Distributed tracing helps in tracking requests as they flow through different services and components in a distributed system. In ASP.NET Core Web API, you can implement distributed tracing using tools like OpenTelemetry or Application Insights. These tools provide instrumentation libraries that you can use to instrument your code and capture trace data. By including trace information in the requests and correlating them across services, you can gain insights into the flow and performance of requests, identify bottlenecks, and troubleshoot issues in your distributed system. Distributed tracing is valuable for understanding the behavior and performance of your Web API in complex environments.