diff --git a/server.go b/server.go
index 274f7329..ba68a215 100644
--- a/server.go
+++ b/server.go
@@ -284,12 +284,15 @@ func (s *Server) sendResponse(t transport.ServerTransport, stream *transport.Str
 }
 
 func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.Stream, srv *service, md *MethodDesc) (err error) {
+	ctx, cancel := context.WithCancel(stream.Context())
+	defer cancel()
 	var traceInfo traceInfo
 	if EnableTracing {
 		traceInfo.tr = trace.New("grpc.Recv."+methodFamily(stream.Method()), stream.Method())
 		defer traceInfo.tr.Finish()
 		traceInfo.firstLine.client = false
 		traceInfo.tr.LazyLog(&traceInfo.firstLine, false)
+		ctx = trace.NewContext(ctx, traceInfo.tr)
 		defer func() {
 			if err != nil && err != io.EOF {
 				traceInfo.tr.LazyLog(&fmtStringer{"%v", []interface{}{err}}, true)
@@ -318,13 +321,15 @@ func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.
 			return err
 		}
 		if traceInfo.tr != nil {
-			traceInfo.tr.LazyLog(&payload{sent: false, msg: req}, true)
+			// TODO: set payload.msg to something that
+			// prints usefully with %s; req is a []byte.
+			traceInfo.tr.LazyLog(&payload{sent: false}, true)
 		}
 		switch pf {
 		case compressionNone:
 			statusCode := codes.OK
 			statusDesc := ""
-			reply, appErr := md.Handler(srv.server, stream.Context(), s.opts.codec, req)
+			reply, appErr := md.Handler(srv.server, ctx, s.opts.codec, req)
 			if appErr != nil {
 				if err, ok := appErr.(rpcError); ok {
 					statusCode = err.code
@@ -333,12 +338,20 @@ func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.
 					statusCode = convertCode(appErr)
 					statusDesc = appErr.Error()
 				}
+				if traceInfo.tr != nil && statusCode != codes.OK {
+					traceInfo.tr.LazyLog(stringer(statusDesc), true)
+					traceInfo.tr.SetError()
+				}
+
 				if err := t.WriteStatus(stream, statusCode, statusDesc); err != nil {
 					grpclog.Printf("grpc: Server.processUnaryRPC failed to write status: %v", err)
 					return err
 				}
 				return nil
 			}
+			if traceInfo.tr != nil {
+				traceInfo.tr.LazyLog(stringer("OK"), false)
+			}
 			opts := &transport.Options{
 				Last:  true,
 				Delay: false,
@@ -367,9 +380,12 @@ func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.
 }
 
 func (s *Server) processStreamingRPC(t transport.ServerTransport, stream *transport.Stream, srv *service, sd *StreamDesc) (err error) {
+	ctx, cancel := context.WithCancel(stream.Context())
+	defer cancel()
 	ss := &serverStream{
 		t:       t,
 		s:       stream,
+		ctx:     ctx,
 		p:       &parser{s: stream},
 		codec:   s.opts.codec,
 		tracing: EnableTracing,
@@ -378,6 +394,7 @@ func (s *Server) processStreamingRPC(t transport.ServerTransport, stream *transp
 		ss.traceInfo.tr = trace.New("grpc.Recv."+methodFamily(stream.Method()), stream.Method())
 		ss.traceInfo.firstLine.client = false
 		ss.traceInfo.tr.LazyLog(&ss.traceInfo.firstLine, false)
+		ss.ctx = trace.NewContext(ss.ctx, ss.traceInfo.tr)
 		defer func() {
 			ss.mu.Lock()
 			if err != nil && err != io.EOF {
@@ -398,6 +415,16 @@ func (s *Server) processStreamingRPC(t transport.ServerTransport, stream *transp
 			ss.statusDesc = appErr.Error()
 		}
 	}
+	if ss.tracing {
+		ss.mu.Lock()
+		if ss.statusCode != codes.OK {
+			ss.traceInfo.tr.LazyLog(stringer(ss.statusDesc), true)
+			ss.traceInfo.tr.SetError()
+		} else {
+			ss.traceInfo.tr.LazyLog(stringer("OK"), false)
+		}
+		ss.mu.Unlock()
+	}
 	return t.WriteStatus(ss.s, ss.statusCode, ss.statusDesc)
 
 }
diff --git a/stream.go b/stream.go
index a9d7c49c..11737112 100644
--- a/stream.go
+++ b/stream.go
@@ -132,6 +132,7 @@ func NewClientStream(ctx context.Context, desc *StreamDesc, cc *ClientConn, meth
 			cs.traceInfo.firstLine.deadline = deadline.Sub(time.Now())
 		}
 		cs.traceInfo.tr.LazyLog(&cs.traceInfo.firstLine, false)
+		ctx = trace.NewContext(ctx, cs.traceInfo.tr)
 	}
 	s, err := t.NewStream(ctx, callHdr)
 	if err != nil {
@@ -293,6 +294,7 @@ type ServerStream interface {
 type serverStream struct {
 	t          transport.ServerTransport
 	s          *transport.Stream
+	ctx        context.Context // provides trace.FromContext when tracing
 	p          *parser
 	codec      Codec
 	statusCode codes.Code
@@ -307,7 +309,7 @@ type serverStream struct {
 }
 
 func (ss *serverStream) Context() context.Context {
-	return ss.s.Context()
+	return ss.ctx
 }
 
 func (ss *serverStream) SendHeader(md metadata.MD) error {
@@ -332,7 +334,6 @@ func (ss *serverStream) SendMsg(m interface{}) (err error) {
 				ss.traceInfo.tr.LazyLog(&fmtStringer{"%v", []interface{}{err}}, true)
 				ss.traceInfo.tr.SetError()
 			}
-
 			ss.mu.Unlock()
 		}
 	}()
diff --git a/trace.go b/trace.go
index 24635740..cde04fbf 100644
--- a/trace.go
+++ b/trace.go
@@ -114,3 +114,7 @@ type fmtStringer struct {
 func (f *fmtStringer) String() string {
 	return fmt.Sprintf(f.format, f.a...)
 }
+
+type stringer string
+
+func (s stringer) String() string { return string(s) }