diff --git a/arbnode/node.go b/arbnode/node.go
index bf57b1c004..fc962829bc 100644
--- a/arbnode/node.go
+++ b/arbnode/node.go
@@ -281,6 +281,7 @@ func DeployOnL1(ctx context.Context, parentChainReader *headerreader.HeaderReade
 
 type Config struct {
 	Sequencer           bool                        `koanf:"sequencer"`
+	EspressoSequencer   bool                        `koanf:"espresso-sequencer"`
 	ParentChainReader   headerreader.Config         `koanf:"parent-chain-reader" reload:"hot"`
 	InboxReader         InboxReaderConfig           `koanf:"inbox-reader" reload:"hot"`
 	DelayedSequencer    DelayedSequencerConfig      `koanf:"delayed-sequencer" reload:"hot"`
@@ -439,6 +440,7 @@ type Node struct {
 	InboxReader             *InboxReader
 	InboxTracker            *InboxTracker
 	DelayedSequencer        *DelayedSequencer
+	EspressoHandler         *EspressoHandler
 	BatchPoster             *BatchPoster
 	MessagePruner           *MessagePruner
 	BlockValidator          *staker.BlockValidator
@@ -853,6 +855,13 @@ func createNodeImpl(
 		return nil, err
 	}
 
+	var espresso *EspressoHandler
+	if config.EspressoSequencer {
+		// EspressoHandler acts like DelayedSequencer, read txs/messages from L1 and build a block.
+		// Maybe we can reuse or recreate some components here.
+		espresso, err = NewEspressoHandler(l1Reader, exec, config)
+	}
+
 	return &Node{
 		ArbDB:                   arbDb,
 		Stack:                   stack,
@@ -863,6 +872,7 @@ func createNodeImpl(
 		InboxReader:             inboxReader,
 		InboxTracker:            inboxTracker,
 		DelayedSequencer:        delayedSequencer,
+		EspressoHandler:         espresso,
 		BatchPoster:             batchPoster,
 		MessagePruner:           messagePruner,
 		BlockValidator:          blockValidator,
@@ -989,6 +999,9 @@ func (n *Node) Start(ctx context.Context) error {
 	if n.DelayedSequencer != nil {
 		n.DelayedSequencer.Start(ctx)
 	}
+	if n.EspressoHandler != nil {
+		n.EspressoHandler.Start(ctx)
+	}
 	if n.BatchPoster != nil {
 		n.BatchPoster.Start(ctx)
 	}
@@ -1071,6 +1084,9 @@ func (n *Node) StopAndWait() {
 	if n.DelayedSequencer != nil && n.DelayedSequencer.Started() {
 		n.DelayedSequencer.StopAndWait()
 	}
+	if n.EspressoHandler != nil && n.EspressoHandler.Started() {
+		n.EspressoHandler.StopAndWait()
+	}
 	if n.BatchPoster != nil && n.BatchPoster.Started() {
 		n.BatchPoster.StopAndWait()
 	}
diff --git a/execution/gethexec/node.go b/execution/gethexec/node.go
index b29309cdbb..2420cea1ed 100644
--- a/execution/gethexec/node.go
+++ b/execution/gethexec/node.go
@@ -169,6 +169,7 @@ func CreateExecutionNode(
 		} else if config.forwardingTarget == "" {
 			txPublisher = NewTxDropper()
 		} else {
+			// Make sure this Forwarder can publish the txs to Espresso Sequencer
 			txPublisher = NewForwarder(config.forwardingTarget, &config.Forwarder)
 		}
 	}
diff --git a/execution/gethexec/sequencer.go b/execution/gethexec/sequencer.go
index 77442f65e4..a85ca6ba79 100644
--- a/execution/gethexec/sequencer.go
+++ b/execution/gethexec/sequencer.go
@@ -66,6 +66,7 @@ type SequencerConfig struct {
 	MaxTxDataSize               int             `koanf:"max-tx-data-size" reload:"hot"`
 	NonceFailureCacheSize       int             `koanf:"nonce-failure-cache-size" reload:"hot"`
 	NonceFailureCacheExpiry     time.Duration   `koanf:"nonce-failure-cache-expiry" reload:"hot"`
+	Espresso                    bool
 }
 
 func (c *SequencerConfig) Validate() error {
@@ -268,6 +269,15 @@ func (c nonceFailureCache) Add(err NonceError, queueItem txQueueItem) {
 	}
 }
 
+type HotShotIndex struct {
+	blockIdx uint64
+	txnIdx   uint64
+}
+
+type HotShotTxnFetcherInterface interface {
+	NextArbitrumTxn(index HotShotIndex)
+}
+
 type Sequencer struct {
 	stopwaiter.StopWaiter
 
@@ -291,6 +301,9 @@ type Sequencer struct {
 	activeMutex sync.Mutex
 	pauseChan   chan struct{}
 	forwarder   *TxForwarder
+
+	// Pointer to the last hotshot transaction sequenced, only used if we are operating in Espresso mode
+	hotShotIndex *HotShotIndex
 }
 
 func NewSequencer(execEngine *ExecutionEngine, l1Reader *headerreader.HeaderReader, configFetcher SequencerConfigFetcher) (*Sequencer, error) {
@@ -710,7 +723,116 @@ func (s *Sequencer) precheckNonces(queueItems []txQueueItem) []txQueueItem {
 	return outputQueueItems
 }
 
+func (s *Sequencer) createBlockEspresso(ctx context.Context) (returnValue bool) {
+	var txns []types.Transaction
+	var totalBatchSize int
+
+	config := s.config()
+
+	for {
+		var txn types.Transaction
+		txn, err = hotshot.NextArbitrumTransaction()
+		txBytes, err := txn.MarshalBinary()
+		if err != nil {
+			//queueItem.returnResult(err)
+			continue
+		}
+		if len(txBytes) > config.MaxTxDataSize {
+			// This tx is too large
+			// queueItem.returnResult(txpool.ErrOversizedData)
+			continue
+		}
+		if totalBatchSize+len(txBytes) > config.MaxTxDataSize {
+			// This tx would be too large to add to this batch
+			// End the batch here to put this tx in the next one, update last processed block and txn idx
+			break
+		}
+		totalBatchSize += len(txBytes)
+		queueItems = append(queueItems, txn)
+	}
+
+	txes := make([]*types.Transaction, len(queueItems))
+	hooks := s.makeSequencingHooks()
+	hooks.ConditionalOptionsForTx = make([]*arbitrum_types.ConditionalOptions, len(queueItems))
+	for i, queueItem := range queueItems {
+		txes[i] = tx
+	}
+
+	timestamp := time.Now().Unix()
+	s.L1BlockAndTimeMutex.Lock()
+	l1Block := s.l1BlockNumber
+	l1Timestamp := s.l1Timestamp
+	s.L1BlockAndTimeMutex.Unlock()
+
+	if s.l1Reader != nil && (l1Block == 0 || math.Abs(float64(l1Timestamp)-float64(timestamp)) > config.MaxAcceptableTimestampDelta.Seconds()) {
+		log.Error(
+			"cannot sequence: unknown L1 block or L1 timestamp too far from local clock time",
+			"l1Block", l1Block,
+			"l1Timestamp", time.Unix(int64(l1Timestamp), 0),
+			"localTimestamp", time.Unix(int64(timestamp), 0),
+		)
+		return false
+	}
+
+	header := &arbostypes.L1IncomingMessageHeader{
+		Kind:        arbostypes.L1MessageType_L2Message,
+		Poster:      l1pricing.BatchPosterAddress,
+		BlockNumber: l1Block,
+		Timestamp:   uint64(timestamp),
+		RequestId:   nil,
+		L1BaseFee:   nil,
+	}
+
+	start := time.Now()
+	block, err := s.execEngine.SequenceTransactions(header, txes, hooks)
+	elapsed := time.Since(start)
+	blockCreationTimer.Update(elapsed)
+	if elapsed >= time.Second*5 {
+		var blockNum *big.Int
+		if block != nil {
+			blockNum = block.Number()
+		}
+		log.Warn("took over 5 seconds to sequence a block", "elapsed", elapsed, "numTxes", len(txes), "success", block != nil, "l2Block", blockNum)
+	}
+	if err == nil && len(hooks.TxErrors) != len(txes) {
+		err = fmt.Errorf("unexpected number of error results: %v vs number of txes %v", len(hooks.TxErrors), len(txes))
+	}
+	if err != nil {
+		if errors.Is(err, context.Canceled) {
+			// thread closed. We'll later try to forward these messages.
+			for _, item := range queueItems {
+				s.txRetryQueue.Push(item)
+			}
+			return true // don't return failure to avoid retrying immediately
+		}
+		log.Error("error sequencing transactions", "err", err)
+		for _, queueItem := range queueItems {
+			queueItem.returnResult(err)
+		}
+		return false
+	}
+
+	if block != nil {
+		successfulBlocksCounter.Inc(1)
+		s.nonceCache.Finalize(block)
+	}
+
+	return true
+}
+
+func (s *Sequencer) usingEspresso() bool {
+	return s.config().Espresso
+}
+
 func (s *Sequencer) createBlock(ctx context.Context) (returnValue bool) {
+	if s.usingEspresso() {
+		return s.createBlockEspresso(ctx)
+	} else {
+		return s.createBlockDefault(ctx)
+	}
+}
+
+func (s *Sequencer) createBlockDefault(ctx context.Context) (returnValue bool) {
 	var queueItems []txQueueItem
 	var totalBatchSize int
 
diff --git a/go-ethereum b/go-ethereum
index b4221631e1..2eaa15227a 160000
--- a/go-ethereum
+++ b/go-ethereum
@@ -1 +1 @@
-Subproject commit b4221631e1e5eac86f01582bd74234e3c0f7f5c7
+Subproject commit 2eaa15227ac2391d136fceea1c901db50d2db8ae
diff --git a/nitro-testnode b/nitro-testnode
index 7ad12c0f1b..179cf311b3 160000
--- a/nitro-testnode
+++ b/nitro-testnode
@@ -1 +1 @@
-Subproject commit 7ad12c0f1be75a72c7360d5258e0090f8225594e
+Subproject commit 179cf311b384f4e8b7e5bbb23306fd17630b41a2
diff --git a/testnode-config/l2_chain_config.json b/testnode-config/l2_chain_config.json
new file mode 100644
index 0000000000..9d9176119a
--- /dev/null
+++ b/testnode-config/l2_chain_config.json
@@ -0,0 +1,28 @@
+{
+    "chainId": 412346,
+    "homesteadBlock": 0,
+    "daoForkSupport": true,
+    "eip150Block": 0,
+    "eip150Hash": "0x0000000000000000000000000000000000000000000000000000000000000000",
+    "eip155Block": 0,
+    "eip158Block": 0,
+    "byzantiumBlock": 0,
+    "constantinopleBlock": 0,
+    "petersburgBlock": 0,
+    "istanbulBlock": 0,
+    "muirGlacierBlock": 0,
+    "berlinBlock": 0,
+    "londonBlock": 0,
+    "clique": {
+        "period": 0,
+        "epoch": 0
+    },
+    "arbitrum": {
+        "EnableArbOS": true,
+        "AllowDebugPrecompiles": true,
+        "DataAvailabilityCommittee": false,
+        "InitialArbOSVersion": 11,
+        "InitialChainOwner": "0x3f1Eae7D46d88F08fc2F8ed27FCb2AB183EB2d0E",
+        "GenesisBlockNum": 0
+    }
+}
\ No newline at end of file
diff --git a/testnode-config/l3node_config.json b/testnode-config/l3node_config.json
new file mode 100644
index 0000000000..8086cd872e
--- /dev/null
+++ b/testnode-config/l3node_config.json
@@ -0,0 +1,80 @@
+{
+    "parent-chain": {
+        "connection": {
+            "url": "ws://sequencer:8548"
+        },
+        "wallet": {
+            "account": "0x3E6134aAD4C4d422FF2A4391Dc315c4DDf98D1a5",
+            "password": "passphrase",
+            "pathname": "/home/user/l1keystore"
+        }
+    },
+    "chain": {
+        "id": 333333,
+        "info-files": [
+            "config/l3_chain_info.json"
+        ]
+    },
+    "node": {
+        "archive": true,
+        "forwarding-target": "null",
+        "staker": {
+            "dangerous": {
+                "without-block-validator": false
+            },
+            "disable-challenge": false,
+            "enable": true,
+            "staker-interval": "10s",
+            "make-assertion-interval": "10s",
+            "strategy": "MakeNodes",
+            "use-smart-contract-wallet": true
+        },
+        "sequencer": {
+            "enable": true,
+            "dangerous": {
+                "no-coordinator": true
+            }
+        },
+        "delayed-sequencer": {
+            "enable": true
+        },
+        "seq-coordinator": {
+            "enable": false,
+            "redis-url": "redis://redis:6379",
+            "lockout-duration": "30s",
+            "lockout-spare": "1s",
+            "my-url": "",
+            "retry-interval": "0.5s",
+            "seq-num-duration": "24h0m0s",
+            "update-interval": "3s"
+        },
+        "batch-poster": {
+            "enable": true,
+            "redis-url": "",
+            "max-delay": "30s",
+            "data-poster": {
+                "redis-signer": {
+                    "signing-key": "0123456789abcdef0123456789abcdef0123456789abcdef0123456789abcdef"
+                },
+                "wait-for-l1-finality": false
+            }
+        },
+        "block-validator": {
+            "validation-server": {
+                "url": "ws://validation_node:8549",
+                "jwtsecret": "config/val_jwt.hex"
+            }
+        }
+    },
+    "persistent": {
+        "chain": "local"
+    },
+    "ws": {
+        "addr": "0.0.0.0"
+    },
+    "http": {
+        "addr": "0.0.0.0",
+        "vhosts": "*",
+        "corsdomain": "*"
+    }
+}
\ No newline at end of file
diff --git a/testnode-config/poster_config.json b/testnode-config/poster_config.json
new file mode 100644
index 0000000000..ef4f50b398
--- /dev/null
+++ b/testnode-config/poster_config.json
@@ -0,0 +1,79 @@
+{
+    "parent-chain": {
+        "connection": {
+            "url": "ws://geth:8546"
+        },
+        "wallet": {
+            "account": "0xe2148eE53c0755215Df69b2616E552154EdC584f",
+            "password": "passphrase",
+            "pathname": "/home/user/l1keystore"
+        }
+    },
+    "chain": {
+        "id": 412346,
+        "info-files": [
+            "config/l2_chain_info.json"
+        ]
+    },
+    "node": {
+        "archive": true,
+        "forwarding-target": "null",
+        "staker": {
+            "dangerous": {
+                "without-block-validator": false
+            },
+            "disable-challenge": false,
+            "enable": false,
+            "staker-interval": "10s",
+            "make-assertion-interval": "10s",
+            "strategy": "MakeNodes"
+        },
+        "sequencer": {
+            "enable": false,
+            "dangerous": {
+                "no-coordinator": false
+            }
+        },
+        "delayed-sequencer": {
+            "enable": false
+        },
+        "seq-coordinator": {
+            "enable": true,
+            "redis-url": "redis://redis:6379",
+            "lockout-duration": "30s",
+            "lockout-spare": "1s",
+            "my-url": "",
+            "retry-interval": "0.5s",
+            "seq-num-duration": "24h0m0s",
+            "update-interval": "3s"
+        },
+        "batch-poster": {
+            "enable": true,
+            "redis-url": "redis://redis:6379",
+            "max-delay": "30s",
+            "data-poster": {
+                "redis-signer": {
+                    "signing-key": "0123456789abcdef0123456789abcdef0123456789abcdef0123456789abcdef"
+                },
+                "wait-for-l1-finality": false
+            }
+        },
+        "block-validator": {
+            "validation-server": {
+                "url": "ws://validation_node:8549",
+                "jwtsecret": "config/val_jwt.hex"
+            }
+        }
+    },
+    "persistent": {
+        "chain": "local"
+    },
+    "ws": {
+        "addr": "0.0.0.0"
+    },
+    "http": {
+        "addr": "0.0.0.0",
+        "vhosts": "*",
+        "corsdomain": "*"
+    }
+}
\ No newline at end of file
diff --git a/testnode-config/sequencer_config.json b/testnode-config/sequencer_config.json
new file mode 100644
index 0000000000..a28959241c
--- /dev/null
+++ b/testnode-config/sequencer_config.json
@@ -0,0 +1,80 @@
+{
+    "parent-chain": {
+        "connection": {
+            "url": "ws://geth:8546"
+        },
+        "wallet": {
+            "account": "0x6A568afe0f82d34759347bb36F14A6bB171d2CBe",
+            "password": "passphrase",
+            "pathname": "/home/user/l1keystore"
+        }
+    },
+    "chain": {
+        "id": 412346,
+        "info-files": [
+            "config/l2_chain_info.json"
+        ]
+    },
+    "node": {
+        "archive": true,
+        "forwarding-target": "null",
+        "staker": {
+            "dangerous": {
+                "without-block-validator": false
+            },
+            "disable-challenge": false,
+            "enable": true,
+            "staker-interval": "10s",
+            "make-assertion-interval": "10s",
+            "strategy": "MakeNodes",
+            "use-smart-contract-wallet": true
+        },
+        "sequencer": {
+            "enable": false,
+            "dangerous": {
+                "no-coordinator": false
+            }
+        },
+        "delayed-sequencer": {
+            "enable": false
+        },
+        "seq-coordinator": {
+            "enable": false,
+            "redis-url": "redis://redis:6379",
+            "lockout-duration": "30s",
+            "lockout-spare": "1s",
+            "my-url": "",
+            "retry-interval": "0.5s",
+            "seq-num-duration": "24h0m0s",
+            "update-interval": "3s"
+        },
+        "batch-poster": {
+            "enable": false,
+            "redis-url": "redis://redis:6379",
+            "max-delay": "30s",
+            "data-poster": {
+                "redis-signer": {
+                    "signing-key": "0123456789abcdef0123456789abcdef0123456789abcdef0123456789abcdef"
+                },
+                "wait-for-l1-finality": false
+            }
+        },
+        "block-validator": {
+            "validation-server": {
+                "url": "ws://validation_node:8549",
+                "jwtsecret": "config/val_jwt.hex"
+            }
+        }
+    },
+    "persistent": {
+        "chain": "local"
+    },
+    "ws": {
+        "addr": "0.0.0.0"
+    },
+    "http": {
+        "addr": "0.0.0.0",
+        "vhosts": "*",
+        "corsdomain": "*"
+    }
+}
\ No newline at end of file
diff --git a/testnode-config/unsafe_staker_config.json b/testnode-config/unsafe_staker_config.json
new file mode 100644
index 0000000000..165dbee07c
--- /dev/null
+++ b/testnode-config/unsafe_staker_config.json
@@ -0,0 +1,80 @@
+{
+    "parent-chain": {
+        "connection": {
+            "url": "ws://geth:8546"
+        },
+        "wallet": {
+            "account": "0x6A568afe0f82d34759347bb36F14A6bB171d2CBe",
+            "password": "passphrase",
+            "pathname": "/home/user/l1keystore"
+        }
+    },
+    "chain": {
+        "id": 412346,
+        "info-files": [
+            "config/l2_chain_info.json"
+        ]
+    },
+    "node": {
+        "archive": true,
+        "forwarding-target": "null",
+        "staker": {
+            "dangerous": {
+                "without-block-validator": true
+            },
+            "disable-challenge": false,
+            "enable": true,
+            "staker-interval": "10s",
+            "make-assertion-interval": "10s",
+            "strategy": "MakeNodes",
+            "use-smart-contract-wallet": true
+        },
+        "sequencer": {
+            "enable": false,
+            "dangerous": {
+                "no-coordinator": false
+            }
+        },
+        "delayed-sequencer": {
+            "enable": false
+        },
+        "seq-coordinator": {
+            "enable": false,
+            "redis-url": "redis://redis:6379",
+            "lockout-duration": "30s",
+            "lockout-spare": "1s",
+            "my-url": "",
+            "retry-interval": "0.5s",
+            "seq-num-duration": "24h0m0s",
+            "update-interval": "3s"
+        },
+        "batch-poster": {
+            "enable": false,
+            "redis-url": "redis://redis:6379",
+            "max-delay": "30s",
+            "data-poster": {
+                "redis-signer": {
+                    "signing-key": "0123456789abcdef0123456789abcdef0123456789abcdef0123456789abcdef"
+                },
+                "wait-for-l1-finality": false
+            }
+        },
+        "block-validator": {
+            "validation-server": {
+                "url": "ws://validation_node:8549",
+                "jwtsecret": "config/val_jwt.hex"
+            }
+        }
+    },
+    "persistent": {
+        "chain": "local"
+    },
+    "ws": {
+        "addr": "0.0.0.0"
+    },
+    "http": {
+        "addr": "0.0.0.0",
+        "vhosts": "*",
+        "corsdomain": "*"
+    }
+}
\ No newline at end of file
diff --git a/testnode-config/validation_node_config.json b/testnode-config/validation_node_config.json
new file mode 100644
index 0000000000..650055d9af
--- /dev/null
+++ b/testnode-config/validation_node_config.json
@@ -0,0 +1,19 @@
+{
+    "persistent": {
+        "chain": "local"
+    },
+    "ws": {
+        "addr": ""
+    },
+    "http": {
+        "addr": ""
+    },
+    "validation": {
+        "api-auth": true,
+        "api-public": false
+    },
+    "auth": {
+        "jwtsecret": "config/val_jwt.hex",
+        "addr": "0.0.0.0"
+    }
+}
\ No newline at end of file