diff --git a/api/all/src/main/java/io/opentelemetry/api/baggage/propagation/Element.java b/api/all/src/main/java/io/opentelemetry/api/baggage/propagation/Element.java
index f6bdaec9eb3..cc1791e80f0 100644
--- a/api/all/src/main/java/io/opentelemetry/api/baggage/propagation/Element.java
+++ b/api/all/src/main/java/io/opentelemetry/api/baggage/propagation/Element.java
@@ -31,6 +31,8 @@ class Element {
   }
 
   private final BitSet excluded;
+  private final boolean allowEmpty;
+  private boolean seenWhitespace;
 
   private boolean leadingSpace;
   private boolean readingValue;
@@ -40,11 +42,11 @@ class Element {
   @Nullable private String value;
 
   static Element createKeyElement() {
-    return new Element(EXCLUDED_KEY_CHARS);
+    return new Element(EXCLUDED_KEY_CHARS, /* allowEmpty= */ false);
   }
 
   static Element createValueElement() {
-    return new Element(EXCLUDED_VALUE_CHARS);
+    return new Element(EXCLUDED_VALUE_CHARS, /* allowEmpty= */ true);
   }
 
   /**
@@ -52,8 +54,9 @@ static Element createValueElement() {
    *
    * @param excluded characters that are not allowed for this type of an element
    */
-  private Element(BitSet excluded) {
+  private Element(BitSet excluded, boolean allowEmpty) {
     this.excluded = excluded;
+    this.allowEmpty = allowEmpty;
     reset(0);
   }
 
@@ -68,6 +71,7 @@ void reset(int start) {
     readingValue = false;
     trailingSpace = false;
     value = null;
+    seenWhitespace = false;
   }
 
   boolean tryTerminating(int index, String header) {
@@ -77,6 +81,9 @@ boolean tryTerminating(int index, String header) {
     if (this.trailingSpace) {
       setValue(header);
       return true;
+    } else if (allowEmpty && !seenWhitespace) {
+      this.value = "";
+      return true;
     } else {
       // leading spaces - no content, invalid
       return false;
@@ -110,6 +117,8 @@ private static boolean isWhitespace(char character) {
   private boolean tryNextWhitespace(int index) {
     if (readingValue) {
       markEnd(index);
+    } else {
+      seenWhitespace = true;
     }
     return true;
   }
diff --git a/api/all/src/test/java/io/opentelemetry/api/baggage/propagation/W3CBaggagePropagatorTest.java b/api/all/src/test/java/io/opentelemetry/api/baggage/propagation/W3CBaggagePropagatorTest.java
index 93f4e25f1a6..c030a258446 100644
--- a/api/all/src/test/java/io/opentelemetry/api/baggage/propagation/W3CBaggagePropagatorTest.java
+++ b/api/all/src/test/java/io/opentelemetry/api/baggage/propagation/W3CBaggagePropagatorTest.java
@@ -208,7 +208,8 @@ void extract_value_empty() {
     Context result =
         propagator.extract(Context.root(), ImmutableMap.of("baggage", "key1="), getter);
 
-    assertThat(Baggage.fromContext(result)).isEqualTo(Baggage.empty());
+    Baggage expectedBaggage = Baggage.builder().put("key1", "").build();
+    assertThat(Baggage.fromContext(result)).isEqualTo(expectedBaggage);
   }
 
   @Test
@@ -219,7 +220,9 @@ void extract_value_empty_withMetadata() {
         propagator.extract(
             Context.root(), ImmutableMap.of("baggage", "key1=;metakey=metaval"), getter);
 
-    assertThat(Baggage.fromContext(result)).isEqualTo(Baggage.empty());
+    Baggage expectedBaggage =
+        Baggage.builder().put("key1", "", BaggageEntryMetadata.create("metakey=metaval")).build();
+    assertThat(Baggage.fromContext(result)).isEqualTo(expectedBaggage);
   }
 
   @Test