diff --git a/src/handler.mjs b/src/handler.mjs
index 8e6ea3db..ae586010 100644
--- a/src/handler.mjs
+++ b/src/handler.mjs
@@ -1,3 +1,6 @@
+import * as Module from "module";
+import { dirname } from "path";
+import { pathToFileURL } from "url";
 import {
   datadog,
   datadogHandlerEnvVar,
@@ -15,8 +18,41 @@ if (process.env.DD_TRACE_DISABLED_PLUGINS === undefined) {
   logDebug("disabled the dd-trace plugin 'fs'");
 }
 
+// True when dd-trace's ESM loader hook is already active via NODE_OPTIONS or
+// execArgv. Covers every preload entry point that registers the hook:
+//   --import dd-trace/initialize.mjs  (documented ESM setup)
+//   --loader dd-trace/initialize.mjs  (legacy)
+//   --require dd-trace/register.js    (documented CJS setup; also registers the hook)
+// module.register() does not dedupe — a second registration chains another hooks
+// worker and every module would be rewritten twice.
+function esmLoaderAlreadyRegistered() {
+  const sources = [process.env.NODE_OPTIONS || "", ...process.execArgv];
+  return sources.some((source) => /dd-trace[\\/](?:[^\s]*\.mjs|register\.js)/.test(source));
+}
+
 if (getEnvValue("DD_TRACE_ENABLED", "true").toLowerCase() === "true") {
-  initTracer();
+  const tracer = initTracer();
+
+  // Register dd-trace's ESM loader hooks programmatically so that ESM imports
+  // (e.g. @aws/durable-execution-sdk-js) are rewritten for instrumentation.
+  // Normally this happens via --import dd-trace/initialize.mjs, but the AWS
+  // durable runtime ignores NODE_OPTIONS so the loader is never registered.
+  // This mirrors what dd-trace/initialize.mjs does at lines 77-84, including
+  // only registering when the tracer initialized — a bail-out leaves the hooks
+  // worker with nothing to instrument and can keep the process from exiting.
+  if (tracer && typeof Module.register === "function" && !esmLoaderAlreadyRegistered()) {
+    try {
+      const require = Module.createRequire(import.meta.url);
+      const ddTraceEntry = require.resolve("dd-trace", {
+        paths: ["/var/task/node_modules", ...(require.resolve.paths("dd-trace") || [])],
+      });
+      const ddTraceRoot = pathToFileURL(dirname(ddTraceEntry) + "/").href;
+      Module.register("./loader-hook.mjs", ddTraceRoot);
+      logDebug("registered dd-trace ESM loader hook for ESM instrumentation");
+    } catch (error) {
+      logDebug("failed to register dd-trace ESM loader hook", { error });
+    }
+  }
 }
 
 const taskRootEnv = getEnvValue(lambdaTaskRootEnvVar, "");