diff --git a/beater/beater.go b/beater/beater.go
index fd413382396..ab25c4aa6c3 100644
--- a/beater/beater.go
+++ b/beater/beater.go
@@ -101,6 +101,7 @@ type beater struct {
 	rawConfig     *common.Config
 	config        *config.Config
 	logger        *logp.Logger
+	namespace     string
 	wrapRunServer func(RunServerFunc) RunServerFunc
 
 	mutex      sync.Mutex // guards stopServer and stopped
@@ -120,14 +121,27 @@ func (bt *beater) Run(b *beat.Beat) error {
 		// during startup. This might change when APM Server is included in Fleet
 		reloadOnce.Do(func() {
 			defer close(done)
-			// TODO(axw) config received from Fleet should be modified to set data_streams.enabled.
+
+			integrationConfig, err := config.NewIntegrationConfig(ucfg.Config)
+			if err != nil {
+				bt.logger.Error("Could not parse integration configuration from Elastic Agent", err)
+				return
+			}
+
 			var cfg *config.Config
-			cfg, err = config.NewConfig(ucfg.Config, elasticsearchOutputConfig(b))
+			apmServerCommonConfig := integrationConfig.APMServer
+			apmServerCommonConfig.Merge(common.MustNewConfigFrom(`{"data_streams.enabled": true}`))
+			cfg, err = config.NewConfig(apmServerCommonConfig, elasticsearchOutputConfig(b))
 			if err != nil {
-				bt.logger.Warn("Could not parse configuration from Elastic Agent ", err)
+				bt.logger.Error("Could not parse apm-server configuration from Elastic Agent ", err)
+				return
 			}
+
 			bt.config = cfg
-			bt.rawConfig = ucfg.Config
+			bt.rawConfig = apmServerCommonConfig
+			if integrationConfig.DataStream != nil {
+				bt.namespace = integrationConfig.DataStream.Namespace
+			}
 			bt.logger.Info("Applying configuration from Elastic Agent... ")
 		})
 		return err
@@ -158,7 +172,7 @@ func (bt *beater) Run(b *beat.Beat) error {
 		runServer = bt.wrapRunServer(runServer)
 	}
 
-	publisher, err := newPublisher(b, bt.config, tracer)
+	publisher, err := newPublisher(b, bt.config, bt.namespace, tracer)
 	if err != nil {
 		return err
 	}
@@ -381,7 +395,7 @@ func runServerWithTracerServer(runServer RunServerFunc, tracerServer *tracerServ
 	}
 }
 
-func newPublisher(b *beat.Beat, cfg *config.Config, tracer *apm.Tracer) (*publish.Publisher, error) {
+func newPublisher(b *beat.Beat, cfg *config.Config, namespace string, tracer *apm.Tracer) (*publish.Publisher, error) {
 	transformConfig, err := newTransformConfig(b.Info, cfg)
 	if err != nil {
 		return nil, err
@@ -389,6 +403,7 @@ func newPublisher(b *beat.Beat, cfg *config.Config, tracer *apm.Tracer) (*publis
 	publisherConfig := &publish.PublisherConfig{
 		Info:            b.Info,
 		Pipeline:        cfg.Pipeline,
+		Namespace:       namespace,
 		TransformConfig: transformConfig,
 	}
 	return publish.NewPublisher(b.Publisher, tracer, publisherConfig)
diff --git a/beater/config/integration.go b/beater/config/integration.go
new file mode 100644
index 00000000000..f31e835434b
--- /dev/null
+++ b/beater/config/integration.go
@@ -0,0 +1,57 @@
+// Licensed to Elasticsearch B.V. under one or more contributor
+// license agreements. See the NOTICE file distributed with
+// this work for additional information regarding copyright
+// ownership. Elasticsearch B.V. licenses this file to you under
+// the Apache License, Version 2.0 (the "License"); you may
+// not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//     http://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing,
+// software distributed under the License is distributed on an
+// "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+// KIND, either express or implied.  See the License for the
+// specific language governing permissions and limitations
+// under the License.
+
+package config
+
+import (
+	"github.com/elastic/beats/v7/libbeat/common"
+)
+
+func NewIntegrationConfig(rootConfig *common.Config) (*IntegrationConfig, error) {
+	config := &IntegrationConfig{
+		DataStream: &DataStream{
+			Namespace: "default",
+		},
+	}
+	err := rootConfig.Unpack(config)
+	return config, err
+}
+
+// IntegrationConfig that comes from Elastic Agent
+type IntegrationConfig struct {
+	ID         string         `config:"id"`
+	Name       string         `config:"name"`
+	Revision   int            `config:"revision"`
+	Type       string         `config:"type"`
+	UseOutput  string         `config:"use_output"`
+	Meta       *Meta          `config:"meta"`
+	DataStream *DataStream    `config:"data_stream"`
+	APMServer  *common.Config `config:"apm-server"`
+}
+
+type DataStream struct {
+	Namespace string `config:"namespace"`
+}
+
+type Meta struct {
+	Package *Package `config:"package"`
+}
+
+type Package struct {
+	Name    string `config:"name"`
+	Version string `config:"version"`
+}
diff --git a/publish/pub.go b/publish/pub.go
index 16b04f7759a..84733ad3031 100644
--- a/publish/pub.go
+++ b/publish/pub.go
@@ -62,6 +62,7 @@ type PendingReq struct {
 type PublisherConfig struct {
 	Info            beat.Info
 	Pipeline        string
+	Namespace       string
 	Processor       beat.ProcessorList
 	TransformConfig *transform.Config
 }
@@ -100,7 +101,7 @@ func NewPublisher(pipeline beat.Pipeline, tracer *apm.Tracer, cfg *PublisherConf
 		Processor: cfg.Processor,
 	}
 	if cfg.TransformConfig.DataStreams {
-		processingCfg.Fields[datastreams.NamespaceField] = "default"
+		processingCfg.Fields[datastreams.NamespaceField] = cfg.Namespace
 	}
 	if cfg.Pipeline != "" {
 		processingCfg.Meta = map[string]interface{}{"pipeline": cfg.Pipeline}
diff --git a/systemtest/approvals/TestDataStreamsEnabled/true.approved.json b/systemtest/approvals/TestDataStreamsEnabled/true.approved.json
index c9a6191a011..c648c1bfbc5 100644
--- a/systemtest/approvals/TestDataStreamsEnabled/true.approved.json
+++ b/systemtest/approvals/TestDataStreamsEnabled/true.approved.json
@@ -7,7 +7,7 @@
                 "version": "0.0.0"
             },
             "data_stream.dataset": "apm.systemtest",
-            "data_stream.namespace": "default",
+            "data_stream.namespace": "",
             "data_stream.type": "traces",
             "ecs": {
                 "version": "dynamic"