diff --git a/CHANGELOG.md b/CHANGELOG.md
index a0382cbb90..e86fe20b39 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,8 +2,9 @@
 
 ## Unreleased
 
-### Features
+## Features
 
+- When setting a transaction on the scope, the SDK will attempt to sync the transaction's trace context with the SDK on the native layer. Finishing a transaction will now also start a new trace ([#4153](https://github.com/getsentry/sentry-dotnet/pull/4153)) 
 - Added `CaptureFeedback` overload with `configureScope` parameter ([#4073](https://github.com/getsentry/sentry-dotnet/pull/4073))
 - Custom SessionReplay masks in MAUI Android apps ([#4121](https://github.com/getsentry/sentry-dotnet/pull/4121))
 
diff --git a/src/Sentry/Scope.cs b/src/Sentry/Scope.cs
index 7e87eb6007..838c961011 100644
--- a/src/Sentry/Scope.cs
+++ b/src/Sentry/Scope.cs
@@ -225,6 +225,20 @@ public ITransactionTracer? Transaction
             try
             {
                 _transaction.Value = value;
+
+                if (Options.EnableScopeSync)
+                {
+                    if (_transaction.Value != null)
+                    {
+                        // If there is a transaction set we propagate the trace to the native layer
+                        Options.ScopeObserver?.SetTrace(_transaction.Value.TraceId, _transaction.Value.SpanId);
+                    }
+                    else
+                    {
+                        // If the transaction is being removed from the scope, reset and sync the trace as well
+                        Options.ScopeObserver?.SetTrace(PropagationContext.TraceId, PropagationContext.SpanId);
+                    }
+                }
             }
             finally
             {
@@ -802,6 +816,11 @@ internal void ResetTransaction(ITransactionTracer? expectedCurrentTransaction)
             if (ReferenceEquals(_transaction.Value, expectedCurrentTransaction))
             {
                 _transaction.Value = null;
+                if (Options.EnableScopeSync)
+                {
+                    // We have to restore the trace on the native layers to be in sync with the current scope
+                    Options.ScopeObserver?.SetTrace(PropagationContext.TraceId, PropagationContext.SpanId);
+                }
             }
         }
         finally
diff --git a/src/Sentry/TransactionTracer.cs b/src/Sentry/TransactionTracer.cs
index c4da3d5933..23c54a5fa2 100644
--- a/src/Sentry/TransactionTracer.cs
+++ b/src/Sentry/TransactionTracer.cs
@@ -392,8 +392,13 @@ public void Finish()
         EndTimestamp ??= _stopwatch.CurrentDateTimeOffset;
         _options?.LogDebug("Finished Transaction {0}.", SpanId);
 
-        // Clear the transaction from the scope
-        _hub.ConfigureScope(scope => scope.ResetTransaction(this));
+        // Clear the transaction from the scope and regenerate the Propagation Context
+        // We do this so new events don't have a trace context that is "older" than the transaction that just finished
+        _hub.ConfigureScope(scope =>
+        {
+            scope.ResetTransaction(this);
+            scope.SetPropagationContext(new SentryPropagationContext());
+        });
 
         // Client decides whether to discard this transaction based on sampling
         _hub.CaptureTransaction(new SentryTransaction(this));
diff --git a/test/Sentry.Tests/Protocol/SentryTransactionTests.cs b/test/Sentry.Tests/Protocol/SentryTransactionTests.cs
index 4e0872ada1..c4f075dd00 100644
--- a/test/Sentry.Tests/Protocol/SentryTransactionTests.cs
+++ b/test/Sentry.Tests/Protocol/SentryTransactionTests.cs
@@ -566,6 +566,30 @@ public void Finish_ChildSpan_StatusSet_DoesNotOverride()
         span.Status.Should().Be(SpanStatus.DataLoss);
     }
 
+    [Fact]
+    public void Finish_ResetsScopeAndSetsNewPropagationContext()
+    {
+        // Arrange
+        var hub = Substitute.For<IHub>();
+        var transaction = new TransactionTracer(hub, "test name", "test op");
+
+        Action<Scope> capturedAction = null;
+        hub.ConfigureScope(Arg.Do<Action<Scope>>(action => capturedAction = action));
+
+        // Act
+        transaction.Finish();
+
+        // Assert
+        hub.Received(1).ConfigureScope(Arg.Any<Action<Scope>>());
+
+        capturedAction.Should().NotBeNull(); // Sanity Check
+        var mockScope = Substitute.For<Scope>();
+        capturedAction(mockScope);
+
+        mockScope.Received(1).ResetTransaction(transaction);
+        mockScope.Received(1).SetPropagationContext(Arg.Any<SentryPropagationContext>());
+    }
+
     [Fact]
     public void ISpan_GetTransaction_FromTransaction()
     {
diff --git a/test/Sentry.Tests/ScopeTests.cs b/test/Sentry.Tests/ScopeTests.cs
index 8040666b10..4b46d62c3f 100644
--- a/test/Sentry.Tests/ScopeTests.cs
+++ b/test/Sentry.Tests/ScopeTests.cs
@@ -290,6 +290,111 @@ public void Span_SetSpanThenCloseIt_ReturnsLatestOpen()
         scope.Span.Should().Be(secondSpan);
     }
 
+    [Theory]
+    [InlineData(true)]
+    [InlineData(false)]
+    public void Transaction_Set_ObserverSetsTraceIfEnabled(bool enableScopeSync)
+    {
+        // Arrange
+        var observer = Substitute.For<IScopeObserver>();
+        var scope = new Scope(new SentryOptions
+        {
+            ScopeObserver = observer,
+            EnableScopeSync = enableScopeSync
+        });
+        var transaction = new TransactionTracer(DisabledHub.Instance, "test-transaction", "op");
+        var expectedTraceId = transaction.TraceId;
+        var expectedSpanId = transaction.SpanId;
+        var expectedCount = enableScopeSync ? 1 : 0;
+
+        // Act
+        scope.Transaction = transaction;
+
+        // Assert
+        observer.Received(expectedCount).SetTrace(Arg.Is(expectedTraceId), Arg.Is(expectedSpanId));
+    }
+
+    [Theory]
+    [InlineData(true)]
+    [InlineData(false)]
+    public void Transaction_SetToNull_ObserverSetsTraceFromPropagationContextIfEnabled(bool enableScopeSync)
+    {
+        // Arrange
+        var observer = Substitute.For<IScopeObserver>();
+        var scope = new Scope(new SentryOptions
+        {
+            ScopeObserver = observer,
+            EnableScopeSync = enableScopeSync
+        });
+        var transaction = new TransactionTracer(DisabledHub.Instance, "test-transaction", "op");
+        scope.Transaction = transaction;
+
+        var expectedTraceId = scope.PropagationContext.TraceId;
+        var expectedSpanId = scope.PropagationContext.SpanId;
+        var expectedCount = enableScopeSync ? 1 : 0;
+
+        observer.ClearReceivedCalls();
+
+        // Act
+        scope.Transaction = null;
+
+        // Assert
+        observer.Received(expectedCount).SetTrace(Arg.Is(expectedTraceId), Arg.Is(expectedSpanId));
+    }
+
+    [Theory]
+    [InlineData(true)]
+    [InlineData(false)]
+    public void ResetTransaction_MatchingTransaction_ObserverSetsTraceFromPropagationContextIfEnabled(bool enableScopeSync)
+    {
+        // Arrange
+        var observer = Substitute.For<IScopeObserver>();
+        var scope = new Scope(new SentryOptions
+        {
+            ScopeObserver = observer,
+            EnableScopeSync = enableScopeSync
+        });
+        var transaction = new TransactionTracer(DisabledHub.Instance, "test-transaction", "op");
+        scope.Transaction = transaction;
+
+        var expectedTraceId = scope.PropagationContext.TraceId;
+        var expectedSpanId = scope.PropagationContext.SpanId;
+        var expectedCount = enableScopeSync ? 1 : 0;
+
+        observer.ClearReceivedCalls();
+
+        // Act
+        scope.ResetTransaction(transaction);
+
+        // Assert
+        observer.Received(expectedCount).SetTrace(Arg.Is(expectedTraceId), Arg.Is(expectedSpanId));
+    }
+
+    [Theory]
+    [InlineData(true)]
+    [InlineData(false)]
+    public void ResetTransaction_NonMatchingTransaction_ObserverNotCalled(bool enableScopeSync)
+    {
+        // Arrange
+        var observer = Substitute.For<IScopeObserver>();
+        var scope = new Scope(new SentryOptions
+        {
+            ScopeObserver = observer,
+            EnableScopeSync = enableScopeSync
+        });
+        var transaction = new TransactionTracer(DisabledHub.Instance, "test-transaction", "op");
+        var differentTransaction = new TransactionTracer(DisabledHub.Instance, "different", "op");
+        scope.Transaction = transaction;
+
+        observer.ClearReceivedCalls();
+
+        // Act
+        scope.ResetTransaction(differentTransaction);
+
+        // Assert
+        observer.DidNotReceive().SetTrace(Arg.Any<SentryId>(), Arg.Any<SpanId>());
+    }
+
     [Fact]
     public void AddAttachment_AddAttachments()
     {