diff --git a/bottlecap/src/secrets/decrypt.rs b/bottlecap/src/secrets/decrypt.rs
index 47467c7ee..b014c3b16 100644
--- a/bottlecap/src/secrets/decrypt.rs
+++ b/bottlecap/src/secrets/decrypt.rs
@@ -202,8 +202,20 @@ async fn decrypt_aws_sm(
     );
 
     let v = request(json_body, headers?, client).await?;
+    extract_secret_string(&v)
+}
+
+// When a Secrets Manager secret is a JSON object, this key is used to extract the API key.
+// Falls back to the raw secret string if the key is absent or the value is not valid JSON.
+const JSON_SECRET_DD_API_KEY: &str = "dd_api_key";
 
+fn extract_secret_string(v: &Value) -> Result<String, Box<dyn std::error::Error + Send + Sync>> {
     if let Some(secret_string) = v["SecretString"].as_str() {
+        if let Ok(parsed) = serde_json::from_str::<Value>(secret_string)
+            && let Some(extracted) = parsed[JSON_SECRET_DD_API_KEY].as_str()
+        {
+            return Ok(extracted.to_string());
+        }
         Ok(secret_string.to_string())
     } else {
         Err(Error::new(std::io::ErrorKind::InvalidData, v.to_string()).into())
@@ -419,6 +431,40 @@ mod tests {
     use super::*;
     use chrono::{NaiveDateTime, TimeZone};
 
+    fn make_sm_response(secret_string: &str) -> Value {
+        serde_json::json!({ "SecretString": secret_string })
+    }
+
+    #[test]
+    fn test_json_secret_extraction() {
+        let v = make_sm_response(r#"{"dd_api_key":"abc123"}"#);
+        let result = extract_secret_string(&v).expect("should extract dd_api_key");
+        assert_eq!(result, "abc123");
+    }
+
+    #[test]
+    fn test_json_secret_missing_key_falls_back_to_raw() {
+        let raw = r#"{"other_key":"abc123"}"#;
+        let v = make_sm_response(raw);
+        let result = extract_secret_string(&v).expect("should fall back to raw JSON string");
+        assert_eq!(result, raw);
+    }
+
+    #[test]
+    fn test_plain_secret_unaffected() {
+        let v = make_sm_response("abc123");
+        let result = extract_secret_string(&v).expect("should return raw value");
+        assert_eq!(result, "abc123");
+    }
+
+    #[test]
+    fn test_malformed_json_secret_falls_back_to_raw() {
+        let raw = r#"{"dd_api_key":"abc123""#; // missing closing brace
+        let v = make_sm_response(raw);
+        let result = extract_secret_string(&v).expect("should fall back to raw string");
+        assert_eq!(result, raw);
+    }
+
     #[test]
     fn key_cleanup() {
         let key = clean_api_key(Some(" 32alxcxf\n".to_string()));