diff --git a/instrumentation/spring/spring-boot-autoconfigure/src/main/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpExporterUtil.java b/instrumentation/spring/spring-boot-autoconfigure/src/main/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpExporterUtil.java
index 151862501bc8..05e52f574dbb 100644
--- a/instrumentation/spring/spring-boot-autoconfigure/src/main/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpExporterUtil.java
+++ b/instrumentation/spring/spring-boot-autoconfigure/src/main/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpExporterUtil.java
@@ -6,7 +6,10 @@
 package io.opentelemetry.instrumentation.spring.autoconfigure.exporters.otlp;
 
 import io.opentelemetry.exporter.otlp.internal.OtlpConfigUtil;
+import java.io.UnsupportedEncodingException;
+import java.net.URLDecoder;
 import java.time.Duration;
+import java.util.AbstractMap;
 import java.util.Map;
 import java.util.function.BiConsumer;
 import java.util.function.Function;
@@ -79,10 +82,20 @@ static <G, H, E> E applySignalProperties(
       headers = properties.getHeaders();
     }
     for (Map.Entry<String, String> entry : headers.entrySet()) {
-      if (isHttpProtobuf) {
-        addHttpHeader.accept(httpBuilder, entry);
-      } else {
-        addGrpcHeader.accept(grpcBuilder, entry);
+      String value = entry.getValue();
+      try {
+        // headers are encoded as URL - see
+        // https://github.com/open-telemetry/opentelemetry-specification/blob/main/specification/protocol/exporter.md#specifying-headers-via-environment-variables
+        Map.Entry<String, String> decoded =
+            new AbstractMap.SimpleEntry<>(entry.getKey(), URLDecoder.decode(value, "UTF-8"));
+
+        if (isHttpProtobuf) {
+          addHttpHeader.accept(httpBuilder, decoded);
+        } else {
+          addGrpcHeader.accept(grpcBuilder, decoded);
+        }
+      } catch (UnsupportedEncodingException e) {
+        throw new IllegalArgumentException("cannot decode header value: " + value, e);
       }
     }
 
diff --git a/instrumentation/spring/spring-boot-autoconfigure/src/test/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpSpanExporterAutoConfigurationTest.java b/instrumentation/spring/spring-boot-autoconfigure/src/test/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpSpanExporterAutoConfigurationTest.java
index 54449e437cbc..8cd7d13a52ee 100644
--- a/instrumentation/spring/spring-boot-autoconfigure/src/test/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpSpanExporterAutoConfigurationTest.java
+++ b/instrumentation/spring/spring-boot-autoconfigure/src/test/java/io/opentelemetry/instrumentation/spring/autoconfigure/exporters/otlp/OtlpSpanExporterAutoConfigurationTest.java
@@ -118,12 +118,12 @@ void useHttpWithEnv() {
         .withPropertyValues(
             "otel.exporter.otlp.enabled=true", "otel.exporter.otlp.protocol=http/protobuf")
         // are similar to environment variables in that they use the same converters
-        .withSystemProperties("otel.exporter.otlp.headers=x=1,y=2")
+        .withSystemProperties("otel.exporter.otlp.headers=x=1,y=2%203")
         .run(context -> {});
 
     Mockito.verify(otlpHttpSpanExporterBuilder).build();
     Mockito.verify(otlpHttpSpanExporterBuilder).addHeader("x", "1");
-    Mockito.verify(otlpHttpSpanExporterBuilder).addHeader("y", "2");
+    Mockito.verify(otlpHttpSpanExporterBuilder).addHeader("y", "2 3");
     Mockito.verifyNoMoreInteractions(otlpHttpSpanExporterBuilder);
   }