff/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUrlQueryOff/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "url_query_params": {"mode": "off"},
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOff/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOff/index.py
index 18c5450196..941a5578a7 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOff/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOff/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "user_info": False,
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOn/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOn/index.py
index 07527dad4a..d5e9590979 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOn/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkDataCollectionUserInfoOn/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
     _experiments={
         "data_collection": {
             "user_info": True,
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkSendDefaultPii/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkSendDefaultPii/index.py
index 502a6ae3ee..ae997c8dfb 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkSendDefaultPii/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/BasicOkSendDefaultPii/index.py
@@ -8,6 +8,7 @@
     traces_sample_rate=1.0,
     send_default_pii=True,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
 )
 
 
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceDisabled/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceDisabled/index.py
index 7669fb8aaf..ae714a43df 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceDisabled/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceDisabled/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=None,  # this is the default, just added for clarity
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
 )
 
 
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceEnabled/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceEnabled/index.py
index 9503f04966..589265cbbe 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceEnabled/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/RaiseErrorPerformanceEnabled/index.py
@@ -7,6 +7,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
 )
 
 
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TimeoutErrorScopeModified/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TimeoutErrorScopeModified/index.py
index 109245b90d..e562221944 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TimeoutErrorScopeModified/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TimeoutErrorScopeModified/index.py
@@ -8,6 +8,7 @@
     dsn=os.environ.get("SENTRY_DSN"),
     traces_sample_rate=1.0,
     integrations=[AwsLambdaIntegration(timeout_warning=True)],
+    trace_lifecycle="stream",
 )
 
 
diff --git a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TracesSampler/index.py b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TracesSampler/index.py
index 3e4d9b3c36..9ed8e39c62 100644
--- a/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TracesSampler/index.py
+++ b/tests/integrations/aws_lambda/lambda_functions_with_embedded_sdk/TracesSampler/index.py
@@ -33,6 +33,7 @@ def trace_sampler(sampling_context):
     traces_sample_rate=1.0,
     traces_sampler=trace_sampler,
     integrations=[AwsLambdaIntegration()],
+    trace_lifecycle="stream",
 )
 
 
diff --git a/tests/integrations/aws_lambda/test_aws_lambda.py b/tests/integrations/aws_lambda/test_aws_lambda.py
index 8cf4498ad9..7f1436aa9e 100644
--- a/tests/integrations/aws_lambda/test_aws_lambda.py
+++ b/tests/integrations/aws_lambda/test_aws_lambda.py
@@ -2,7 +2,6 @@
 import subprocess
 import tempfile
 import time
-from unittest import mock
 
 import boto3
 import docker
@@ -107,96 +106,23 @@ def lambda_client():
     )
 
 
-def test_basic_no_exception(lambda_client, test_environment):
-    lambda_client.invoke(
-        FunctionName="BasicOk",
-        Payload=json.dumps({}),
-    )
-    envelopes = test_environment["server"].envelopes
-
-    (transaction_event,) = envelopes
-
-    assert transaction_event["type"] == "transaction"
-    assert transaction_event["transaction"] == "BasicOk"
-    assert transaction_event["sdk"]["name"] == "sentry.python.aws_lambda"
-
-    assert transaction_event["extra"]["cloudwatch logs"] == {
-        "log_group": mock.ANY,
-        "log_stream": mock.ANY,
-        "url": mock.ANY,
-    }
-    assert transaction_event["extra"]["lambda"] == {
-        "aws_request_id": mock.ANY,
-        "execution_duration_in_millis": mock.ANY,
-        "function_name": "BasicOk",
-        "function_version": "$LATEST",
-        "invoked_function_arn": "arn:aws:lambda:us-east-1:012345678912:function:BasicOk",
-        "remaining_time_in_millis": mock.ANY,
-    }
-    assert transaction_event["contexts"]["trace"] == {
-        "op": "function.aws",
-        "description": mock.ANY,
-        "span_id": mock.ANY,
-        "parent_span_id": mock.ANY,
-        "trace_id": mock.ANY,
-        "origin": "auto.function.aws_lambda",
-        "data": mock.ANY,
-    }
-
-
-def test_basic_exception(lambda_client, test_environment):
-    lambda_client.invoke(
-        FunctionName="BasicException",
-        Payload=json.dumps({}),
-    )
-    envelopes = test_environment["server"].envelopes
-
-    # The second envelope we ignore.
-    # It is the transaction that we test in test_basic_no_exception.
-    (error_event, _) = envelopes
-
-    assert error_event["level"] == "error"
-    assert error_event["exception"]["values"][0]["type"] == "RuntimeError"
-    assert error_event["exception"]["values"][0]["value"] == "Oh!"
-    assert error_event["sdk"]["name"] == "sentry.python.aws_lambda"
-
-    assert error_event["extra"]["cloudwatch logs"] == {
-        "log_group": mock.ANY,
-        "log_stream": mock.ANY,
-        "url": mock.ANY,
-    }
-    assert error_event["extra"]["lambda"] == {
-        "aws_request_id": mock.ANY,
-        "execution_duration_in_millis": mock.ANY,
-        "function_name": "BasicException",
-        "function_version": "$LATEST",
-        "invoked_function_arn": "arn:aws:lambda:us-east-1:012345678912:function:BasicException",
-        "remaining_time_in_millis": mock.ANY,
-    }
-    assert error_event["contexts"]["trace"] == {
-        "op": "function.aws",
-        "description": mock.ANY,
-        "span_id": mock.ANY,
-        "parent_span_id": mock.ANY,
-        "trace_id": mock.ANY,
-        "origin": "auto.function.aws_lambda",
-        "data": mock.ANY,
-    }
-
-
 def test_init_error(lambda_client, test_environment):
     lambda_client.invoke(
         FunctionName="InitError",
         Payload=json.dumps({}),
     )
     envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (error_event, transaction_event) = envelopes
+    (error_event,) = envelopes
 
     assert (
         error_event["exception"]["values"][0]["value"] == "name 'func' is not defined"
     )
-    assert transaction_event["transaction"] == "InitError"
+
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    assert segment_spans[0]["name"] == "InitError"
 
 
 def test_timeout_error_scope_modified(lambda_client, test_environment):
@@ -293,13 +219,9 @@ def test_non_dict_event(
         Payload=aws_event,
     )
     envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (error_event, transaction_event) = envelopes
-
-    assert transaction_event["type"] == "transaction"
-    assert transaction_event["transaction"] == "BasicException"
-    assert transaction_event["sdk"]["name"] == "sentry.python.aws_lambda"
-    assert transaction_event["contexts"]["trace"]["status"] == "internal_error"
+    (error_event,) = envelopes
 
     assert error_event["level"] == "error"
     assert error_event["transaction"] == "BasicException"
@@ -321,7 +243,11 @@ def test_non_dict_event(
         request_data = {"url": "awslambda:///BasicException"}
 
     assert error_event["request"] == request_data
-    assert transaction_event["request"] == request_data
+
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    assert segment_spans[0]["name"] == "BasicException"
+    assert segment_spans[0]["status"] == "error"
 
 
 def test_request_data_with_send_default_pii_false(lambda_client, test_environment):
@@ -357,88 +283,15 @@ def test_request_data_with_send_default_pii_false(lambda_client, test_environmen
         FunctionName="BasicOk",
         Payload=payload,
     )
-    envelopes = test_environment["server"].envelopes
-
-    (transaction_event,) = envelopes
-
-    assert transaction_event["request"] == {
-        "headers": {
-            "Host": "iwsz2c7uwi.execute-api.us-east-1.amazonaws.com",
-            "User-Agent": "custom",
-            # X-Forwarded-Proto is not sensitive and passes through.
-            "X-Forwarded-Proto": "https",
-            # With send_default_pii=False, _filter_headers substitutes the
-            # SENSITIVE_HEADERS (Authorization, Cookie); the EventScrubber
-            # also scrubs them. Both end up as "[Filtered]".
-            "Authorization": "[Filtered]",
-            "Cookie": "[Filtered]",
-        },
-        "method": "GET",
-        "query_string": {"bonkers": "true"},
-        "url": "https://iwsz2c7uwi.execute-api.us-east-1.amazonaws.com/asd",
-    }
-
-
-def test_request_data_with_send_default_pii_true(lambda_client, test_environment):
-    payload = b"""
-        {
-          "resource": "/asd",
-          "path": "/asd",
-          "httpMethod": "GET",
-          "headers": {
-            "Host": "iwsz2c7uwi.execute-api.us-east-1.amazonaws.com",
-            "User-Agent": "custom",
-            "X-Forwarded-Proto": "https",
-            "Authorization": "Bearer secret-token",
-            "Cookie": "sessionid=secret"
-          },
-          "queryStringParameters": {
-            "bonkers": "true"
-          },
-          "pathParameters": null,
-          "stageVariables": null,
-          "requestContext": {
-            "identity": {
-                "sourceIp": "213.47.147.207",
-                "userArn": "42"
-            }
-          },
-          "body": null,
-          "isBase64Encoded": false
-        }
-    """
-
-    lambda_client.invoke(
-        FunctionName="BasicOkSendDefaultPii",
-        Payload=payload,
-    )
-    envelopes = test_environment["server"].envelopes
-
-    (transaction_event,) = envelopes
+    span_items = test_environment["server"].span_items
 
-    assert transaction_event["request"] == {
-        "headers": {
-            "Host": "iwsz2c7uwi.execute-api.us-east-1.amazonaws.com",
-            "User-Agent": "custom",
-            "X-Forwarded-Proto": "https",
-            # With send_default_pii=True (and no data_collection config),
-            # _filter_headers passes headers through untouched. Authorization
-            # and Cookie are still scrubbed to "[Filtered]" by the always-on
-            # EventScrubber (DEFAULT_DENYLIST), independent of PII settings.
-            "Authorization": "[Filtered]",
-            "Cookie": "[Filtered]",
-        },
-        "method": "GET",
-        "query_string": {"bonkers": "true"},
-        "url": "https://iwsz2c7uwi.execute-api.us-east-1.amazonaws.com/asd",
-        "data": None,
-    }
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
-    # Legacy send_default_pii=True attaches the user identity.
-    assert transaction_event["user"] == {
-        "id": "42",
-        "ip_address": "213.47.147.207",
-    }
+    assert _get_span_attr(attrs, "http.request.method") == "GET"
+    # With send_default_pii=False (default for layer), query string is not included.
+    assert "url.query" not in attrs
 
 
 USER_INFO_PAYLOAD = b"""
@@ -473,14 +326,13 @@ def test_user_info_with_data_collection_user_info_on(lambda_client, test_environ
         FunctionName="BasicOkDataCollectionUserInfoOn",
         Payload=USER_INFO_PAYLOAD,
     )
-    envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (transaction_event,) = envelopes
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
-    assert transaction_event["user"] == {
-        "id": "42",
-        "ip_address": "213.47.147.207",
-    }
+    assert _get_span_attr(attrs, "user.id") == "42"
 
 
 def test_user_info_with_data_collection_user_info_off(lambda_client, test_environment):
@@ -488,11 +340,13 @@ def test_user_info_with_data_collection_user_info_off(lambda_client, test_enviro
         FunctionName="BasicOkDataCollectionUserInfoOff",
         Payload=USER_INFO_PAYLOAD,
     )
-    envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (transaction_event,) = envelopes
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
-    assert "user" not in transaction_event
+    assert "user.id" not in attrs
 
 
 def test_request_data_with_data_collection_allowlist(lambda_client, test_environment):
@@ -529,29 +383,25 @@ def test_request_data_with_data_collection_allowlist(lambda_client, test_environ
         FunctionName="BasicOkDataCollectionAllowlist",
         Payload=payload,
     )
-    envelopes = test_environment["server"].envelopes
-
-    (transaction_event,) = envelopes
+    span_items = test_environment["server"].span_items
 
-    assert transaction_event["request"] == {
-        "headers": {
-            # Allowlisted, non-sensitive headers pass through.
-            "User-Agent": "custom",
-            "X-Allow-Me": "yes",
-            # Not allowlisted -> substituted.
-            "Host": "[Filtered]",
-            "X-Forwarded-Proto": "[Filtered]",
-            # Allowlisted but sensitive -> still filtered; an allowlist entry
-            # cannot override the built-in sensitive denylist.
-            "Authorization": "[Filtered]",
-            # Not allowlisted, and cookies are always substituted.
-            "Cookie": "[Filtered]",
-        },
-        "method": "GET",
-        "query_string": {"bonkers": "true"},
-        "url": "https://iwsz2c7uwi.execute-api.us-east-1.amazonaws.com/asd",
-        "data": '{"toy": "tennisball"}',
-    }
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
+
+    assert _get_span_attr(attrs, "http.request.method") == "GET"
+    # Allowlisted, non-sensitive headers pass through.
+    assert _get_span_attr(attrs, "http.request.header.user-agent") == "custom"
+    assert _get_span_attr(attrs, "http.request.header.x-allow-me") == "yes"
+    # Not allowlisted -> filtered.
+    assert _get_span_attr(attrs, "http.request.header.host") == "[Filtered]"
+    assert (
+        _get_span_attr(attrs, "http.request.header.x-forwarded-proto") == "[Filtered]"
+    )
+    # Allowlisted but sensitive -> still filtered.
+    assert _get_span_attr(attrs, "http.request.header.authorization") == "[Filtered]"
+    # Not allowlisted, and cookies are always filtered.
+    assert _get_span_attr(attrs, "http.request.header.cookie") == "[Filtered]"
 
 
 def test_request_data_with_data_collection_denylist(lambda_client, test_environment):
@@ -588,28 +438,28 @@ def test_request_data_with_data_collection_denylist(lambda_client, test_environm
         FunctionName="BasicOkDataCollectionDenylist",
         Payload=payload,
     )
-    envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (transaction_event,) = envelopes
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
-    assert transaction_event["request"] == {
-        "headers": {
-            # Not denied by any term -> pass through.
-            "Host": "iwsz2c7uwi.execute-api.us-east-1.amazonaws.com",
-            "X-Custom": "keep-me",
-            # Denied by custom terms.
-            "User-Agent": "[Filtered]",
-            "X-Forwarded-Proto": "[Filtered]",
-            # Denied by the built-in sensitive denylist.
-            "Authorization": "[Filtered]",
-            # Cookies are always substituted.
-            "Cookie": "[Filtered]",
-        },
-        "method": "GET",
-        "query_string": {"bonkers": "true"},
-        "url": "https://iwsz2c7uwi.execute-api.us-east-1.amazonaws.com/asd",
-        "data": '{"toy": "tennisball"}',
-    }
+    assert _get_span_attr(attrs, "http.request.method") == "GET"
+    # Not denied by any term -> pass through.
+    assert (
+        _get_span_attr(attrs, "http.request.header.host")
+        == "iwsz2c7uwi.execute-api.us-east-1.amazonaws.com"
+    )
+    assert _get_span_attr(attrs, "http.request.header.x-custom") == "keep-me"
+    # Denied by custom terms.
+    assert _get_span_attr(attrs, "http.request.header.user-agent") == "[Filtered]"
+    assert (
+        _get_span_attr(attrs, "http.request.header.x-forwarded-proto") == "[Filtered]"
+    )
+    # Denied by the built-in sensitive denylist.
+    assert _get_span_attr(attrs, "http.request.header.authorization") == "[Filtered]"
+    # Cookies are always filtered.
+    assert _get_span_attr(attrs, "http.request.header.cookie") == "[Filtered]"
 
 
 def test_request_data_with_data_collection_off(lambda_client, test_environment):
@@ -645,66 +495,16 @@ def test_request_data_with_data_collection_off(lambda_client, test_environment):
         FunctionName="BasicOkDataCollectionOff",
         Payload=payload,
     )
-    envelopes = test_environment["server"].envelopes
-
-    (transaction_event,) = envelopes
-
-    assert transaction_event["request"] == {
-        # With request headers collection turned off, no headers are collected.
-        "headers": {},
-        "method": "GET",
-        "query_string": {"bonkers": "true"},
-        "url": "https://iwsz2c7uwi.execute-api.us-east-1.amazonaws.com/asd",
-        "data": '{"toy": "tennisball"}',
-    }
-
-
-def test_url_query_params_with_data_collection_denylist(
-    lambda_client, test_environment
-):
-    payload = b"""
-        {
-          "resource": "/asd",
-          "path": "/asd",
-          "httpMethod": "GET",
-          "headers": {
-            "Host": "iwsz2c7uwi.execute-api.us-east-1.amazonaws.com",
-            "X-Forwarded-Proto": "https"
-          },
-          "queryStringParameters": {
-            "page": "2",
-            "tracking": "campaign",
-            "token": "secret-token"
-          },
-          "pathParameters": null,
-          "stageVariables": null,
-          "requestContext": {
-            "identity": {
-              "sourceIp": "213.47.147.207",
-              "userArn": "42"
-            }
-          },
-          "body": null,
-          "isBase64Encoded": false
-        }
-    """
-
-    lambda_client.invoke(
-        FunctionName="BasicOkDataCollectionUrlQueryDenylist",
-        Payload=payload,
-    )
-    envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (transaction_event,) = envelopes
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
-    assert transaction_event["request"]["query_string"] == {
-        # Not denied by any term -> pass through.
-        "page": "2",
-        # Denied by custom terms.
-        "tracking": "[Filtered]",
-        # Denied by the built-in sensitive denylist.
-        "token": "[Filtered]",
-    }
+    assert _get_span_attr(attrs, "http.request.method") == "GET"
+    # With request headers collection turned off, no header attributes are collected.
+    header_attrs = [k for k in attrs if k.startswith("http.request.header.")]
+    assert header_attrs == []
 
 
 def test_url_query_params_with_data_collection_allowlist(
@@ -741,19 +541,19 @@ def test_url_query_params_with_data_collection_allowlist(
         FunctionName="BasicOkDataCollectionUrlQueryAllowlist",
         Payload=payload,
     )
-    envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (transaction_event,) = envelopes
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
-    assert transaction_event["request"]["query_string"] == {
-        # Allowlisted, non-sensitive -> pass through.
-        "page": "2",
-        # Not allowlisted -> substituted.
-        "tracking": "[Filtered]",
-        # Allowlisted but sensitive -> still filtered; an allowlist entry
-        # cannot override the built-in sensitive denylist.
-        "token": "[Filtered]",
-    }
+    # Allowlisted, non-sensitive -> pass through.
+    # Not allowlisted -> substituted.
+    # Allowlisted but sensitive -> still filtered.
+    assert (
+        _get_span_attr(attrs, "url.query")
+        == "page=2&tracking=%5BFiltered%5D&token=%5BFiltered%5D"
+    )
 
 
 def test_url_query_params_with_data_collection_off(lambda_client, test_environment):
@@ -787,41 +587,14 @@ def test_url_query_params_with_data_collection_off(lambda_client, test_environme
         FunctionName="BasicOkDataCollectionUrlQueryOff",
         Payload=payload,
     )
-    envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    (transaction_event,) = envelopes
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
+    attrs = segment_spans[0]["attributes"]
 
     # With url_query_params collection turned off, no query string is collected.
-    assert "query_string" not in transaction_event["request"]
-
-
-def test_trace_continuation(lambda_client, test_environment):
-    trace_id = "471a43a4192642f0b136d5159a501701"
-    parent_span_id = "6e8f22c393e68f19"
-    parent_sampled = 1
-    sentry_trace_header = "{}-{}-{}".format(trace_id, parent_span_id, parent_sampled)
-
-    # We simulate here AWS Api Gateway's behavior of passing HTTP headers
-    # as the `headers` dict in the event passed to the Lambda function.
-    payload = {
-        "headers": {
-            "sentry-trace": sentry_trace_header,
-        }
-    }
-
-    lambda_client.invoke(
-        FunctionName="BasicException",
-        Payload=json.dumps(payload),
-    )
-    envelopes = test_environment["server"].envelopes
-
-    (error_event, transaction_event) = envelopes
-
-    assert (
-        error_event["contexts"]["trace"]["trace_id"]
-        == transaction_event["contexts"]["trace"]["trace_id"]
-        == "471a43a4192642f0b136d5159a501701"
-    )
+    assert "url.query" not in attrs
 
 
 @pytest.mark.parametrize(
@@ -848,7 +621,7 @@ def test_headers(lambda_client, test_environment, payload):
     )
     envelopes = test_environment["server"].envelopes
 
-    (error_event, _) = envelopes
+    (error_event,) = envelopes
 
     assert error_event["level"] == "error"
     assert error_event["exception"]["values"][0]["type"] == "RuntimeError"
@@ -860,12 +633,13 @@ def test_span_origin(lambda_client, test_environment):
         FunctionName="BasicOk",
         Payload=json.dumps({}),
     )
-    envelopes = test_environment["server"].envelopes
-
-    (transaction_event,) = envelopes
+    span_items = test_environment["server"].span_items
 
+    segment_spans = [s for s in span_items if s.get("is_segment")]
+    assert len(segment_spans) == 1
     assert (
-        transaction_event["contexts"]["trace"]["origin"] == "auto.function.aws_lambda"
+        _get_span_attr(segment_spans[0]["attributes"], "sentry.origin")
+        == "auto.function.aws_lambda"
     )
 
 
@@ -900,22 +674,18 @@ def test_error_has_new_trace_context(
         Payload=json.dumps({}),
     )
     envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    if lambda_function_name == "RaiseErrorPerformanceEnabled":
-        (error_event, transaction_event) = envelopes
-    else:
-        (error_event,) = envelopes
-        transaction_event = None
+    (error_event,) = envelopes
 
     assert "trace" in error_event["contexts"]
     assert "trace_id" in error_event["contexts"]["trace"]
 
-    if transaction_event:
-        assert "trace" in transaction_event["contexts"]
-        assert "trace_id" in transaction_event["contexts"]["trace"]
+    if lambda_function_name == "RaiseErrorPerformanceEnabled":
+        segment_spans = [s for s in span_items if s.get("is_segment")]
+        assert len(segment_spans) == 1
         assert (
-            error_event["contexts"]["trace"]["trace_id"]
-            == transaction_event["contexts"]["trace"]["trace_id"]
+            error_event["contexts"]["trace"]["trace_id"] == segment_spans[0]["trace_id"]
         )
 
 
@@ -927,7 +697,7 @@ def _get_span_attr(attrs, key):
     return val
 
 
-def test_span_streaming_no_error(lambda_client, test_environment):
+def test_no_error(lambda_client, test_environment):
     lambda_client.invoke(
         FunctionName="BasicOkSpanStreaming",
         Payload=json.dumps({}),
@@ -969,7 +739,7 @@ def test_span_streaming_no_error(lambda_client, test_environment):
     assert _get_span_attr(attrs, "messaging.batch.message_count") == 1
 
 
-def test_span_streaming_error(lambda_client, test_environment):
+def test_error(lambda_client, test_environment):
     lambda_client.invoke(
         FunctionName="RaiseErrorSpanStreaming",
         Payload=json.dumps({}),
@@ -1019,7 +789,7 @@ def test_span_streaming_error(lambda_client, test_environment):
     assert _get_span_attr(attrs, "messaging.batch.message_count") == 1
 
 
-def test_span_streaming_trace_continuation(lambda_client, test_environment):
+def test_trace_continuation(lambda_client, test_environment):
     trace_id = "471a43a4192642f0b136d5159a501701"
     parent_span_id = "6e8f22c393e68f19"
     parent_sampled = 1
@@ -1059,7 +829,7 @@ def test_span_streaming_trace_continuation(lambda_client, test_environment):
     assert "faas.invocation_id" in attrs
 
 
-def test_span_streaming_request_attributes(lambda_client, test_environment):
+def test_request_attributes(lambda_client, test_environment):
     payload = {
         "headers": {
             "Content-Type": "application/json",
@@ -1102,9 +872,7 @@ def test_span_streaming_request_attributes(lambda_client, test_environment):
     assert _get_span_attr(attrs, "aws.log.stream.names") == ["$LATEST"]
 
 
-def test_span_streaming_url_query_params_with_data_collection(
-    lambda_client, test_environment
-):
+def test_url_query_params_with_data_collection(lambda_client, test_environment):
     payload = {
         "httpMethod": "GET",
         "queryStringParameters": {
@@ -1159,12 +927,9 @@ def test_error_has_existing_trace_context(
         Payload=json.dumps(payload),
     )
     envelopes = test_environment["server"].envelopes
+    span_items = test_environment["server"].span_items
 
-    if lambda_function_name == "RaiseErrorPerformanceEnabled":
-        (error_event, transaction_event) = envelopes
-    else:
-        (error_event,) = envelopes
-        transaction_event = None
+    (error_event,) = envelopes
 
     assert "trace" in error_event["contexts"]
     assert "trace_id" in error_event["contexts"]["trace"]
@@ -1173,10 +938,7 @@ def test_error_has_existing_trace_context(
         == "471a43a4192642f0b136d5159a501701"
     )
 
-    if transaction_event:
-        assert "trace" in transaction_event["contexts"]
-        assert "trace_id" in transaction_event["contexts"]["trace"]
-        assert (
-            transaction_event["contexts"]["trace"]["trace_id"]
-            == "471a43a4192642f0b136d5159a501701"
-        )
+    if lambda_function_name == "RaiseErrorPerformanceEnabled":
+        segment_spans = [s for s in span_items if s.get("is_segment")]
+        assert len(segment_spans) == 1
+        assert segment_spans[0]["trace_id"] == "471a43a4192642f0b136d5159a501701"