diff --git a/crates/observation-tools-client/src/client.rs b/crates/observation-tools-client/src/client.rs
index 38ddbb2..55686f6 100644
--- a/crates/observation-tools-client/src/client.rs
+++ b/crates/observation-tools-client/src/client.rs
@@ -4,13 +4,13 @@ use crate::error::Result;
 use crate::execution::BeginExecution;
 use crate::execution::ExecutionHandle;
 use crate::observation_handle::ObservationHandle;
-use crate::ObservationWithPayload;
 use async_channel;
 use log::error;
 use log::info;
 use log::trace;
 use napi_derive::napi;
 use observation_tools_shared::models::Execution;
+use observation_tools_shared::Observation;
 // Re-export constants from shared crate for convenience
 pub use observation_tools_shared::BATCH_SIZE;
 pub use observation_tools_shared::BLOB_THRESHOLD_BYTES;
@@ -31,11 +31,18 @@ pub(crate) enum UploaderMessage {
     handle: ExecutionHandle,
     uploaded_tx: tokio::sync::watch::Sender<ExecutionUploadResult>,
   },
-  Observations {
-    observations: Vec<ObservationWithPayload>,
+  Observation {
+    observation: Observation,
     handle: ObservationHandle,
     uploaded_tx: tokio::sync::watch::Sender<ObservationUploadResult>,
   },
+  Payload {
+    observation_id: observation_tools_shared::ObservationId,
+    execution_id: observation_tools_shared::models::ExecutionId,
+    payload_id: observation_tools_shared::PayloadId,
+    name: String,
+    payload: observation_tools_shared::Payload,
+  },
   Flush,
   Shutdown,
 }
@@ -48,15 +55,26 @@ impl std::fmt::Debug for UploaderMessage {
         .debug_struct("Execution")
         .field("execution", execution)
         .finish(),
-      Self::Observations {
-        observations,
+      Self::Observation {
+        observation,
         handle,
         ..
       } => f
-        .debug_struct("Observations")
-        .field("observations", observations)
+        .debug_struct("Observation")
+        .field("observation", observation)
         .field("handle", handle)
         .finish(),
+      Self::Payload {
+        observation_id,
+        payload_id,
+        name,
+        ..
+      } => f
+        .debug_struct("Payload")
+        .field("observation_id", observation_id)
+        .field("payload_id", payload_id)
+        .field("name", name)
+        .finish(),
       Self::Flush => write!(f, "Flush"),
       Self::Shutdown => write!(f, "Shutdown"),
     }
@@ -279,6 +297,18 @@ impl ClientBuilder {
   }
 }
 
+/// Data for a payload ready to be uploaded
+#[derive(Debug)]
+pub(crate) struct PayloadUploadData {
+  pub(crate) observation_id: observation_tools_shared::ObservationId,
+  pub(crate) execution_id: observation_tools_shared::models::ExecutionId,
+  pub(crate) payload_id: observation_tools_shared::PayloadId,
+  pub(crate) name: String,
+  pub(crate) mime_type: String,
+  pub(crate) size: usize,
+  pub(crate) data: Vec<u8>,
+}
+
 async fn uploader_task(
   api_client: crate::server_client::Client,
   rx: async_channel::Receiver<UploaderMessage>,
@@ -291,12 +321,14 @@ async fn uploader_task(
     tokio::sync::watch::Sender<ObservationUploadResult>,
   );
 
-  let flush_observations = async |buffer: &mut Vec<ObservationWithPayload>,
-                                  senders: &mut Vec<ObservationSender>| {
-    if buffer.is_empty() {
+  let flush = async |observation_buffer: &mut Vec<Observation>,
+                     senders: &mut Vec<ObservationSender>,
+                     payload_buffer: &mut Vec<PayloadUploadData>| {
+    if observation_buffer.is_empty() && payload_buffer.is_empty() {
       return;
     }
-    let result = upload_observations(&api_client, buffer.drain(..).collect()).await;
+    let result =
+      upload_observations(&api_client, observation_buffer.drain(..).collect(), payload_buffer.drain(..).collect()).await;
     match result {
       Ok(()) => {
         // Signal all senders that observations were uploaded successfully
@@ -314,8 +346,9 @@ async fn uploader_task(
       }
     }
   };
-  let mut observation_buffer: Vec<ObservationWithPayload> = Vec::new();
+  let mut observation_buffer: Vec<Observation> = Vec::new();
   let mut sender_buffer: Vec<ObservationSender> = Vec::new();
+  let mut payload_buffer: Vec<PayloadUploadData> = Vec::new();
   loop {
     let msg = rx.recv().await.ok();
     match msg {
@@ -327,7 +360,6 @@ async fn uploader_task(
         let result = upload_execution(&api_client, execution).await;
         match result {
           Ok(()) => {
-            // Signal successful upload with handle
             let _ = uploaded_tx.send(Some(Ok(handle)));
           }
           Err(e) => {
@@ -337,22 +369,36 @@ async fn uploader_task(
           }
         }
       }
-      Some(UploaderMessage::Observations {
-        observations,
+      Some(UploaderMessage::Observation {
+        observation,
         handle,
         uploaded_tx,
       }) => {
-        observation_buffer.extend(observations);
+        observation_buffer.push(observation);
         sender_buffer.push((handle, uploaded_tx));
-        if observation_buffer.len() >= BATCH_SIZE {
-          flush_observations(&mut observation_buffer, &mut sender_buffer).await;
-        }
+      }
+      Some(UploaderMessage::Payload {
+        observation_id,
+        execution_id,
+        payload_id,
+        name,
+        payload,
+      }) => {
+        payload_buffer.push(PayloadUploadData {
+          observation_id,
+          execution_id,
+          payload_id,
+          name,
+          mime_type: payload.mime_type,
+          size: payload.size,
+          data: payload.data,
+        });
       }
       Some(UploaderMessage::Flush) => {
-        flush_observations(&mut observation_buffer, &mut sender_buffer).await;
+        flush(&mut observation_buffer, &mut sender_buffer, &mut payload_buffer).await;
       }
       Some(UploaderMessage::Shutdown) | None => {
-        flush_observations(&mut observation_buffer, &mut sender_buffer).await;
+        flush(&mut observation_buffer, &mut sender_buffer, &mut payload_buffer).await;
         break;
       }
     }
@@ -383,31 +429,42 @@ async fn upload_execution(
 
 async fn upload_observations(
   client: &crate::server_client::Client,
-  observations: Vec<ObservationWithPayload>,
+  observations: Vec<Observation>,
+  payloads: Vec<PayloadUploadData>,
 ) -> Result<()> {
-  if observations.is_empty() {
+  if observations.is_empty() && payloads.is_empty() {
     return Ok(());
   }
 
   // Group by execution_id
-  let mut by_execution: std::collections::HashMap<_, Vec<_>> = std::collections::HashMap::new();
+  let mut by_execution: std::collections::HashMap<_, (Vec<_>, Vec<_>)> =
+    std::collections::HashMap::new();
   for obs in observations {
     by_execution
-      .entry(obs.observation.execution_id)
+      .entry(obs.execution_id)
       .or_default()
+      .0
       .push(obs);
   }
+  for p in payloads {
+    by_execution
+      .entry(p.execution_id)
+      .or_default()
+      .1
+      .push(p);
+  }
 
   // Upload each batch via multipart form
-  for (execution_id, observations) in by_execution {
+  for (execution_id, (observations, payloads)) in by_execution {
     trace!(
-      "Uploading {} observations for execution {}",
+      "Uploading {} observations + {} payloads for execution {}",
       observations.len(),
+      payloads.len(),
       execution_id
     );
 
     client
-      .create_observations_multipart(&execution_id.to_string(), observations)
+      .create_observations_multipart(&execution_id.to_string(), observations, payloads)
       .await
       .map_err(|e| crate::error::Error::Config(e.to_string()))?;
   }
diff --git a/crates/observation-tools-client/src/lib.rs b/crates/observation-tools-client/src/lib.rs
index 3538e6c..5c358c5 100644
--- a/crates/observation-tools-client/src/lib.rs
+++ b/crates/observation-tools-client/src/lib.rs
@@ -33,8 +33,8 @@ pub use observation_handle::SendObservation;
 // Re-export procedural macro
 pub use observation_tools_macros::observe;
 // Re-export from shared for convenience
-use observation_tools_shared::Observation;
 pub use observation_tools_shared::Payload;
+pub use observation_tools_shared::PayloadBuilder;
 
 /// Register a global execution shared across all threads
 ///
@@ -64,9 +64,3 @@ pub fn current_execution() -> Option<ExecutionHandle> {
 pub fn clear_global_execution() {
   context::clear_global_execution()
 }
-
-#[derive(Debug)]
-struct ObservationWithPayload {
-  observation: Observation,
-  payload: Payload,
-}
diff --git a/crates/observation-tools-client/src/logger.rs b/crates/observation-tools-client/src/logger.rs
index 50dc64a..bb4c09c 100644
--- a/crates/observation-tools-client/src/logger.rs
+++ b/crates/observation-tools-client/src/logger.rs
@@ -40,7 +40,7 @@ impl Log for ObservationLogger {
     let builder = ObservationBuilder::new("ObservationLogger")
       .observation_type(ObservationType::LogEntry)
       .log_level(record.level().into())
-      .label(format!("log/{}", record.target()));
+      .metadata("target", record.target());
     let builder = if let (Some(file), Some(line)) = (record.file(), record.line()) {
       builder.source(file, line)
     } else {
diff --git a/crates/observation-tools-client/src/observation.rs b/crates/observation-tools-client/src/observation.rs
index 8a25a39..7c58ed7 100644
--- a/crates/observation-tools-client/src/observation.rs
+++ b/crates/observation-tools-client/src/observation.rs
@@ -7,14 +7,15 @@ use crate::execution::ExecutionHandle;
 use crate::observation_handle::ObservationHandle;
 use crate::observation_handle::SendObservation;
 use crate::Error;
-use crate::ObservationWithPayload;
 use napi_derive::napi;
+use observation_tools_shared::GroupId;
 use observation_tools_shared::LogLevel;
 use observation_tools_shared::Markdown;
 use observation_tools_shared::Observation;
 use observation_tools_shared::ObservationId;
 use observation_tools_shared::ObservationType;
 use observation_tools_shared::Payload;
+use observation_tools_shared::PayloadId;
 use observation_tools_shared::SourceInfo;
 use serde::Serialize;
 use std::any::TypeId;
@@ -32,7 +33,7 @@ use std::fmt::Debug;
 #[napi]
 pub struct ObservationBuilder {
   name: String,
-  labels: Vec<String>,
+  group_ids: Vec<GroupId>,
   metadata: HashMap<String, String>,
   source: Option<SourceInfo>,
   parent_span_id: Option<String>,
@@ -49,7 +50,7 @@ impl ObservationBuilder {
   pub fn new<T: AsRef<str>>(name: T) -> Self {
     Self {
       name: name.as_ref().to_string(),
-      labels: Vec::new(),
+      group_ids: Vec::new(),
       metadata: HashMap::new(),
       source: None,
       parent_span_id: None,
@@ -78,18 +79,6 @@ impl ObservationBuilder {
     self
   }
 
-  /// Add a label to the observation
-  pub fn label(mut self, label: impl Into<String>) -> Self {
-    self.labels.push(label.into());
-    self
-  }
-
-  /// Add multiple labels to the observation
-  pub fn labels(mut self, labels: impl IntoIterator<Item = impl Into<String>>) -> Self {
-    self.labels.extend(labels.into_iter().map(|l| l.into()));
-    self
-  }
-
   /// Add metadata to the observation
   pub fn metadata(mut self, key: impl Into<String>, value: impl Into<String>) -> Self {
     self.metadata.insert(key.into(), value.into());
@@ -155,7 +144,7 @@ impl ObservationBuilder {
   }
 
   /// Internal method to build and send the observation
-  fn send_observation(mut self, payload: Payload) -> SendObservation {
+  pub(crate) fn send_observation(mut self, payload: Payload) -> SendObservation {
     let Some(execution) = self.execution.take().or_else(context::get_current_execution) else {
       log::error!(
         "No execution context available for observation '{}'",
@@ -167,11 +156,22 @@ impl ObservationBuilder {
     self.send_with_execution(payload, &execution)
   }
 
-  /// Internal method to build and send the observation with a resolved execution
+  /// Internal method to build and send the observation with a resolved execution.
+  /// Sends the default payload with name "default".
   fn send_with_execution(
     self,
     payload: Payload,
     execution: &ExecutionHandle,
+  ) -> SendObservation {
+    self.send_with_execution_and_name(payload, "default", execution)
+  }
+
+  /// Internal method to build and send the observation with a named payload.
+  fn send_with_execution_and_name(
+    self,
+    payload: Payload,
+    payload_name: impl Into<String>,
+    execution: &ExecutionHandle,
   ) -> SendObservation {
     let observation_id = self.custom_id.unwrap_or_else(ObservationId::new);
 
@@ -196,13 +196,12 @@ impl ObservationBuilder {
       name: self.name,
       observation_type: self.observation_type,
       log_level: self.log_level,
-      labels: self.labels,
+      group_ids: self.group_ids,
+      parent_group_id: None,
       metadata: self.metadata,
       source: self.source,
       parent_span_id,
       created_at: chrono::Utc::now(),
-      mime_type: payload.mime_type.clone(),
-      payload_size: payload.size,
     };
 
     let (uploaded_tx, uploaded_rx) = tokio::sync::watch::channel::<ObservationUploadResult>(None);
@@ -215,13 +214,11 @@ impl ObservationBuilder {
       observation_id
     );
 
+    // Send observation metadata
     if let Err(e) = execution
       .uploader_tx
-      .try_send(UploaderMessage::Observations {
-        observations: vec![ObservationWithPayload {
-          observation,
-          payload,
-        }],
+      .try_send(UploaderMessage::Observation {
+        observation,
         handle: handle.clone(),
         uploaded_tx,
       })
@@ -230,6 +227,15 @@ impl ObservationBuilder {
       return SendObservation::stub(Error::ChannelClosed);
     }
 
+    // Send the payload as a separate message
+    let _ = execution.uploader_tx.try_send(UploaderMessage::Payload {
+      observation_id,
+      execution_id: execution.id(),
+      payload_id: PayloadId::new(),
+      name: payload_name.into(),
+      payload,
+    });
+
     SendObservation::new(handle, uploaded_rx)
   }
 }
@@ -275,10 +281,10 @@ impl ObservationBuilder {
     Ok(self)
   }
 
-  /// Add a label to the observation
-  #[napi(js_name = "label")]
-  pub fn label_napi(&mut self, label: String) -> &Self {
-    self.labels.push(label);
+  /// Add a group to the observation by group ID string
+  #[napi(js_name = "group")]
+  pub fn group_napi(&mut self, group_id: String) -> &Self {
+    self.group_ids.push(GroupId::from(group_id));
     self
   }
 
diff --git a/crates/observation-tools-client/src/server_client.rs b/crates/observation-tools-client/src/server_client.rs
index f5b9e9b..0549727 100644
--- a/crates/observation-tools-client/src/server_client.rs
+++ b/crates/observation-tools-client/src/server_client.rs
@@ -1,6 +1,7 @@
 use crate::server_client::types::PayloadOrPointerResponse;
-use crate::ObservationWithPayload;
+use observation_tools_shared::Observation;
 use reqwest::multipart::Part;
+use serde::Serialize;
 use std::time::Duration;
 
 include!(concat!(env!("OUT_DIR"), "/observation_tools_openapi.rs"));
@@ -21,6 +22,13 @@ impl PayloadOrPointerResponse {
   }
 }
 
+impl types::GetObservation {
+  /// Get the first (default) payload's data, for backward-compatible tests
+  pub fn payload(&self) -> &PayloadOrPointerResponse {
+    &self.payloads[0].data
+  }
+}
+
 pub fn create_client(base_url: &str, api_key: Option<String>) -> anyhow::Result<Client> {
   Ok(Client::new_with_client(
     &base_url,
@@ -51,41 +59,68 @@ pub async fn pre_hook_async(
   Ok(())
 }
 
+/// Default payload name used for the primary observation payload
+pub const DEFAULT_PAYLOAD_NAME: &str = "default";
+
+/// Entry in the payload manifest sent alongside the multipart form
+#[derive(Serialize)]
+struct PayloadManifestEntry {
+  observation_id: String,
+  payload_id: String,
+  name: String,
+  mime_type: String,
+  size: usize,
+}
+
 // Extension methods for Client
 impl Client {
   pub(crate) async fn create_observations_multipart(
     &self,
     execution_id: &str,
-    observations: Vec<ObservationWithPayload>,
+    observations: Vec<Observation>,
+    payloads: Vec<crate::client::PayloadUploadData>,
   ) -> anyhow::Result<()> {
+    if observations.is_empty() && payloads.is_empty() {
+      return Ok(());
+    }
+
     let url = format!("{}/api/exe/{}/obs", self.baseurl, execution_id);
-    let observation_count = observations.len();
 
     log::trace!(
-      "Creating observations via multipart: url={}, count={}",
+      "Creating observations via multipart: url={}, observations={}, payloads={}",
       url,
-      observation_count
+      observations.len(),
+      payloads.len()
     );
 
     // Build multipart form
     let mut form = reqwest::multipart::Form::new();
 
-    let (observations, payloads): (Vec<_>, Vec<_>) = observations
-      .into_iter()
-      .map(|obs| (obs.observation, obs.payload))
-      .unzip();
-    let payloads = observations
-      .iter()
-      .zip(payloads.into_iter())
-      .map(|(obs, payload)| (obs.id.to_string(), payload.data))
-      .collect::<Vec<_>>();
-
+    // Part 1: observations JSON
     let observations_json = serde_json::to_vec(&observations)?;
     let observations_part = Part::bytes(observations_json).mime_str("application/json")?;
     form = form.part("observations", observations_part);
-    for (obs_id, payload_data) in payloads {
-      let part = Part::bytes(payload_data);
-      form = form.part(obs_id, part);
+
+    // Part 2: payload manifest JSON
+    let manifest: Vec<PayloadManifestEntry> = payloads
+      .iter()
+      .map(|p| PayloadManifestEntry {
+        observation_id: p.observation_id.to_string(),
+        payload_id: p.payload_id.as_str().to_string(),
+        name: p.name.clone(),
+        mime_type: p.mime_type.clone(),
+        size: p.size,
+      })
+      .collect();
+    let manifest_json = serde_json::to_vec(&manifest)?;
+    let manifest_part = Part::bytes(manifest_json).mime_str("application/json")?;
+    form = form.part("payload_manifest", manifest_part);
+
+    // Part 3: payload data parts
+    for p in payloads {
+      let part_key = format!("{}:{}:{}", p.observation_id, p.payload_id.as_str(), p.name);
+      let part = Part::bytes(p.data);
+      form = form.part(part_key, part);
     }
 
     let mut request_builder = self.client.post(&url).multipart(form);