diff --git a/CHANGELOG.md b/CHANGELOG.md
index 52bc006893..a6f5600bb9 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -55,6 +55,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
   ([#4141](https://github.com/open-telemetry/opentelemetry-python-contrib/pull/4141))
 - `opentelemetry-instrumentation-pyramid`: pass request attributes at span creation
   ([#4139](https://github.com/open-telemetry/opentelemetry-python-contrib/pull/4139))
+- `opentelemetry-instrumentation-psycopg2`: Add parameter `capture_parameters` to instrumentor.
+  ([#4212](https://github.com/open-telemetry/opentelemetry-python-contrib/pull/4212))
 
 ### Fixed
 
diff --git a/instrumentation/opentelemetry-instrumentation-psycopg2/src/opentelemetry/instrumentation/psycopg2/__init__.py b/instrumentation/opentelemetry-instrumentation-psycopg2/src/opentelemetry/instrumentation/psycopg2/__init__.py
index f5e113a47e..f04047e925 100644
--- a/instrumentation/opentelemetry-instrumentation-psycopg2/src/opentelemetry/instrumentation/psycopg2/__init__.py
+++ b/instrumentation/opentelemetry-instrumentation-psycopg2/src/opentelemetry/instrumentation/psycopg2/__init__.py
@@ -136,6 +136,19 @@
 Warning:
     Capture of sqlcomment in ``db.statement`` may have high cardinality without platform normalization. See `Semantic Conventions for database spans <https://opentelemetry.io/docs/specs/semconv/database/database-spans/#generating-a-summary-of-the-query-text>`_ for more information.
 
+Capture parameters
+******************
+By default, only statements are captured, without the associated query parameters.
+To capture query parameters in the span attribute `db.statement.parameters`, enable `capture_parameters`.
+
+.. code:: python
+
+    from opentelemetry.instrumentation.psycopg2 import Psycopg2Instrumentor
+
+    Psycopg2Instrumentor().instrument(
+        capture_parameters=True,
+    )
+
 API
 ---
 """
@@ -202,6 +215,7 @@ def _instrument(self, **kwargs):
         enable_attribute_commenter = kwargs.get(
             "enable_attribute_commenter", False
         )
+        capture_parameters = kwargs.get("capture_parameters", False)
         dbapi.wrap_connect(
             __name__,
             psycopg2,
@@ -214,6 +228,7 @@ def _instrument(self, **kwargs):
             enable_commenter=enable_sqlcommenter,
             commenter_options=commenter_options,
             enable_attribute_commenter=enable_attribute_commenter,
+            capture_parameters=capture_parameters,
         )
 
     def _uninstrument(self, **kwargs):
diff --git a/instrumentation/opentelemetry-instrumentation-psycopg2/tests/test_psycopg2_instrumentation.py b/instrumentation/opentelemetry-instrumentation-psycopg2/tests/test_psycopg2_instrumentation.py
index 93a17d9ed1..1847bb5106 100644
--- a/instrumentation/opentelemetry-instrumentation-psycopg2/tests/test_psycopg2_instrumentation.py
+++ b/instrumentation/opentelemetry-instrumentation-psycopg2/tests/test_psycopg2_instrumentation.py
@@ -15,14 +15,21 @@
 from unittest import TestCase
 from unittest.mock import Mock, call, patch
 
+import psycopg2
+
 from opentelemetry.instrumentation.auto_instrumentation._load import (
     _load_instrumentors,
 )
-from opentelemetry.instrumentation.psycopg2 import Psycopg2Instrumentor
+from opentelemetry.instrumentation.psycopg2 import (
+    DatabaseApiIntegration,
+    Psycopg2Instrumentor,
+)
 from opentelemetry.instrumentation.psycopg2.package import (
     _instruments_psycopg2,
     _instruments_psycopg2_binary,
 )
+from opentelemetry.instrumentation.psycopg2.version import __version__
+from opentelemetry.test.test_base import TestBase
 
 
 class TestPsycopg2InstrumentationDependencies(TestCase):
@@ -160,3 +167,41 @@ def _instrumentation_loaded_successfully_call():
         mock_logger.debug.assert_has_calls(
             [_instrumentation_loaded_successfully_call()]
         )
+
+
+@patch("opentelemetry.instrumentation.psycopg2.dbapi")
+class TestPsycopg2InstrumentorParameters(TestBase):
+    def tearDown(self):
+        super().tearDown()
+        with self.disable_logging():
+            Psycopg2Instrumentor().uninstrument()
+
+    def test_instrument_defaults(self, mock_dbapi):
+        Psycopg2Instrumentor().instrument()
+
+        mock_dbapi.wrap_connect.assert_called_once_with(
+            "opentelemetry.instrumentation.psycopg2",
+            psycopg2,
+            "connect",
+            "postgresql",
+            {
+                "database": "info.dbname",
+                "port": "info.port",
+                "host": "info.host",
+                "user": "info.user",
+            },
+            version=__version__,
+            tracer_provider=None,
+            db_api_integration_factory=DatabaseApiIntegration,
+            enable_commenter=False,
+            commenter_options={},
+            enable_attribute_commenter=False,
+            capture_parameters=False,
+        )
+
+    def test_instrument_capture_parameters(self, mock_dbapi):
+        Psycopg2Instrumentor().instrument(capture_parameters=True)
+
+        self.assertTrue(
+            mock_dbapi.wrap_connect.call_args.kwargs["capture_parameters"]
+        )