diff --git a/src/handshake-ik.ts b/src/handshake-ik.ts
index 9ce370a..76d9e6a 100644
--- a/src/handshake-ik.ts
+++ b/src/handshake-ik.ts
@@ -5,6 +5,8 @@ import {bytes, bytes32} from "./@types/basic";
 import {KeyPair, PeerId} from "./@types/libp2p";
 import {IHandshake} from "./@types/handshake-interface";
 import {Buffer} from "buffer";
+import {decode0, decode1, encode0, encode1} from "./encoder";
+import {verifySignedPayload} from "./utils";
 
 export class IKHandshake implements IHandshake {
   public isInitiator: boolean;
@@ -38,6 +40,38 @@ export class IKHandshake implements IHandshake {
     this.session = this.ik.initSession(this.isInitiator, this.prologue, this.staticKeypair, remoteStaticKey);
   }
 
+  public async stage0(): Promise<void> {
+    if (this.isInitiator) {
+      const messageBuffer = this.ik.sendMessage(this.session, this.payload);
+      this.connection.writeLP(encode0(messageBuffer));
+    } else {
+      const receivedMessageBuffer = decode0(await this.connection.readLP());
+      const plaintext = this.ik.recvMessage(this.session, receivedMessageBuffer);
+
+      try {
+        await verifySignedPayload(receivedMessageBuffer.ns, plaintext, this.remotePeer.id);
+      } catch (e) {
+        throw new Error(`Error occurred while verifying signed payload: ${e.message}`);
+      }
+    }
+  }
+
+  public async stage1(): Promise<void> {
+    if (this.isInitiator) {
+      const receivedMessageBuffer = decode1(await this.connection.readLP());
+      const plaintext = this.ik.recvMessage(this.session, receivedMessageBuffer);
+
+      try {
+        await verifySignedPayload(receivedMessageBuffer.ns, plaintext, this.remotePeer.id);
+      } catch (e) {
+        throw new Error(`Error occurred while verifying signed payload: ${e.message}`);
+      }
+    } else {
+      const messageBuffer = this.ik.sendMessage(this.session, this.payload);
+      this.connection.writeLP(encode1(messageBuffer));
+    }
+  }
+
   public decrypt(ciphertext: Buffer, session: NoiseSession): Buffer {
     const cs = this.getCS(session, false);
     return this.ik.decryptWithAd(cs, Buffer.alloc(0), ciphertext);
diff --git a/src/noise.ts b/src/noise.ts
index cebdec9..752e2a7 100644
--- a/src/noise.ts
+++ b/src/noise.ts
@@ -179,7 +179,9 @@ export class Noise implements INoiseConnection {
     handshake: IKHandshake,
     payload: bytes,
   ): Promise<IKHandshake> {
-    // TODO
+
+    await handshake.stage0();
+    await handshake.stage1();
 
     return handshake;
   }
diff --git a/test/ik-handshake.test.ts b/test/ik-handshake.test.ts
new file mode 100644
index 0000000..1201d3b
--- /dev/null
+++ b/test/ik-handshake.test.ts
@@ -0,0 +1,56 @@
+import Wrap from "it-pb-rpc";
+import Duplex from 'it-pair/duplex';
+import {Buffer} from "buffer";
+
+import {createPeerIdsFromFixtures} from "./fixtures/peer";
+import {generateKeypair, getPayload} from "../src/utils";
+import {IKHandshake} from "../src/handshake-ik";
+import {assert} from "chai";
+
+describe("IK Handshake", () => {
+  let peerA, peerB, fakePeer;
+
+  before(async () => {
+    [peerA, peerB, fakePeer] = await createPeerIdsFromFixtures(3);
+  });
+
+  it("should finish both stages as initiator and responder", async() => {
+    try {
+      const duplex = Duplex();
+      const connectionFrom = Wrap(duplex[0]);
+      const connectionTo = Wrap(duplex[1]);
+
+      const prologue = Buffer.from('/noise');
+      const staticKeysInitiator = generateKeypair();
+      const staticKeysResponder = generateKeypair();
+
+      const initPayload = await getPayload(peerA, staticKeysInitiator.publicKey);
+      const handshakeInit = new IKHandshake(true, initPayload, prologue, staticKeysInitiator, connectionFrom, peerB, staticKeysResponder.publicKey);
+
+      const respPayload = await getPayload(peerB, staticKeysResponder.publicKey);
+      const handshakeResp = new IKHandshake(false, respPayload, prologue, staticKeysResponder, connectionTo, peerA, staticKeysInitiator.publicKey);
+
+      await handshakeInit.stage0();
+      await handshakeResp.stage0();
+
+      await handshakeResp.stage1();
+      await handshakeInit.stage1();
+
+      // Test shared key
+      if (handshakeInit.session.cs1 && handshakeResp.session.cs1 && handshakeInit.session.cs2 && handshakeResp.session.cs2) {
+        assert(handshakeInit.session.cs1.k.equals(handshakeResp.session.cs1.k));
+        assert(handshakeInit.session.cs2.k.equals(handshakeResp.session.cs2.k));
+      } else {
+        assert(false);
+      }
+
+      // Test encryption and decryption
+      const encrypted = handshakeInit.encrypt(Buffer.from("encryptthis"), handshakeInit.session);
+      const decrypted = handshakeResp.decrypt(encrypted, handshakeResp.session);
+      assert(decrypted.equals(Buffer.from("encryptthis")));
+    } catch (e) {
+      console.error(e);
+      assert(false, e.message);
+    }
+  });
+});