diff --git a/synapse/handlers/receipts.py b/synapse/handlers/receipts.py
new file mode 100644
index 0000000000..f3f7050633
--- /dev/null
+++ b/synapse/handlers/receipts.py
@@ -0,0 +1,130 @@
+# -*- coding: utf-8 -*-
+# Copyright 2015 OpenMarket Ltd
+#
+# 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.
+
+"""Contains handlers for federation events."""
+
+from ._base import BaseHandler
+
+from twisted.internet import defer
+
+from synapse.util.logcontext import PreserveLoggingContext
+
+import logging
+
+
+logger = logging.getLogger(__name__)
+
+
+class ReceiptsHandler(BaseHandler):
+    def __init__(self, hs):
+        super(ReceiptsHandler, self).__init__(hs)
+
+        self.federation.register_edu_handler(
+            "m.receipt", self._received_remote_receipt
+        )
+
+        self._latest_serial = 0
+
+    @defer.inlineCallbacks
+    def received_client_receipt(self, room_id, receipt_type, user_id,
+                                event_id):
+        # 1. Persist.
+        # 2. Notify local clients
+        # 3. Notify remote servers
+
+        receipt = {
+            "room_id": room_id,
+            "receipt_type": receipt_type,
+            "user_id": user_id,
+            "event_ids": [event_id],
+        }
+
+        yield self._handle_new_receipts([receipt])
+        self._push_remotes([receipt])
+
+    @defer.inlineCallbacks
+    def _received_remote_receipt(self, origin, content):
+        receipts = [
+            {
+                "room_id": room_id,
+                "receipt_type": receipt_type,
+                "user_id": user_id,
+                "event_ids": [event_id],
+            }
+            for room_id, room_values in content.items()
+            for event_id, ev_values in room_values.items()
+            for receipt_type, users in ev_values.items()
+            for user_id in users
+        ]
+
+        yield self._handle_new_receipts(receipts)
+
+    @defer.inlineCallbacks
+    def _handle_new_receipts(self, receipts):
+        for receipt in receipts:
+            room_id = receipt["room_id"]
+            receipt_type = receipt["receipt_type"]
+            user_id = receipt["user_id"]
+            event_ids = receipt["event_ids"]
+
+            stream_id, max_persisted_id = yield self.store.insert_receipt(
+                room_id, receipt_type, user_id, event_ids,
+            )
+
+            # TODO: Use max_persisted_id
+
+            self._latest_serial = max(self._latest_serial, stream_id)
+
+            with PreserveLoggingContext():
+                self.notifier.on_new_user_event(
+                    "recei[t_key", self._latest_serial, rooms=[room_id]
+                )
+
+            localusers = set()
+            remotedomains = set()
+
+            rm_handler = self.homeserver.get_handlers().room_member_handler
+            yield rm_handler.fetch_room_distributions_into(
+                room_id, localusers=localusers, remotedomains=remotedomains
+            )
+
+            receipt["remotedomains"] = remotedomains
+
+            self.notifier.on_new_user_event(
+                "receipt_key", self._latest_room_serial, rooms=[room_id]
+            )
+
+    def _push_remotes(self, receipts):
+        # TODO: Some of this stuff should be coallesced.
+        for receipt in receipts:
+            room_id = receipt["room_id"]
+            receipt_type = receipt["receipt_type"]
+            user_id = receipt["user_id"]
+            event_ids = receipt["event_ids"]
+            remotedomains = receipt["remotedomains"]
+
+            for domain in remotedomains:
+                self.federation.send_edu(
+                    destination=domain,
+                    edu_type="m.receipt",
+                    content={
+                        room_id: {
+                            event_id: {
+                                receipt_type: [user_id]
+                            }
+                            for event_id in event_ids
+                        },
+                    },
+                )