diff --git a/Cargo.lock b/Cargo.lock
index f69325552b6d..3918fd8ae846 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -6701,6 +6701,7 @@ name = "polkadot-parachain"
 version = "0.9.8"
 dependencies = [
  "derive_more",
+ "frame-support",
  "parity-scale-codec",
  "parity-util-mem",
  "polkadot-core-primitives",
@@ -10660,9 +10661,9 @@ checksum = "502d53007c02d7605a05df1c1a73ee436952781653da5d0bf57ad608f66932c1"
 
 [[package]]
 name = "syn"
-version = "1.0.67"
+version = "1.0.74"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "6498a9efc342871f91cc2d0d694c674368b4ceb40f62b65a7a08c3792935e702"
+checksum = "1873d832550d4588c3dbc20f01361ab00bfe741048f71e3fecf145a7cc18b29c"
 dependencies = [
  "proc-macro2",
  "quote",
@@ -12303,6 +12304,45 @@ dependencies = [
  "xcm",
 ]
 
+[[package]]
+name = "xcm-simulator"
+version = "0.9.8"
+dependencies = [
+ "frame-support",
+ "parity-scale-codec",
+ "paste",
+ "polkadot-core-primitives",
+ "polkadot-parachain",
+ "polkadot-runtime-parachains",
+ "sp-io",
+ "sp-std",
+ "xcm",
+ "xcm-executor",
+]
+
+[[package]]
+name = "xcm-simulator-example"
+version = "0.9.8"
+dependencies = [
+ "frame-support",
+ "frame-system",
+ "pallet-balances",
+ "pallet-xcm",
+ "parity-scale-codec",
+ "paste",
+ "polkadot-core-primitives",
+ "polkadot-parachain",
+ "polkadot-runtime-parachains",
+ "sp-core",
+ "sp-io",
+ "sp-runtime",
+ "sp-std",
+ "xcm",
+ "xcm-builder",
+ "xcm-executor",
+ "xcm-simulator",
+]
+
 [[package]]
 name = "yamux"
 version = "0.9.0"
diff --git a/Cargo.toml b/Cargo.toml
index 668b61db7ee0..03712f321752 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -39,6 +39,8 @@ members = [
 	"xcm",
 	"xcm/xcm-builder",
 	"xcm/xcm-executor",
+	"xcm/xcm-simulator",
+	"xcm/xcm-simulator/example",
 	"xcm/pallet-xcm",
 	"node/client",
 	"node/collation-generation",
diff --git a/parachain/Cargo.toml b/parachain/Cargo.toml
index 116d80e84188..819f1c8774d2 100644
--- a/parachain/Cargo.toml
+++ b/parachain/Cargo.toml
@@ -14,6 +14,7 @@ parity-util-mem = { version = "0.10.0", optional = true }
 sp-std = { git = "https://github.com/paritytech/substrate", branch = "master", default-features = false }
 sp-runtime = { git = "https://github.com/paritytech/substrate", branch = "master", default-features = false }
 sp-core = { git = "https://github.com/paritytech/substrate", branch = "master", default-features = false }
+frame-support = { git = "https://github.com/paritytech/substrate", branch = "master", default-features = false }
 polkadot-core-primitives = { path = "../core-primitives", default-features = false }
 derive_more = "0.99.11"
 
diff --git a/parachain/src/primitives.rs b/parachain/src/primitives.rs
index bf6d45ad01c8..5f7f58f9bb2d 100644
--- a/parachain/src/primitives.rs
+++ b/parachain/src/primitives.rs
@@ -22,6 +22,7 @@ use sp_std::vec::Vec;
 use parity_scale_codec::{Encode, Decode, CompactAs};
 use sp_core::{RuntimeDebug, TypeId};
 use sp_runtime::traits::Hash as _;
+use frame_support::weights::Weight;
 
 #[cfg(feature = "std")]
 use serde::{Serialize, Deserialize};
@@ -318,6 +319,59 @@ pub struct HrmpChannelId {
 /// A message from a parachain to its Relay Chain.
 pub type UpwardMessage = Vec<u8>;
 
+/// Something that should be called when a downward message is received.
+pub trait DmpMessageHandler {
+	/// Handle some incoming DMP messages (note these are individual XCM messages).
+	///
+	/// Also, process messages up to some `max_weight`.
+	fn handle_dmp_messages(
+		iter: impl Iterator<Item = (RelayChainBlockNumber, Vec<u8>)>,
+		max_weight: Weight,
+	) -> Weight;
+}
+impl DmpMessageHandler for () {
+	fn handle_dmp_messages(
+		iter: impl Iterator<Item = (RelayChainBlockNumber, Vec<u8>)>,
+		_max_weight: Weight,
+	) -> Weight {
+		iter.for_each(drop);
+		0
+	}
+}
+
+/// The aggregate XCMP message format.
+#[derive(Copy, Clone, Eq, PartialEq, Ord, PartialOrd, Encode, Decode)]
+pub enum XcmpMessageFormat {
+	/// Encoded `VersionedXcm` messages, all concatenated.
+	ConcatenatedVersionedXcm,
+	/// Encoded `Vec<u8>` messages, all concatenated.
+	ConcatenatedEncodedBlob,
+	/// One or more channel control signals; these should be interpreted immediately upon receipt
+	/// from the relay-chain.
+	Signals,
+}
+
+/// Something that should be called for each batch of messages received over XCMP.
+pub trait XcmpMessageHandler {
+	/// Handle some incoming XCMP messages (note these are the big one-per-block aggregate
+	/// messages).
+	///
+	/// Also, process messages up to some `max_weight`.
+	fn handle_xcmp_messages<'a, I: Iterator<Item = (Id, RelayChainBlockNumber, &'a [u8])>>(
+		iter: I,
+		max_weight: Weight,
+	) -> Weight;
+}
+impl XcmpMessageHandler for () {
+	fn handle_xcmp_messages<'a, I: Iterator<Item = (Id, RelayChainBlockNumber, &'a [u8])>>(
+		iter: I,
+		_max_weight: Weight,
+	) -> Weight {
+		for _ in iter {}
+		0
+	}
+}
+
 /// Validation parameters for evaluating the parachain validity function.
 // TODO: balance downloads (https://github.com/paritytech/polkadot/issues/220)
 #[derive(PartialEq, Eq, Decode, Clone)]
diff --git a/xcm/Cargo.toml b/xcm/Cargo.toml
index 66d565efde4e..adb604bad336 100644
--- a/xcm/Cargo.toml
+++ b/xcm/Cargo.toml
@@ -1,7 +1,7 @@
 [package]
 name = "xcm"
 version = "0.9.8"
-authors = ["Parity Technologies x<admin@parity.io>"]
+authors = ["Parity Technologies <admin@parity.io>"]
 description = "The basic XCM datastructures."
 edition = "2018"
 
diff --git a/xcm/xcm-simulator/Cargo.toml b/xcm/xcm-simulator/Cargo.toml
new file mode 100644
index 000000000000..be5c80111c00
--- /dev/null
+++ b/xcm/xcm-simulator/Cargo.toml
@@ -0,0 +1,20 @@
+[package]
+name = "xcm-simulator"
+version = "0.9.8"
+authors = ["Parity Technologies <admin@parity.io>"]
+description = "Test kit to simulate cross-chain message passing and XCM execution"
+edition = "2018"
+
+[dependencies]
+codec = { package = "parity-scale-codec", version = "2.0.0" }
+paste = "1.0.5"
+
+frame-support = { git = "https://github.com/paritytech/substrate", branch = "master" }
+sp-io = { git = "https://github.com/paritytech/substrate", branch = "master" }
+sp-std = { git = "https://github.com/paritytech/substrate", branch = "master" }
+
+xcm = { path = "../" }
+xcm-executor = { path = "../xcm-executor" }
+polkadot-core-primitives = { path = "../../core-primitives"}
+polkadot-parachain = { path = "../../parachain" }
+polkadot-runtime-parachains = { path = "../../runtime/parachains" }
diff --git a/xcm/xcm-simulator/example/Cargo.toml b/xcm/xcm-simulator/example/Cargo.toml
new file mode 100644
index 000000000000..3d8ddbb77d64
--- /dev/null
+++ b/xcm/xcm-simulator/example/Cargo.toml
@@ -0,0 +1,27 @@
+[package]
+name = "xcm-simulator-example"
+version = "0.9.8"
+authors = ["Parity Technologies <admin@parity.io>"]
+description = "Examples of xcm-simulator usage."
+edition = "2018"
+
+[dependencies]
+codec = { package = "parity-scale-codec", version = "2.0.0" }
+paste = "1.0.5"
+
+frame-system = { git = "https://github.com/paritytech/substrate", branch = "master" }
+frame-support = { git = "https://github.com/paritytech/substrate", branch = "master" }
+pallet-balances = { git = "https://github.com/paritytech/substrate", branch = "master" }
+sp-std = { git = "https://github.com/paritytech/substrate", branch = "master" }
+sp-core = { git = "https://github.com/paritytech/substrate", branch = "master" }
+sp-runtime = { git = "https://github.com/paritytech/substrate", branch = "master" }
+sp-io = { git = "https://github.com/paritytech/substrate", branch = "master" }
+
+xcm = { path = "../../" }
+xcm-simulator = { path = "../" }
+xcm-executor = { path = "../../xcm-executor" }
+xcm-builder = { path = "../../xcm-builder" }
+pallet-xcm = { path = "../../pallet-xcm" }
+polkadot-core-primitives = { path = "../../../core-primitives"}
+polkadot-runtime-parachains = { path = "../../../runtime/parachains" }
+polkadot-parachain = { path = "../../../parachain" }
\ No newline at end of file
diff --git a/xcm/xcm-simulator/example/src/lib.rs b/xcm/xcm-simulator/example/src/lib.rs
new file mode 100644
index 000000000000..f318409bf187
--- /dev/null
+++ b/xcm/xcm-simulator/example/src/lib.rs
@@ -0,0 +1,215 @@
+// Copyright 2021 Parity Technologies (UK) Ltd.
+// This file is part of Polkadot.
+
+// Polkadot is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Polkadot is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+// You should have received a copy of the GNU General Public License
+// along with Polkadot.  If not, see <http://www.gnu.org/licenses/>.
+
+mod parachain;
+mod relay_chain;
+
+use sp_runtime::AccountId32;
+use xcm_simulator::{decl_test_network, decl_test_parachain, decl_test_relay_chain};
+
+pub const ALICE: AccountId32 = AccountId32::new([0u8; 32]);
+
+decl_test_parachain! {
+	pub struct ParaA {
+		Runtime = parachain::Runtime,
+		XcmpMessageHandler = parachain::MsgQueue,
+		DmpMessageHandler = parachain::MsgQueue,
+		new_ext = para_ext(1),
+	}
+}
+
+decl_test_parachain! {
+	pub struct ParaB {
+		Runtime = parachain::Runtime,
+		XcmpMessageHandler = parachain::MsgQueue,
+		DmpMessageHandler = parachain::MsgQueue,
+		new_ext = para_ext(2),
+	}
+}
+
+decl_test_relay_chain! {
+	pub struct Relay {
+		Runtime = relay_chain::Runtime,
+		XcmConfig = relay_chain::XcmConfig,
+		new_ext = relay_ext(),
+	}
+}
+
+decl_test_network! {
+	pub struct MockNet {
+		relay_chain = Relay,
+		parachains = vec![
+			(1, ParaA),
+			(2, ParaB),
+		],
+	}
+}
+
+pub const INITIAL_BALANCE: u128 = 1_000_000_000;
+
+pub fn para_ext(para_id: u32) -> sp_io::TestExternalities {
+	use parachain::{MsgQueue, Runtime, System};
+
+	let mut t = frame_system::GenesisConfig::default().build_storage::<Runtime>().unwrap();
+
+	pallet_balances::GenesisConfig::<Runtime> { balances: vec![(ALICE, INITIAL_BALANCE)] }
+		.assimilate_storage(&mut t)
+		.unwrap();
+
+	let mut ext = sp_io::TestExternalities::new(t);
+	ext.execute_with(|| {
+		System::set_block_number(1);
+		MsgQueue::set_para_id(para_id.into());
+	});
+	ext
+}
+
+pub fn relay_ext() -> sp_io::TestExternalities {
+	use relay_chain::{Runtime, System};
+
+	let mut t = frame_system::GenesisConfig::default().build_storage::<Runtime>().unwrap();
+
+	pallet_balances::GenesisConfig::<Runtime> { balances: vec![(ALICE, INITIAL_BALANCE)] }
+		.assimilate_storage(&mut t)
+		.unwrap();
+
+	let mut ext = sp_io::TestExternalities::new(t);
+	ext.execute_with(|| System::set_block_number(1));
+	ext
+}
+
+pub type RelayChainPalletXcm = pallet_xcm::Pallet<relay_chain::Runtime>;
+pub type ParachainPalletXcm = pallet_xcm::Pallet<parachain::Runtime>;
+
+#[cfg(test)]
+mod tests {
+	use super::*;
+
+	use codec::Encode;
+	use frame_support::assert_ok;
+	use xcm::v0::{
+		Junction::{self, Parachain, Parent},
+		MultiAsset::*,
+		MultiLocation::*,
+		NetworkId, OriginKind,
+		Xcm::*,
+	};
+	use xcm_simulator::TestExt;
+
+	#[test]
+	fn dmp() {
+		MockNet::reset();
+
+		let remark = parachain::Call::System(
+			frame_system::Call::<parachain::Runtime>::remark_with_event(vec![1, 2, 3]),
+		);
+		Relay::execute_with(|| {
+			assert_ok!(RelayChainPalletXcm::send_xcm(
+				Null,
+				X1(Parachain(1)),
+				Transact {
+					origin_type: OriginKind::SovereignAccount,
+					require_weight_at_most: INITIAL_BALANCE as u64,
+					call: remark.encode().into(),
+				},
+			));
+		});
+
+		ParaA::execute_with(|| {
+			use parachain::{Event, System};
+			assert!(System::events()
+				.iter()
+				.any(|r| matches!(r.event, Event::System(frame_system::Event::Remarked(_, _)))));
+		});
+	}
+
+	#[test]
+	fn ump() {
+		MockNet::reset();
+
+		let remark = relay_chain::Call::System(
+			frame_system::Call::<relay_chain::Runtime>::remark_with_event(vec![1, 2, 3]),
+		);
+		ParaA::execute_with(|| {
+			assert_ok!(ParachainPalletXcm::send_xcm(
+				Null,
+				X1(Parent),
+				Transact {
+					origin_type: OriginKind::SovereignAccount,
+					require_weight_at_most: INITIAL_BALANCE as u64,
+					call: remark.encode().into(),
+				},
+			));
+		});
+
+		Relay::execute_with(|| {
+			use relay_chain::{Event, System};
+			assert!(System::events()
+				.iter()
+				.any(|r| matches!(r.event, Event::System(frame_system::Event::Remarked(_, _)))));
+		});
+	}
+
+	#[test]
+	fn xcmp() {
+		MockNet::reset();
+
+		let remark = parachain::Call::System(
+			frame_system::Call::<parachain::Runtime>::remark_with_event(vec![1, 2, 3]),
+		);
+		ParaA::execute_with(|| {
+			assert_ok!(ParachainPalletXcm::send_xcm(
+				Null,
+				X2(Parent, Parachain(2)),
+				Transact {
+					origin_type: OriginKind::SovereignAccount,
+					require_weight_at_most: INITIAL_BALANCE as u64,
+					call: remark.encode().into(),
+				},
+			));
+		});
+
+		ParaB::execute_with(|| {
+			use parachain::{Event, System};
+			assert!(System::events()
+				.iter()
+				.any(|r| matches!(r.event, Event::System(frame_system::Event::Remarked(_, _)))));
+		});
+	}
+
+	#[test]
+	fn reserve_transfer() {
+		MockNet::reset();
+
+		Relay::execute_with(|| {
+			assert_ok!(RelayChainPalletXcm::reserve_transfer_assets(
+				relay_chain::Origin::signed(ALICE),
+				X1(Parachain(1)),
+				X1(Junction::AccountId32 { network: NetworkId::Any, id: ALICE.into() }),
+				vec![ConcreteFungible { id: Null, amount: 123 }],
+				123,
+			));
+		});
+
+		ParaA::execute_with(|| {
+			// free execution, full amount received
+			assert_eq!(
+				pallet_balances::Pallet::<parachain::Runtime>::free_balance(&ALICE),
+				INITIAL_BALANCE + 123
+			);
+		});
+	}
+}
diff --git a/xcm/xcm-simulator/example/src/parachain.rs b/xcm/xcm-simulator/example/src/parachain.rs
new file mode 100644
index 000000000000..f4ad471ff697
--- /dev/null
+++ b/xcm/xcm-simulator/example/src/parachain.rs
@@ -0,0 +1,321 @@
+// Copyright 2021 Parity Technologies (UK) Ltd.
+// This file is part of Polkadot.
+
+// Polkadot is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Polkadot is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+// You should have received a copy of the GNU General Public License
+// along with Polkadot.  If not, see <http://www.gnu.org/licenses/>.
+
+//! Parachain runtime mock.
+
+use codec::{Decode, Encode};
+use frame_support::{
+	construct_runtime, parameter_types,
+	traits::{All, AllowAll},
+	weights::{constants::WEIGHT_PER_SECOND, Weight},
+};
+use sp_core::H256;
+use sp_runtime::{
+	testing::Header,
+	traits::{Hash, IdentityLookup},
+	AccountId32,
+};
+use sp_std::{convert::TryFrom, prelude::*};
+
+use pallet_xcm::XcmPassthrough;
+use polkadot_core_primitives::BlockNumber as RelayBlockNumber;
+use polkadot_parachain::primitives::{
+	DmpMessageHandler, Id as ParaId, Sibling, XcmpMessageFormat, XcmpMessageHandler,
+};
+use xcm::{
+	v0::{
+		Error as XcmError, ExecuteXcm,
+		Junction::{Parachain, Parent},
+		MultiAsset,
+		MultiLocation::{self, X1},
+		NetworkId, Outcome, Xcm,
+	},
+	VersionedXcm,
+};
+use xcm_builder::{
+	AccountId32Aliases, AllowUnpaidExecutionFrom, CurrencyAdapter as XcmCurrencyAdapter,
+	EnsureXcmOrigin, FixedRateOfConcreteFungible, FixedWeightBounds, IsConcrete, LocationInverter,
+	NativeAsset, ParentIsDefault, SiblingParachainConvertsVia, SignedAccountId32AsNative,
+	SignedToAccountId32, SovereignSignedViaLocation,
+};
+use xcm_executor::{Config, XcmExecutor};
+
+pub type AccountId = AccountId32;
+pub type Balance = u128;
+
+parameter_types! {
+	pub const BlockHashCount: u64 = 250;
+}
+
+impl frame_system::Config for Runtime {
+	type Origin = Origin;
+	type Call = Call;
+	type Index = u64;
+	type BlockNumber = u64;
+	type Hash = H256;
+	type Hashing = ::sp_runtime::traits::BlakeTwo256;
+	type AccountId = AccountId;
+	type Lookup = IdentityLookup<Self::AccountId>;
+	type Header = Header;
+	type Event = Event;
+	type BlockHashCount = BlockHashCount;
+	type BlockWeights = ();
+	type BlockLength = ();
+	type Version = ();
+	type PalletInfo = PalletInfo;
+	type AccountData = pallet_balances::AccountData<Balance>;
+	type OnNewAccount = ();
+	type OnKilledAccount = ();
+	type DbWeight = ();
+	type BaseCallFilter = AllowAll;
+	type SystemWeightInfo = ();
+	type SS58Prefix = ();
+	type OnSetCode = ();
+}
+
+parameter_types! {
+	pub ExistentialDeposit: Balance = 1;
+	pub const MaxLocks: u32 = 50;
+	pub const MaxReserves: u32 = 50;
+}
+
+impl pallet_balances::Config for Runtime {
+	type MaxLocks = MaxLocks;
+	type Balance = Balance;
+	type Event = Event;
+	type DustRemoval = ();
+	type ExistentialDeposit = ExistentialDeposit;
+	type AccountStore = System;
+	type WeightInfo = ();
+	type MaxReserves = MaxReserves;
+	type ReserveIdentifier = [u8; 8];
+}
+
+parameter_types! {
+	pub const ReservedXcmpWeight: Weight = WEIGHT_PER_SECOND / 4;
+	pub const ReservedDmpWeight: Weight = WEIGHT_PER_SECOND / 4;
+}
+
+parameter_types! {
+	pub const KsmLocation: MultiLocation = MultiLocation::X1(Parent);
+	pub const RelayNetwork: NetworkId = NetworkId::Kusama;
+	pub Ancestry: MultiLocation = Parachain(MsgQueue::parachain_id().into()).into();
+}
+
+pub type LocationToAccountId = (
+	ParentIsDefault<AccountId>,
+	SiblingParachainConvertsVia<Sibling, AccountId>,
+	AccountId32Aliases<RelayNetwork, AccountId>,
+);
+
+pub type XcmOriginToCallOrigin = (
+	SovereignSignedViaLocation<LocationToAccountId, Origin>,
+	SignedAccountId32AsNative<RelayNetwork, Origin>,
+	XcmPassthrough<Origin>,
+);
+
+parameter_types! {
+	pub const UnitWeightCost: Weight = 1;
+	pub KsmPerSecond: (MultiLocation, u128) = (X1(Parent), 1);
+}
+
+pub type LocalAssetTransactor =
+	XcmCurrencyAdapter<Balances, IsConcrete<KsmLocation>, LocationToAccountId, AccountId, ()>;
+
+pub type XcmRouter = super::ParachainXcmRouter<MsgQueue>;
+pub type Barrier = AllowUnpaidExecutionFrom<All<MultiLocation>>;
+
+pub struct XcmConfig;
+impl Config for XcmConfig {
+	type Call = Call;
+	type XcmSender = XcmRouter;
+	type AssetTransactor = LocalAssetTransactor;
+	type OriginConverter = XcmOriginToCallOrigin;
+	type IsReserve = NativeAsset;
+	type IsTeleporter = ();
+	type LocationInverter = LocationInverter<Ancestry>;
+	type Barrier = Barrier;
+	type Weigher = FixedWeightBounds<UnitWeightCost, Call>;
+	type Trader = FixedRateOfConcreteFungible<KsmPerSecond, ()>;
+	type ResponseHandler = ();
+}
+
+#[frame_support::pallet]
+pub mod mock_msg_queue {
+	use super::*;
+	use frame_support::pallet_prelude::*;
+
+	#[pallet::config]
+	pub trait Config: frame_system::Config {
+		type Event: From<Event<Self>> + IsType<<Self as frame_system::Config>::Event>;
+		type XcmExecutor: ExecuteXcm<Self::Call>;
+	}
+
+	#[pallet::call]
+	impl<T: Config> Pallet<T> {}
+
+	#[pallet::pallet]
+	#[pallet::generate_store(pub(super) trait Store)]
+	pub struct Pallet<T>(_);
+
+	#[pallet::storage]
+	#[pallet::getter(fn parachain_id)]
+	pub(super) type ParachainId<T: Config> = StorageValue<_, ParaId, ValueQuery>;
+
+	impl<T: Config> Get<ParaId> for Pallet<T> {
+		fn get() -> ParaId {
+			Self::parachain_id()
+		}
+	}
+
+	pub type MessageId = [u8; 32];
+
+	#[pallet::event]
+	#[pallet::generate_deposit(pub(super) fn deposit_event)]
+	pub enum Event<T: Config> {
+		// XCMP
+		/// Some XCM was executed ok.
+		Success(Option<T::Hash>),
+		/// Some XCM failed.
+		Fail(Option<T::Hash>, XcmError),
+		/// Bad XCM version used.
+		BadVersion(Option<T::Hash>),
+		/// Bad XCM format used.
+		BadFormat(Option<T::Hash>),
+
+		// DMP
+		/// Downward message is invalid XCM.
+		InvalidFormat(MessageId),
+		/// Downward message is unsupported version of XCM.
+		UnsupportedVersion(MessageId),
+		/// Downward message executed with the given outcome.
+		ExecutedDownward(MessageId, Outcome),
+	}
+
+	impl<T: Config> Pallet<T> {
+		pub fn set_para_id(para_id: ParaId) {
+			ParachainId::<T>::put(para_id);
+		}
+
+		fn handle_xcmp_message(
+			sender: ParaId,
+			_sent_at: RelayBlockNumber,
+			xcm: VersionedXcm<T::Call>,
+			max_weight: Weight,
+		) -> Result<Weight, XcmError> {
+			let hash = Encode::using_encoded(&xcm, T::Hashing::hash);
+			let (result, event) = match Xcm::<T::Call>::try_from(xcm) {
+				Ok(xcm) => {
+					let location = (Parent, Parachain(sender.into()));
+					match T::XcmExecutor::execute_xcm(location.into(), xcm, max_weight) {
+						Outcome::Error(e) => (Err(e.clone()), Event::Fail(Some(hash), e)),
+						Outcome::Complete(w) => (Ok(w), Event::Success(Some(hash))),
+						// As far as the caller is concerned, this was dispatched without error, so
+						// we just report the weight used.
+						Outcome::Incomplete(w, e) => (Ok(w), Event::Fail(Some(hash), e)),
+					}
+				},
+				Err(()) => (Err(XcmError::UnhandledXcmVersion), Event::BadVersion(Some(hash))),
+			};
+			Self::deposit_event(event);
+			result
+		}
+	}
+
+	impl<T: Config> XcmpMessageHandler for Pallet<T> {
+		fn handle_xcmp_messages<'a, I: Iterator<Item = (ParaId, RelayBlockNumber, &'a [u8])>>(
+			iter: I,
+			max_weight: Weight,
+		) -> Weight {
+			for (sender, sent_at, data) in iter {
+				let mut data_ref = data;
+				let _ = XcmpMessageFormat::decode(&mut data_ref)
+					.expect("Simulator encodes with versioned xcm format; qed");
+
+				let mut remaining_fragments = &data_ref[..];
+				while !remaining_fragments.is_empty() {
+					if let Ok(xcm) = VersionedXcm::<T::Call>::decode(&mut remaining_fragments) {
+						let _ = Self::handle_xcmp_message(sender, sent_at, xcm, max_weight);
+					} else {
+						debug_assert!(false, "Invalid incoming XCMP message data");
+					}
+				}
+			}
+			max_weight
+		}
+	}
+
+	impl<T: Config> DmpMessageHandler for Pallet<T> {
+		fn handle_dmp_messages(
+			iter: impl Iterator<Item = (RelayBlockNumber, Vec<u8>)>,
+			limit: Weight,
+		) -> Weight {
+			for (_i, (_sent_at, data)) in iter.enumerate() {
+				let id = sp_io::hashing::blake2_256(&data[..]);
+				let maybe_msg =
+					VersionedXcm::<T::Call>::decode(&mut &data[..]).map(Xcm::<T::Call>::try_from);
+				match maybe_msg {
+					Err(_) => {
+						Self::deposit_event(Event::InvalidFormat(id));
+					},
+					Ok(Err(())) => {
+						Self::deposit_event(Event::UnsupportedVersion(id));
+					},
+					Ok(Ok(x)) => {
+						let outcome = T::XcmExecutor::execute_xcm(Parent.into(), x, limit);
+						Self::deposit_event(Event::ExecutedDownward(id, outcome));
+					},
+				}
+			}
+			limit
+		}
+	}
+}
+
+impl mock_msg_queue::Config for Runtime {
+	type Event = Event;
+	type XcmExecutor = XcmExecutor<XcmConfig>;
+}
+
+pub type LocalOriginToLocation = SignedToAccountId32<Origin, AccountId, RelayNetwork>;
+
+impl pallet_xcm::Config for Runtime {
+	type Event = Event;
+	type SendXcmOrigin = EnsureXcmOrigin<Origin, LocalOriginToLocation>;
+	type XcmRouter = XcmRouter;
+	type ExecuteXcmOrigin = EnsureXcmOrigin<Origin, LocalOriginToLocation>;
+	type XcmExecuteFilter = All<(MultiLocation, Xcm<Call>)>;
+	type XcmExecutor = XcmExecutor<XcmConfig>;
+	type XcmTeleportFilter = ();
+	type XcmReserveTransferFilter = All<(MultiLocation, Vec<MultiAsset>)>;
+	type Weigher = FixedWeightBounds<UnitWeightCost, Call>;
+}
+
+type UncheckedExtrinsic = frame_system::mocking::MockUncheckedExtrinsic<Runtime>;
+type Block = frame_system::mocking::MockBlock<Runtime>;
+
+construct_runtime!(
+	pub enum Runtime where
+		Block = Block,
+		NodeBlock = Block,
+		UncheckedExtrinsic = UncheckedExtrinsic,
+	{
+		System: frame_system::{Pallet, Call, Storage, Config, Event<T>},
+		Balances: pallet_balances::{Pallet, Call, Storage, Config<T>, Event<T>},
+		MsgQueue: mock_msg_queue::{Pallet, Storage, Event<T>},
+		PolkadotXcm: pallet_xcm::{Pallet, Call, Event<T>, Origin},
+	}
+);
diff --git a/xcm/xcm-simulator/example/src/relay_chain.rs b/xcm/xcm-simulator/example/src/relay_chain.rs
new file mode 100644
index 000000000000..c69f20d05eaf
--- /dev/null
+++ b/xcm/xcm-simulator/example/src/relay_chain.rs
@@ -0,0 +1,180 @@
+// Copyright 2021 Parity Technologies (UK) Ltd.
+// This file is part of Polkadot.
+
+// Polkadot is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Polkadot is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+// You should have received a copy of the GNU General Public License
+// along with Polkadot.  If not, see <http://www.gnu.org/licenses/>.
+
+//! Relay chain runtime mock.
+
+use frame_support::{
+	construct_runtime, parameter_types,
+	traits::{All, AllowAll},
+	weights::Weight,
+};
+use sp_core::H256;
+use sp_runtime::{testing::Header, traits::IdentityLookup, AccountId32};
+
+use polkadot_parachain::primitives::Id as ParaId;
+use polkadot_runtime_parachains::{configuration, origin, shared, ump};
+use xcm::v0::{MultiAsset, MultiLocation, NetworkId};
+use xcm_builder::{
+	AccountId32Aliases, AllowUnpaidExecutionFrom, ChildParachainAsNative,
+	ChildParachainConvertsVia, ChildSystemParachainAsSuperuser,
+	CurrencyAdapter as XcmCurrencyAdapter, FixedRateOfConcreteFungible, FixedWeightBounds,
+	IsConcrete, LocationInverter, SignedAccountId32AsNative, SignedToAccountId32,
+	SovereignSignedViaLocation,
+};
+use xcm_executor::{Config, XcmExecutor};
+
+pub type AccountId = AccountId32;
+pub type Balance = u128;
+
+parameter_types! {
+	pub const BlockHashCount: u64 = 250;
+}
+
+impl frame_system::Config for Runtime {
+	type Origin = Origin;
+	type Call = Call;
+	type Index = u64;
+	type BlockNumber = u64;
+	type Hash = H256;
+	type Hashing = ::sp_runtime::traits::BlakeTwo256;
+	type AccountId = AccountId;
+	type Lookup = IdentityLookup<Self::AccountId>;
+	type Header = Header;
+	type Event = Event;
+	type BlockHashCount = BlockHashCount;
+	type BlockWeights = ();
+	type BlockLength = ();
+	type Version = ();
+	type PalletInfo = PalletInfo;
+	type AccountData = pallet_balances::AccountData<Balance>;
+	type OnNewAccount = ();
+	type OnKilledAccount = ();
+	type DbWeight = ();
+	type BaseCallFilter = AllowAll;
+	type SystemWeightInfo = ();
+	type SS58Prefix = ();
+	type OnSetCode = ();
+}
+
+parameter_types! {
+	pub ExistentialDeposit: Balance = 1;
+	pub const MaxLocks: u32 = 50;
+	pub const MaxReserves: u32 = 50;
+}
+
+impl pallet_balances::Config for Runtime {
+	type MaxLocks = MaxLocks;
+	type Balance = Balance;
+	type Event = Event;
+	type DustRemoval = ();
+	type ExistentialDeposit = ExistentialDeposit;
+	type AccountStore = System;
+	type WeightInfo = ();
+	type MaxReserves = MaxReserves;
+	type ReserveIdentifier = [u8; 8];
+}
+
+impl shared::Config for Runtime {}
+
+impl configuration::Config for Runtime {}
+
+parameter_types! {
+	pub const KsmLocation: MultiLocation = MultiLocation::Null;
+	pub const KusamaNetwork: NetworkId = NetworkId::Kusama;
+	pub const AnyNetwork: NetworkId = NetworkId::Any;
+	pub Ancestry: MultiLocation = MultiLocation::Null;
+	pub UnitWeightCost: Weight = 1_000;
+}
+
+pub type SovereignAccountOf =
+	(ChildParachainConvertsVia<ParaId, AccountId>, AccountId32Aliases<KusamaNetwork, AccountId>);
+
+pub type LocalAssetTransactor =
+	XcmCurrencyAdapter<Balances, IsConcrete<KsmLocation>, SovereignAccountOf, AccountId, ()>;
+
+type LocalOriginConverter = (
+	SovereignSignedViaLocation<SovereignAccountOf, Origin>,
+	ChildParachainAsNative<origin::Origin, Origin>,
+	SignedAccountId32AsNative<KusamaNetwork, Origin>,
+	ChildSystemParachainAsSuperuser<ParaId, Origin>,
+);
+
+parameter_types! {
+	pub const BaseXcmWeight: Weight = 1_000;
+	pub KsmPerSecond: (MultiLocation, u128) = (KsmLocation::get(), 1);
+}
+
+pub type XcmRouter = super::RelayChainXcmRouter;
+pub type Barrier = AllowUnpaidExecutionFrom<All<MultiLocation>>;
+
+pub struct XcmConfig;
+impl Config for XcmConfig {
+	type Call = Call;
+	type XcmSender = XcmRouter;
+	type AssetTransactor = LocalAssetTransactor;
+	type OriginConverter = LocalOriginConverter;
+	type IsReserve = ();
+	type IsTeleporter = ();
+	type LocationInverter = LocationInverter<Ancestry>;
+	type Barrier = Barrier;
+	type Weigher = FixedWeightBounds<BaseXcmWeight, Call>;
+	type Trader = FixedRateOfConcreteFungible<KsmPerSecond, ()>;
+	type ResponseHandler = ();
+}
+
+pub type LocalOriginToLocation = SignedToAccountId32<Origin, AccountId, KusamaNetwork>;
+
+impl pallet_xcm::Config for Runtime {
+	type Event = Event;
+	type SendXcmOrigin = xcm_builder::EnsureXcmOrigin<Origin, LocalOriginToLocation>;
+	type XcmRouter = XcmRouter;
+	// Anyone can execute XCM messages locally...
+	type ExecuteXcmOrigin = xcm_builder::EnsureXcmOrigin<Origin, LocalOriginToLocation>;
+	type XcmExecuteFilter = ();
+	type XcmExecutor = XcmExecutor<XcmConfig>;
+	type XcmTeleportFilter = All<(MultiLocation, Vec<MultiAsset>)>;
+	type XcmReserveTransferFilter = All<(MultiLocation, Vec<MultiAsset>)>;
+	type Weigher = FixedWeightBounds<BaseXcmWeight, Call>;
+}
+
+parameter_types! {
+	pub const FirstMessageFactorPercent: u64 = 100;
+}
+
+impl ump::Config for Runtime {
+	type Event = Event;
+	type UmpSink = ump::XcmSink<XcmExecutor<XcmConfig>, Runtime>;
+	type FirstMessageFactorPercent = FirstMessageFactorPercent;
+}
+
+impl origin::Config for Runtime {}
+
+type UncheckedExtrinsic = frame_system::mocking::MockUncheckedExtrinsic<Runtime>;
+type Block = frame_system::mocking::MockBlock<Runtime>;
+
+construct_runtime!(
+	pub enum Runtime where
+		Block = Block,
+		NodeBlock = Block,
+		UncheckedExtrinsic = UncheckedExtrinsic,
+	{
+		System: frame_system::{Pallet, Call, Storage, Config, Event<T>},
+		Balances: pallet_balances::{Pallet, Call, Storage, Config<T>, Event<T>},
+		ParasOrigin: origin::{Pallet, Origin},
+		ParasUmp: ump::{Pallet, Call, Storage, Event},
+		XcmPallet: pallet_xcm::{Pallet, Call, Storage, Event<T>},
+	}
+);
diff --git a/xcm/xcm-simulator/src/lib.rs b/xcm/xcm-simulator/src/lib.rs
new file mode 100644
index 000000000000..096d62b61695
--- /dev/null
+++ b/xcm/xcm-simulator/src/lib.rs
@@ -0,0 +1,244 @@
+// Copyright 2021 Parity Technologies (UK) Ltd.
+// This file is part of Polkadot.
+
+// Polkadot is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Polkadot is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+// You should have received a copy of the GNU General Public License
+// along with Polkadot.  If not, see <http://www.gnu.org/licenses/>.
+
+//! Test kit to simulate cross-chain message passing and XCM execution
+
+pub use codec::Encode;
+pub use paste;
+
+pub use frame_support::{traits::Get, weights::Weight};
+pub use sp_io::TestExternalities;
+pub use sp_std::{cell::RefCell, marker::PhantomData};
+
+pub use polkadot_core_primitives::BlockNumber as RelayBlockNumber;
+pub use polkadot_parachain::primitives::{
+	DmpMessageHandler as DmpMessageHandlerT, Id as ParaId, XcmpMessageFormat,
+	XcmpMessageHandler as XcmpMessageHandlerT,
+};
+pub use polkadot_runtime_parachains::{
+	dmp,
+	ump::{self, MessageId, UmpSink, XcmSink},
+};
+pub use xcm::{v0::prelude::*, VersionedXcm};
+pub use xcm_executor::XcmExecutor;
+
+pub trait TestExt {
+	fn new_ext() -> sp_io::TestExternalities;
+	fn reset_ext();
+	fn execute_with<R>(execute: impl FnOnce() -> R) -> R;
+}
+
+pub enum MessageKind {
+	Ump,
+	Dmp,
+	Xcmp,
+}
+
+pub fn encode_xcm(message: Xcm<()>, message_kind: MessageKind) -> Vec<u8> {
+	match message_kind {
+		MessageKind::Ump | MessageKind::Dmp => VersionedXcm::<()>::from(message).encode(),
+		MessageKind::Xcmp => {
+			let fmt = XcmpMessageFormat::ConcatenatedVersionedXcm;
+			let mut outbound = fmt.encode();
+
+			let encoded = VersionedXcm::<()>::from(message).encode();
+			outbound.extend_from_slice(&encoded[..]);
+			outbound
+		},
+	}
+}
+
+#[macro_export]
+macro_rules! decl_test_relay_chain {
+	(
+		pub struct $name:ident {
+			Runtime = $runtime:path,
+			XcmConfig = $xcm_config:path,
+			new_ext = $new_ext:expr,
+		}
+	) => {
+		pub struct $name;
+
+		$crate::__impl_ext!($name, $new_ext);
+
+		impl $crate::UmpSink for $name {
+			fn process_upward_message(
+				origin: $crate::ParaId,
+				msg: &[u8],
+				max_weight: $crate::Weight,
+			) -> Result<$crate::Weight, ($crate::MessageId, $crate::Weight)> {
+				use $crate::{ump::UmpSink, TestExt};
+
+				Self::execute_with(|| {
+					$crate::ump::XcmSink::<$crate::XcmExecutor<$xcm_config>, $runtime>::process_upward_message(
+						origin, msg, max_weight,
+					)
+				})
+			}
+		}
+	};
+}
+
+#[macro_export]
+macro_rules! decl_test_parachain {
+	(
+		pub struct $name:ident {
+			Runtime = $runtime:path,
+			XcmpMessageHandler = $xcmp_message_handler:path,
+			DmpMessageHandler = $dmp_message_handler:path,
+			new_ext = $new_ext:expr,
+		}
+	) => {
+		pub struct $name;
+
+		$crate::__impl_ext!($name, $new_ext);
+
+		impl $crate::XcmpMessageHandlerT for $name {
+			fn handle_xcmp_messages<
+				'a,
+				I: Iterator<Item = ($crate::ParaId, $crate::RelayBlockNumber, &'a [u8])>,
+			>(
+				iter: I,
+				max_weight: $crate::Weight,
+			) -> $crate::Weight {
+				use $crate::{TestExt, XcmpMessageHandlerT};
+
+				$name::execute_with(|| {
+					<$xcmp_message_handler>::handle_xcmp_messages(iter, max_weight)
+				})
+			}
+		}
+
+		impl $crate::DmpMessageHandlerT for $name {
+			fn handle_dmp_messages(
+				iter: impl Iterator<Item = ($crate::RelayBlockNumber, Vec<u8>)>,
+				max_weight: $crate::Weight,
+			) -> $crate::Weight {
+				use $crate::{DmpMessageHandlerT, TestExt};
+
+				$name::execute_with(|| {
+					<$dmp_message_handler>::handle_dmp_messages(iter, max_weight)
+				})
+			}
+		}
+	};
+}
+
+#[macro_export]
+macro_rules! __impl_ext {
+	// entry point: generate ext name
+	($name:ident, $new_ext:expr) => {
+		$crate::paste::paste! {
+			$crate::__impl_ext!(@impl $name, $new_ext, [<EXT_ $name:upper>]);
+		}
+	};
+	// impl
+	(@impl $name:ident, $new_ext:expr, $ext_name:ident) => {
+		thread_local! {
+			pub static $ext_name: $crate::RefCell<$crate::TestExternalities>
+				= $crate::RefCell::new($new_ext);
+		}
+
+		impl $crate::TestExt for $name {
+			fn new_ext() -> $crate::TestExternalities {
+				$new_ext
+			}
+
+			fn reset_ext() {
+				$ext_name.with(|v| *v.borrow_mut() = $new_ext);
+			}
+
+			fn execute_with<R>(execute: impl FnOnce() -> R) -> R {
+				$ext_name.with(|v| v.borrow_mut().execute_with(execute))
+			}
+		}
+	};
+}
+
+#[macro_export]
+macro_rules! decl_test_network {
+	(
+		pub struct $name:ident {
+			relay_chain = $relay_chain:ty,
+			parachains = vec![ $( ($para_id:expr, $parachain:ty), )* ],
+		}
+	) => {
+		pub struct $name;
+
+		impl $name {
+			pub fn reset() {
+				use $crate::TestExt;
+
+				<$relay_chain>::reset_ext();
+				$( <$parachain>::reset_ext(); )*
+			}
+		}
+
+		/// XCM router for parachain.
+		pub struct ParachainXcmRouter<T>($crate::PhantomData<T>);
+
+		impl<T: $crate::Get<$crate::ParaId>> $crate::SendXcm for ParachainXcmRouter<T> {
+			fn send_xcm(destination: $crate::MultiLocation, message: $crate::Xcm<()>) -> $crate::XcmResult {
+				use $crate::{UmpSink, XcmpMessageHandlerT};
+
+				match destination {
+					$crate::X1($crate::Parent) => {
+						let encoded = $crate::encode_xcm(message, $crate::MessageKind::Ump);
+						let _ = <$relay_chain>::process_upward_message(
+							T::get(), &encoded[..],
+							$crate::Weight::max_value(),
+						);
+						Ok(())
+					},
+					$(
+						$crate::X2($crate::Parent, $crate::Parachain(id)) if id == $para_id => {
+							let encoded = $crate::encode_xcm(message, $crate::MessageKind::Xcmp);
+							let messages = vec![(T::get(), 1, &encoded[..])];
+							let _ = <$parachain>::handle_xcmp_messages(
+								messages.into_iter(),
+								$crate::Weight::max_value(),
+							);
+							Ok(())
+						},
+					)*
+					_ => Err($crate::XcmError::CannotReachDestination(destination, message)),
+				}
+			}
+		}
+
+		/// XCM router for relay chain.
+		pub struct RelayChainXcmRouter;
+		impl $crate::SendXcm for RelayChainXcmRouter {
+			fn send_xcm(destination: $crate::MultiLocation, message: $crate::Xcm<()>) -> $crate::XcmResult {
+				use $crate::DmpMessageHandlerT;
+
+				match destination {
+					$(
+						$crate::X1($crate::Parachain(id)) if id == $para_id => {
+							let encoded = $crate::encode_xcm(message, $crate::MessageKind::Dmp);
+							let messages = vec![(1, encoded)];
+							let _ = <$parachain>::handle_dmp_messages(
+								messages.into_iter(), $crate::Weight::max_value(),
+							);
+							Ok(())
+						},
+					)*
+					_ => Err($crate::XcmError::SendFailed("Only sends to children parachain.")),
+				}
+			}
+		}
+	};
+}