diff --git a/packages/opentelemetry-instrumentation-haystack/opentelemetry/instrumentation/haystack/utils.py b/packages/opentelemetry-instrumentation-haystack/opentelemetry/instrumentation/haystack/utils.py
index cbb3b8a437..14e0898daa 100644
--- a/packages/opentelemetry-instrumentation-haystack/opentelemetry/instrumentation/haystack/utils.py
+++ b/packages/opentelemetry-instrumentation-haystack/opentelemetry/instrumentation/haystack/utils.py
@@ -15,6 +15,8 @@ def default(self, o):
             return dataclasses.asdict(o)
         if hasattr(o, "to_json"):
             return o.to_json()
+        if hasattr(o, "model_dump_json"):
+            return o.model_dump_json()
         return super().default(o)
 
 
diff --git a/packages/opentelemetry-instrumentation-llamaindex/opentelemetry/instrumentation/llamaindex/utils.py b/packages/opentelemetry-instrumentation-llamaindex/opentelemetry/instrumentation/llamaindex/utils.py
index 01ab07cc56..affc81c2c4 100644
--- a/packages/opentelemetry-instrumentation-llamaindex/opentelemetry/instrumentation/llamaindex/utils.py
+++ b/packages/opentelemetry-instrumentation-llamaindex/opentelemetry/instrumentation/llamaindex/utils.py
@@ -64,6 +64,8 @@ class JSONEncoder(json.JSONEncoder):
     def default(self, o):
         if dataclasses.is_dataclass(o):
             return dataclasses.asdict(o)
+        if hasattr(o, "model_dump_json"):
+            return o.model_dump_json()
         elif hasattr(o, "json"):
             return o.json()
         elif hasattr(o, "to_json"):
diff --git a/packages/traceloop-sdk/pyproject.toml b/packages/traceloop-sdk/pyproject.toml
index bc3b4a4fc2..5a8b93f1fe 100644
--- a/packages/traceloop-sdk/pyproject.toml
+++ b/packages/traceloop-sdk/pyproject.toml
@@ -68,7 +68,7 @@ opentelemetry-instrumentation-groq = { path = "../opentelemetry-instrumentation-
 opentelemetry-instrumentation-mcp = { path = "../opentelemetry-instrumentation-mcp", develop = true }
 colorama = "^0.4.6"
 tenacity = ">=8.2.3, <10.0"
-pydantic = ">=1"
+pydantic = ">=2"
 jinja2 = "^3.1.5"
 deprecated = "^1.2.14"
 aiohttp = "^3.11.11"
diff --git a/packages/traceloop-sdk/tests/test_json_encoder.py b/packages/traceloop-sdk/tests/test_json_encoder.py
new file mode 100644
index 0000000000..c880fbe878
--- /dev/null
+++ b/packages/traceloop-sdk/tests/test_json_encoder.py
@@ -0,0 +1,31 @@
+from pathlib import Path
+import pytest
+from pydantic import BaseModel
+
+from traceloop.sdk.decorators import task
+from opentelemetry.semconv_ai import SpanAttributes
+
+
+def test_json_encoder_task(exporter, recwarn):
+
+    class TestValue(BaseModel):
+        value: int
+
+    @task(name="test_task")
+    def test_method(a: TestValue, b: TestValue):
+        return TestValue(value=a.value + b.value)
+
+    result = test_method(TestValue(value=2), TestValue(value=3))
+
+    assert result.value == 5
+
+    spans = exporter.get_finished_spans()
+    assert len(spans) == 1
+    span = spans[0]
+    assert span.attributes[SpanAttributes.TRACELOOP_ENTITY_INPUT] == r'{"args": ["{\"value\":2}", "{\"value\":3}"], "kwargs": {}}'
+    assert span.attributes[SpanAttributes.TRACELOOP_ENTITY_OUTPUT] == r'"{\"value\":5}"'
+
+    for warning in recwarn:
+        file = Path(warning.filename)
+        if file.name == "json_encoder.py" and "`json` method is deprecated" in str(warning.message):
+            pytest.fail(f"Deprecation warning found: {warning.message}")
diff --git a/packages/traceloop-sdk/traceloop/sdk/prompts/model.py b/packages/traceloop-sdk/traceloop/sdk/prompts/model.py
index dddb80cfdd..04bb819b73 100644
--- a/packages/traceloop-sdk/traceloop/sdk/prompts/model.py
+++ b/packages/traceloop-sdk/traceloop/sdk/prompts/model.py
@@ -1,7 +1,7 @@
 import datetime
 from typing import List, Literal, Optional, Union
 
-from pydantic import BaseModel, Field
+from pydantic import BaseModel, Field, ConfigDict
 from typing_extensions import Annotated
 
 
@@ -10,8 +10,9 @@ class TemplateEngine:
 
 
 class RegistryObjectBaseModel(BaseModel):
-    class Config:
-        arbitrary_types_allowed = True
+    model_config = ConfigDict(
+        arbitrary_types_allowed=True
+    )
 
 
 class TextContent(RegistryObjectBaseModel):
diff --git a/packages/traceloop-sdk/traceloop/sdk/utils/json_encoder.py b/packages/traceloop-sdk/traceloop/sdk/utils/json_encoder.py
index ad35a3b504..80d81336b0 100644
--- a/packages/traceloop-sdk/traceloop/sdk/utils/json_encoder.py
+++ b/packages/traceloop-sdk/traceloop/sdk/utils/json_encoder.py
@@ -14,6 +14,9 @@ def default(self, o):
         if hasattr(o, "to_json"):
             return o.to_json()
 
+        if hasattr(o, "model_dump_json"):
+            return o.model_dump_json()
+
         if hasattr(o, "json"):
             return o.json()