diff --git a/synapse/federation/handler.py b/synapse/federation/handler.py
new file mode 100644
index 0000000000..31e8470b33
--- /dev/null
+++ b/synapse/federation/handler.py
@@ -0,0 +1,148 @@
+# -*- coding: utf-8 -*-
+# Copyright 2014 matrix.org
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+# http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+from twisted.internet import defer
+
+from .pdu_codec import PduCodec
+
+from synapse.api.errors import AuthError
+from synapse.util.logutils import log_function
+
+import logging
+
+
+logger = logging.getLogger(__name__)
+
+
+class FederationEventHandler(object):
+ """ Responsible for:
+ a) handling received Pdus before handing them on as Events to the rest
+ of the home server (including auth and state conflict resoultion)
+ b) converting events that were produced by local clients that may need
+ to be sent to remote home servers.
+ """
+
+ def __init__(self, hs):
+ self.store = hs.get_datastore()
+ self.replication_layer = hs.get_replication_layer()
+ self.state_handler = hs.get_state_handler()
+ # self.auth_handler = gs.get_auth_handler()
+ self.event_handler = hs.get_handlers().federation_handler
+ self.server_name = hs.hostname
+
+ self.lock_manager = hs.get_room_lock_manager()
+
+ self.replication_layer.set_handler(self)
+
+ self.pdu_codec = PduCodec(hs)
+
+ @log_function
+ @defer.inlineCallbacks
+ def handle_new_event(self, event):
+ """ Takes in an event from the client to server side, that has already
+ been authed and handled by the state module, and sends it to any
+ remote home servers that may be interested.
+
+ Args:
+ event
+
+ Returns:
+ Deferred: Resolved when it has successfully been queued for
+ processing.
+ """
+ yield self._fill_out_prev_events(event)
+
+ pdu = self.pdu_codec.pdu_from_event(event)
+
+ if not hasattr(pdu, "destinations") or not pdu.destinations:
+ pdu.destinations = []
+
+ yield self.replication_layer.send_pdu(pdu)
+
+ @log_function
+ @defer.inlineCallbacks
+ def backfill(self, room_id, limit):
+ # TODO: Work out which destinations to ask for pagination
+ # self.replication_layer.paginate(dest, room_id, limit)
+ pass
+
+ @log_function
+ def get_state_for_room(self, destination, room_id):
+ return self.replication_layer.get_state_for_context(
+ destination, room_id
+ )
+
+ @log_function
+ @defer.inlineCallbacks
+ def on_receive_pdu(self, pdu):
+ """ Called by the ReplicationLayer when we have a new pdu. We need to
+ do auth checks and put it throught the StateHandler.
+ """
+ event = self.pdu_codec.event_from_pdu(pdu)
+
+ try:
+ with (yield self.lock_manager.lock(pdu.context)):
+ if event.is_state:
+ is_new_state = yield self.state_handler.handle_new_state(
+ pdu
+ )
+ if not is_new_state:
+ return
+ else:
+ is_new_state = False
+
+ yield self.event_handler.on_receive(event, is_new_state)
+
+ except AuthError:
+ # TODO: Implement something in federation that allows us to
+ # respond to PDU.
+ raise
+
+ return
+
+ @defer.inlineCallbacks
+ def _on_new_state(self, pdu, new_state_event):
+ # TODO: Do any store stuff here. Notifiy C2S about this new
+ # state.
+
+ yield self.store.update_current_state(
+ pdu_id=pdu.pdu_id,
+ origin=pdu.origin,
+ context=pdu.context,
+ pdu_type=pdu.pdu_type,
+ state_key=pdu.state_key
+ )
+
+ yield self.event_handler.on_receive(new_state_event)
+
+ @defer.inlineCallbacks
+ def _fill_out_prev_events(self, event):
+ if hasattr(event, "prev_events"):
+ return
+
+ results = yield self.store.get_latest_pdus_in_context(
+ event.room_id
+ )
+
+ es = [
+ "%s@%s" % (p_id, origin) for p_id, origin, _ in results
+ ]
+
+ event.prev_events = [e for e in es if e != event.event_id]
+
+ if results:
+ event.depth = max([int(v) for _, _, v in results]) + 1
+ else:
+ event.depth = 0
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