diff --git a/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/[param]/error/route.ts b/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/[param]/error/route.ts
new file mode 100644
index 000000000000..dbc0c6193131
--- /dev/null
+++ b/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/[param]/error/route.ts
@@ -0,0 +1,3 @@
+export async function GET(request: Request) {
+  throw new Error('Dynamic route handler error');
+}
diff --git a/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/[param]/route.ts b/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/[param]/route.ts
new file mode 100644
index 000000000000..581a4d68b640
--- /dev/null
+++ b/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/[param]/route.ts
@@ -0,0 +1,9 @@
+import { NextResponse } from 'next/server';
+
+export async function GET() {
+  return NextResponse.json({ name: 'Beep' });
+}
+
+export async function POST() {
+  return NextResponse.json({ name: 'Boop' }, { status: 400 });
+}
diff --git a/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/static/route.ts b/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/static/route.ts
new file mode 100644
index 000000000000..c2407f908b8b
--- /dev/null
+++ b/dev-packages/e2e-tests/test-applications/nextjs-turbo/app/route-handlers/static/route.ts
@@ -0,0 +1,5 @@
+import { NextResponse } from 'next/server';
+
+export async function GET(request: Request) {
+  return NextResponse.json({ name: 'Static' });
+}
diff --git a/dev-packages/e2e-tests/test-applications/nextjs-turbo/package.json b/dev-packages/e2e-tests/test-applications/nextjs-turbo/package.json
index 1cfbd8eb6628..e28db5352884 100644
--- a/dev-packages/e2e-tests/test-applications/nextjs-turbo/package.json
+++ b/dev-packages/e2e-tests/test-applications/nextjs-turbo/package.json
@@ -17,7 +17,7 @@
     "@types/node": "^18.19.1",
     "@types/react": "^19",
     "@types/react-dom": "^19",
-    "next": "^15.3.5",
+    "next": "^15.5.4",
     "react": "^19",
     "react-dom": "^19",
     "typescript": "~5.0.0"
diff --git a/dev-packages/e2e-tests/test-applications/nextjs-turbo/tests/app-router/route-handlers.test.ts b/dev-packages/e2e-tests/test-applications/nextjs-turbo/tests/app-router/route-handlers.test.ts
new file mode 100644
index 000000000000..544ba0084167
--- /dev/null
+++ b/dev-packages/e2e-tests/test-applications/nextjs-turbo/tests/app-router/route-handlers.test.ts
@@ -0,0 +1,73 @@
+import { expect, test } from '@playwright/test';
+import { waitForError, waitForTransaction } from '@sentry-internal/test-utils';
+
+test('Should create a transaction for dynamic route handlers', async ({ request }) => {
+  const routehandlerTransactionPromise = waitForTransaction('nextjs-turbo', async transactionEvent => {
+    return transactionEvent?.transaction === 'GET /route-handlers/[param]';
+  });
+
+  const response = await request.get('/route-handlers/foo');
+  expect(await response.json()).toStrictEqual({ name: 'Beep' });
+
+  const routehandlerTransaction = await routehandlerTransactionPromise;
+
+  expect(routehandlerTransaction.contexts?.trace?.status).toBe('ok');
+  expect(routehandlerTransaction.contexts?.trace?.op).toBe('http.server');
+});
+
+test('Should create a transaction for static route handlers', async ({ request }) => {
+  const routehandlerTransactionPromise = waitForTransaction('nextjs-turbo', async transactionEvent => {
+    return transactionEvent?.transaction === 'GET /route-handlers/static';
+  });
+
+  const response = await request.get('/route-handlers/static');
+  expect(await response.json()).toStrictEqual({ name: 'Static' });
+
+  const routehandlerTransaction = await routehandlerTransactionPromise;
+
+  expect(routehandlerTransaction.contexts?.trace?.status).toBe('ok');
+  expect(routehandlerTransaction.contexts?.trace?.op).toBe('http.server');
+});
+
+test('Should create a transaction for route handlers and correctly set span status depending on http status', async ({
+  request,
+}) => {
+  const routehandlerTransactionPromise = waitForTransaction('nextjs-turbo', async transactionEvent => {
+    return transactionEvent?.transaction === 'POST /route-handlers/[param]';
+  });
+
+  const response = await request.post('/route-handlers/bar');
+  expect(await response.json()).toStrictEqual({ name: 'Boop' });
+
+  const routehandlerTransaction = await routehandlerTransactionPromise;
+
+  expect(routehandlerTransaction.contexts?.trace?.status).toBe('invalid_argument');
+  expect(routehandlerTransaction.contexts?.trace?.op).toBe('http.server');
+});
+
+test('Should record exceptions and transactions for faulty route handlers', async ({ request }) => {
+  const errorEventPromise = waitForError('nextjs-turbo', errorEvent => {
+    return errorEvent?.exception?.values?.[0]?.value === 'Dynamic route handler error';
+  });
+
+  const routehandlerTransactionPromise = waitForTransaction('nextjs-turbo', async transactionEvent => {
+    return transactionEvent?.transaction === 'GET /route-handlers/[param]/error';
+  });
+
+  await request.get('/route-handlers/boop/error').catch(() => {});
+
+  const routehandlerTransaction = await routehandlerTransactionPromise;
+  const routehandlerError = await errorEventPromise;
+
+  expect(routehandlerTransaction.contexts?.trace?.status).toBe('internal_error');
+  expect(routehandlerTransaction.contexts?.trace?.op).toBe('http.server');
+  expect(routehandlerTransaction.contexts?.trace?.origin).toContain('auto');
+
+  expect(routehandlerError.exception?.values?.[0].value).toBe('Dynamic route handler error');
+
+  expect(routehandlerError.request?.method).toBe('GET');
+  // todo: make sure url is attached to request object
+  // expect(routehandlerError.request?.url).toContain('/route-handlers/boop/error');
+
+  expect(routehandlerError.transaction).toBe('/route-handlers/[param]/error');
+});