diff --git a/aws_lambda/aws_lambda.py b/aws_lambda/aws_lambda.py
index 17c0126..9e765d9 100755
--- a/aws_lambda/aws_lambda.py
+++ b/aws_lambda/aws_lambda.py
@@ -539,6 +539,9 @@ def create_function(cfg, path_to_zip_file, use_s3=False, s3_file=None):
                 'SecurityGroupIds': cfg.get('security_group_ids', []),
             },
             'Publish': True,
+            'TracingConfig': {
+                'Mode': cfg.get('aws_xray_tracing_config', 'PassThrough')
+            },
         }
     else:
         kwargs = {
@@ -555,6 +558,9 @@ def create_function(cfg, path_to_zip_file, use_s3=False, s3_file=None):
                 'SecurityGroupIds': cfg.get('security_group_ids', []),
             },
             'Publish': True,
+            'TracingConfig': {
+                'Mode': cfg.get('aws_xray_tracing_config', 'PassThrough')
+            },
         }
 
     if 'tags' in cfg:
@@ -636,6 +642,9 @@ def update_function(
             'SubnetIds': cfg.get('subnet_ids', []),
             'SecurityGroupIds': cfg.get('security_group_ids', []),
         },
+        'TracingConfig': {
+            'Mode': cfg.get('aws_xray_tracing_config', 'PassThrough')
+        },
     }
 
     if 'environment_variables' in cfg:
diff --git a/aws_lambda/project_templates/config.yaml b/aws_lambda/project_templates/config.yaml
index 8029c80..41c12af 100644
--- a/aws_lambda/project_templates/config.yaml
+++ b/aws_lambda/project_templates/config.yaml
@@ -16,6 +16,9 @@ runtime: python2.7
 aws_access_key_id:
 aws_secret_access_key:
 
+# set xray tracing config to either PassThrough or Active
+aws_xray_tracing_config: PassThrough
+
 # dist_directory: dist
 # timeout: 15
 # memory_size: 512