diff --git a/ssb/tests/test_packet_stream.py b/ssb/tests/test_packet_stream.py
new file mode 100644
index 0000000..3686487
--- /dev/null
+++ b/ssb/tests/test_packet_stream.py
@@ -0,0 +1,187 @@
+import pytest
+from asyncio import gather
+from asynctest import patch
+from nacl.signing import SigningKey
+
+from ssb.packet_stream import PSClient, PSMessageType
+
+
+async def _collect_messages(generator):
+    results = []
+    async for msg in generator:
+        results.append(msg)
+    return results
+
+MSG_BODY_1 = (b'{"previous":"%KTGP6W8vF80McRAZHYDWuKOD0KlNyKSq6Gb42iuV7Iw=.sha256","author":"@1+Iwm79DKvVBqYKFkhT6fWRbA'
+              b'VvNNVH4F2BSxwhYmx8=.ed25519","sequence":116,"timestamp":1496696699331,"hash":"sha256","content":{"type"'
+              b':"post","channel":"crypto","text":"Does anybody know any good resources (e.g. books) to learn cryptogra'
+              b'phy? I\'m not speaking of basic concepts (e.g. what\'s a private key) but the actual mathematics behind'
+              b' the whole thing.\\nI have a copy of the \\"Handbook of Applied Cryptography\\" on my bookshelf but I f'
+              b'ound it too long/hard to follow. Are there any better alternatives?","mentions":[]},"signature":"hqKePb'
+              b'bTXWxEi1njDnOWFsL0M0AoNoWyBFgNE6KXj//DThepaZSy9vRbygDHX5uNmCdyOrsQrwZsZhmUYKwtDQ==.sig.ed25519"}')
+
+MSG_BODY_2 = (b'{"previous":"%iQRhPyqmNLpGaO1Tpm1I22jqnUEwRwkCTDbwAGtM+lY=.sha256","author":"@1+Iwm79DKvVBqYKFkhT6fWRbA'
+              b'VvNNVH4F2BSxwhYmx8=.ed25519","sequence":103,"timestamp":1496674211806,"hash":"sha256","content":{"type"'
+              b':"post","channel":"git-ssb","text":"Is it only me or `git.scuttlebot.io` is timing out?\\n\\nE.g. try a'
+              b'ccessing %vZCTqraoqKBKNZeATErXEtnoEr+wnT3p8tT+vL+29I4=.sha256","mentions":[{"link":"%vZCTqraoqKBKNZeATE'
+              b'rXEtnoEr+wnT3p8tT+vL+29I4=.sha256"}]},"signature":"+i4U0HUGDDEyNoNr2NIROPnT3WQj3RuTaIhY5koWW8f0vwr4tZsY'
+              b'mAkqqMwFWfP+eBIbc7DZ835er6r6h9CwAg==.sig.ed25519"}')
+
+
+class MockConnection(object):
+    def __init__(self):
+        self.input = []
+        self.output = []
+        self.connected = False
+
+    async def read(self):
+        if not self.input:
+            raise StopAsyncIteration
+        return self.input.pop(0)
+
+    def write(self, data):
+        self.output.append(data)
+
+    def feed(self, input):
+        self.input += input
+
+    def get_output(self):
+        while True:
+            if not self.output:
+                break
+            yield self.output.pop(0)
+
+    async def disconnect(self):
+        self.connected = False
+
+
+@pytest.fixture
+def ps_client(monkeypatch):
+    def mock_connect():
+        client._connected = True
+        connection.connected = True
+    client = PSClient('fake.local', 1000, SigningKey.generate(), b'\00' * 32)
+
+    connection = MockConnection()
+    monkeypatch.setattr(client, 'connect', mock_connect)
+    monkeypatch.setattr(client, 'connection', connection)
+    client.connect()
+
+    return client, connection
+
+
+@pytest.mark.asyncio
+async def test_message_decoding(ps_client):
+    client, connection = ps_client
+
+    assert client.is_connected
+
+    connection.feed([
+        b'\n\x00\x00\x00\x9a\x00\x00\x04\xfb',
+        b'{"name":["createHistoryStream"],"args":[{"id":"@omgyp7Pnrw+Qm0I6T6Fh5VvnKmodMXwnxTIesW2DgMg=.ed25519",'
+        b'"seq":10,"live":true,"keys":false}],"type":"source"}'
+    ])
+
+    messages = (await _collect_messages(client))
+    assert len(messages) == 1
+    assert messages[0].type == PSMessageType.JSON
+    assert messages[0].body == {
+        'name': ['createHistoryStream'],
+        'args': [
+            {
+                'id': '@omgyp7Pnrw+Qm0I6T6Fh5VvnKmodMXwnxTIesW2DgMg=.ed25519',
+                'seq': 10,
+                'live': True,
+                'keys': False
+            }
+        ],
+        'type': 'source'
+    }
+
+
+@pytest.mark.asyncio
+async def test_message_encoding(ps_client):
+    client, connection = ps_client
+
+    assert client.is_connected
+
+    client.send({
+        'name': ['createHistoryStream'],
+        'args': [{
+            'id': "@1+Iwm79DKvVBqYKFkhT6fWRbAVvNNVH4F2BSxwhYmx8=.ed25519",
+            'seq': 1,
+            'live': False,
+            'keys': False
+        }],
+        'type': 'source'
+    }, stream=True)
+
+    body = (b'{"name": ["createHistoryStream"], "args": [{"id": "@1+Iwm79DKvVBqYKFkhT6fWRbAVvNNVH4F2BSxwhYmx8=.ed25519"'
+            b', "seq": 1, "live": false, "keys": false}], "type": "source"}')
+
+    assert list(connection.get_output()) == [b'\x0a\x00\x00\x00\xa6\x00\x00\x00\x01', body]
+
+
+@pytest.mark.asyncio
+async def test_message_source(ps_client, mocker):
+    client, connection = ps_client
+    mocker.patch.object(client, 'register_handler', wraps=client.register_handler)
+
+    assert client.is_connected
+
+    client.send({
+        'name': ['createHistoryStream'],
+        'args': [{
+            'id': "@1+Iwm79DKvVBqYKFkhT6fWRbAVvNNVH4F2BSxwhYmx8=.ed25519",
+            'seq': 1,
+            'live': False,
+            'keys': False
+        }],
+        'type': 'source'
+    }, stream=True)
+
+    assert client.req_counter == 2
+    assert client.register_handler.call_count == 1
+    handler = list(client._event_map.values())[0][1]
+
+    with patch.object(handler, 'process') as mock_process:
+        connection.feed([b'\n\x00\x00\x02\xc5\xff\xff\xff\xff', MSG_BODY_1])
+        msg = await client.read()
+        assert mock_process.call_count == 1
+
+        # responses have negative req
+        assert msg.req == -1
+        assert msg.body['previous'] == '%KTGP6W8vF80McRAZHYDWuKOD0KlNyKSq6Gb42iuV7Iw=.sha256'
+
+        assert client.req_counter == 2
+
+    stream_handler = client.send({
+        'name': ['createHistoryStream'],
+        'args': [{
+            'id': "@1+Iwm79DKvVBqYKFkhT6fWRbAVvNNVH4F2BSxwhYmx8=.ed25519",
+            'seq': 1,
+            'live': False,
+            'keys': False
+        }],
+        'type': 'source'
+    }, stream=True)
+
+    assert client.req_counter == 3
+    assert client.register_handler.call_count == 2
+    handler = list(client._event_map.values())[1][1]
+
+    with patch.object(handler, 'process', wraps=handler.process) as mock_process:
+        connection.feed([b'\n\x00\x00\x02\xc5\xff\xff\xff\xfe', MSG_BODY_1, b'\x0e\x00\x00\x023\xff\xff\xff\xfe',
+                         MSG_BODY_2])
+
+        # execute both message polling and response handling loops
+        collected, handled = await gather(_collect_messages(client), _collect_messages(stream_handler))
+
+        # No messages collected, since they're all responses
+        assert collected == []
+
+        assert mock_process.call_count == 2
+
+        for msg in handled:
+            # responses have negative req
+            assert msg.req == -2