diff --git a/pkg/dds/CHANGELOG.md b/pkg/dds/CHANGELOG.md
index c7cb39c690e6..9192e3c14bfc 100644
--- a/pkg/dds/CHANGELOG.md
+++ b/pkg/dds/CHANGELOG.md
@@ -3,6 +3,8 @@
 and prepared DDS for using `unified_analytics` through the Dart Tooling Daemon.
 - Internal change: removed `analytics` parameter from the DevTools server `defaultHandler` method.
 - Updated `README.md` and added  contributing guide (`CONTRIBUTING.md`).
+- Updated `package:dds_service_extensions` constraint to ^2.0.0.
+- Determine default `requireUserPermissionToResume` values from the `pause_isolates_on_start` and `pause_isolates_on_exit` flags.
 
 # 4.0.0
 - Updated DDS protocol to version 2.0.
diff --git a/pkg/dds/lib/src/isolate_manager.dart b/pkg/dds/lib/src/isolate_manager.dart
index e5f8363b8b15..668fecff5623 100644
--- a/pkg/dds/lib/src/isolate_manager.dart
+++ b/pkg/dds/lib/src/isolate_manager.dart
@@ -280,6 +280,7 @@ class IsolateManager {
         );
       }
     }
+    await _determineRequireUserPermissionToResumeFromFlags();
     _initialized = true;
   }
 
@@ -383,14 +384,10 @@ class IsolateManager {
     DartDevelopmentServiceClient client,
     json_rpc.Parameters parameters,
   ) async {
-    int pauseTypeMask = 0;
-    if (parameters['onPauseStart'].asBoolOr(false)) {
-      pauseTypeMask |= PauseTypeMasks.pauseOnStartMask;
-    }
-    if (parameters['onPauseExit'].asBoolOr(false)) {
-      pauseTypeMask |= PauseTypeMasks.pauseOnExitMask;
-    }
-    _requireUserPermissionToResumeMask = pauseTypeMask;
+    _setRequireUserPermissionToResume(
+      onPauseStart: parameters['onPauseStart'].asBoolOr(false),
+      onPauseExit: parameters['onPauseExit'].asBoolOr(false),
+    );
 
     // Check if isolates have been waiting for a user resume and resume any
     // isolates that no longer need to wait for a user resume.
@@ -415,6 +412,51 @@ class IsolateManager {
     };
   }
 
+  Future<void> _determineRequireUserPermissionToResumeFromFlags() async {
+    try {
+      final result = await dds.vmServiceClient.sendRequest('getFlagList')
+          as Map<String, dynamic>;
+      final flagList = FlagList.parse(result);
+      final flags = flagList!.flags!;
+
+      bool? pauseOnStartValue;
+      bool? pauseOnExitValue;
+      for (final flag in flags) {
+        if (flag.name == 'pause_isolates_on_start') {
+          pauseOnStartValue = flag.valueAsString == 'true';
+        }
+        if (flag.name == 'pause_isolates_on_exit') {
+          pauseOnExitValue = flag.valueAsString == 'true';
+        }
+        if (pauseOnStartValue != null && pauseOnExitValue != null) {
+          break;
+        }
+      }
+
+      _setRequireUserPermissionToResume(
+        onPauseStart: pauseOnStartValue ?? false,
+        onPauseExit: pauseOnExitValue ?? false,
+      );
+    } catch (_) {
+      // Swallow any errors. Otherwise, this will cause initialization to
+      // silently fail.
+    }
+  }
+
+  void _setRequireUserPermissionToResume({
+    required bool onPauseStart,
+    required bool onPauseExit,
+  }) {
+    int pauseTypeMask = 0;
+    if (onPauseStart) {
+      pauseTypeMask |= PauseTypeMasks.pauseOnStartMask;
+    }
+    if (onPauseExit) {
+      pauseTypeMask |= PauseTypeMasks.pauseOnExitMask;
+    }
+    _requireUserPermissionToResumeMask = pauseTypeMask;
+  }
+
   Future<Map<String, dynamic>> getCachedCpuSamples(
       json_rpc.Parameters parameters) async {
     final isolateId = parameters['isolateId'].asString;
diff --git a/pkg/dds/pubspec.yaml b/pkg/dds/pubspec.yaml
index 987ea344c96f..61489083e0b0 100644
--- a/pkg/dds/pubspec.yaml
+++ b/pkg/dds/pubspec.yaml
@@ -13,7 +13,7 @@ dependencies:
   async: ^2.4.1
   browser_launcher: ^1.0.0
   collection: ^1.15.0
-  dds_service_extensions: ^1.6.0
+  dds_service_extensions: ^2.0.0
   dap: ^1.2.0
   extension_discovery: ^2.0.0
   devtools_shared: ^8.0.1
diff --git a/pkg/dds/test/client_resume_approvals_approve_then_disconnect_test.dart b/pkg/dds/test/client_resume_approvals_approve_then_disconnect_test.dart
index 98ea607d1c87..61ae0f5d3796 100644
--- a/pkg/dds/test/client_resume_approvals_approve_then_disconnect_test.dart
+++ b/pkg/dds/test/client_resume_approvals_approve_then_disconnect_test.dart
@@ -20,6 +20,7 @@ void fooBar() {
 final test = <IsolateTest>[
   hasPausedAtStart,
   (VmService service, IsolateRef isolate) async {
+    service.requireUserPermissionToResume(onPauseStart: false);
     final isolateId = isolate.id!;
     final client1 = await createClient(
       service: service,
diff --git a/pkg/dds/test/client_resume_approvals_disconnect_test.dart b/pkg/dds/test/client_resume_approvals_disconnect_test.dart
index a2ae9fc797be..f0b113688053 100644
--- a/pkg/dds/test/client_resume_approvals_disconnect_test.dart
+++ b/pkg/dds/test/client_resume_approvals_disconnect_test.dart
@@ -21,6 +21,7 @@ final test = <IsolateTest>[
   // Multiple clients, disconnect client awaiting approval.
   hasPausedAtStart,
   (VmService service, IsolateRef isolate) async {
+    service.requireUserPermissionToResume(onPauseStart: false);
     final isolateId = isolate.id!;
     final client1 = await createClient(
       service: service,
@@ -43,8 +44,7 @@ final test = <IsolateTest>[
     await hasPausedAtStart(service, isolate);
 
     // Once client2 disconnects, there are no clients which require resume
-    // approval. Ensure we resume immediately so we don't deadlock waiting for
-    // approvals from disconnected clients.
+    // approval.
     await client2.dispose();
   },
   hasStoppedAtExit,
diff --git a/pkg/dds/test/client_resume_approvals_identical_names_test.dart b/pkg/dds/test/client_resume_approvals_identical_names_test.dart
index 6183ff75d0fd..69b11c63ffd1 100644
--- a/pkg/dds/test/client_resume_approvals_identical_names_test.dart
+++ b/pkg/dds/test/client_resume_approvals_identical_names_test.dart
@@ -19,6 +19,7 @@ void fooBar() {
 final test = <IsolateTest>[
   // Multiple clients, same client names.
   (VmService service, IsolateRef isolateRef) async {
+    service.requireUserPermissionToResume(onPauseStart: false);
     // ignore: unused_local_variable
     final client1 = await createClient(
       service: service,
diff --git a/pkg/dds/test/client_resume_approvals_multiple_names_test.dart b/pkg/dds/test/client_resume_approvals_multiple_names_test.dart
index 6d2d897a09f0..307672762579 100644
--- a/pkg/dds/test/client_resume_approvals_multiple_names_test.dart
+++ b/pkg/dds/test/client_resume_approvals_multiple_names_test.dart
@@ -21,6 +21,7 @@ void fooBar() {
 final test = <IsolateTest>[
   // Multiple clients, different client names.
   (VmService service, IsolateRef isolateRef) async {
+    service.requireUserPermissionToResume(onPauseStart: false);
     final isolateId = isolateRef.id!;
     final client1 = await createClient(
       service: service,
diff --git a/pkg/dds/test/client_resume_approvals_name_change_test.dart b/pkg/dds/test/client_resume_approvals_name_change_test.dart
index a54b25eff949..3bc0e04216e3 100644
--- a/pkg/dds/test/client_resume_approvals_name_change_test.dart
+++ b/pkg/dds/test/client_resume_approvals_name_change_test.dart
@@ -22,6 +22,7 @@ void fooBar() {
 final test = <IsolateTest>[
   // Remove required approvals via name change.
   (VmService service, IsolateRef isolateRef) async {
+    service.requireUserPermissionToResume(onPauseStart: false);
     final isolateId = isolateRef.id!;
 
     // Create two clients with the same name.