Serverless computing’s scalability and cost savings make observability crucial but challenging. Achieving this on AWS involves leveraging Lambda’s built-in CloudWatch monitoring along with Kubernetes for a unified approach. Collect metrics, logs, and traces, and utilize Prometheus, Grafana, CloudWatch Logs, and AWS X-Ray for insights and performance optimization. Implementing best practices like defining metrics, distributed tracing, log correlation, and monitoring automation ensures effective serverless application management.