diff --git a/.chloggen/update_tempo.yaml b/.chloggen/update_tempo.yaml
new file mode 100644
index 000000000..1c9e8efeb
--- /dev/null
+++ b/.chloggen/update_tempo.yaml
@@ -0,0 +1,16 @@
+# 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. tempostack, tempomonolithic, github action)
+component: operator
+
+# A brief description of the change. Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: Update Tempo to v2.6.0
+
+# One or more tracking issues related to the change
+issues: [1044]
+
+# (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:
diff --git a/Makefile b/Makefile
index 8b5c89e13..f5f488fff 100644
--- a/Makefile
+++ b/Makefile
@@ -1,6 +1,6 @@
 # Current Operator version
 OPERATOR_VERSION ?= 0.13.0
-TEMPO_VERSION ?= 2.5.0
+TEMPO_VERSION ?= 2.6.0
 JAEGER_QUERY_VERSION ?= 1.62.0
 TEMPO_QUERY_VERSION ?= main-1de25ca
 TEMPO_GATEWAY_VERSION ?= main-2024-08-05-11d0d94
diff --git a/bundle/community/manifests/tempo-operator.clusterserviceversion.yaml b/bundle/community/manifests/tempo-operator.clusterserviceversion.yaml
index c90de1319..e35eff89b 100644
--- a/bundle/community/manifests/tempo-operator.clusterserviceversion.yaml
+++ b/bundle/community/manifests/tempo-operator.clusterserviceversion.yaml
@@ -74,7 +74,7 @@ metadata:
     capabilities: Deep Insights
     categories: Logging & Tracing,Monitoring
     containerImage: ghcr.io/grafana/tempo-operator/tempo-operator:v0.13.0
-    createdAt: "2024-10-12T18:04:08Z"
+    createdAt: "2024-10-14T12:48:35Z"
     description: Create and manage deployments of Tempo, a high-scale distributed
       tracing backend.
     operatorframework.io/cluster-monitoring: "true"
@@ -463,6 +463,34 @@ spec:
         x-descriptors:
         - urn:alm:descriptor:io.kubernetes:Secret
       - description: GCP defines the configuration for Google Cloud Storage.
+	tests := []struct {
+		name                     string
+		instanceAddrType         v1alpha1.InstanceAddrType
+		expectedContainerEnvVars []corev1.EnvVar
+	}{
+		{
+			name:                     "default",
+			expectedContainerEnvVars: []corev1.EnvVar{},
+		},
+		{
+			name: "set InstanceAddrType to PodIP",
+			expectedContainerEnvVars: []corev1.EnvVar{
+				{
+					Name: "HASH_RING_INSTANCE_ADDR",
+					ValueFrom: &corev1.EnvVarSource{
+						FieldRef: &corev1.ObjectFieldSelector{
+							APIVersion: "v1",
+							FieldPath:  "status.podIP",
+						},
+					},
+				},
+			},
+			instanceAddrType: v1alpha1.InstanceAddrPodIP,
+		},
+	}
+
+	for _, ts := range tests {
+		t.Run(ts.name, func(t *testing.T) {
         displayName: Google Cloud Storage
         path: storage.traces.gcs
       - description: Secret is the name of a Secret containing credentials for accessing
@@ -1458,7 +1486,7 @@ spec:
                 - --config=controller_manager_config.yaml
                 env:
                 - name: RELATED_IMAGE_TEMPO
-                  value: docker.io/grafana/tempo:2.5.0
+                  value: docker.io/grafana/tempo:2.6.0
                 - name: RELATED_IMAGE_JAEGER_QUERY
                   value: docker.io/jaegertracing/jaeger-query:1.62.0
                 - name: RELATED_IMAGE_TEMPO_QUERY
@@ -1607,7 +1635,7 @@ spec:
   provider:
     name: Grafana Tempo Operator SIG
   relatedImages:
-  - image: docker.io/grafana/tempo:2.5.0
+  - image: docker.io/grafana/tempo:2.6.0
     name: tempo
   - image: docker.io/jaegertracing/jaeger-query:1.62.0
     name: jaeger-query
diff --git a/bundle/openshift/manifests/tempo-operator.clusterserviceversion.yaml b/bundle/openshift/manifests/tempo-operator.clusterserviceversion.yaml
index 504d78028..5ba5163d0 100644
--- a/bundle/openshift/manifests/tempo-operator.clusterserviceversion.yaml
+++ b/bundle/openshift/manifests/tempo-operator.clusterserviceversion.yaml
@@ -1468,7 +1468,7 @@ spec:
                 - --config=controller_manager_config.yaml
                 env:
                 - name: RELATED_IMAGE_TEMPO
-                  value: docker.io/grafana/tempo:2.5.0
+                  value: docker.io/grafana/tempo:2.6.0
                 - name: RELATED_IMAGE_JAEGER_QUERY
                   value: docker.io/jaegertracing/jaeger-query:1.62.0
                 - name: RELATED_IMAGE_TEMPO_QUERY
@@ -1628,7 +1628,7 @@ spec:
   provider:
     name: Grafana Tempo Operator SIG
   relatedImages:
-  - image: docker.io/grafana/tempo:2.5.0
+  - image: docker.io/grafana/tempo:2.6.0
     name: tempo
   - image: docker.io/jaegertracing/jaeger-query:1.62.0
     name: jaeger-query
diff --git a/config/manager/manager.yaml b/config/manager/manager.yaml
index a1a7f323f..a7822e56a 100644
--- a/config/manager/manager.yaml
+++ b/config/manager/manager.yaml
@@ -40,7 +40,7 @@ spec:
         - --leader-elect
         env:
         - name: RELATED_IMAGE_TEMPO
-          value: docker.io/grafana/tempo:2.5.0
+          value: docker.io/grafana/tempo:2.6.0
         - name: RELATED_IMAGE_JAEGER_QUERY
           value: docker.io/jaegertracing/jaeger-query:1.62.0
         - name: RELATED_IMAGE_TEMPO_QUERY