diff --git a/spring-webflux/src/main/java/org/springframework/web/reactive/function/client/DefaultWebClient.java b/spring-webflux/src/main/java/org/springframework/web/reactive/function/client/DefaultWebClient.java
index 443ba3018f9..62f93369561 100644
--- a/spring-webflux/src/main/java/org/springframework/web/reactive/function/client/DefaultWebClient.java
+++ b/spring-webflux/src/main/java/org/springframework/web/reactive/function/client/DefaultWebClient.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2002-2024 the original author or authors.
+ * Copyright 2002-2025 the original author or authors.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -449,20 +449,21 @@ final class DefaultWebClient implements WebClient {
 		@Override
 		public Mono<ClientResponse> exchange() {
 			ClientRequest.Builder requestBuilder = initRequestBuilder();
-			ClientRequestObservationContext observationContext = new ClientRequestObservationContext(requestBuilder);
 			return Mono.deferContextual(contextView -> {
 				Observation observation = ClientHttpObservationDocumentation.HTTP_REACTIVE_CLIENT_EXCHANGES.observation(observationConvention,
-						DEFAULT_OBSERVATION_CONVENTION, () -> observationContext, observationRegistry);
+						DEFAULT_OBSERVATION_CONVENTION, () -> new ClientRequestObservationContext(requestBuilder), observationRegistry);
 				observation
 						.parentObservation(contextView.getOrDefault(ObservationThreadLocalAccessor.KEY, null))
 						.start();
-				ExchangeFilterFunction filterFunction = new ObservationFilterFunction(observationContext);
+				ExchangeFilterFunction filterFunction = new ObservationFilterFunction(observation.getContext());
 				if (filterFunctions != null) {
 					filterFunction = filterFunctions.andThen(filterFunction);
 				}
 				ClientRequest request = requestBuilder.build();
-				observationContext.setUriTemplate((String) request.attribute(URI_TEMPLATE_ATTRIBUTE).orElse(null));
-				observationContext.setRequest(request);
+				if (observation.getContext() instanceof ClientRequestObservationContext observationContext) {
+					observationContext.setUriTemplate((String) request.attribute(URI_TEMPLATE_ATTRIBUTE).orElse(null));
+					observationContext.setRequest(request);
+				}
 				final ExchangeFilterFunction finalFilterFunction = filterFunction;
 				Mono<ClientResponse> responseMono = Mono.defer(
 								() -> finalFilterFunction.apply(exchangeFunction).exchange(request))
@@ -478,7 +479,8 @@ final class DefaultWebClient implements WebClient {
 						.doOnNext(response -> responseReceived.set(true))
 						.doOnError(observation::error)
 						.doFinally(signalType -> {
-							if (signalType == SignalType.CANCEL && !responseReceived.get()) {
+							if (signalType == SignalType.CANCEL && !responseReceived.get() &&
+									observation.getContext() instanceof ClientRequestObservationContext observationContext) {
 								observationContext.setAborted(true);
 							}
 							observation.stop();
@@ -734,15 +736,19 @@ final class DefaultWebClient implements WebClient {
 
 	private static class ObservationFilterFunction implements ExchangeFilterFunction {
 
-		private final ClientRequestObservationContext observationContext;
+		private final Observation.Context observationContext;
 
-		ObservationFilterFunction(ClientRequestObservationContext observationContext) {
+		ObservationFilterFunction(Observation.Context observationContext) {
 			this.observationContext = observationContext;
 		}
 
 		@Override
 		public Mono<ClientResponse> filter(ClientRequest request, ExchangeFunction next) {
-			return next.exchange(request).doOnNext(this.observationContext::setResponse);
+			Mono<ClientResponse> exchange = next.exchange(request);
+			if (this.observationContext instanceof ClientRequestObservationContext clientContext) {
+				exchange = exchange.doOnNext(clientContext::setResponse);
+			}
+			return exchange;
 		}
 	}
 
diff --git a/spring-webflux/src/test/java/org/springframework/web/reactive/function/client/WebClientObservationTests.java b/spring-webflux/src/test/java/org/springframework/web/reactive/function/client/WebClientObservationTests.java
index 96c6d3a3ff0..f42efc97f35 100644
--- a/spring-webflux/src/test/java/org/springframework/web/reactive/function/client/WebClientObservationTests.java
+++ b/spring-webflux/src/test/java/org/springframework/web/reactive/function/client/WebClientObservationTests.java
@@ -69,6 +69,7 @@ class WebClientObservationTests {
 		when(mockResponse.statusCode()).thenReturn(HttpStatus.OK);
 		when(mockResponse.headers()).thenReturn(new MockClientHeaders());
 		when(mockResponse.bodyToMono(Void.class)).thenReturn(Mono.empty());
+		when(mockResponse.bodyToMono(String.class)).thenReturn(Mono.error(IllegalStateException::new), Mono.just("Hello"));
 		when(mockResponse.bodyToFlux(String.class)).thenReturn(Flux.just("first", "second"));
 		when(mockResponse.releaseBody()).thenReturn(Mono.empty());
 		when(this.exchangeFunction.exchange(this.request.capture())).thenReturn(Mono.just(mockResponse));
@@ -141,6 +142,16 @@ class WebClientObservationTests {
 				.hasLowCardinalityKeyValue("status", "200");
 	}
 
+	@Test
+	void recordsSingleObservationForRetries() {
+		StepVerifier.create(this.builder.build().get().uri("/path").retrieve().bodyToMono(String.class).retry(1))
+				.expectNextCount(1)
+				.expectComplete()
+				.verify(Duration.ofSeconds(2));
+		assertThatHttpObservation().hasLowCardinalityKeyValue("outcome", "SUCCESS")
+				.hasLowCardinalityKeyValue("status", "200");
+	}
+
 	@Test
 	void setsCurrentObservationInReactorContext() {
 		ExchangeFilterFunction assertionFilter = (request, chain) -> chain.exchange(request).contextWrite(context -> {