diff --git a/litellm/integrations/langfuse/langfuse.py b/litellm/integrations/langfuse/langfuse.py
index cdeff86b4bd..81855c76854 100644
--- a/litellm/integrations/langfuse/langfuse.py
+++ b/litellm/integrations/langfuse/langfuse.py
@@ -3,6 +3,7 @@
 import os
 import traceback
 from datetime import datetime
+from hashlib import sha256
 from importlib.metadata import version as package_version
 from typing import (
     TYPE_CHECKING,
@@ -845,9 +846,16 @@ class LangFuseLogger:
             else self.Langfuse.create_trace_id(seed=trace_id)
         )
         normalized_parent_id = parent_observation_id.lower().replace("-", "") if parent_observation_id else ""
-        return (
-            {"trace_id": resolved_trace_id, "parent_span_id": normalized_parent_id}
+        resolved_parent_id = (
+            normalized_parent_id
             if self._is_valid_langfuse_id(normalized_parent_id, 16)
+            else sha256(normalized_parent_id.encode("utf-8")).digest()[:8].hex()
+            if normalized_parent_id
+            else None
+        )
+        return (
+            {"trace_id": resolved_trace_id, "parent_span_id": resolved_parent_id}
+            if resolved_parent_id
             else {"trace_id": resolved_trace_id}
         )
 
diff --git a/tests/test_litellm/integrations/test_langfuse.py b/tests/test_litellm/integrations/test_langfuse.py
index b3958496c96..4a96dfb4829 100644
--- a/tests/test_litellm/integrations/test_langfuse.py
+++ b/tests/test_litellm/integrations/test_langfuse.py
@@ -3,6 +3,7 @@ import os
 import sys
 import types
 import unittest
+from hashlib import sha256
 from typing import Optional
 from unittest.mock import MagicMock, patch
 
@@ -235,6 +236,21 @@ class TestLangfuseUsageDetails(unittest.TestCase):
         }
         self.mock_langfuse_client.create_trace_id.assert_called_once_with(seed="external-trace-id")
 
+        parent_observation_id = "550E8400-E29B-41D4-A716-446655440000"
+        context = self.logger._create_langfuse_trace_context(
+            trace_id="a" * 32,
+            parent_observation_id=parent_observation_id,
+        )
+
+        assert context == {
+            "trace_id": "a" * 32,
+            "parent_span_id": sha256(
+                parent_observation_id.lower().replace("-", "").encode("utf-8")
+            )
+            .digest()[:8]
+            .hex(),
+        }
+
     def test_langfuse_usage_details_optional_fields(self):
         """Test that LangfuseUsageDetails fields are properly defined as Optional"""
         # Create an instance with None values for optional fields