diff --git a/x-pack/plugins/apm/server/lib/services/annotations/get_derived_service_annotations.ts b/x-pack/plugins/apm/server/lib/services/annotations/get_derived_service_annotations.ts
index 028c8c042c8dc..611f9b18a0b1a 100644
--- a/x-pack/plugins/apm/server/lib/services/annotations/get_derived_service_annotations.ts
+++ b/x-pack/plugins/apm/server/lib/services/annotations/get_derived_service_annotations.ts
@@ -92,7 +92,7 @@ export async function getDerivedServiceAnnotations({
                 },
               },
               sort: {
-                '@timestamp': 'desc',
+                '@timestamp': 'asc',
               },
             },
           });
diff --git a/x-pack/test/apm_api_integration/tests/index.ts b/x-pack/test/apm_api_integration/tests/index.ts
index 7c38f37093fa4..813e0e4f3cdb8 100644
--- a/x-pack/test/apm_api_integration/tests/index.ts
+++ b/x-pack/test/apm_api_integration/tests/index.ts
@@ -84,6 +84,7 @@ export default function apmApiIntegrationTests(providerContext: FtrProviderConte
 
     describe('services/annotations', function () {
       loadTestFile(require.resolve('./services/annotations'));
+      loadTestFile(require.resolve('./services/derived_annotations'));
     });
 
     describe('services/service_details', function () {
diff --git a/x-pack/test/apm_api_integration/tests/services/derived_annotations.ts b/x-pack/test/apm_api_integration/tests/services/derived_annotations.ts
new file mode 100644
index 0000000000000..2ff4eb7e73306
--- /dev/null
+++ b/x-pack/test/apm_api_integration/tests/services/derived_annotations.ts
@@ -0,0 +1,181 @@
+/*
+ * Copyright Elasticsearch B.V. and/or licensed to Elasticsearch B.V. under one
+ * or more contributor license agreements. Licensed under the Elastic License
+ * 2.0; you may not use this file except in compliance with the Elastic License
+ * 2.0.
+ */
+
+import expect from '@kbn/expect';
+import { APIReturnType } from '../../../../plugins/apm/public/services/rest/createCallApmApi';
+import { createApmApiSupertest } from '../../common/apm_api_supertest';
+import { FtrProviderContext } from '../../common/ftr_provider_context';
+import { registry } from '../../common/registry';
+
+export default function annotationApiTests({ getService }: FtrProviderContext) {
+  const supertestRead = createApmApiSupertest(getService('supertestAsApmReadUser'));
+  const es = getService('es');
+
+  const dates = [
+    new Date('2021-02-01T00:00:00.000Z'),
+    new Date('2021-02-01T01:00:00.000Z'),
+    new Date('2021-02-01T02:00:00.000Z'),
+    new Date('2021-02-01T03:00:00.000Z'),
+  ];
+
+  const indexName = 'apm-8.0.0-transaction';
+
+  registry.when(
+    'Derived deployment annotations with a basic license',
+    { config: 'basic', archives: [] },
+    () => {
+      describe('when there are multiple service versions', () => {
+        let response: APIReturnType<'GET /api/apm/services/{serviceName}/annotation/search'>;
+
+        before(async () => {
+          const { body: indexExists } = await es.indices.exists({ index: indexName });
+          if (indexExists) {
+            await es.indices.delete({
+              index: indexName,
+            });
+          }
+
+          await es.indices.create({
+            index: indexName,
+            body: {
+              mappings: {
+                properties: {
+                  service: {
+                    properties: {
+                      name: {
+                        type: 'keyword',
+                      },
+                      version: {
+                        type: 'keyword',
+                      },
+                      environment: {
+                        type: 'keyword',
+                      },
+                    },
+                  },
+                  transaction: {
+                    properties: {
+                      type: {
+                        type: 'keyword',
+                      },
+                      duration: {
+                        type: 'long',
+                      },
+                    },
+                  },
+                  observer: {
+                    properties: {
+                      version_major: {
+                        type: 'byte',
+                      },
+                    },
+                  },
+                  processor: {
+                    properties: {
+                      event: {
+                        type: 'keyword',
+                      },
+                    },
+                  },
+                },
+              },
+            },
+          });
+
+          const docs = dates.flatMap((date, index) => {
+            const baseAnnotation = {
+              transaction: {
+                type: 'request',
+                duration: 1000000,
+              },
+
+              service: {
+                name: 'opbeans-java',
+                environment: 'production',
+                version: index + 1,
+              },
+              observer: {
+                version_major: 8,
+              },
+              processor: {
+                event: 'transaction',
+              },
+            };
+            return [
+              {
+                ...baseAnnotation,
+                '@timestamp': date.toISOString(),
+              },
+              {
+                ...baseAnnotation,
+                '@timestamp': new Date(date.getTime() + 30000),
+              },
+              {
+                ...baseAnnotation,
+                '@timestamp': new Date(date.getTime() + 60000),
+              },
+            ];
+          });
+
+          await es.bulk({
+            index: indexName,
+            body: docs.flatMap((doc) => [{ index: {} }, doc]),
+            refresh: true,
+          });
+
+          response = (
+            await supertestRead({
+              endpoint: 'GET /api/apm/services/{serviceName}/annotation/search',
+              params: {
+                path: {
+                  serviceName: 'opbeans-java',
+                },
+                query: {
+                  start: dates[1].toISOString(),
+                  end: dates[2].toISOString(),
+                  environment: 'production',
+                },
+              },
+            })
+          ).body;
+        });
+
+        it('annotations are displayed for the service versions in the given time range', async () => {
+          expect(response.annotations.length).to.be(2);
+          expect(response.annotations[0]['@timestamp']).to.be(dates[1].getTime());
+          expect(response.annotations[1]['@timestamp']).to.be(dates[2].getTime());
+
+          expectSnapshot(response.annotations[0]).toMatchInline(`
+            Object {
+              "@timestamp": 1612141200000,
+              "id": "2",
+              "text": "2",
+              "type": "version",
+            }
+          `);
+        });
+
+        it('annotations are not displayed for the service versions outside of the given time range', () => {
+          expect(
+            response.annotations.some((annotation) => {
+              return (
+                annotation['@timestamp'] !== dates[0].getTime() &&
+                annotation['@timestamp'] !== dates[2].getTime()
+              );
+            })
+          );
+        });
+
+        after(async () => {
+          await es.indices.delete({
+            index: indexName,
+          });
+        });
+      });
+    }
+  );
+}