diff --git a/projects/fal/src/fal/app.py b/projects/fal/src/fal/app.py
index d97aa3fa..fc57ac1d 100644
--- a/projects/fal/src/fal/app.py
+++ b/projects/fal/src/fal/app.py
@@ -1,6 +1,7 @@
 from __future__ import annotations
 
 import asyncio
+import contextvars
 import inspect
 import json
 import os
@@ -52,7 +53,7 @@
     r"\.git/",
     r"\.DS_Store$",
 ]
-
+LOG_CONTEXT_PREFIX = "LOG_"
 
 EndpointT = TypeVar("EndpointT", bound=Callable[..., Any])
 logger = get_logger(__name__)
@@ -89,9 +90,28 @@ async def open_isolate_channel(address: str) -> async_grpc.Channel | None:
     return channel
 
 
+def merge_contextvars(logger_labels: dict[str, str]) -> None:
+    for k, v in logger_labels.items():
+        ContextVar(f"{LOG_CONTEXT_PREFIX}{k}").set(v)  # type: ignore
+
+
+def clear_contextvars() -> None:
+    ctx = contextvars.copy_context()
+    for k in ctx:
+        if k.name.startswith(LOG_CONTEXT_PREFIX):
+            k.set(Ellipsis)
+
+
 async def _set_logger_labels(
     logger_labels: dict[str, str], channel: async_grpc.Channel
 ):
+    # Set the labels into the current context so isolate agent can use them for
+    # associating log lines with the current request context
+    if not logger_labels:
+        clear_contextvars()
+    else:
+        merge_contextvars(logger_labels)
+
     try:
         import sys
 
diff --git a/projects/fal/tests/unit/test_app.py b/projects/fal/tests/unit/test_app.py
index 4c532be6..3e06d1c2 100644
--- a/projects/fal/tests/unit/test_app.py
+++ b/projects/fal/tests/unit/test_app.py
@@ -1,5 +1,6 @@
 from __future__ import annotations
 
+import contextvars
 import os
 import pickle
 from contextvars import ContextVar
@@ -8,6 +9,7 @@
 
 import fal
 from fal import App, endpoint
+from fal.app import LOG_CONTEXT_PREFIX, clear_contextvars, merge_contextvars
 from fal.container import ContainerImage
 
 
@@ -257,6 +259,39 @@ class LeakCheckApp(App):
     assert "app_auth" not in hk
 
 
+def test_merge_context_vars():
+    labels = {"fal_request_id": "123", "fal_endpoint": "/"}
+    request_id_var = f"{LOG_CONTEXT_PREFIX}fal_request_id"
+    endpoint_var = f"{LOG_CONTEXT_PREFIX}fal_endpoint"
+    unrelated_var = "unrelated_key"
+    contextvars.ContextVar(unrelated_var).set("value")
+
+    # We have to convert to dict and lookup by name because each ContextVar
+    # is a different object. Since merge_contextvars creates new ContextVars,
+    # we can't just do direct lookups.
+    vars = dict((k.name, v) for k, v in contextvars.copy_context().items())
+
+    assert vars.get(unrelated_var) == "value"
+
+    assert vars.get(request_id_var) is None
+    assert vars.get(endpoint_var) is None
+
+    merge_contextvars(labels)
+    vars = dict((k.name, v) for k, v in contextvars.copy_context().items())
+
+    assert vars.get(request_id_var) == "123"
+    assert vars.get(endpoint_var) == "/"
+
+    clear_contextvars()
+    vars = dict((k.name, v) for k, v in contextvars.copy_context().items())
+
+    # Cleared contextvars are set to Ellipsis
+    assert vars.get(request_id_var) is Ellipsis
+    assert vars.get(endpoint_var) is Ellipsis
+    # Does not clear unrelated contextvars
+    assert vars.get("unrelated_key") == "value"
+
+
 @pytest.mark.asyncio
 async def test_runner_state_lifecycle_complete():
     """Test that FAL_RUNNER_STATE transitions through all phases correctly"""