diff --git a/langfuse/client.py b/langfuse/client.py
index ee5753dd..bfe3887b 100644
--- a/langfuse/client.py
+++ b/langfuse/client.py
@@ -1,3 +1,4 @@
+from contextlib import contextmanager
 import datetime as dt
 import logging
 import os
@@ -2557,6 +2558,85 @@ def get_langchain_handler(
 
         return trace.get_langchain_handler(update_parent=True)
 
+    @contextmanager
+    def observe_llama_index(
+        self,
+        *,
+        run_name: str,
+        run_description: Optional[str] = None,
+        run_metadata: Optional[Any] = None,
+        llama_index_integration_constructor_kwargs: Optional[Dict[str, Any]] = {},
+    ):
+        """Context manager for observing LlamaIndex operations linked to this dataset item.
+
+        This method sets up a LlamaIndex callback handler that integrates with Langfuse, allowing detailed logging
+        and tracing of LlamaIndex operations within the context of a specific dataset run. It ensures that all
+        operations performed within the context are linked to the appropriate dataset item and run in Langfuse.
+
+        Args:
+            run_name (str): The name of the dataset run.
+            run_description (Optional[str]): Description of the dataset run. Defaults to None.
+            run_metadata (Optional[Any]): Additional metadata for the dataset run. Defaults to None.
+            llama_index_integration_constructor_kwargs (Optional[Dict[str, Any]]): Keyword arguments to pass
+                to the LlamaIndex integration constructor. Defaults to an empty dictionary.
+
+        Yields:
+            LlamaIndexCallbackHandler: The callback handler for LlamaIndex operations.
+
+        Example:
+            ```python
+            dataset_item = dataset.items[0]
+
+            with dataset_item.observe_llama_index(run_name="example-run", run_description="Example LlamaIndex run") as handler:
+                # Perform LlamaIndex operations here
+                some_llama_index_operation()
+            ```
+
+        Raises:
+            ImportError: If required modules for LlamaIndex integration are not available.
+        """
+        metadata = {
+            "dataset_item_id": self.id,
+            "run_name": run_name,
+            "dataset_id": self.dataset_id,
+        }
+        trace = self.langfuse.trace(name="dataset-run", metadata=metadata)
+        self.link(
+            trace, run_name, run_metadata=run_metadata, run_description=run_description
+        )
+
+        try:
+            import llama_index.core
+            from llama_index.core import Settings
+            from llama_index.core.callbacks import CallbackManager
+
+            from langfuse.llama_index import LlamaIndexCallbackHandler
+
+            callback_handler = LlamaIndexCallbackHandler(
+                **llama_index_integration_constructor_kwargs,
+            )
+            callback_handler.set_root(trace, update_root=True)
+
+            # Temporarily set the global handler to the new handler if previous handler is a LlamaIndexCallbackHandler
+            # LlamaIndex does not adding two errors of same type, so if global handler is already a LlamaIndexCallbackHandler, we need to remove it
+            prev_global_handler = llama_index.core.global_handler
+            prev_callback_manager = Settings.callback_manager
+
+            if isinstance(prev_global_handler, LlamaIndexCallbackHandler):
+                llama_index.core.global_handler = None
+
+            Settings.callback_manager = CallbackManager([callback_handler])
+
+        except Exception as e:
+            self.log.exception(e)
+
+        try:
+            yield callback_handler
+        finally:
+            # Reset the handlers
+            Settings.callback_manager = prev_callback_manager
+            llama_index.core.global_handler = prev_global_handler
+
     def get_llama_index_handler(
         self,
         *,
diff --git a/tests/test_datasets.py b/tests/test_datasets.py
index 46cc0925..2c2b8ce3 100644
--- a/tests/test_datasets.py
+++ b/tests/test_datasets.py
@@ -344,13 +344,13 @@ def test_llama_index_dataset():
     dataset_item_id = None
 
     for item in dataset.items:
-        handler = item.get_llama_index_handler(run_name=run_name)
-        dataset_item_id = item.id
+        with item.observe_llama_index(run_name=run_name) as handler:
+            dataset_item_id = item.id
 
-        index = get_llama_index_index(handler)
-        index.as_query_engine().query(
-            "What did the speaker achieve in the past twelve months?"
-        )
+            index = get_llama_index_index(handler)
+            index.as_query_engine().query(
+                "What did the speaker achieve in the past twelve months?"
+            )
 
     langfuse.flush()
     run = langfuse.get_dataset_run(dataset_name, run_name)