diff --git a/livekit-android-sdk/src/main/java/io/livekit/android/room/RTCEngine.kt b/livekit-android-sdk/src/main/java/io/livekit/android/room/RTCEngine.kt
index 2ebd7ede..c52a5b9b 100644
--- a/livekit-android-sdk/src/main/java/io/livekit/android/room/RTCEngine.kt
+++ b/livekit-android-sdk/src/main/java/io/livekit/android/room/RTCEngine.kt
@@ -65,7 +65,7 @@ internal constructor(
     private val pctFactory: PeerConnectionTransport.Factory,
     @Named(InjectionNames.DISPATCHER_IO)
     private val ioDispatcher: CoroutineDispatcher,
-) : SignalClient.Listener, DataChannel.Observer {
+) : SignalClient.Listener {
     internal var listener: Listener? = null
 
     /**
@@ -218,7 +218,7 @@ internal constructor(
                     LOSSY_DATA_CHANNEL_LABEL -> lossyDataChannelSub = dataChannel
                     else -> return@onDataChannel
                 }
-                dataChannel.registerObserver(this)
+                dataChannel.registerObserver(DataChannelObserver(dataChannel))
             }
 
             subscriberObserver.connectionChangeListener = connectionStateListener
@@ -239,7 +239,9 @@ internal constructor(
             createDataChannel(
                 RELIABLE_DATA_CHANNEL_LABEL,
                 reliableInit,
-            ).apply { registerObserver(this@RTCEngine) }
+            ).also { dataChannel ->
+                dataChannel.registerObserver(DataChannelObserver(dataChannel))
+            }
         }
 
         val lossyInit = DataChannel.Init()
@@ -249,7 +251,9 @@ internal constructor(
             createDataChannel(
                 LOSSY_DATA_CHANNEL_LABEL,
                 lossyInit,
-            ).apply { registerObserver(this@RTCEngine) }
+            ).also { dataChannel ->
+                dataChannel.registerObserver(DataChannelObserver(dataChannel))
+            }
         }
     }
 
@@ -684,8 +688,11 @@ internal constructor(
     }
 
     companion object {
-        private const val RELIABLE_DATA_CHANNEL_LABEL = "_reliable"
-        private const val LOSSY_DATA_CHANNEL_LABEL = "_lossy"
+        @VisibleForTesting
+        internal const val RELIABLE_DATA_CHANNEL_LABEL = "_reliable"
+
+        @VisibleForTesting
+        internal const val LOSSY_DATA_CHANNEL_LABEL = "_lossy"
         internal const val MAX_DATA_PACKET_SIZE = 15000
         private const val MAX_RECONNECT_RETRIES = 10
         private const val MAX_RECONNECT_TIMEOUT = 60 * 1000
@@ -883,13 +890,13 @@ internal constructor(
 
     // --------------------------------- DataChannel.Observer ------------------------------------//
 
-    override fun onBufferedAmountChange(previousAmount: Long) {
+    fun onBufferedAmountChange(dataChannel: DataChannel, previousAmount: Long) {
     }
 
-    override fun onStateChange() {
+    fun onStateChange(dataChannel: DataChannel) {
     }
 
-    override fun onMessage(buffer: DataChannel.Buffer?) {
+    fun onMessage(dataChannel: DataChannel, buffer: DataChannel.Buffer?) {
         if (buffer == null) {
             return
         }
@@ -911,6 +918,20 @@ internal constructor(
         }
     }
 
+    private inner class DataChannelObserver(val dataChannel: DataChannel) : DataChannel.Observer {
+        override fun onBufferedAmountChange(p0: Long) {
+            this@RTCEngine.onBufferedAmountChange(dataChannel, p0)
+        }
+
+        override fun onStateChange() {
+            this@RTCEngine.onStateChange(dataChannel)
+        }
+
+        override fun onMessage(p0: DataChannel.Buffer) {
+            this@RTCEngine.onMessage(dataChannel, p0)
+        }
+    }
+
     fun sendSyncState(
         subscription: LivekitRtc.UpdateSubscription,
         publishedTracks: List<LivekitRtc.TrackPublishedResponse>,
diff --git a/livekit-android-sdk/src/test/java/io/livekit/android/MockE2ETest.kt b/livekit-android-sdk/src/test/java/io/livekit/android/MockE2ETest.kt
index f8a1188b..c223496a 100644
--- a/livekit-android-sdk/src/test/java/io/livekit/android/MockE2ETest.kt
+++ b/livekit-android-sdk/src/test/java/io/livekit/android/MockE2ETest.kt
@@ -35,9 +35,12 @@ import okhttp3.Request
 import okhttp3.Response
 import okio.ByteString
 import org.junit.Before
+import org.junit.runner.RunWith
+import org.robolectric.RobolectricTestRunner
 import org.webrtc.PeerConnection
 
 @ExperimentalCoroutinesApi
+@RunWith(RobolectricTestRunner::class)
 abstract class MockE2ETest : BaseTest() {
 
     internal lateinit var component: TestLiveKitComponent
diff --git a/livekit-android-sdk/src/test/java/io/livekit/android/room/RoomDataMockE2ETest.kt b/livekit-android-sdk/src/test/java/io/livekit/android/room/RoomDataMockE2ETest.kt
new file mode 100644
index 00000000..615f27db
--- /dev/null
+++ b/livekit-android-sdk/src/test/java/io/livekit/android/room/RoomDataMockE2ETest.kt
@@ -0,0 +1,65 @@
+/*
+ * Copyright 2023 LiveKit, Inc.
+ *
+ * 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.
+ */
+
+package io.livekit.android.room
+
+import com.google.protobuf.ByteString
+import io.livekit.android.MockE2ETest
+import io.livekit.android.assert.assertIsClass
+import io.livekit.android.events.EventCollector
+import io.livekit.android.events.RoomEvent
+import io.livekit.android.mock.MockDataChannel
+import io.livekit.android.mock.MockPeerConnection
+import kotlinx.coroutines.ExperimentalCoroutinesApi
+import livekit.LivekitModels.DataPacket
+import livekit.LivekitModels.UserPacket
+import org.junit.Assert.assertEquals
+import org.junit.Test
+import org.webrtc.DataChannel
+import java.nio.ByteBuffer
+
+@OptIn(ExperimentalCoroutinesApi::class)
+class RoomDataMockE2ETest : MockE2ETest() {
+    @Test
+    fun dataReceivedEvent() = runTest {
+        connect()
+        val subPeerConnection = component.rtcEngine().getSubscriberPeerConnection() as MockPeerConnection
+        val subDataChannel = MockDataChannel(RTCEngine.RELIABLE_DATA_CHANNEL_LABEL)
+        subPeerConnection.observer?.onDataChannel(subDataChannel)
+
+        val collector = EventCollector(room.events, coroutineRule.scope)
+        val dataPacket = with(DataPacket.newBuilder()) {
+            user = with(UserPacket.newBuilder()) {
+                payload = ByteString.copyFrom("hello", Charsets.UTF_8)
+                build()
+            }
+            build()
+        }
+        val dataBuffer = DataChannel.Buffer(
+            ByteBuffer.wrap(dataPacket.toByteArray()),
+            true
+        )
+
+        subDataChannel.observer?.onMessage(dataBuffer)
+        val events = collector.stopCollecting()
+
+        assertEquals(1, events.size)
+        assertIsClass(RoomEvent.DataReceived::class.java, events[0])
+
+        val event = events[0] as RoomEvent.DataReceived
+        assertEquals("hello", event.data.decodeToString())
+    }
+}