diff --git a/tests/integration/webclient/src/test/java/io/helidon/tests/integration/webclient/TracingPropagationTest.java b/tests/integration/webclient/src/test/java/io/helidon/tests/integration/webclient/TracingPropagationTest.java
index 56469a43ac0..499bf2fb41b 100644
--- a/tests/integration/webclient/src/test/java/io/helidon/tests/integration/webclient/TracingPropagationTest.java
+++ b/tests/integration/webclient/src/test/java/io/helidon/tests/integration/webclient/TracingPropagationTest.java
@@ -81,7 +81,7 @@ void testTracingSuccess() throws ExecutionException, InterruptedException {
         assertThat(wsSpan.operationName(), is("HTTP Request"));
         tags = wsSpan.tags();
         assertThat(tags.get(Tags.HTTP_METHOD.getKey()), is("GET"));
-        assertThat(tags.get(Tags.HTTP_URL.getKey()), is(uri));
+        assertThat(tags.get(Tags.HTTP_URL.getKey()), is("/greet"));
         assertThat(tags.get(Tags.HTTP_STATUS.getKey()), is(200));
         assertThat(tags.get(Tags.COMPONENT.getKey()), is("helidon-webserver"));
 
diff --git a/webclient/webclient/src/main/java/io/helidon/webclient/WebClientRequestBuilderImpl.java b/webclient/webclient/src/main/java/io/helidon/webclient/WebClientRequestBuilderImpl.java
index e6a08379b84..7ebdaba77d8 100644
--- a/webclient/webclient/src/main/java/io/helidon/webclient/WebClientRequestBuilderImpl.java
+++ b/webclient/webclient/src/main/java/io/helidon/webclient/WebClientRequestBuilderImpl.java
@@ -494,6 +494,8 @@ private <T> Single<T> invokeWithEntity(Flow.Publisher<DataChunk> requestEntity,
 
     private Single<WebClientResponse> invoke(Flow.Publisher<DataChunk> requestEntity) {
         this.uri = prepareFinalURI();
+        //Relative URI is used in request if no proxy set
+        URI requestURI = proxy == Proxy.noProxy() ? prepareRelativeURI() : uri;
         if (requestId == null) {
             requestId = REQUEST_NUMBER.incrementAndGet();
         }
@@ -519,7 +521,7 @@ private Single<WebClientResponse> invoke(Flow.Publisher<DataChunk> requestEntity
             HttpHeaders headers = toNettyHttpHeaders();
             DefaultHttpRequest request = new DefaultHttpRequest(toNettyHttpVersion(httpVersion),
                                                                 toNettyMethod(method),
-                                                                uri.toASCIIString(),
+                                                                requestURI.toASCIIString(),
                                                                 headers);
             HttpUtil.isKeepAlive(request);
 
@@ -631,6 +633,29 @@ private URI prepareFinalURI() {
         return this.uri;
     }
 
+    private URI prepareRelativeURI() {
+        try {
+            String path = this.path.toString();
+            String query = this.uri.getQuery();
+            String fragment = this.uri.getFragment();
+            if (skipUriEncoding) {
+                StringBuilder sb = new StringBuilder();
+                sb.append(path);
+                if (query != null) {
+                    sb.append('?');
+                    sb.append(query);
+                } else if (fragment != null) {
+                    sb.append('#');
+                    sb.append(fragment);
+                }
+                return URI.create(sb.toString());
+            }
+            return new URI(null, null, null, -1, path, query, fragment);
+        } catch (URISyntaxException e) {
+            throw new WebClientException("Could not create URI instance for the request.", e);
+        }
+    }
+
     private String resolveQuery() {
         String queries = "";
         for (Map.Entry<String, List<String>> entry : queryParams.toMap().entrySet()) {