diff --git a/src/Aspire.Hosting/DistributedApplicationBuilder.cs b/src/Aspire.Hosting/DistributedApplicationBuilder.cs
index cb424ba7cb8..0c338160625 100644
--- a/src/Aspire.Hosting/DistributedApplicationBuilder.cs
+++ b/src/Aspire.Hosting/DistributedApplicationBuilder.cs
@@ -80,12 +80,13 @@ public DistributedApplicationBuilder(DistributedApplicationOptions options)
 
         AppHostDirectory = options.ProjectDirectory ?? _innerBuilder.Environment.ContentRootPath;
 
+        // Set configuration
+        ConfigurePublishingOptions(options);
         _innerBuilder.Configuration.AddInMemoryCollection(new Dictionary<string, string?>
         {
             // Make the app host directory available to the application via configuration
             ["AppHost:Directory"] = AppHostDirectory
         });
-
         if (!IsOtlpApiKeyAuthDisabled(_innerBuilder.Configuration))
         {
             // Set a random API key for the OTLP exporter.
@@ -97,7 +98,6 @@ public DistributedApplicationBuilder(DistributedApplicationOptions options)
                 }
             );
         }
-
         if (!options.DisableDashboard)
         {
             // Set a random API key for the OTLP exporter.
@@ -136,7 +136,6 @@ public DistributedApplicationBuilder(DistributedApplicationOptions options)
         _innerBuilder.Services.AddSingleton<IKubernetesService, KubernetesService>();
 
         // Publishing support
-        ConfigurePublishingOptions(options);
         _innerBuilder.Services.AddLifecycleHook<Http2TransportMutationHook>();
         _innerBuilder.Services.AddKeyedSingleton<IDistributedApplicationPublisher, ManifestPublisher>("manifest");
         _innerBuilder.Services.AddKeyedSingleton<IDistributedApplicationPublisher, DcpPublisher>("dcp");
diff --git a/tests/Aspire.Hosting.Tests/ProjectResourceTests.cs b/tests/Aspire.Hosting.Tests/ProjectResourceTests.cs
index 29d0e2ba3c1..38baad1cad0 100644
--- a/tests/Aspire.Hosting.Tests/ProjectResourceTests.cs
+++ b/tests/Aspire.Hosting.Tests/ProjectResourceTests.cs
@@ -5,7 +5,6 @@
 using Aspire.Hosting.Tests.Helpers;
 using Aspire.Hosting.Tests.Utils;
 using Aspire.Hosting.Utils;
-using Microsoft.Extensions.Configuration;
 using Microsoft.Extensions.DependencyInjection;
 using Xunit;
 
@@ -91,11 +90,7 @@ public async Task AddProjectAddsEnvironmentVariablesAndServiceMetadata()
     [InlineData(null, true)]
     public async Task AddProjectAddsEnvironmentVariablesAndServiceMetadata_OtlpAuthDisabledSetting(string? value, bool hasHeader)
     {
-        var appBuilder = CreateBuilder();
-        appBuilder.Configuration.AddInMemoryCollection(new Dictionary<string, string?>
-        {
-            ["DOTNET_DISABLE_OTLP_API_KEY_AUTH"] = value
-        });
+        var appBuilder = CreateBuilder(args: [$"DOTNET_DISABLE_OTLP_API_KEY_AUTH={value}"]);
 
         appBuilder.AddProject<TestProject>("projectName", launchProfileName: null);
         using var app = appBuilder.Build();
@@ -108,7 +103,14 @@ public async Task AddProjectAddsEnvironmentVariablesAndServiceMetadata_OtlpAuthD
 
         var config = await EnvironmentVariableEvaluator.GetEnvironmentVariablesAsync(resource);
 
-        Assert.Equal(hasHeader, config.ContainsKey("OTEL_EXPORTER_OTLP_HEADERS"));
+        if (hasHeader)
+        {
+            Assert.True(config.ContainsKey("OTEL_EXPORTER_OTLP_HEADERS"), "Config should have 'OTEL_EXPORTER_OTLP_HEADERS' header and doesn't.");
+        }
+        else
+        {
+            Assert.False(config.ContainsKey("OTEL_EXPORTER_OTLP_HEADERS"), "Config shouldn't have 'OTEL_EXPORTER_OTLP_HEADERS' header and does.");
+        }
     }
 
     [Fact]
@@ -282,10 +284,18 @@ public async Task VerifyManifest(bool disableForwardedHeaders)
         Assert.Equal(expectedManifest, manifest.ToString());
     }
 
-    private static IDistributedApplicationBuilder CreateBuilder(DistributedApplicationOperation operation = DistributedApplicationOperation.Publish)
+    private static IDistributedApplicationBuilder CreateBuilder(string[]? args = null, DistributedApplicationOperation operation = DistributedApplicationOperation.Publish)
     {
-        var args = operation == DistributedApplicationOperation.Publish ? new[] { "--publisher", "manifest" } : Array.Empty<string>();
-        var appBuilder = DistributedApplication.CreateBuilder(args);
+        var resovledArgs = new List<string>();
+        if (args != null)
+        {
+            resovledArgs.AddRange(args);
+        }
+        if (operation == DistributedApplicationOperation.Publish)
+        {
+            resovledArgs.AddRange(["--publisher", "manifest"]);
+        }
+        var appBuilder = DistributedApplication.CreateBuilder(resovledArgs.ToArray());
         // Block DCP from actually starting anything up as we don't need it for this test.
         appBuilder.Services.AddKeyedSingleton<IDistributedApplicationPublisher, NoopPublisher>("manifest");