diff --git a/build.sbt b/build.sbt
index 0243805a..7d8c05df 100644
--- a/build.sbt
+++ b/build.sbt
@@ -50,7 +50,7 @@ val Scala213 = "2.13.17"
 val Scala3 = "3.3.6"
 ThisBuild / crossScalaVersions := Seq(Scala212, Scala3, Scala213)
 
-val catsEffectVersion = "3.5.7"
+val catsEffectVersion = "3.6.3"
 val circeVersion = "0.14.15"
 val fs2Version = "3.12.2"
 val http4sVersion = "0.23.32"
@@ -89,7 +89,9 @@ lazy val lambda = crossProject(JSPlatform, JVMPlatform)
     name := "feral-lambda",
     libraryDependencies ++= Seq(
       "org.typelevel" %%% "cats-effect" % catsEffectVersion,
+      "org.typelevel" %%% "cats-mtl" % "1.6.0",
       "org.tpolecat" %%% "natchez-core" % natchezVersion,
+      "org.tpolecat" %%% "natchez-mtl" % natchezVersion,
       "io.circe" %%% "circe-scodec" % circeVersion,
       "io.circe" %%% "circe-jawn" % circeVersion,
       "com.comcast" %%% "ip4s-core" % "3.7.0",
diff --git a/examples/shared/src/main/scala/feral/examples/Http4sLambda.scala b/examples/shared/src/main/scala-2/feral/examples/Http4sHandler.scala
similarity index 71%
rename from examples/shared/src/main/scala/feral/examples/Http4sLambda.scala
rename to examples/shared/src/main/scala-2/feral/examples/Http4sHandler.scala
index 6d43807f..3333f11b 100644
--- a/examples/shared/src/main/scala/feral/examples/Http4sLambda.scala
+++ b/examples/shared/src/main/scala-2/feral/examples/Http4sHandler.scala
@@ -16,12 +16,13 @@
 
 package feral.examples
 
-import cats.effect._
 import cats.effect.std.Random
+import cats.effect.{Trace => _, _}
+import cats.mtl._
 import feral.lambda._
 import feral.lambda.events._
 import feral.lambda.http4s._
-import natchez.Trace
+import natchez._
 import natchez.http4s.NatchezMiddleware
 import natchez.xray.XRay
 import org.http4s.HttpApp
@@ -43,6 +44,9 @@ import org.http4s.syntax.all._
 object http4sHandler
     extends IOLambda[ApiGatewayProxyEventV2, ApiGatewayProxyStructuredResultV2] {
 
+  private type Handler =
+    Invocation[IO, ApiGatewayProxyEventV2] => IO[Option[ApiGatewayProxyStructuredResultV2]]
+
   /**
    * Actually, this is a `Resource` that builds your handler. The handler is acquired exactly
    * once when your Lambda starts and is permanently installed to process all incoming events.
@@ -52,29 +56,31 @@ object http4sHandler
    * event come from? Because accessing the event via `Invocation` is now also an effect in
    * `IO`, it becomes a step in your program.
    */
-  def handler = for {
-    entrypoint <- Resource
-      .eval(Random.scalaUtilRandom[IO])
-      .flatMap(implicit r => XRay.entryPoint[IO]())
-    client <- EmberClientBuilder.default[IO].build
-  } yield { implicit inv => // the Invocation provides access to the event and context
+  def handler: Resource[IO, Handler] =
+    for {
+      entrypoint <- Resource
+        .eval(Random.scalaUtilRandom[IO])
+        .flatMap(implicit r => XRay.entryPoint[IO]())
+      client <- EmberClientBuilder.default[IO].build
+      implicit0(local: Local[IO, Span[IO]]) <- IO.local(Span.noop[IO]).toResource
+    } yield { implicit inv => // the Invocation provides access to the event and context
 
-    // a middleware to add tracing to any handler
-    // it extracts the kernel from the event and adds tags derived from the context
-    TracedHandler(entrypoint) { implicit trace =>
-      val tracedClient = NatchezMiddleware.client(client)
+      // a middleware to add tracing to any handler
+      // it extracts the kernel from the event and adds tags derived from the context
+      TracedHandler(entrypoint) { implicit trace =>
+        val tracedClient = NatchezMiddleware.client(client)
 
-      // a "middleware" that converts an HttpApp into a ApiGatewayProxyHandler
-      ApiGatewayProxyHandlerV2(myApp[IO](tracedClient))
+        // a "middleware" that converts an HttpApp into a ApiGatewayProxyHandler
+        ApiGatewayProxyHandlerV2(myApp[IO](tracedClient))
+      }
     }
-  }
 
   /**
    * Nothing special about this method, including its existence, just an example :)
    */
   def myApp[F[_]: Concurrent: Trace](client: Client[F]): HttpApp[F] = {
     implicit val dsl = Http4sDsl[F]
-    import dsl._
+    import dsl.*
 
     val routes = HttpRoutes.of[F] {
       case GET -> Root / "foo" => Ok("bar")
diff --git a/examples/shared/src/main/scala-3/feral/examples/Http4sHandler.scala b/examples/shared/src/main/scala-3/feral/examples/Http4sHandler.scala
new file mode 100644
index 00000000..9a73ea18
--- /dev/null
+++ b/examples/shared/src/main/scala-3/feral/examples/Http4sHandler.scala
@@ -0,0 +1,87 @@
+/*
+ * Copyright 2021 Typelevel
+ *
+ * Licensed 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 feral.examples
+
+import cats.effect.std.Random
+import cats.effect.{Trace as _, *}
+import cats.mtl.*
+import feral.lambda.*
+import feral.lambda.events.*
+import feral.lambda.http4s.*
+import natchez.*
+import natchez.http4s.NatchezMiddleware
+import natchez.xray.XRay
+import org.http4s.HttpApp
+import org.http4s.HttpRoutes
+import org.http4s.client.Client
+import org.http4s.dsl.Http4sDsl
+import org.http4s.ember.client.EmberClientBuilder
+import org.http4s.syntax.all.*
+
+/**
+ * For a gentle introduction, please look at the `KinesisLambda` first which uses
+ * `IOLambda.Simple`.
+ *
+ * The `IOLambda` uses a slightly more complicated encoding by introducing an effect
+ * `Invocation[F]` which provides access to the event and context in `F`. This allows you to
+ * compose your handler as a stack of "middlewares", making it easy to e.g. add tracing to your
+ * Lambda.
+ */
+object http4sHandler
+    extends IOLambda[ApiGatewayProxyEventV2, ApiGatewayProxyStructuredResultV2]:
+
+  private type Handler =
+    Invocation[IO, ApiGatewayProxyEventV2] => IO[Option[ApiGatewayProxyStructuredResultV2]]
+
+  /**
+   * Actually, this is a `Resource` that builds your handler. The handler is acquired exactly
+   * once when your Lambda starts and is permanently installed to process all incoming events.
+   *
+   * The handler itself is a program expressed as `IO[Option[Result]]`, which is run every time
+   * that your Lambda is triggered. This may seem counter-intuitive at first: where does the
+   * event come from? Because accessing the event via `Invocation` is now also an effect in
+   * `IO`, it becomes a step in your program.
+   */
+  def handler: Resource[IO, Handler] =
+    for
+      entrypoint <- Resource
+        .eval(Random.scalaUtilRandom[IO])
+        .flatMap(implicit r => XRay.entryPoint[IO]())
+      client <- EmberClientBuilder.default[IO].build
+      given Local[IO, Span[IO]] <- IO.local(Span.noop[IO]).toResource
+    yield implicit inv => // the Invocation provides access to the event and context
+
+      // a middleware to add tracing to any handler
+      // it extracts the kernel from the event and adds tags derived from the context
+      TracedHandler(entrypoint):
+        val tracedClient = NatchezMiddleware.client(client)
+
+        // a "middleware" that converts an HttpApp into a ApiGatewayProxyHandler
+        ApiGatewayProxyHandlerV2(myApp[IO](tracedClient))
+
+  /**
+   * Nothing special about this method, including its existence, just an example :)
+   */
+  def myApp[F[_]: Concurrent: Trace](client: Client[F]): HttpApp[F] =
+    implicit val dsl = Http4sDsl[F]
+    import dsl.*
+
+    val routes = HttpRoutes.of[F]:
+      case GET -> Root / "foo" => Ok("bar")
+      case GET -> Root / "joke" => Ok(client.expect[String](uri"icanhazdadjoke.com"))
+
+    NatchezMiddleware.server(routes).orNotFound
diff --git a/lambda/shared/src/main/scala-2/feral/lambda/TracedHandlerPlatform.scala b/lambda/shared/src/main/scala-2/feral/lambda/TracedHandlerPlatform.scala
new file mode 100644
index 00000000..f73e628c
--- /dev/null
+++ b/lambda/shared/src/main/scala-2/feral/lambda/TracedHandlerPlatform.scala
@@ -0,0 +1,30 @@
+/*
+ * Copyright 2021 Typelevel
+ *
+ * Licensed 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 feral.lambda
+
+import cats.effect.{Trace => _, _}
+import cats.mtl.Local
+import natchez._
+
+trait TracedHandlerPlatform {
+  def apply[F[_]: MonadCancelThrow, Event, Result](entryPoint: EntryPoint[F])(
+      handler: Trace[F] => F[Option[Result]])(
+      implicit inv: Invocation[F, Event],
+      KS: KernelSource[Event],
+      L: Local[F, Span[F]]): F[Option[Result]] =
+    TracedHandlerImpl[F, Event, Result](entryPoint)(handler)
+}
diff --git a/lambda/shared/src/main/scala-3/feral/lambda/TracedHandlerPlatform.scala b/lambda/shared/src/main/scala-3/feral/lambda/TracedHandlerPlatform.scala
new file mode 100644
index 00000000..70c3f4f4
--- /dev/null
+++ b/lambda/shared/src/main/scala-3/feral/lambda/TracedHandlerPlatform.scala
@@ -0,0 +1,29 @@
+/*
+ * Copyright 2021 Typelevel
+ *
+ * Licensed 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 feral.lambda
+
+import cats.effect.{Trace as _, *}
+import cats.mtl.Local
+import natchez.*
+
+trait TracedHandlerPlatform:
+  def apply[F[_]: MonadCancelThrow, Event, Result](entryPoint: EntryPoint[F])(
+      handler: Trace[F] ?=> F[Option[Result]])(
+      using Invocation[F, Event],
+      KernelSource[Event],
+      Local[F, Span[F]]): F[Option[Result]] =
+    TracedHandlerImpl[F, Event, Result](entryPoint) { implicit t => handler }
diff --git a/lambda/shared/src/main/scala/feral/lambda/TracedHandler.scala b/lambda/shared/src/main/scala/feral/lambda/TracedHandler.scala
index ac8cc28c..f12e535d 100644
--- a/lambda/shared/src/main/scala/feral/lambda/TracedHandler.scala
+++ b/lambda/shared/src/main/scala/feral/lambda/TracedHandler.scala
@@ -18,44 +18,89 @@ package feral.lambda
 
 import cats.data.Kleisli
 import cats.effect.IO
-import cats.effect.kernel.MonadCancelThrow
+import cats.effect.{Trace => _, _}
+import cats.mtl.Local
 import cats.syntax.all._
-import natchez.EntryPoint
-import natchez.Span
-import natchez.Trace
+import fs2.compat.NotGiven
+import natchez._
+import natchez.mtl._
 
-object TracedHandler {
+object TracedHandler extends TracedHandlerPlatform {
 
-  def apply[Event, Result](entryPoint: EntryPoint[IO])(
+  def apply[Event, Result](
+      entryPoint: EntryPoint[IO],
       handler: Trace[IO] => IO[Option[Result]])(
       implicit inv: Invocation[IO, Event],
-      KS: KernelSource[Event]): IO[Option[Result]] = for {
-    event <- inv.event
-    context <- inv.context
-    kernel = KS.extract(event)
-    result <- entryPoint.continueOrElseRoot(context.functionName, kernel).use { span =>
-      span.put(
-        AwsTags.arn(context.invokedFunctionArn),
-        AwsTags.requestId(context.awsRequestId)
-      ) >> Trace.ioTrace(span) >>= handler
-    }
-  } yield result
+      KS: KernelSource[Event],
+      @annotation.unused NotLocal: NotGiven[Local[IO, Span[IO]]]): IO[Option[Result]] =
+    for {
+      event <- inv.event
+      context <- inv.context
+      kernel = KS.extract(event)
+      result <- entryPoint.continueOrElseRoot(context.functionName, kernel).use { span =>
+        span.put(
+          AwsTags.arn(context.invokedFunctionArn),
+          AwsTags.requestId(context.awsRequestId)
+        ) >> Trace.ioTrace(span) >>= handler
+      }
+    } yield result
 
   def apply[F[_]: MonadCancelThrow, Event, Result](
       entryPoint: EntryPoint[F],
       handler: Kleisli[F, Span[F], Option[Result]])(
-      // inv first helps bind Event for KernelSource. h/t @bpholt
       implicit inv: Invocation[F, Event],
-      KS: KernelSource[Event]): F[Option[Result]] = for {
-    event <- inv.event
-    context <- inv.context
-    kernel = KS.extract(event)
-    result <- entryPoint.continueOrElseRoot(context.functionName, kernel).use { span =>
-      span.put(
-        AwsTags.arn(context.invokedFunctionArn),
-        AwsTags.requestId(context.awsRequestId)
-      ) >> handler(span)
-    }
-  } yield result
+      KS: KernelSource[Event],
+      @annotation.unused NotLocal: NotGiven[Local[IO, Span[IO]]]): F[Option[Result]] =
+    for {
+      event <- inv.event
+      context <- inv.context
+      kernel = KS.extract(event)
+      result <- entryPoint.continueOrElseRoot(context.functionName, kernel).use { span =>
+        span.put(
+          AwsTags.arn(context.invokedFunctionArn),
+          AwsTags.requestId(context.awsRequestId)
+        ) >> handler(span)
+      }
+    } yield result
+
+  @deprecated("use variant with Local tracing semantics", "0.3.2")
+  def apply[Event, Result](
+      entryPoint: EntryPoint[IO],
+      handler: Trace[IO] => IO[Option[Result]],
+      inv: Invocation[IO, Event],
+      KS: KernelSource[Event]): IO[Option[Result]] =
+    apply(entryPoint, handler)(inv, KS, implicitly)
+
+  @deprecated("use variant with Local tracing semantics", "0.3.2")
+  def apply[F[_], Event, Result](
+      entryPoint: EntryPoint[F],
+      handler: Kleisli[F, Span[F], Option[Result]],
+      M: MonadCancel[F, Throwable],
+      inv: Invocation[F, Event],
+      KS: KernelSource[Event]): F[Option[Result]] = {
+    apply(entryPoint, handler)(M, inv, KS, implicitly)
+  }
+
+}
+
+private[lambda] object TracedHandlerImpl {
+  def apply[F[_]: MonadCancelThrow, Event, Result](entryPoint: EntryPoint[F])(
+      handler: Trace[F] => F[Option[Result]])(
+      implicit inv: Invocation[F, Event],
+      KS: KernelSource[Event],
+      L: Local[F, Span[F]]): F[Option[Result]] =
+    for {
+      event <- Invocation[F, Event].event
+      context <- Invocation[F, Event].context
+      kernel = KernelSource[Event].extract(event)
+      result <- entryPoint.continueOrElseRoot(context.functionName, kernel).use {
+        Local[F, Span[F]].scope {
+          Trace[F].put(
+            AwsTags.arn(context.invokedFunctionArn),
+            AwsTags.requestId(context.awsRequestId)
+          ) >> handler(Trace[F])
+        }
+      }
+    } yield result
 
 }
diff --git a/lambda/shared/src/test/scala-2/feral/lambda/TracedLambdaSuite.scala b/lambda/shared/src/test/scala-2/feral/lambda/TracedLambdaSuite.scala
new file mode 100644
index 00000000..77bbee24
--- /dev/null
+++ b/lambda/shared/src/test/scala-2/feral/lambda/TracedLambdaSuite.scala
@@ -0,0 +1,44 @@
+/*
+ * Copyright 2021 Typelevel
+ *
+ * Licensed 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 feral.lambda
+
+import cats.data.Kleisli
+import cats.effect.IO
+import feral.lambda.events.KinesisStreamEvent
+import natchez.EntryPoint
+import natchez.Span
+import natchez.Trace
+
+import scala.annotation.nowarn
+
+class TracedLambdaSuite {
+
+  @nowarn
+  def syntaxTest = { // Checking for compilation, nothing more
+
+    implicit def inv: Invocation[IO, KinesisStreamEvent] = ???
+    def ioEntryPoint: EntryPoint[IO] = ???
+    def needsTrace[F[_]: Trace]: F[Option[INothing]] = ???
+
+    IO.local(Span.noop[IO]).flatMap { implicit local =>
+      TracedHandler(ioEntryPoint) { implicit trace => needsTrace[IO] }
+    }
+
+    TracedHandler(ioEntryPoint, Kleisli[IO, Span[IO], Option[INothing]](???))
+  }
+
+}
diff --git a/lambda/shared/src/test/scala/feral/lambda/TracedHandlerSuite.scala b/lambda/shared/src/test/scala-3/feral/lambda/TracedLambdaSuite.scala
similarity index 90%
rename from lambda/shared/src/test/scala/feral/lambda/TracedHandlerSuite.scala
rename to lambda/shared/src/test/scala-3/feral/lambda/TracedLambdaSuite.scala
index b02044fe..359bdcf9 100644
--- a/lambda/shared/src/test/scala/feral/lambda/TracedHandlerSuite.scala
+++ b/lambda/shared/src/test/scala-3/feral/lambda/TracedLambdaSuite.scala
@@ -34,7 +34,9 @@ class TracedLambdaSuite {
     def ioEntryPoint: EntryPoint[IO] = ???
     def needsTrace[F[_]: Trace]: F[Option[INothing]] = ???
 
-    TracedHandler(ioEntryPoint) { implicit trace => needsTrace[IO] }
+    IO.local(Span.noop[IO]).flatMap { implicit local =>
+      TracedHandler(ioEntryPoint) { needsTrace[IO] }
+    }
 
     TracedHandler(ioEntryPoint, Kleisli[IO, Span[IO], Option[INothing]](???))
   }