diff --git a/src/cpp/ext/gcp/BUILD b/src/cpp/ext/gcp/BUILD
index e728e2d216e..edb4f385dc5 100644
--- a/src/cpp/ext/gcp/BUILD
+++ b/src/cpp/ext/gcp/BUILD
@@ -38,6 +38,8 @@ grpc_cc_library(
         "observability.h",
     ],
     external_deps = [
+        "absl/status",
+        "absl/status:statusor",
         "opencensus-trace",
         "opencensus-trace-stackdriver_exporter",
         "opencensus-stats-stackdriver_exporter",
@@ -46,7 +48,9 @@ grpc_cc_library(
     tags = ["nofixdeps"],
     visibility = ["//test:__subpackages__"],
     deps = [
+        ":observability_config",
         "//:gpr",
+        "//:grpc++_public_hdrs",
         "//:grpc_opencensus_plugin",
     ],
 )
diff --git a/src/cpp/ext/gcp/observability.cc b/src/cpp/ext/gcp/observability.cc
index 2ccb8f64e97..e5a2132b8d0 100644
--- a/src/cpp/ext/gcp/observability.cc
+++ b/src/cpp/ext/gcp/observability.cc
@@ -20,14 +20,19 @@
 
 #include <stdint.h>
 
+#include <string>
 #include <utility>
 
+#include "absl/status/statusor.h"
 #include "opencensus/exporters/stats/stackdriver/stackdriver_exporter.h"
 #include "opencensus/exporters/trace/stackdriver/stackdriver_exporter.h"
 #include "opencensus/trace/sampler.h"
 #include "opencensus/trace/trace_config.h"
 
 #include <grpcpp/opencensus.h>
+#include <grpcpp/support/config.h>
+
+#include "src/cpp/ext/gcp/observability_config.h"
 
 namespace grpc {
 namespace experimental {
@@ -42,23 +47,30 @@ constexpr uint32_t kMaxMessageEvents = 128;
 constexpr uint32_t kMaxLinks = 128;
 }  // namespace
 
-void GcpObservabilityInit() {
-  // TODO(yashykt): Add code for gRPC config parsing
+absl::Status GcpObservabilityInit() {
+  auto config = grpc::internal::GcpObservabilityConfig::ReadFromEnv();
+  if (!config.ok()) {
+    return config.status();
+  }
   grpc::RegisterOpenCensusPlugin();
   grpc::RegisterOpenCensusViewsForExport();
-  // TODO(yashykt): Setup tracing and stats exporting only if enabled in config.
-  // TODO(yashykt): Get probability from config
-  opencensus::trace::TraceConfig::SetCurrentTraceParams(
-      {kMaxAttributes, kMaxAnnotations, kMaxMessageEvents, kMaxLinks,
-       opencensus::trace::ProbabilitySampler(1.0)});
-  opencensus::exporters::trace::StackdriverOptions trace_opts;
-  // TODO(yashykt): Set up project ID based on config
-  opencensus::exporters::trace::StackdriverExporter::Register(
-      std::move(trace_opts));
-  opencensus::exporters::stats::StackdriverOptions stats_opts;
-  // TODO(yashykt): Set up project ID based on config
-  opencensus::exporters::stats::StackdriverExporter::Register(
-      std::move(stats_opts));
+  if (!config->cloud_trace.disabled) {
+    opencensus::trace::TraceConfig::SetCurrentTraceParams(
+        {kMaxAttributes, kMaxAnnotations, kMaxMessageEvents, kMaxLinks,
+         opencensus::trace::ProbabilitySampler(
+             config->cloud_trace.sampling_rate)});
+    opencensus::exporters::trace::StackdriverOptions trace_opts;
+    trace_opts.project_id = config->project_id;
+    opencensus::exporters::trace::StackdriverExporter::Register(
+        std::move(trace_opts));
+  }
+  if (!config->cloud_monitoring.disabled) {
+    opencensus::exporters::stats::StackdriverOptions stats_opts;
+    stats_opts.project_id = config->project_id;
+    opencensus::exporters::stats::StackdriverExporter::Register(
+        std::move(stats_opts));
+  }
+  return absl::Status();
 }
 
 }  // namespace experimental
diff --git a/src/cpp/ext/gcp/observability.h b/src/cpp/ext/gcp/observability.h
index f5e401b875a..b562e1cabf5 100644
--- a/src/cpp/ext/gcp/observability.h
+++ b/src/cpp/ext/gcp/observability.h
@@ -21,11 +21,13 @@
 // instead of in src/, but I'm not yet sure about the naming, so keeping it here
 // till we decide.
 
+#include "absl/status/status.h"
+
 namespace grpc {
 namespace experimental {
 
 // Initialize GCP Observability for gRPC.
-void GcpObservabilityInit();
+absl::Status GcpObservabilityInit();
 
 }  // namespace experimental
 }  // namespace grpc
diff --git a/test/cpp/ext/gcp/observability_test.cc b/test/cpp/ext/gcp/observability_test.cc
index 5c2cc387de0..47fb6706150 100644
--- a/test/cpp/ext/gcp/observability_test.cc
+++ b/test/cpp/ext/gcp/observability_test.cc
@@ -24,7 +24,12 @@
 namespace {
 
 TEST(GcpObservabilityTest, RegistrationTest) {
-  grpc::experimental::GcpObservabilityInit();
+  auto status = grpc::experimental::GcpObservabilityInit();
+  EXPECT_EQ(status,
+            absl::FailedPreconditionError(
+                "Environment variables GRPC_OBSERVABILITY_CONFIG_FILE or "
+                "GRPC_OBSERVABILITY_CONFIG "
+                "not defined"));
 }
 
 }  // namespace