Technologies are disclosed for local and distributed function based dynamic traffic management for network services. A service host executes a network service and provides a service framework that includes one or more handlers. When a request is received for the service, one of the handlers assigns a classification to the request. The handler then provides the classification to a dynamic function based traffic controller. The controller determines whether the network service is to process the request based on the classification of the request, metrics associated with the network service, and a local traffic management policy. If the controller determines that the network service is not to process the request, the request is rejected. Otherwise, the request is passed to the network service for processing. Metrics can also be provided from the service host to a distributed performance monitoring system for use in managing network traffic at a fleet level.