diff --git a/collector/receiver/telemetryapireceiver/README.md b/collector/receiver/telemetryapireceiver/README.md
index c412c8f4f7..f31974f126 100644
--- a/collector/receiver/telemetryapireceiver/README.md
+++ b/collector/receiver/telemetryapireceiver/README.md
@@ -17,7 +17,7 @@ Supported events:
 
 | Field   | Default                               | Description                                                                                                                             |
 |---------|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|
-| `port`  | 4325                                  | HTTP server port to receive Telemetry API data.                                                                                         |
+| `port`  | 0 (dynamically determined by OS)      | HTTP server port to receive Telemetry API data.                                                                                         |
 | `types` | ["platform", "function", "extension"] | [Types](https://docs.aws.amazon.com/lambda/latest/dg/telemetry-api-reference.html#telemetry-subscribe-api) of telemetry to subscribe to |
 
 
diff --git a/collector/receiver/telemetryapireceiver/factory.go b/collector/receiver/telemetryapireceiver/factory.go
index 3f4f4f177d..9a68951cd1 100644
--- a/collector/receiver/telemetryapireceiver/factory.go
+++ b/collector/receiver/telemetryapireceiver/factory.go
@@ -27,7 +27,7 @@ import (
 const (
 	typeStr     = "telemetryapi"
 	stability   = component.StabilityLevelDevelopment
-	defaultPort = 4325
+	defaultPort = 0
 	platform    = "platform"
 	function    = "function"
 	extension   = "extension"
diff --git a/collector/receiver/telemetryapireceiver/receiver.go b/collector/receiver/telemetryapireceiver/receiver.go
index e3b932723b..eff197782f 100644
--- a/collector/receiver/telemetryapireceiver/receiver.go
+++ b/collector/receiver/telemetryapireceiver/receiver.go
@@ -18,8 +18,10 @@ import (
 	"context"
 	crand "crypto/rand"
 	"encoding/json"
+	"errors"
 	"fmt"
 	"io"
+	"net"
 	"net/http"
 	"os"
 	"strconv"
@@ -84,29 +86,55 @@ type telemetryAPIReceiver struct {
 	logReport               bool
 }
 
+func (r *telemetryAPIReceiver) bindListener() (net.Listener, string, error) {
+	listenerAddr := listenOnAddress()
+	l, err := net.Listen("tcp", listenerAddr+":"+strconv.Itoa(r.port))
+	if err != nil {
+		return nil, "", err
+	}
+	addr := fmt.Sprintf("%s:%d", listenerAddr, l.Addr().(*net.TCPAddr).Port)
+	return l, addr, nil
+}
+
 func (r *telemetryAPIReceiver) Start(ctx context.Context, host component.Host) error {
-	address := listenOnAddress(r.port)
-	r.logger.Info("Listening for requests", zap.String("address", address))
+	if len(r.types) == 0 {
+		return fmt.Errorf("no telemetry event types provided")
+	}
+
+	listener, address, err := r.bindListener()
+	if err != nil {
+		return fmt.Errorf("failed to find available port: %w", err)
+	}
+	r.logger.Info("Starting telemetry API listener", zap.String("address", address))
 
 	mux := http.NewServeMux()
 	mux.HandleFunc("/", r.httpHandler)
 	r.httpServer = &http.Server{Addr: address, Handler: mux}
 	go func() {
-		_ = r.httpServer.ListenAndServe()
+		err := r.httpServer.Serve(listener)
+		if !errors.Is(err, http.ErrServerClosed) {
+			r.logger.Error("Unexpected stop on HTTP Server", zap.Error(err))
+		} else {
+			r.logger.Info("HTTP server closed", zap.Error(err))
+		}
 	}()
 
 	telemetryClient := telemetryapi.NewClient(r.logger)
-	if len(r.types) > 0 {
-		_, err := telemetryClient.Subscribe(ctx, r.types, r.extensionID, fmt.Sprintf("http://%s/", address))
-		if err != nil {
-			r.logger.Info("Listening for requests", zap.String("address", address), zap.String("extensionID", r.extensionID))
-			return err
-		}
+	if _, err := telemetryClient.Subscribe(ctx, r.types, r.extensionID, fmt.Sprintf("http://%s/", address)); err != nil {
+		r.logger.Error("Failed to subscribe to telemetry", zap.Error(err))
+		_ = r.Shutdown(ctx)
+		return err
 	}
+	r.logger.Info("Successfully subscribed to telemetry", zap.String("address", address))
 	return nil
 }
 
 func (r *telemetryAPIReceiver) Shutdown(ctx context.Context) error {
+	if r.httpServer != nil {
+		if err := r.httpServer.Shutdown(ctx); err != nil {
+			return err
+		}
+	}
 	return nil
 }
 
@@ -727,14 +755,10 @@ func newTelemetryAPIReceiver(
 	}, nil
 }
 
-func listenOnAddress(port int) string {
+func listenOnAddress() string {
 	envAwsLocal, ok := os.LookupEnv("AWS_SAM_LOCAL")
-	var addr string
 	if ok && envAwsLocal == "true" {
-		addr = ":" + strconv.Itoa(port)
-	} else {
-		addr = "sandbox.localdomain:" + strconv.Itoa(port)
+		return ""
 	}
-
-	return addr
+	return "sandbox.localdomain"
 }
diff --git a/collector/receiver/telemetryapireceiver/receiver_test.go b/collector/receiver/telemetryapireceiver/receiver_test.go
index 39cca22312..fd9a7cd49c 100644
--- a/collector/receiver/telemetryapireceiver/receiver_test.go
+++ b/collector/receiver/telemetryapireceiver/receiver_test.go
@@ -38,16 +38,16 @@ func TestListenOnAddress(t *testing.T) {
 		{
 			desc: "listen on address without AWS_SAM_LOCAL env variable",
 			testFunc: func(t *testing.T) {
-				addr := listenOnAddress(4325)
-				require.EqualValues(t, "sandbox.localdomain:4325", addr)
+				addr := listenOnAddress()
+				require.EqualValues(t, "sandbox.localdomain", addr)
 			},
 		},
 		{
 			desc: "listen on address with AWS_SAM_LOCAL env variable",
 			testFunc: func(t *testing.T) {
 				t.Setenv("AWS_SAM_LOCAL", "true")
-				addr := listenOnAddress(4325)
-				require.EqualValues(t, ":4325", addr)
+				addr := listenOnAddress()
+				require.EqualValues(t, "", addr)
 			},
 		},
 	}
@@ -56,6 +56,31 @@ func TestListenOnAddress(t *testing.T) {
 	}
 }
 
+func TestBindListener(t *testing.T) {
+	t.Setenv("AWS_SAM_LOCAL", "true")
+
+	t.Run("dynamic port allocation", func(t *testing.T) {
+		r, err := newTelemetryAPIReceiver(&Config{Port: 0}, receivertest.NewNopSettings(Type))
+		require.NoError(t, err)
+		listener, addr, err := r.bindListener()
+		require.NoError(t, err)
+		require.NotEmpty(t, addr)
+		require.NotNil(t, listener)
+		t.Cleanup(func() { require.NoError(t, listener.Close()) })
+		require.Contains(t, addr, ":")
+	})
+
+	t.Run("specific port", func(t *testing.T) {
+		r, err := newTelemetryAPIReceiver(&Config{Port: 4325}, receivertest.NewNopSettings(Type))
+		require.NoError(t, err)
+		listener, addr, err := r.bindListener()
+		require.NoError(t, err)
+		require.NotNil(t, listener)
+		t.Cleanup(func() { require.NoError(t, listener.Close()) })
+		require.Contains(t, addr, ":4325")
+	})
+}
+
 type mockConsumer struct {
 	consumed int
 }