diff --git a/docs/testing.md b/docs/testing.md
index 8ce97346b9..5a24452813 100644
--- a/docs/testing.md
+++ b/docs/testing.md
@@ -4,9 +4,15 @@ This guide outlines how to test NeMo RL using unit and functional tests, detaili
 
 ## Unit Tests
 
-:::{important}
-Unit tests require 2 GPUs to test the full suite.
-:::
+> [!IMPORTANT]
+> Unit tests require 2 GPUs to test the full suite.
+
+> [!TIP]
+> Some unit tests require setting up test assets which you can download with 
+> ```sh
+> uv run tests/unit/prepare_unit_test_assets.py
+> ```
+
 
 ```sh
 # Run the unit tests using local GPUs
diff --git a/nemo_rl/distributed/virtual_cluster.py b/nemo_rl/distributed/virtual_cluster.py
index 6e0a75b880..8b7a075d3b 100644
--- a/nemo_rl/distributed/virtual_cluster.py
+++ b/nemo_rl/distributed/virtual_cluster.py
@@ -45,6 +45,9 @@ class PY_EXECUTABLES:
     # Use NeMo-RL direct dependencies.
     BASE = "uv run --locked"
 
+    # Use NeMo-RL direct dependencies.
+    AUTOMODEL = "uv run --locked --extra automodel"
+
     # Use NeMo-RL direct dependencies and vllm.
     VLLM = "uv run --locked --extra vllm"
 
diff --git a/nemo_rl/models/dtensor/parallelize.py b/nemo_rl/models/dtensor/parallelize.py
index 7de646d47a..f0cdadd1a9 100644
--- a/nemo_rl/models/dtensor/parallelize.py
+++ b/nemo_rl/models/dtensor/parallelize.py
@@ -357,6 +357,76 @@ def get_hf_tp_plan(model: PreTrainedModel):
     return hf_tp_plan
 
 
+def _parallelize_nm5_h(
+    model,
+    dp_mesh: DeviceMesh,
+    tp_mesh: DeviceMesh,
+    param_dtype: torch.dtype,
+    sequence_parallel: bool = False,
+    activation_checkpointing: bool = False,
+    cpu_offload: bool = False,
+    custom_parallel_plan: Optional[Union[dict, str]] = None,
+) -> torch.distributed.fsdp.FSDPModule:
+    """Parallelize a NemotronHForCausalLM model across data and tensor parallel dimensions."""
+    assert not sequence_parallel, (
+        "Sequence parallelism is not supported for NemotronHForCausalLM"
+    )
+    assert custom_parallel_plan is None, (
+        "Custom parallel plan is not supported for NemotronHForCausalLM"
+    )
+
+    model_tp_plan: dict[str, ParallelStyle] = {
+        "lm_head": ColwiseParallel(output_layouts=Shard(-1), use_local_output=False),
+    }
+
+    mlp_tp_plan: dict[str, ParallelStyle] = {
+        "mixer.up_proj": ColwiseParallel(),
+        "mixer.down_proj": RowwiseParallel(),
+    }
+
+    layers: torch.nn.ModuleList = model.backbone.layers
+    parallelize_module(model, tp_mesh, model_tp_plan)
+
+    for layer in model.backbone.layers:
+        if layer.block_type == "mlp":
+            parallelize_module(layer, tp_mesh, mlp_tp_plan)
+
+    if activation_checkpointing:
+        for i in range(len(layers)):
+            if layers[i].block_type == "mlp":
+                layers[i] = checkpoint_wrapper(layers[i])
+
+            if layers[i].block_type == "mamba":
+                layers[i] = checkpoint_wrapper(layers[i])
+
+    mp_policy = MixedPrecisionPolicy(
+        param_dtype=param_dtype,
+        reduce_dtype=torch.float32,
+        output_dtype=torch.float32,
+    )
+
+    offload_policy = (
+        CPUOffloadPolicy(pin_memory=False)
+        if cpu_offload
+        else torch.distributed.fsdp.OffloadPolicy
+    )
+
+    for layer in layers:
+        fully_shard(
+            layer, mesh=dp_mesh, mp_policy=mp_policy, offload_policy=offload_policy
+        )
+
+    # do not reshard after forward for root model
+    # because its parameters will be used in backward immediately
+    return fully_shard(
+        model,
+        mesh=dp_mesh,
+        mp_policy=mp_policy,
+        offload_policy=offload_policy,
+        reshard_after_forward=False,
+    )
+
+
 def _parallelize_model(
     model: Union[
         Qwen2ForCausalLM,
@@ -394,7 +464,20 @@ def _parallelize_model(
         ValueError: If the model type is not supported for parallelization.
     """
     model_cls = type(model)
-    if model_cls == Gemma3ForConditionalGeneration:
+    if model_cls.__name__ == "NemotronHForCausalLM":
+        # need to do something special for nm5, since it's harder to shard the mamba layers
+        # nm5 is not importable, so we check the __name__ attribute
+        return _parallelize_nm5_h(
+            model,
+            dp_mesh,
+            tp_mesh,
+            param_dtype,
+            sequence_parallel,
+            activation_checkpointing,
+            cpu_offload,
+            custom_parallel_plan,
+        )
+    elif model_cls == Gemma3ForConditionalGeneration:
         layers: torch.nn.ModuleList = model.language_model.layers  # type: ignore
         num_attention_heads = model.config.text_config.num_attention_heads
         num_key_value_heads = model.config.text_config.num_key_value_heads
diff --git a/nemo_rl/models/policy/dtensor_policy_worker.py b/nemo_rl/models/policy/dtensor_policy_worker.py
index aba599923f..992b70b582 100644
--- a/nemo_rl/models/policy/dtensor_policy_worker.py
+++ b/nemo_rl/models/policy/dtensor_policy_worker.py
@@ -259,6 +259,7 @@ def __init__(
         with init_empty_weights():
             self.model = model_class.from_config(
                 model_config,
+                trust_remote_code=True,
             )
 
         if self.model.config.pad_token_id is None:
diff --git a/pyproject.toml b/pyproject.toml
index cb7b6f5227..5fc35e2b34 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -55,11 +55,17 @@ automodel = [
     # https://github.com/NVIDIA/TransformerEngine/blob/v2.3/transformer_engine/pytorch/attention/dot_product_attention/utils.py#L108
     # https://github.com/facebookresearch/xformers/blob/8354497deb2c04c67fbb2e2ad911e86530da0e90/xformers/ops/fmha/flash.py#L76
     "flash-attn==2.7.4.post1",
+    "mamba-ssm",
+    "causal-conv1d",
 ]
 vllm = [
     "vllm==0.10.0",
     # Remove this once https://github.com/NVIDIA-NeMo/RL/issues/501 resolved
     "flash-attn==2.7.4.post1",
+    # Remove this once https://github.com/NVIDIA-NeMo/RL/issues/501 resolved
+    "mamba-ssm",
+    # Remove this once https://github.com/NVIDIA-NeMo/RL/issues/501 resolved
+    "causal-conv1d",
 ]
 mcore = [
     # also need cudnn (https://developer.nvidia.com/cudnn-downloads?target_os=Linux&target_arch=x86_64&Distribution=Ubuntu&target_version=20.04&target_type=deb_network)
@@ -132,6 +138,8 @@ torchvision = [
 triton = [
   { index = "pytorch-cu128" },
 ]
+causal-conv1d = { git = "https://github.com/Dao-AILab/causal-conv1d", tag = "v1.5.0.post8" }
+mamba-ssm = { git = "https://github.com/state-spaces/mamba.git", rev = "2e16fc3062cdcd4ebef27a9aa4442676e1c7edf4" }
 
 [tool.uv.workspace]
 members = [
@@ -145,7 +153,7 @@ url = "https://download.pytorch.org/whl/cu128"
 explicit = true
 
 [tool.uv]
-no-build-isolation-package = ["transformer-engine-torch", "transformer-engine", "flash-attn"]
+no-build-isolation-package = ["transformer-engine-torch", "transformer-engine", "flash-attn", "mamba-ssm", "causal-conv1d"]
 # Always apply the build group since dependencies like TE/mcore/nemo-run require build dependencies
 # and this lets us assume they are implicitly installed with a simply `uv sync`. Ideally, we'd
 # avoid including these in the default dependency set, but for now it's required.
diff --git a/tests/unit/L0_Unit_Tests_Generation.sh b/tests/unit/L0_Unit_Tests_Generation.sh
index 1e33bea35e..3f607cc080 100644
--- a/tests/unit/L0_Unit_Tests_Generation.sh
+++ b/tests/unit/L0_Unit_Tests_Generation.sh
@@ -15,6 +15,8 @@
 #!/bin/bash
 set -xeuo pipefail # Exit immediately if a command exits with a non-zero status
 
+uv run tests/unit/prepare_unit_test_assets.py
+
 cd /opt/nemo-rl
 uv run --no-sync bash -x ./tests/run_unit.sh unit/models/generation/ --cov=nemo_rl --cov-report=term-missing --cov-report=json --hf-gated
 
diff --git a/tests/unit/L0_Unit_Tests_Other.sh b/tests/unit/L0_Unit_Tests_Other.sh
index e86d6f887a..a639730044 100644
--- a/tests/unit/L0_Unit_Tests_Other.sh
+++ b/tests/unit/L0_Unit_Tests_Other.sh
@@ -15,6 +15,8 @@
 #!/bin/bash
 set -xeuo pipefail # Exit immediately if a command exits with a non-zero status
 
+uv run tests/unit/prepare_unit_test_assets.py
+
 cd /opt/nemo-rl
 uv run --no-sync bash -x ./tests/run_unit.sh unit/ --ignore=unit/models/generation/ --ignore=unit/models/policy/ --cov=nemo_rl --cov-report=term-missing --cov-report=json --hf-gated
 
diff --git a/tests/unit/L0_Unit_Tests_Policy.sh b/tests/unit/L0_Unit_Tests_Policy.sh
index 4df69728ff..6fe9309fe6 100644
--- a/tests/unit/L0_Unit_Tests_Policy.sh
+++ b/tests/unit/L0_Unit_Tests_Policy.sh
@@ -15,6 +15,8 @@
 #!/bin/bash
 set -xeuo pipefail # Exit immediately if a command exits with a non-zero status
 
+uv run tests/unit/prepare_unit_test_assets.py
+
 cd /opt/nemo-rl
 uv run --no-sync bash -x ./tests/run_unit.sh unit/models/policy/ --cov=nemo_rl --cov-report=term-missing --cov-report=json --hf-gated
 
diff --git a/tests/unit/conftest.py b/tests/unit/conftest.py
index 1346a1173d..978131969a 100644
--- a/tests/unit/conftest.py
+++ b/tests/unit/conftest.py
@@ -576,3 +576,49 @@ def tiny_gemma3_model_path():
     tokenizer.save_pretrained(model_path)
     del model, tokenizer
     yield model_path
+
+
+def _build_tiny_nemotron5_h_checkpoint(model_path: str) -> None:
+    import shutil
+
+    from transformers import AutoConfig, AutoModelForCausalLM, AutoTokenizer
+
+    config = AutoConfig.from_pretrained(
+        "nvidia/Nemotron-H-8B-Base-8K", trust_remote_code=True
+    )
+    config.hybrid_override_pattern = "M*-"
+    config.num_hidden_layers = 3
+    config.intermediate_size = 32
+    config.hidden_size = 256
+    config.num_attention_heads = 8
+    config.mamba_num_heads = 8
+    config.num_key_value_heads = 8
+    config.n_groups = 1
+
+    model = AutoModelForCausalLM.from_config(config, trust_remote_code=True)
+    tokenizer = AutoTokenizer.from_pretrained(
+        "nvidia/Nemotron-H-8B-Base-8K", trust_remote_code=True
+    )
+
+    shutil.rmtree(model_path, ignore_errors=True)
+    model.save_pretrained(model_path)
+    tokenizer.save_pretrained(model_path)
+
+
+@pytest.fixture(scope="session")
+def tiny_nemotron5_h_model_path():
+    """Fixture that returns a path to a tiny nemotron model with a dummy tokenizer.
+
+    If the asset hasn't been prepared by the prepare script, skip the tests that require it.
+    """
+    model_path = os.path.join(
+        TEST_ASSETS_DIR, "tiny_nemotron5_h_with_nemotron_tokenizer"
+    )
+
+    config_file = os.path.join(model_path, "config.json")
+    if not os.path.exists(config_file):
+        pytest.skip(
+            "Tiny Nemotron-H test asset not prepared. Run `uv run tests/unit/prepare_unit_test_assets.py` first."
+        )
+
+    yield model_path
diff --git a/tests/unit/models/policy/test_dtensor_worker.py b/tests/unit/models/policy/test_dtensor_worker.py
index f6d1a7c2a8..457a4a8e3e 100644
--- a/tests/unit/models/policy/test_dtensor_worker.py
+++ b/tests/unit/models/policy/test_dtensor_worker.py
@@ -328,6 +328,13 @@ def training_setup(request, two_gpu_virtual_cluster):
         ("tiny_gemma3_model_path", 1, 1, False, True, True),
         ("tiny_gemma3_model_path", 1, 1, True, True, True),
         # CP doesn't support gemma3 due to spda input has attent_mask != None.
+        # Nemotron-H doesn't support SP https://github.com/NVIDIA-NeMo/RL/issues/881
+        # ("tiny_nemotron5_h_model_path", 1, 1, True, True, False),
+        # ("tiny_nemotron5_h_model_path", 1, 1, True, False, True),
+        # ("tiny_nemotron5_h_model_path", 1, 1, True, True, True),
+        ("tiny_nemotron5_h_model_path", 1, 1, False, False, False),
+        ("tiny_nemotron5_h_model_path", 1, 1, False, True, True),
+        # nemotron5_h doesn't support cp
     ],
     indirect=True,
 )
diff --git a/tests/unit/prepare_unit_test_assets.py b/tests/unit/prepare_unit_test_assets.py
new file mode 100644
index 0000000000..6cb8344c55
--- /dev/null
+++ b/tests/unit/prepare_unit_test_assets.py
@@ -0,0 +1,98 @@
+# Copyright (c) 2025, NVIDIA CORPORATION.  All rights reserved.
+#
+# 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.
+"""
+This script exists to help load any unit asset that requires special handling.
+
+The initial reason for this was to help with Nemotron-H which has a requirement
+to have mamaba-ssm in the base environment in order to initialize a dummy model. Since
+the unit tests should be runable with the base environment (without mamba-ssm),
+we use ray.remotes to build the asset here. We do this outside of a fixture
+like the other test assets because this one sometimes takes a while to build. This
+extra setup time can sometimes cause timeouts in the unit tests if unlucky.
+"""
+
+import os
+
+import ray
+
+from nemo_rl.distributed.virtual_cluster import PY_EXECUTABLES
+from nemo_rl.utils.venvs import create_local_venv
+
+TESTS_DIR = os.path.dirname(os.path.abspath(__file__))
+TEST_ASSETS_DIR = os.path.join(TESTS_DIR, "test_assets")
+
+
+def build_tiny_nemotron5_h_checkpoint(model_path: str) -> None:
+    import shutil
+
+    from transformers import AutoConfig, AutoModelForCausalLM, AutoTokenizer
+
+    config = AutoConfig.from_pretrained(
+        "nvidia/Nemotron-H-8B-Base-8K", trust_remote_code=True
+    )
+    config.hybrid_override_pattern = "M*-"
+    config.num_hidden_layers = 3
+    config.intermediate_size = 32
+    config.hidden_size = 256
+    config.num_attention_heads = 8
+    config.mamba_num_heads = 8
+    config.num_key_value_heads = 8
+    config.n_groups = 1
+
+    model = AutoModelForCausalLM.from_config(config, trust_remote_code=True)
+    tokenizer = AutoTokenizer.from_pretrained(
+        "nvidia/Nemotron-H-8B-Base-8K", trust_remote_code=True
+    )
+
+    shutil.rmtree(model_path, ignore_errors=True)
+    model.save_pretrained(model_path)
+    tokenizer.save_pretrained(model_path)
+    print(f"✓ Built tiny Nemotron-H asset at: {model_path}")
+
+
+def main() -> None:
+    os.makedirs(TEST_ASSETS_DIR, exist_ok=True)
+
+    target = os.path.join(TEST_ASSETS_DIR, "tiny_nemotron5_h_with_nemotron_tokenizer")
+
+    # Create Automodel env venv
+    automodel_python = create_local_venv(
+        py_executable=PY_EXECUTABLES.AUTOMODEL, venv_name="automodel_env"
+    )
+
+    ############################################################################
+    # Add other remote calls here
+    ############################################################################
+    # Submit as list of remote calls and wait individually
+    remote_calls = [
+        ray.remote(build_tiny_nemotron5_h_checkpoint)
+        .options(
+            num_gpus=0.01,  # tiny reservation to satisfy CUDA-inspecting deps
+            runtime_env={"py_executable": automodel_python},
+            name="build-nemotron5h",
+        )
+        .remote(target)
+    ]
+
+    for obj_ref in remote_calls:
+        ray.get(obj_ref)
+
+
+if __name__ == "__main__":
+    if not ray.is_initialized():
+        ray.init(ignore_reinit_error=True, include_dashboard=False)
+    try:
+        main()
+    finally:
+        ray.shutdown()
diff --git a/uv.lock b/uv.lock
index c2a8c6cfe9..9cd8ecb5e3 100644
--- a/uv.lock
+++ b/uv.lock
@@ -402,6 +402,16 @@ wheels = [
     { url = "https://files.pythonhosted.org/packages/9e/96/d32b941a501ab566a16358d68b6eb4e4acc373fab3c3c4d7d9e649f7b4bb/catalogue-2.0.10-py3-none-any.whl", hash = "sha256:58c2de0020aa90f4a2da7dfad161bf7b3b054c86a5f09fcedc0b2b740c109a9f", size = 17325, upload-time = "2023-09-25T06:29:23.337Z" },
 ]
 
+[[package]]
+name = "causal-conv1d"
+version = "1.5.0.post8"
+source = { git = "https://github.com/Dao-AILab/causal-conv1d?tag=v1.5.0.post8#82867a9d2e6907cc0f637ac6aff318f696838548" }
+dependencies = [
+    { name = "ninja" },
+    { name = "packaging" },
+    { name = "torch" },
+]
+
 [[package]]
 name = "cbor2"
 version = "5.6.5"
@@ -2023,6 +2033,21 @@ wheels = [
     { url = "https://files.pythonhosted.org/packages/87/fb/99f81ac72ae23375f22b7afdb7642aba97c00a713c217124420147681a2f/mako-1.3.10-py3-none-any.whl", hash = "sha256:baef24a52fc4fc514a0887ac600f9f1cff3d82c61d4d700a1fa84d597b88db59", size = 78509, upload-time = "2025-04-10T12:50:53.297Z" },
 ]
 
+[[package]]
+name = "mamba-ssm"
+version = "2.2.4"
+source = { git = "https://github.com/state-spaces/mamba.git?rev=2e16fc3062cdcd4ebef27a9aa4442676e1c7edf4#2e16fc3062cdcd4ebef27a9aa4442676e1c7edf4" }
+dependencies = [
+    { name = "einops" },
+    { name = "ninja" },
+    { name = "packaging" },
+    { name = "setuptools" },
+    { name = "torch" },
+    { name = "transformers" },
+    { name = "triton", version = "3.3.0", source = { registry = "https://download.pytorch.org/whl/cu128" }, marker = "sys_platform != 'linux'" },
+    { name = "triton", version = "3.3.1", source = { registry = "https://download.pytorch.org/whl/cu128" }, marker = "sys_platform == 'linux'" },
+]
+
 [[package]]
 name = "markdown"
 version = "3.8.2"
@@ -2542,7 +2567,9 @@ dependencies = [
 
 [package.optional-dependencies]
 automodel = [
+    { name = "causal-conv1d" },
     { name = "flash-attn" },
+    { name = "mamba-ssm" },
 ]
 mcore = [
     { name = "flash-attn" },
@@ -2552,7 +2579,9 @@ mcore = [
     { name = "vllm" },
 ]
 vllm = [
+    { name = "causal-conv1d" },
     { name = "flash-attn" },
+    { name = "mamba-ssm" },
     { name = "vllm" },
 ]
 
@@ -2592,6 +2621,8 @@ test = [
 requires-dist = [
     { name = "accelerate", specifier = ">=0.26" },
     { name = "blobfile" },
+    { name = "causal-conv1d", marker = "extra == 'automodel'", git = "https://github.com/Dao-AILab/causal-conv1d?tag=v1.5.0.post8" },
+    { name = "causal-conv1d", marker = "extra == 'vllm'", git = "https://github.com/Dao-AILab/causal-conv1d?tag=v1.5.0.post8" },
     { name = "colored", specifier = "==2.2.3" },
     { name = "datasets", specifier = ">=4.0.0" },
     { name = "debugpy" },
@@ -2599,6 +2630,8 @@ requires-dist = [
     { name = "flash-attn", marker = "extra == 'mcore'", specifier = "==2.7.4.post1" },
     { name = "flash-attn", marker = "extra == 'vllm'", specifier = "==2.7.4.post1" },
     { name = "hydra-core" },
+    { name = "mamba-ssm", marker = "extra == 'automodel'", git = "https://github.com/state-spaces/mamba.git?rev=2e16fc3062cdcd4ebef27a9aa4442676e1c7edf4" },
+    { name = "mamba-ssm", marker = "extra == 'vllm'", git = "https://github.com/state-spaces/mamba.git?rev=2e16fc3062cdcd4ebef27a9aa4442676e1c7edf4" },
     { name = "math-verify" },
     { name = "matplotlib" },
     { name = "megatron-core", marker = "extra == 'mcore'", editable = "3rdparty/Megatron-LM-workspace" },