diff --git a/src/OpenTelemetry.Instrumentation.AspNetCore/Implementation/HttpInListener.cs b/src/OpenTelemetry.Instrumentation.AspNetCore/Implementation/HttpInListener.cs
index 1ff80acc8b2..60081f1b90e 100644
--- a/src/OpenTelemetry.Instrumentation.AspNetCore/Implementation/HttpInListener.cs
+++ b/src/OpenTelemetry.Instrumentation.AspNetCore/Implementation/HttpInListener.cs
@@ -35,6 +35,10 @@ namespace OpenTelemetry.Instrumentation.AspNetCore.Implementation
     internal class HttpInListener : ListenerHandler
     {
         internal const string ActivityOperationName = "Microsoft.AspNetCore.Hosting.HttpRequestIn";
+#if NET7_0_OR_GREATER
+        // https://github.com/dotnet/aspnetcore/blob/8d6554e655b64da75b71e0e20d6db54a3ba8d2fb/src/Hosting/Hosting/src/GenericHost/GenericWebHostBuilder.cs#L85
+        internal static readonly string AspNetCoreActivitySourceName = "Microsoft.AspNetCore";
+#endif
         internal static readonly AssemblyName AssemblyName = typeof(HttpInListener).Assembly.GetName();
         internal static readonly string ActivitySourceName = AssemblyName.Name;
         internal static readonly Version Version = AssemblyName.Version;
@@ -96,8 +100,14 @@ public override void OnStartActivity(Activity activity, object payload)
                     // Create a new activity with its parent set from the extracted context.
                     // This makes the new activity as a "sibling" of the activity created by
                     // Asp.Net Core.
+#if NET7_0_OR_GREATER
+                    // For NET7.0 onwards activity is created using ActivitySource so,
+                    // we will use the source of the activity to create the new one.
+                    Activity newOne = activity.Source.CreateActivity(ActivityOperationName, ActivityKind.Server, ctx.ActivityContext);
+#else
                     Activity newOne = new Activity(ActivityOperationName);
                     newOne.SetParentId(ctx.ActivityContext.TraceId, ctx.ActivityContext.SpanId, ctx.ActivityContext.TraceFlags);
+#endif
                     newOne.TraceStateString = ctx.ActivityContext.TraceState;
 
                     newOne.SetTag("IsCreatedByInstrumentation", bool.TrueString);
@@ -135,8 +145,10 @@ public override void OnStartActivity(Activity activity, object payload)
                     return;
                 }
 
+#if !NET7_0_OR_GREATER
                 ActivityInstrumentationHelper.SetActivitySourceProperty(activity, ActivitySource);
                 ActivityInstrumentationHelper.SetKindProperty(activity, ActivityKind.Server);
+#endif
 
                 var path = (request.PathBase.HasValue || request.Path.HasValue) ? (request.PathBase + request.Path).ToString() : "/";
                 activity.DisplayName = path;
diff --git a/src/OpenTelemetry.Instrumentation.AspNetCore/TracerProviderBuilderExtensions.cs b/src/OpenTelemetry.Instrumentation.AspNetCore/TracerProviderBuilderExtensions.cs
index 8ff58d22c73..2e2e4dfc253 100644
--- a/src/OpenTelemetry.Instrumentation.AspNetCore/TracerProviderBuilderExtensions.cs
+++ b/src/OpenTelemetry.Instrumentation.AspNetCore/TracerProviderBuilderExtensions.cs
@@ -15,6 +15,10 @@
 // </copyright>
 
 using System;
+#if NET7_0_OR_GREATER
+using System.Diagnostics;
+using Microsoft.Extensions.DependencyInjection;
+#endif
 using OpenTelemetry.Instrumentation.AspNetCore;
 using OpenTelemetry.Instrumentation.AspNetCore.Implementation;
 using OpenTelemetry.Internal;
@@ -42,7 +46,7 @@ public static TracerProviderBuilder AddAspNetCoreInstrumentation(
             {
                 return deferredTracerProviderBuilder.Configure((sp, builder) =>
                 {
-                    AddAspNetCoreInstrumentation(builder, sp.GetOptions<AspNetCoreInstrumentationOptions>(), configureAspNetCoreInstrumentationOptions);
+                    AddAspNetCoreInstrumentation(builder, sp.GetOptions<AspNetCoreInstrumentationOptions>(), configureAspNetCoreInstrumentationOptions, sp);
                 });
             }
 
@@ -51,22 +55,44 @@ public static TracerProviderBuilder AddAspNetCoreInstrumentation(
 
         internal static TracerProviderBuilder AddAspNetCoreInstrumentation(
             this TracerProviderBuilder builder,
-            AspNetCoreInstrumentation instrumentation)
+            AspNetCoreInstrumentation instrumentation,
+            IServiceProvider serviceProvider = null)
         {
+            // For .NET7.0 onwards activity will be created using activitySource.
+            // https://github.com/dotnet/aspnetcore/blob/bf3352f2422bf16fa3ca49021f0e31961ce525eb/src/Hosting/Hosting/src/Internal/HostingApplicationDiagnostics.cs#L327
+            // For .NET6.0 and below, we will continue to use legacy way.
+#if NET7_0_OR_GREATER
+            // TODO: Check with .NET team to see if this can be prevented
+            // as this allows user to override the ActivitySource.
+            var activitySourceService = serviceProvider?.GetService<ActivitySource>();
+            if (activitySourceService != null)
+            {
+                builder.AddSource(activitySourceService.Name);
+            }
+            else
+            {
+                // For users not using hosting package?
+                builder.AddSource(HttpInListener.AspNetCoreActivitySourceName);
+            }
+#else
             builder.AddSource(HttpInListener.ActivitySourceName);
             builder.AddLegacySource(HttpInListener.ActivityOperationName); // for the activities created by AspNetCore
+#endif
+
             return builder.AddInstrumentation(() => instrumentation);
         }
 
         private static TracerProviderBuilder AddAspNetCoreInstrumentation(
             TracerProviderBuilder builder,
             AspNetCoreInstrumentationOptions options,
-            Action<AspNetCoreInstrumentationOptions> configure = null)
+            Action<AspNetCoreInstrumentationOptions> configure = null,
+            IServiceProvider serviceProvider = null)
         {
             configure?.Invoke(options);
             return AddAspNetCoreInstrumentation(
                 builder,
-                new AspNetCoreInstrumentation(new HttpInListener(options)));
+                new AspNetCoreInstrumentation(new HttpInListener(options)),
+                serviceProvider);
         }
     }
 }
diff --git a/test/OpenTelemetry.Instrumentation.AspNetCore.Tests/BasicTests.cs b/test/OpenTelemetry.Instrumentation.AspNetCore.Tests/BasicTests.cs
index 21eaa64a3f3..d10f6b12aaf 100644
--- a/test/OpenTelemetry.Instrumentation.AspNetCore.Tests/BasicTests.cs
+++ b/test/OpenTelemetry.Instrumentation.AspNetCore.Tests/BasicTests.cs
@@ -348,7 +348,7 @@ public async Task ExtractContextIrrespectiveOfSamplingDecision(SamplingDecision
                 var expectedTraceId = ActivityTraceId.CreateRandom();
                 var expectedParentSpanId = ActivitySpanId.CreateRandom();
                 var expectedTraceState = "rojo=1,congo=2";
-                var activityContext = new ActivityContext(expectedTraceId, expectedParentSpanId, ActivityTraceFlags.Recorded, expectedTraceState);
+                var activityContext = new ActivityContext(expectedTraceId, expectedParentSpanId, ActivityTraceFlags.Recorded, expectedTraceState, true);
                 var expectedBaggage = Baggage.SetBaggage("key1", "value1").SetBaggage("key2", "value2");
                 Sdk.SetDefaultTextMapPropagator(new ExtractOnlyPropagator(activityContext, expectedBaggage));
 
@@ -553,6 +553,47 @@ void ConfigureTestServices(IServiceCollection services)
             Assert.Equal(shouldEnrichBeCalled, enrichCalled);
         }
 
+#if NET7_0_OR_GREATER
+        [Fact]
+        public async Task UserRegisteredActivitySourceIsUsedForActivityCreationByAspNetCore()
+        {
+            var exportedItems = new List<Activity>();
+            void ConfigureTestServices(IServiceCollection services)
+            {
+                services.AddOpenTelemetryTracing(options =>
+                {
+                    options.AddAspNetCoreInstrumentation()
+                    .AddInMemoryExporter(exportedItems);
+                });
+
+                // Register ActivitySource here so that it will be used
+                // by ASP.NET Core to create activities
+                // https://github.com/dotnet/aspnetcore/blob/0e5cbf447d329a1e7d69932c3decd1c70a00fbba/src/Hosting/Hosting/src/Internal/WebHost.cs#L152
+                services.AddSingleton(sp => new ActivitySource("UserRegisteredActivitySource"));
+            }
+
+            // Arrange
+            using (var client = this.factory
+                .WithWebHostBuilder(builder =>
+                    builder.ConfigureTestServices(ConfigureTestServices))
+                .CreateClient())
+            {
+                // Act
+                var response = await client.GetAsync("/api/values");
+
+                // Assert
+                response.EnsureSuccessStatusCode(); // Status Code 200-299
+
+                WaitForActivityExport(exportedItems, 1);
+            }
+
+            Assert.Single(exportedItems);
+            var activity = exportedItems[0];
+
+            Assert.Equal("UserRegisteredActivitySource", activity.Source.Name);
+        }
+#endif
+
         public void Dispose()
         {
             this.tracerProvider?.Dispose();
@@ -575,8 +616,13 @@ private static void WaitForActivityExport(List<Activity> exportedItems, int coun
         private static void ValidateAspNetCoreActivity(Activity activityToValidate, string expectedHttpPath)
         {
             Assert.Equal(ActivityKind.Server, activityToValidate.Kind);
+#if NET7_0_OR_GREATER
+            Assert.Equal(HttpInListener.AspNetCoreActivitySourceName, activityToValidate.Source.Name);
+            Assert.Empty(activityToValidate.Source.Version);
+#else
             Assert.Equal(HttpInListener.ActivitySourceName, activityToValidate.Source.Name);
             Assert.Equal(HttpInListener.Version.ToString(), activityToValidate.Source.Version);
+#endif
             Assert.Equal(expectedHttpPath, activityToValidate.GetTagValue(SemanticConventions.AttributeHttpTarget) as string);
         }