diff --git a/pathwaysutils/test/elastic_simulated_fault_integration_test.py b/pathwaysutils/test/elastic_simulated_fault_integration_test.py
new file mode 100644
index 0000000..5c8de22
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+++ b/pathwaysutils/test/elastic_simulated_fault_integration_test.py
@@ -0,0 +1,128 @@
+# Copyright 2026 Google LLC
+#
+# 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
+#
+#      https://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.
+"""Integration test for elasticity logic using DeviceLossSimulator.
+
+Simulates device loss and recovery to test slice health checks and fault
+handling without cordoning or deleting physical pods.
+"""
+
+import os
+
+os.environ["XLA_FLAGS"] = (
+    os.environ.get("XLA_FLAGS", "") + " --xla_force_host_platform_device_count=4"
+)
+
+from absl.testing import absltest
+from absl.testing import parameterized
+import jax
+import jax.numpy as jnp
+from jax.sharding import Mesh, NamedSharding, PartitionSpec as P
+import numpy as np
+from pathwaysutils.elastic import elastic
+from pathwaysutils.test import mock_fault_injection
+
+
+class ElasticSimulatedFaultIntegrationTest(parameterized.TestCase):
+
+  def setUp(self):
+    super().setUp()
+    self.simulator = mock_fault_injection.DeviceLossSimulator()
+    self.simulator.start()
+    self.devices = tuple(jax.devices())
+    # Each "slice" is made up of one device to simulate multislice failures in
+    # single host tests.
+    self.slice_to_devices = {i: [dev] for i, dev in enumerate(self.devices)}
+
+  def tearDown(self):
+    self.simulator.stop()
+    super().tearDown()
+
+  @parameterized.parameters(0, 1)
+  def test_simulated_slice_loss_and_recovery(self, target_slice: int):
+    """Verifies elasticity slice health detection under simulated faults."""
+    all_slices = set(self.slice_to_devices.keys())
+
+    # 1. All slices active initially
+    active_slices = elastic.get_active_slice_indices(self.slice_to_devices)
+    self.assertEqual(active_slices, all_slices)
+
+    # 2. Simulate loss of target slice
+    self.simulator.mark_slice_lost(target_slice, self.slice_to_devices)
+
+    active_after_loss = elastic.get_active_slice_indices(self.slice_to_devices)
+    self.assertNotIn(target_slice, active_after_loss)
+    self.assertEqual(active_after_loss, all_slices - {target_slice})
+
+    # 3. Simulate recovery of target slice
+    self.simulator.mark_slice_connected(target_slice, self.slice_to_devices)
+
+    active_after_recovery = elastic.get_active_slice_indices(
+        self.slice_to_devices
+    )
+    self.assertEqual(active_after_recovery, all_slices)
+
+  def _create_array(self, device_indices: tuple[int, ...]) -> jax.Array:
+    if len(device_indices) == 1:
+      return jax.device_put(
+          jnp.array([1.0, 2.0]), self.devices[device_indices[0]]
+      )
+    target_devices = [self.devices[i] for i in device_indices]
+    mesh = Mesh(np.array(target_devices), ("devices",))
+    sharding = NamedSharding(mesh, P("devices"))
+    return jax.device_put(jnp.array([1.0, 2.0]), sharding)
+
+  @parameterized.named_parameters(
+      dict(
+          testcase_name="single_device_on_lost_device",
+          device_indices=(0,),
+      ),
+      dict(
+          testcase_name="multi_device_including_lost_device",
+          device_indices=(0, 1),
+      ),
+  )
+  def test_array_loss_on_device_failure(self, device_indices: tuple[int, ...]):
+    """Verifies arrays residing on failed devices raise slice-down errors."""
+    arr = self._create_array(device_indices)
+
+    self.simulator.mark_device_lost(self.devices[0])
+
+    with self.assertRaises(jax.errors.JaxRuntimeError) as ctx:
+      _ = arr.block_until_ready()
+    self.assertTrue(elastic.is_error_due_to_slice_down(ctx.exception))
+
+  @parameterized.named_parameters(
+      dict(
+          testcase_name="single_device_on_healthy_device",
+          device_indices=(1,),
+      ),
+      dict(
+          testcase_name="multi_device_excluding_lost_device",
+          device_indices=(1, 2),
+      ),
+  )
+  def test_array_accessible_on_healthy_devices(
+      self, device_indices: tuple[int, ...]
+  ):
+    """Verifies arrays on healthy devices remain accessible when other devices fail."""
+    arr = self._create_array(device_indices)
+
+    self.simulator.mark_device_lost(self.devices[0])
+
+    _ = arr.block_until_ready()
+    np.testing.assert_array_equal(np.asarray(arr), [1.0, 2.0])
+
+
+if __name__ == "__main__":
+  absltest.main()