diff --git a/Readme.md b/Readme.md
index 84b4703c..58c7736b 100644
--- a/Readme.md
+++ b/Readme.md
@@ -44,6 +44,7 @@ functions:
 | Blackfire          | `${bref-extra:blackfire-php-81}`      |
 | Calendar           | `${bref-extra:calendar-php-81}`       |
 | Cassandra          | `${bref-extra:cassandra-php-81}`      |
+| Datadog            | `${bref-extra:datadog-php-81}`        |
 | Decimal            | `${bref-extra:decimal-php-81}`        |
 | DS                 | `${bref-extra:ds-php-81}`             |
 | Elastic APM        | `${bref-extra:elastic-apm-php-81}`    |
@@ -136,6 +137,10 @@ in your `serverless.yaml` in order to tell unixODBC to load the required ini fil
 
 Read [the New Relic tutorial](docs/newrelic.md).
 
+### Datadog
+
+Read [the notes on configuring the Datadog layer](docs/datadog.md).
+
 ## Docker images
 
 There are Docker images for every layer. They are updated on every push to master
diff --git a/docs/datadog.md b/docs/datadog.md
new file mode 100644
index 00000000..4b202583
--- /dev/null
+++ b/docs/datadog.md
@@ -0,0 +1,41 @@
+# Configuring the Datadog Layer
+
+The Datadog layer provides the [Datadog Agent][] and [ddtrace extension for PHP][].
+
+When using this layer, you must set the following environment variables:
+
+- `DD_API_KEY`
+
+It may be necessary to set the following environment variables when running
+PHP in a serverless environment:
+
+- `DD_TRACE_CLI_ENABLED` - set this value to `1` (the default is `0`)
+
+The following environment variables may be useful or necessary, depending on
+how you use Datadog:
+
+- `DD_SITE` - this defaults to `datadoghq.com`
+- `DD_LOG_LEVEL` - e.g., `trace`, `debug`, `info`, `warn`, `error`, `critical`, `off`
+- `DD_SERVICE` - the name of your service as it should appear in Datadog
+- `DD_VERSION` - the version of your service, for display and filtering in Datadog
+- `DD_ENV` - the environment your service is running in (i.e., staging, prod, etc.),
+  for display and filtering in Datadog
+
+Using environment variables, you may set any of the [Datadog Agent environment
+variables][] or [PHP ddtrace environment variables][] in your `serverless.yml`
+configuration, or you may configure them using a custom PHP INI file with Bref,
+as described in the [Bref documentation][].
+
+All values not set in your configuration will use the default [INI settings][]
+for the extension.
+
+See the [Datadog documentation][] for more information about serverless
+monitoring for AWS Lambda.
+
+[datadog agent]: https://docs.datadoghq.com/agent/
+[ddtrace extension for php]: https://docs.datadoghq.com/tracing/trace_collection/dd_libraries/php/
+[datadog agent environment variables]: https://docs.datadoghq.com/containers/docker/apm/?tab=linux#docker-apm-agent-environment-variables
+[php ddtrace environment variables]: https://docs.datadoghq.com/tracing/trace_collection/library_config/php/#environment-variable-configuration
+[bref documentation]: https://bref.sh/docs/environment/php.html
+[ini settings]: https://docs.datadoghq.com/tracing/trace_collection/library_config/php/
+[datadog documentation]: https://docs.datadoghq.com/serverless/aws_lambda
diff --git a/layers/datadog/Dockerfile b/layers/datadog/Dockerfile
new file mode 100644
index 00000000..3b913c15
--- /dev/null
+++ b/layers/datadog/Dockerfile
@@ -0,0 +1,24 @@
+ARG PHP_VERSION
+FROM bref/build-php-$PHP_VERSION:1.7.14 AS ext
+
+ENV DDTRACE_BUILD_DIR=${BUILD_DIR}/ddtrace
+
+RUN set -xe; \
+    mkdir -p ${DDTRACE_BUILD_DIR}; \
+    curl -Ls -o ${DDTRACE_BUILD_DIR}/datadog-setup.php https://github.com/DataDog/dd-trace-php/releases/latest/download/datadog-setup.php
+
+WORKDIR ${DDTRACE_BUILD_DIR}
+
+RUN php datadog-setup.php --php-bin=all
+
+RUN cp "$(php-config --extension-dir)/ddtrace.so" /tmp/ddtrace.so
+RUN echo 'extension=/opt/bref-extra/ddtrace.so' > /tmp/ext.ini
+
+FROM scratch
+
+COPY --from=ext /tmp/ddtrace.so /opt/bref-extra/ddtrace.so
+COPY --from=ext /tmp/ext.ini /opt/bref/etc/php/conf.d/98-ddtrace.ini
+
+# This adds the Datadog Agent to the layer.
+# Refer to https://gallery.ecr.aws/datadog/lambda-extension
+COPY --from=public.ecr.aws/datadog/lambda-extension:latest /opt/extensions/ /opt/extensions
diff --git a/layers/datadog/config.json b/layers/datadog/config.json
new file mode 100644
index 00000000..a5a35316
--- /dev/null
+++ b/layers/datadog/config.json
@@ -0,0 +1,7 @@
+{
+    "php": [
+        "80",
+        "81",
+        "82"
+    ]
+}
diff --git a/layers/datadog/test.php b/layers/datadog/test.php
new file mode 100644
index 00000000..5168713c
--- /dev/null
+++ b/layers/datadog/test.php
@@ -0,0 +1,8 @@
+<?php
+
+if (!function_exists($func = '\DDTrace\trace_method')) {
+    echo sprintf('FAIL: Function "%s" does not exist.', $func).PHP_EOL;
+    exit(1);
+}
+
+exit(0);