diff --git a/packages/multichain-account-service/CHANGELOG.md b/packages/multichain-account-service/CHANGELOG.md
index 428e0be92f7..22262b7ae4b 100644
--- a/packages/multichain-account-service/CHANGELOG.md
+++ b/packages/multichain-account-service/CHANGELOG.md
@@ -7,6 +7,11 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+### Added
+
+- Accept P2TR (taproot) accounts as compatible Bitcoin accounts in `BtcAccountProvider`
+- Add testnet4 (`BtcScope.Testnet4`) to Bitcoin provider capabilities and account discovery
+
 ### Changed
 
 - Bump `@metamask/accounts-controller` from `^37.1.1` to `^37.2.0` ([#8363](https://github.com/MetaMask/core/pull/8363))
diff --git a/packages/multichain-account-service/src/providers/BtcAccountProvider.test.ts b/packages/multichain-account-service/src/providers/BtcAccountProvider.test.ts
index 98dc3a8dd7b..f2a2a89fc72 100644
--- a/packages/multichain-account-service/src/providers/BtcAccountProvider.test.ts
+++ b/packages/multichain-account-service/src/providers/BtcAccountProvider.test.ts
@@ -295,6 +295,14 @@ describe('BtcAccountProvider', () => {
     expect(provider.isAccountCompatible(account)).toBe(true);
   });
 
+  it('returns true if a P2TR account is compatible', () => {
+    const account = MOCK_BTC_P2TR_ACCOUNT_1;
+    const { provider } = setup({
+      accounts: [account],
+    });
+    expect(provider.isAccountCompatible(account)).toBe(true);
+  });
+
   it('returns false if an account is not compatible', () => {
     const account = MOCK_HD_ACCOUNT_1;
     const { provider } = setup({
diff --git a/packages/multichain-account-service/src/providers/BtcAccountProvider.ts b/packages/multichain-account-service/src/providers/BtcAccountProvider.ts
index 5661dbaa30d..8aa6c5619ff 100644
--- a/packages/multichain-account-service/src/providers/BtcAccountProvider.ts
+++ b/packages/multichain-account-service/src/providers/BtcAccountProvider.ts
@@ -47,7 +47,7 @@ export class BtcAccountProvider extends SnapAccountProvider {
   static BTC_SNAP_ID = 'npm:@metamask/bitcoin-wallet-snap' as SnapId;
 
   readonly capabilities: KeyringCapabilities = {
-    scopes: [BtcScope.Mainnet, BtcScope.Testnet],
+    scopes: [BtcScope.Mainnet, BtcScope.Testnet, BtcScope.Testnet4],
     bip44: {
       deriveIndex: true,
       deriveIndexRange: true,
@@ -68,7 +68,8 @@ export class BtcAccountProvider extends SnapAccountProvider {
 
   isAccountCompatible(account: Bip44Account<InternalAccount>): boolean {
     return (
-      account.type === BtcAccountType.P2wpkh &&
+      (account.type === BtcAccountType.P2wpkh ||
+        account.type === BtcAccountType.P2tr) &&
       Object.values<string>(BtcAccountType).includes(account.type)
     );
   }
@@ -113,7 +114,7 @@ export class BtcAccountProvider extends SnapAccountProvider {
               withTimeout(
                 () =>
                   client.discoverAccounts(
-                    [BtcScope.Mainnet],
+                    [BtcScope.Mainnet, BtcScope.Testnet4],
                     entropySource,
                     groupIndex,
                   ),