diff --git a/synapse/federation/handler.py b/synapse/federation/handler.py
deleted file mode 100644
index ce98f4f94a..0000000000
--- a/synapse/federation/handler.py
+++ /dev/null
@@ -1,156 +0,0 @@
-# -*- 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, snapshot):
-        """ 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
-            snapshot (.storage.Snapshot): THe snapshot the event happened after
-
-        Returns:
-            Deferred: Resolved when it has successfully been queued for
-            processing.
-        """
-        yield self.fill_out_prev_events(event, snapshot)
-
-        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, dest, room_id, limit):
-        pdus = yield self.replication_layer.backfill(dest, room_id, limit)
-
-        if not pdus:
-            defer.returnValue([])
-
-        events = [
-            self.pdu_codec.event_from_pdu(pdu)
-            for pdu in pdus
-        ]
-
-        defer.returnValue(events)
-
-    @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, backfilled):
-        """ 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 and not backfilled:
-                    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, backfilled)
-
-        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, snapshot):
-        if hasattr(event, "prev_events"):
-            return
-
-        results = snapshot.prev_pdus
-
-        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
diff --git a/synapse/handlers/_base.py b/synapse/handlers/_base.py
index 32c0d6b8aa..00da47bb5d 100644
--- a/synapse/handlers/_base.py
+++ b/synapse/handlers/_base.py
@@ -43,4 +43,5 @@ class BaseRoomHandler(BaseHandler):
 
         self.notifier.on_new_room_event(event, store_id)
 
-        yield self.hs.get_federation().handle_new_event(event, snapshot)
+        federation_handler = self.hs.get_handlers().federation_handler
+        yield federation_handler.handle_new_event(event, snapshot)
diff --git a/synapse/handlers/federation.py b/synapse/handlers/federation.py
index bfc1ab86f2..a2e935add0 100644
--- a/synapse/handlers/federation.py
+++ b/synapse/handlers/federation.py
@@ -20,6 +20,9 @@ from ._base import BaseHandler
 from synapse.api.events.room import InviteJoinEvent, RoomMemberEvent
 from synapse.api.constants import Membership
 from synapse.util.logutils import log_function
+from synapse.federation.pdu_codec import PduCodec
+
+from synapse.api.errors import AuthError
 
 from twisted.internet import defer
 
@@ -30,8 +33,14 @@ logger = logging.getLogger(__name__)
 
 
 class FederationHandler(BaseHandler):
+    """Handles events that originated from federation.
+        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.
+    """
 
-    """Handles events that originated from federation."""
     def __init__(self, hs):
         super(FederationHandler, self).__init__(hs)
 
@@ -42,6 +51,112 @@ class FederationHandler(BaseHandler):
 
         self.waiting_for_join_list = {}
 
+        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.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, snapshot):
+        """ 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
+            snapshot (.storage.Snapshot): THe snapshot the event happened after
+
+        Returns:
+            Deferred: Resolved when it has successfully been queued for
+            processing.
+        """
+        yield self.fill_out_prev_events(event, snapshot)
+
+        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
+    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, backfilled):
+        """ 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 and not backfilled:
+                    is_new_state = yield self.state_handler.handle_new_state(
+                        pdu
+                    )
+                    if not is_new_state:
+                        return
+                else:
+                    is_new_state = False
+
+            yield self.on_receive(event, is_new_state, backfilled)
+
+        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.on_receive(new_state_event)
+
+    @defer.inlineCallbacks
+    def fill_out_prev_events(self, event, snapshot):
+        if hasattr(event, "prev_events"):
+            return
+
+        results = snapshot.prev_pdus
+
+        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
+
+
+
     @log_function
     @defer.inlineCallbacks
     def on_receive(self, event, is_new_state, backfilled):
@@ -86,8 +201,7 @@ class FederationHandler(BaseHandler):
             if not room:
                 # Huh, let's try and get the current state
                 try:
-                    federation = self.hs.get_federation()
-                    yield federation.get_state_for_room(
+                    yield self.get_state_for_room(
                         event.origin, event.room_id
                     )
 
@@ -119,11 +233,10 @@ class FederationHandler(BaseHandler):
                     "user_joined_room", user=user, room_id=event.room_id
                 )
 
-
     @log_function
     @defer.inlineCallbacks
     def backfill(self, dest, room_id, limit):
-        events = yield self.hs.get_federation().backfill(dest, room_id, limit)
+        events = yield self._backfill(dest, room_id, limit)
 
         for event in events:
             try:
@@ -133,10 +246,23 @@ class FederationHandler(BaseHandler):
 
         defer.returnValue(events)
 
+    @defer.inlineCallbacks
+    def _backfill(self, dest, room_id, limit):
+        pdus = yield self.replication_layer.backfill(dest, room_id, limit)
+
+        if not pdus:
+            defer.returnValue([])
+
+        events = [
+            self.pdu_codec.event_from_pdu(pdu)
+            for pdu in pdus
+        ]
+
+        defer.returnValue(events)
+
     @log_function
     @defer.inlineCallbacks
     def do_invite_join(self, target_host, room_id, joinee, content):
-        federation = self.hs.get_federation()
 
         hosts = yield self.store.get_joined_hosts_for_room(room_id)
         if self.hs.hostname in hosts:
@@ -146,7 +272,7 @@ class FederationHandler(BaseHandler):
 
         # First get current state to see if we are already joined.
         try:
-            yield federation.get_state_for_room(target_host, room_id)
+            yield self.get_state_for_room(target_host, room_id)
 
             hosts = yield self.store.get_joined_hosts_for_room(room_id)
             if self.hs.hostname in hosts:
@@ -166,7 +292,7 @@ class FederationHandler(BaseHandler):
 
         new_event.destinations = [target_host]
 
-        yield federation.handle_new_event(new_event)
+        yield self.handle_new_event(new_event)
 
         # TODO (erikj): Time out here.
         d = defer.Deferred()
diff --git a/synapse/handlers/room.py b/synapse/handlers/room.py
index 4797f8be0c..6abfa00c5c 100644
--- a/synapse/handlers/room.py
+++ b/synapse/handlers/room.py
@@ -368,7 +368,8 @@ class RoomCreationHandler(BaseRoomHandler):
         yield self.state_handler.handle_new_event(config_event)
         # store_id = persist...
 
-        yield self.hs.get_federation().handle_new_event(config_event)
+        federation_handler = self.hs.get_handlers().federation_handler
+        yield federation_handler.handle_new_event(config_event)
         # self.notifier.on_new_room_event(event, store_id)
 
         content = {"membership": Membership.JOIN}
diff --git a/synapse/server.py b/synapse/server.py
index c5b0a32757..b825917748 100644
--- a/synapse/server.py
+++ b/synapse/server.py
@@ -20,7 +20,6 @@
 
 # Imports required for the default HomeServer() implementation
 from synapse.federation import initialize_http_replication
-from synapse.federation.handler import FederationEventHandler
 from synapse.api.events.factory import EventFactory
 from synapse.api.notifier import Notifier
 from synapse.api.auth import Auth
@@ -58,7 +57,6 @@ class BaseHomeServer(object):
         'http_client',
         'db_pool',
         'persistence_service',
-        'federation',
         'replication_layer',
         'datastore',
         'event_factory',
@@ -152,9 +150,6 @@ class HomeServer(BaseHomeServer):
     def build_replication_layer(self):
         return initialize_http_replication(self)
 
-    def build_federation(self):
-        return FederationEventHandler(self)
-
     def build_datastore(self):
         return DataStore(self)
 
diff --git a/synapse/storage/__init__.py b/synapse/storage/__init__.py
index a726b7346b..130387184f 100644
--- a/synapse/storage/__init__.py
+++ b/synapse/storage/__init__.py
@@ -60,7 +60,9 @@ class DataStore(RoomMemberStore, RoomStore,
     def persist_event(self, event=None, backfilled=False, pdu=None):
         # FIXME (erikj): This should be removed when we start amalgamating
         # event and pdu storage
-        yield self.hs.get_federation().fill_out_prev_events(event)
+        if event is not None:
+            federation_handler = self.hs.get_handlers().federation_handler
+            yield federation_handler.fill_out_prev_events(event)
 
         stream_ordering = None
         if backfilled:
diff --git a/tests/handlers/test_room.py b/tests/handlers/test_room.py
index a1ab8dde68..613f5c307e 100644
--- a/tests/handlers/test_room.py
+++ b/tests/handlers/test_room.py
@@ -53,23 +53,26 @@ class RoomMemberHandlerTestCase(unittest.TestCase):
             handlers=NonCallableMock(spec_set=[
                 "room_member_handler",
                 "profile_handler",
+                "federation_handler",
             ]),
             auth=NonCallableMock(spec_set=["check"]),
-            federation=NonCallableMock(spec_set=[
-                "handle_new_event",
-                "get_state_for_room",
-            ]),
             state_handler=NonCallableMock(spec_set=["handle_new_event"]),
         )
 
+        self.federation = NonCallableMock(spec_set=[
+            "handle_new_event",
+            "get_state_for_room",
+        ])
+
         self.datastore = hs.get_datastore()
         self.handlers = hs.get_handlers()
         self.notifier = hs.get_notifier()
-        self.federation = hs.get_federation()
         self.state_handler = hs.get_state_handler()
         self.distributor = hs.get_distributor()
         self.hs = hs
 
+        self.handlers.federation_handler = self.federation
+
         self.distributor.declare("collect_presencelike_data")
 
         self.handlers.room_member_handler = RoomMemberHandler(self.hs)
@@ -333,21 +336,24 @@ class RoomCreationTest(unittest.TestCase):
             handlers=NonCallableMock(spec_set=[
                 "room_creation_handler",
                 "room_member_handler",
+                "federation_handler",
             ]),
             auth=NonCallableMock(spec_set=["check"]),
-            federation=NonCallableMock(spec_set=[
-                "handle_new_event",
-            ]),
             state_handler=NonCallableMock(spec_set=["handle_new_event"]),
         )
 
+        self.federation = NonCallableMock(spec_set=[
+            "handle_new_event",
+        ])
+
         self.datastore = hs.get_datastore()
         self.handlers = hs.get_handlers()
         self.notifier = hs.get_notifier()
-        self.federation = hs.get_federation()
         self.state_handler = hs.get_state_handler()
         self.hs = hs
 
+        self.handlers.federation_handler = self.federation
+
         self.handlers.room_creation_handler = RoomCreationHandler(self.hs)
         self.room_creation_handler = self.handlers.room_creation_handler
 
diff --git a/tests/rest/test_events.py b/tests/rest/test_events.py
index 4025e14581..cb641e0232 100644
--- a/tests/rest/test_events.py
+++ b/tests/rest/test_events.py
@@ -128,9 +128,9 @@ class EventStreamPermissionsTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             replication_layer=Mock(),
             state_handler=state_handler,
+            datastore=MemoryDataStore(),
             persistence_service=persistence_service,
             clock=Mock(spec=[
                 "call_later",
@@ -139,9 +139,10 @@ class EventStreamPermissionsTestCase(RestTestCase):
             ]),
         )
 
+        hs.get_handlers().federation_handler = Mock()
+
         hs.get_clock().time_msec.return_value = 1000000
 
-        hs.datastore = MemoryDataStore()
         synapse.rest.register.register_servlets(hs, self.mock_resource)
         synapse.rest.events.register_servlets(hs, self.mock_resource)
         synapse.rest.room.register_servlets(hs, self.mock_resource)
diff --git a/tests/rest/test_rooms.py b/tests/rest/test_rooms.py
index 8514d6ba21..83e5d0c129 100644
--- a/tests/rest/test_rooms.py
+++ b/tests/rest/test_rooms.py
@@ -54,12 +54,12 @@ class RoomPermissionsTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             datastore=MemoryDataStore(),
             replication_layer=Mock(),
             state_handler=state_handler,
             persistence_service=persistence_service,
         )
+        hs.get_handlers().federation_handler = Mock()
 
         def _get_user_by_token(token=None):
             return hs.parse_userid(self.auth_user_id)
@@ -403,12 +403,12 @@ class RoomsMemberListTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             datastore=MemoryDataStore(),
             replication_layer=Mock(),
             state_handler=state_handler,
             persistence_service=persistence_service,
         )
+        hs.get_handlers().federation_handler = Mock()
 
         self.auth_user_id = self.user_id
 
@@ -484,12 +484,12 @@ class RoomsCreateTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             datastore=MemoryDataStore(),
             replication_layer=Mock(),
             state_handler=state_handler,
             persistence_service=persistence_service,
         )
+        hs.get_handlers().federation_handler = Mock()
 
         def _get_user_by_token(token=None):
             return hs.parse_userid(self.auth_user_id)
@@ -626,12 +626,12 @@ class RoomTopicTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             datastore=MemoryDataStore(),
             replication_layer=Mock(),
             state_handler=state_handler,
             persistence_service=persistence_service,
         )
+        hs.get_handlers().federation_handler = Mock()
 
         def _get_user_by_token(token=None):
             return hs.parse_userid(self.auth_user_id)
@@ -729,12 +729,12 @@ class RoomMemberStateTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             datastore=MemoryDataStore(),
             replication_layer=Mock(),
             state_handler=state_handler,
             persistence_service=persistence_service,
         )
+        hs.get_handlers().federation_handler = Mock()
 
         def _get_user_by_token(token=None):
             return hs.parse_userid(self.auth_user_id)
@@ -855,12 +855,12 @@ class RoomMessagesTestCase(RestTestCase):
             "test",
             db_pool=None,
             http_client=None,
-            federation=Mock(),
             datastore=MemoryDataStore(),
             replication_layer=Mock(),
             state_handler=state_handler,
             persistence_service=persistence_service,
         )
+        hs.get_handlers().federation_handler = Mock()
 
         def _get_user_by_token(token=None):
             return hs.parse_userid(self.auth_user_id)