diff --git a/processor/spanprocessor/README.md b/processor/spanprocessor/README.md
index 6954d29c7feb..de2aa8986242 100644
--- a/processor/spanprocessor/README.md
+++ b/processor/spanprocessor/README.md
@@ -2,14 +2,15 @@
 
 Supported pipeline types: traces
 
-The span processor modifies the span name based on its attributes or extract span attributes from the span name. Please refer to
-[config.go](./config.go) for the config spec.
+The span processor modifies the span name based on its attributes or extract span attributes from the span name. It also allows
+to change span status. Please refer to [config.go](./config.go) for the config spec.
 
 It optionally supports the ability to [include/exclude spans](../README.md#includeexclude-spans).
 
 The following actions are supported:
 
 - `name`: Modify the name of attributes within a span
+- `status`: Modify the status of the span
 
 ### Name a span
 
@@ -96,5 +97,28 @@ span/to_attributes:
         - ^\/api\/v1\/document\/(?P<documentId>.*)\/update$
 ```
 
+### Set status for span
+
+The following setting is required:
+
+- `code`: Represents span status. One of the following values "Unset", "Error", "Ok".
+
+The following setting is allowed only for code "Error":
+- `description`
+
+Example:
+
+```yaml
+# Set status allows to set specific status for a given span. Possible values are
+# Ok, Error and Unset as per
+# https://github.com/open-telemetry/opentelemetry-specification/blob/main/specification/trace/api.md#set-status
+# The description field allows to set a human-readable message for errors.
+span/set_status:
+  status:
+    code: Error
+    description: "some error description"
+```
+
+
 Refer to [config.yaml](./testdata/config.yaml) for detailed
 examples on using the processor.
diff --git a/processor/spanprocessor/config.go b/processor/spanprocessor/config.go
index d6f386576a8e..ce47c51dc83a 100644
--- a/processor/spanprocessor/config.go
+++ b/processor/spanprocessor/config.go
@@ -35,6 +35,9 @@ type Config struct {
 	// Note: The field name is `Rename` to avoid collision with the Name() method
 	// from config.NamedEntity
 	Rename Name `mapstructure:"name"`
+
+	// SetStatus specifies status which should be set for this span.
+	SetStatus *Status `mapstructure:"status"`
 }
 
 // Name specifies the attributes to use to re-name a span.
@@ -80,6 +83,15 @@ type ToAttributes struct {
 	BreakAfterMatch bool `mapstructure:"break_after_match"`
 }
 
+type Status struct {
+	// Code is one of three values "Ok" or "Error" or "Unset". Please check:
+	// https://github.com/open-telemetry/opentelemetry-specification/blob/main/specification/trace/api.md#set-status
+	Code string `mapstructure:"code"`
+
+	// Description is an optional field documenting Error statuses.
+	Description string `mapstructure:"description"`
+}
+
 var _ config.Processor = (*Config)(nil)
 
 // Validate checks if the processor configuration is valid
diff --git a/processor/spanprocessor/config_test.go b/processor/spanprocessor/config_test.go
index 17e678f7d395..8bfb387e5881 100644
--- a/processor/spanprocessor/config_test.go
+++ b/processor/spanprocessor/config_test.go
@@ -87,6 +87,31 @@ func TestLoadConfig(t *testing.T) {
 			},
 		},
 	})
+
+	// Set name
+	p4 := cfg.Processors[config.NewComponentIDWithName("span", "set_status_err")]
+	assert.Equal(t, p4, &Config{
+		ProcessorSettings: config.NewProcessorSettings(config.NewComponentIDWithName("span", "set_status_err")),
+		SetStatus: &Status{
+			Code:        "Error",
+			Description: "some additional error description",
+		},
+	})
+
+	p5 := cfg.Processors[config.NewComponentIDWithName("span", "set_status_ok")]
+	assert.Equal(t, p5, &Config{
+		ProcessorSettings: config.NewProcessorSettings(config.NewComponentIDWithName("span", "set_status_ok")),
+		MatchConfig: filterconfig.MatchConfig{
+			Include: &filterconfig.MatchProperties{
+				Attributes: []filterconfig.Attribute{
+					{Key: "http.status_code", Value: 400},
+				},
+			},
+		},
+		SetStatus: &Status{
+			Code: "Ok",
+		},
+	})
 }
 
 func createMatchConfig(matchType filterset.MatchType) *filterset.Config {
diff --git a/processor/spanprocessor/factory.go b/processor/spanprocessor/factory.go
index 2abbfd6a32ae..7c616da02850 100644
--- a/processor/spanprocessor/factory.go
+++ b/processor/spanprocessor/factory.go
@@ -29,13 +29,24 @@ const (
 	typeStr = "span"
 )
 
+const (
+	// status represents span status
+	statusCodeUnset = "Unset"
+	statusCodeError = "Error"
+	statusCodeOk    = "Ok"
+)
+
 var processorCapabilities = consumer.Capabilities{MutatesData: true}
 
 // errMissingRequiredField is returned when a required field in the config
 // is not specified.
 // TODO https://github.com/open-telemetry/opentelemetry-collector/issues/215
 //	Move this to the error package that allows for span name and field to be specified.
-var errMissingRequiredField = errors.New("error creating \"span\" processor: either \"from_attributes\" or \"to_attributes\" must be specified in \"name:\"")
+var (
+	errMissingRequiredField       = errors.New("error creating \"span\" processor: either \"from_attributes\" or \"to_attributes\" must be specified in \"name:\" or \"setStatus\" must be specified")
+	errIncorrectStatusCode        = errors.New("error creating \"span\" processor: \"status\" must have specified \"code\" as \"Ok\" or \"Error\" or \"Unset\"")
+	errIncorrectStatusDescription = errors.New("error creating \"span\" processor: \"description\" can be specified only for \"code\" \"Error\"")
+)
 
 // NewFactory returns a new factory for the Span processor.
 func NewFactory() component.ProcessorFactory {
@@ -62,10 +73,20 @@ func createTracesProcessor(
 	// processor to be valid. If not set and not enforced, the processor would do no work.
 	oCfg := cfg.(*Config)
 	if len(oCfg.Rename.FromAttributes) == 0 &&
-		(oCfg.Rename.ToAttributes == nil || len(oCfg.Rename.ToAttributes.Rules) == 0) {
+		(oCfg.Rename.ToAttributes == nil || len(oCfg.Rename.ToAttributes.Rules) == 0) &&
+		oCfg.SetStatus == nil {
 		return nil, errMissingRequiredField
 	}
 
+	if oCfg.SetStatus != nil {
+		if oCfg.SetStatus.Code != statusCodeUnset && oCfg.SetStatus.Code != statusCodeError && oCfg.SetStatus.Code != statusCodeOk {
+			return nil, errIncorrectStatusCode
+		}
+		if len(oCfg.SetStatus.Description) > 0 && oCfg.SetStatus.Code != statusCodeError {
+			return nil, errIncorrectStatusDescription
+		}
+	}
+
 	sp, err := newSpanProcessor(*oCfg)
 	if err != nil {
 		return nil, err
diff --git a/processor/spanprocessor/span.go b/processor/spanprocessor/span.go
index 7cc71619b44e..950d8147366c 100644
--- a/processor/spanprocessor/span.go
+++ b/processor/spanprocessor/span.go
@@ -97,6 +97,7 @@ func (sp *spanProcessor) processTraces(_ context.Context, td pdata.Traces) (pdat
 				}
 				sp.processFromAttributes(s)
 				sp.processToAttributes(s)
+				sp.processUpdateStatus(s)
 			}
 		}
 	}
@@ -220,3 +221,19 @@ func (sp *spanProcessor) processToAttributes(span pdata.Span) {
 		}
 	}
 }
+
+func (sp *spanProcessor) processUpdateStatus(span pdata.Span) {
+	cfg := sp.config.SetStatus
+	if cfg != nil {
+		if cfg.Code == statusCodeOk {
+			span.Status().SetCode(pdata.StatusCodeOk)
+			span.Status().SetMessage("")
+		} else if cfg.Code == statusCodeError {
+			span.Status().SetCode(pdata.StatusCodeError)
+			span.Status().SetMessage(cfg.Description)
+		} else if cfg.Code == statusCodeUnset {
+			span.Status().SetCode(pdata.StatusCodeUnset)
+			span.Status().SetMessage("")
+		}
+	}
+}
diff --git a/processor/spanprocessor/span_test.go b/processor/spanprocessor/span_test.go
index db850843d7ff..72f4f1cda2b5 100644
--- a/processor/spanprocessor/span_test.go
+++ b/processor/spanprocessor/span_test.go
@@ -593,3 +593,84 @@ func TestSpanProcessor_skipSpan(t *testing.T) {
 		runIndividualTestCase(t, tc, tp)
 	}
 }
+
+func generateTraceDataSetStatus(code pdata.StatusCode, description string, attrs map[string]pdata.AttributeValue) pdata.Traces {
+	td := pdata.NewTraces()
+	rs := td.ResourceSpans().AppendEmpty()
+	span := rs.InstrumentationLibrarySpans().AppendEmpty().Spans().AppendEmpty()
+	span.Status().SetCode(code)
+	span.Status().SetMessage(description)
+	span.Attributes().InitFromMap(attrs).Sort()
+	return td
+}
+
+func TestSpanProcessor_setStatusCode(t *testing.T) {
+	factory := NewFactory()
+	cfg := factory.CreateDefaultConfig()
+	oCfg := cfg.(*Config)
+	oCfg.SetStatus = &Status{
+		Code:        "Error",
+		Description: "Set custom error message",
+	}
+	tp, err := factory.CreateTracesProcessor(context.Background(), componenttest.NewNopProcessorCreateSettings(), oCfg, consumertest.NewNop())
+	require.Nil(t, err)
+	require.NotNil(t, tp)
+
+	td := generateTraceDataSetStatus(pdata.StatusCodeUnset, "foobar", nil)
+	td.InternalRep()
+
+	assert.NoError(t, tp.ConsumeTraces(context.Background(), td))
+
+	assert.EqualValues(t, generateTraceDataSetStatus(pdata.StatusCodeError, "Set custom error message", nil), td)
+}
+
+func TestSpanProcessor_setStatusCodeConditionally(t *testing.T) {
+	factory := NewFactory()
+	cfg := factory.CreateDefaultConfig()
+	oCfg := cfg.(*Config)
+	oCfg.SetStatus = &Status{
+		Code:        "Error",
+		Description: "custom error message",
+	}
+	// This test numer two include rule for applying rule only for status code 400
+	oCfg.Include = &filterconfig.MatchProperties{
+		Attributes: []filterconfig.Attribute{
+			{Key: "http.status_code", Value: 400},
+		},
+	}
+	tp, err := factory.CreateTracesProcessor(context.Background(), componenttest.NewNopProcessorCreateSettings(), oCfg, consumertest.NewNop())
+	require.Nil(t, err)
+	require.NotNil(t, tp)
+
+	testCases := []struct {
+		inputAttributes         map[string]pdata.AttributeValue
+		inputStatusCode         pdata.StatusCode
+		outputStatusCode        pdata.StatusCode
+		outputStatusDescription string
+	}{
+		{
+			// without attribiutes - should not apply rule and leave status code as it is
+			inputStatusCode:  pdata.StatusCodeOk,
+			outputStatusCode: pdata.StatusCodeOk,
+		},
+		{
+			inputAttributes: map[string]pdata.AttributeValue{
+				"http.status_code": pdata.NewAttributeValueInt(400),
+			},
+			inputStatusCode:         pdata.StatusCodeOk,
+			outputStatusCode:        pdata.StatusCodeError,
+			outputStatusDescription: "custom error message",
+		},
+	}
+
+	for _, tc := range testCases {
+		t.Run("set-status-test", func(t *testing.T) {
+			td := generateTraceDataSetStatus(tc.inputStatusCode, "", tc.inputAttributes)
+			td.InternalRep()
+
+			assert.NoError(t, tp.ConsumeTraces(context.Background(), td))
+
+			assert.EqualValues(t, generateTraceDataSetStatus(tc.outputStatusCode, tc.outputStatusDescription, tc.inputAttributes), td)
+		})
+	}
+}
diff --git a/processor/spanprocessor/testdata/config.yaml b/processor/spanprocessor/testdata/config.yaml
index 59884cd2d3dd..1c900520d32e 100644
--- a/processor/spanprocessor/testdata/config.yaml
+++ b/processor/spanprocessor/testdata/config.yaml
@@ -84,6 +84,24 @@ processors:
         rules:
           - "(?P<operation_website>.*?)$"
 
+  # This example changes status of a span to error and sets description.
+  # Possible values for code are: "Ok", "Error" or "Unset".
+  # Description is an optional field used for documenting Error statuses.
+  span/set_status_err:
+    status:
+      code: "Error"
+      description: "some additional error description"
+
+  # However you may want to set status conditionally. Example below sets
+  # status to success only when attribute http.status_code is equal to 400
+  span/set_status_ok:
+    include:
+      attributes:
+        - Key: http.status_code
+          Value: 400
+    status:
+      code: "Ok"
+
 exporters:
   nop: