diff --git a/internal/daemon/worker/controller_connection.go b/internal/daemon/worker/controller_connection.go
index 724ce40d97..a01572a2d6 100644
--- a/internal/daemon/worker/controller_connection.go
+++ b/internal/daemon/worker/controller_connection.go
@@ -275,22 +275,74 @@ func (w *Worker) workerConnectionInfo(addr string) (*structpb.Struct, error) {
 	return st, nil
 }
 
-// monitorUpstreamConnectionState listens for new state changes from grpc client
-// connection and updates the state
+// monitorUpstreamConnectionState listens for new state changes from grpc client connection,
+// updates the state, and logs significant state transitions for observability
 func monitorUpstreamConnectionState(ctx context.Context, cc *grpc.ClientConn, connectionState *atomic.Value) {
+	const op = "worker.monitorUpstreamConnectionState"
 	var state connectivity.State
 	if v := connectionState.Load(); !util.IsNil(v) {
 		state = v.(connectivity.State)
 	}
 
 	for cc.WaitForStateChange(ctx, state) {
+		previousState := state
 		state = cc.GetState()
 
 		// if the client is shutdown, exit function
 		if state == connectivity.Shutdown {
+			event.WriteSysEvent(ctx, op, "upstream connection shut down",
+				"upstream_address", cc.Target(),
+				"previous_state", previousState.String(),
+				"current_state", state.String(),
+			)
 			return
 		}
 
 		connectionState.Store(state)
+
+		switch state {
+		case connectivity.TransientFailure:
+			event.WriteError(ctx, op,
+				fmt.Errorf("upstream connection entered transient failure state; worker cannot reach upstream"),
+				event.WithInfo(
+					"upstream_address", cc.Target(),
+					"previous_state", previousState.String(),
+					"current_state", state.String(),
+				),
+			)
+		case connectivity.Connecting:
+			if previousState == connectivity.Ready || previousState == connectivity.TransientFailure {
+				event.WriteSysEvent(ctx, op, "upstream connection is reconnecting",
+					"upstream_address", cc.Target(),
+					"previous_state", previousState.String(),
+					"current_state", state.String(),
+				)
+			}
+		case connectivity.Ready:
+			if previousState != connectivity.Ready {
+				event.WriteSysEvent(ctx, op, "upstream connection is ready",
+					"upstream_address", cc.Target(),
+					"previous_state", previousState.String(),
+					"current_state", state.String(),
+				)
+			}
+		case connectivity.Idle:
+			if previousState == connectivity.Ready {
+				event.WriteSysEvent(ctx, op, "upstream connection has become idle",
+					"upstream_address", cc.Target(),
+					"previous_state", previousState.String(),
+					"current_state", state.String(),
+				)
+			}
+		default:
+			event.WriteError(ctx, op,
+				fmt.Errorf("upstream connection entered unexpected state"),
+				event.WithInfo(
+					"upstream_address", cc.Target(),
+					"previous_state", previousState.String(),
+					"current_state", state.String(),
+				),
+			)
+		}
 	}
 }