diff --git a/.chloggen/otlpencoding_alpha.yaml b/.chloggen/otlpencoding_alpha.yaml
new file mode 100644
index 000000000000..bc4f7e87d0e4
--- /dev/null
+++ b/.chloggen/otlpencoding_alpha.yaml
@@ -0,0 +1,27 @@
+# Use this changelog template to create an entry for release notes.
+
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: enhancement
+
+# The name of the component, or a single word describing the area of concern, (e.g. filelogreceiver)
+component: otlpencodingextension
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: Move otlpencodingextension to alpha
+
+# Mandatory: One or more tracking issues related to the change. You can use the PR number here if no issue exists.
+issues: [32701]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext:
+
+# If your change doesn't affect end users or the exported elements of any package,
+# you should instead start your pull request title with [chore] or use the "Skip Changelog" label.
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: []
diff --git a/extension/encoding/otlpencodingextension/README.md b/extension/encoding/otlpencodingextension/README.md
index 8df038c092d0..8d7d4db81b7f 100644
--- a/extension/encoding/otlpencodingextension/README.md
+++ b/extension/encoding/otlpencodingextension/README.md
@@ -3,10 +3,28 @@
 <!-- status autogenerated section -->
 | Status        |           |
 | ------------- |-----------|
-| Stability     | [development]  |
+| Stability     | [alpha]  |
 | Distributions | [] |
 | Issues        | [![Open issues](https://img.shields.io/github/issues-search/open-telemetry/opentelemetry-collector-contrib?query=is%3Aissue%20is%3Aopen%20label%3Aextension%2Fotlpencoding%20&label=open&color=orange&logo=opentelemetry)](https://github.com/open-telemetry/opentelemetry-collector-contrib/issues?q=is%3Aopen+is%3Aissue+label%3Aextension%2Fotlpencoding) [![Closed issues](https://img.shields.io/github/issues-search/open-telemetry/opentelemetry-collector-contrib?query=is%3Aissue%20is%3Aclosed%20label%3Aextension%2Fotlpencoding%20&label=closed&color=blue&logo=opentelemetry)](https://github.com/open-telemetry/opentelemetry-collector-contrib/issues?q=is%3Aclosed+is%3Aissue+label%3Aextension%2Fotlpencoding) |
 | [Code Owners](https://github.com/open-telemetry/opentelemetry-collector-contrib/blob/main/CONTRIBUTING.md#becoming-a-code-owner)    | [@dao-jun](https://www.github.com/dao-jun), [@VihasMakwana](https://www.github.com/VihasMakwana) |
 
-[development]: https://github.com/open-telemetry/opentelemetry-collector#development
-<!-- end autogenerated section -->
\ No newline at end of file
+[alpha]: https://github.com/open-telemetry/opentelemetry-collector#alpha
+<!-- end autogenerated section -->
+
+This extension unmarshals and marshals data encoded according to the [OTLP specification](https://opentelemetry.io/docs/specs/otlp/).
+
+It accepts OTLP data encoded using Protobuf or JSON protocols.
+
+Example using Protobuf protocol:
+```yaml
+extensions:
+  otlp_encoding:
+    protocol: otlp_proto
+```
+
+Example using JSON protocol:
+```yaml
+extensions:
+  otlp_encoding:
+    protocol: otlp_json
+```
diff --git a/extension/encoding/otlpencodingextension/internal/metadata/generated_status.go b/extension/encoding/otlpencodingextension/internal/metadata/generated_status.go
index 7dd0e1680578..843857390420 100644
--- a/extension/encoding/otlpencodingextension/internal/metadata/generated_status.go
+++ b/extension/encoding/otlpencodingextension/internal/metadata/generated_status.go
@@ -13,7 +13,7 @@ var (
 )
 
 const (
-	ExtensionStability = component.StabilityLevelDevelopment
+	ExtensionStability = component.StabilityLevelAlpha
 )
 
 func Meter(settings component.TelemetrySettings) metric.Meter {
diff --git a/extension/encoding/otlpencodingextension/metadata.yaml b/extension/encoding/otlpencodingextension/metadata.yaml
index 82770d041eec..10c703d30743 100644
--- a/extension/encoding/otlpencodingextension/metadata.yaml
+++ b/extension/encoding/otlpencodingextension/metadata.yaml
@@ -4,7 +4,7 @@ scope_name: otelcol/otlpencoding
 status:
   class: extension
   stability:
-    development: [ extension ]
+    alpha: [ extension ]
   distributions: [ ]
   codeowners:
     active: [ dao-jun, VihasMakwana ]