diff --git a/cmd/roomserver-integration-tests/main.go b/cmd/roomserver-integration-tests/main.go
index 43574778..41ea6f4d 100644
--- a/cmd/roomserver-integration-tests/main.go
+++ b/cmd/roomserver-integration-tests/main.go
@@ -215,7 +215,8 @@ func writeToRoomServer(input []string, roomserverURL string) error {
 	if err != nil {
 		return err
 	}
-	return x.InputRoomEvents(context.Background(), &request, &response)
+	x.InputRoomEvents(context.Background(), &request, &response)
+	return response.Err()
 }
 
 // testRoomserver is used to run integration tests against a single roomserver.
diff --git a/federationapi/routing/send.go b/federationapi/routing/send.go
index 9def7c3c..cb7bea6c 100644
--- a/federationapi/routing/send.go
+++ b/federationapi/routing/send.go
@@ -372,12 +372,9 @@ func (t *txnReq) processEvent(ctx context.Context, e gomatrixserverlib.Event, is
 		return t.processEventWithMissingState(ctx, e, stateResp.RoomVersion, isInboundTxn)
 	}
 
-	// Check that the event is allowed by the state at the event.
-	if err := checkAllowedByState(e, gomatrixserverlib.UnwrapEventHeaders(stateResp.StateEvents)); err != nil {
-		return err
-	}
-
-	// pass the event to the roomserver
+	// pass the event to the roomserver which will do auth checks
+	// If the event fail auth checks, gmsl.NotAllowed error will be returned which we be silently
+	// discarded by the caller of this function
 	return api.SendEvents(
 		context.Background(),
 		t.rsAPI,
diff --git a/federationapi/routing/send_test.go b/federationapi/routing/send_test.go
index a714d07e..4f447f37 100644
--- a/federationapi/routing/send_test.go
+++ b/federationapi/routing/send_test.go
@@ -89,12 +89,11 @@ func (t *testRoomserverAPI) InputRoomEvents(
 	ctx context.Context,
 	request *api.InputRoomEventsRequest,
 	response *api.InputRoomEventsResponse,
-) error {
+) {
 	t.inputRoomEvents = append(t.inputRoomEvents, request.InputRoomEvents...)
 	for _, ire := range request.InputRoomEvents {
 		fmt.Println("InputRoomEvents: ", ire.Event.EventID())
 	}
-	return nil
 }
 
 func (t *testRoomserverAPI) PerformInvite(
@@ -461,7 +460,8 @@ func TestBasicTransaction(t *testing.T) {
 	assertInputRoomEvents(t, rsAPI.inputRoomEvents, []gomatrixserverlib.HeaderedEvent{testEvents[len(testEvents)-1]})
 }
 
-// The purpose of this test is to check that if the event received fails auth checks the transaction is failed.
+// The purpose of this test is to check that if the event received fails auth checks the event is still sent to the roomserver
+// as it does the auth check.
 func TestTransactionFailAuthChecks(t *testing.T) {
 	rsAPI := &testRoomserverAPI{
 		queryStateAfterEvents: func(req *api.QueryStateAfterEventsRequest) api.QueryStateAfterEventsResponse {
@@ -479,11 +479,9 @@ func TestTransactionFailAuthChecks(t *testing.T) {
 		testData[len(testData)-1], // a message event
 	}
 	txn := mustCreateTransaction(rsAPI, &txnFedClient{}, pdus)
-	mustProcessTransaction(t, txn, []string{
-		// expect the event to have an error
-		testEvents[len(testEvents)-1].EventID(),
-	})
-	assertInputRoomEvents(t, rsAPI.inputRoomEvents, nil) // expect no messages to be sent to the roomserver
+	mustProcessTransaction(t, txn, []string{})
+	// expect message to be sent to the roomserver
+	assertInputRoomEvents(t, rsAPI.inputRoomEvents, []gomatrixserverlib.HeaderedEvent{testEvents[len(testEvents)-1]})
 }
 
 // The purpose of this test is to make sure that when an event is received for which we do not know the prev_events,
diff --git a/roomserver/api/api.go b/roomserver/api/api.go
index eecefe32..2495157a 100644
--- a/roomserver/api/api.go
+++ b/roomserver/api/api.go
@@ -16,7 +16,7 @@ type RoomserverInternalAPI interface {
 		ctx context.Context,
 		request *InputRoomEventsRequest,
 		response *InputRoomEventsResponse,
-	) error
+	)
 
 	PerformInvite(
 		ctx context.Context,
diff --git a/roomserver/api/api_trace.go b/roomserver/api/api_trace.go
index 64330930..b7accb9a 100644
--- a/roomserver/api/api_trace.go
+++ b/roomserver/api/api_trace.go
@@ -23,10 +23,9 @@ func (t *RoomserverInternalAPITrace) InputRoomEvents(
 	ctx context.Context,
 	req *InputRoomEventsRequest,
 	res *InputRoomEventsResponse,
-) error {
-	err := t.Impl.InputRoomEvents(ctx, req, res)
-	util.GetLogger(ctx).WithError(err).Infof("InputRoomEvents req=%+v res=%+v", js(req), js(res))
-	return err
+) {
+	t.Impl.InputRoomEvents(ctx, req, res)
+	util.GetLogger(ctx).Infof("InputRoomEvents req=%+v res=%+v", js(req), js(res))
 }
 
 func (t *RoomserverInternalAPITrace) PerformInvite(
diff --git a/roomserver/api/input.go b/roomserver/api/input.go
index 651c0e9f..862a6fa1 100644
--- a/roomserver/api/input.go
+++ b/roomserver/api/input.go
@@ -16,6 +16,8 @@
 package api
 
 import (
+	"fmt"
+
 	"github.com/matrix-org/gomatrixserverlib"
 )
 
@@ -87,4 +89,18 @@ type InputRoomEventsRequest struct {
 
 // InputRoomEventsResponse is a response to InputRoomEvents
 type InputRoomEventsResponse struct {
+	ErrMsg     string // set if there was any error
+	NotAllowed bool   // true if an event in the input was not allowed.
+}
+
+func (r *InputRoomEventsResponse) Err() error {
+	if r.ErrMsg == "" {
+		return nil
+	}
+	if r.NotAllowed {
+		return &gomatrixserverlib.NotAllowed{
+			Message: r.ErrMsg,
+		}
+	}
+	return fmt.Errorf("InputRoomEventsResponse: %s", r.ErrMsg)
 }
diff --git a/roomserver/api/wrapper.go b/roomserver/api/wrapper.go
index e5339311..cc048ddd 100644
--- a/roomserver/api/wrapper.go
+++ b/roomserver/api/wrapper.go
@@ -187,7 +187,8 @@ func SendInputRoomEvents(
 ) error {
 	request := InputRoomEventsRequest{InputRoomEvents: ires}
 	var response InputRoomEventsResponse
-	return rsAPI.InputRoomEvents(ctx, &request, &response)
+	rsAPI.InputRoomEvents(ctx, &request, &response)
+	return response.Err()
 }
 
 // SendInvite event to the roomserver.
diff --git a/roomserver/internal/alias.go b/roomserver/internal/alias.go
index d576a817..3e023d2a 100644
--- a/roomserver/internal/alias.go
+++ b/roomserver/internal/alias.go
@@ -271,5 +271,6 @@ func (r *RoomserverInternalAPI) sendUpdatedAliasesEvent(
 	var inputRes api.InputRoomEventsResponse
 
 	// Send the request
-	return r.InputRoomEvents(ctx, &inputReq, &inputRes)
+	r.InputRoomEvents(ctx, &inputReq, &inputRes)
+	return inputRes.Err()
 }
diff --git a/roomserver/internal/input/input.go b/roomserver/internal/input/input.go
index 51d20ad3..d340ac21 100644
--- a/roomserver/internal/input/input.go
+++ b/roomserver/internal/input/input.go
@@ -110,7 +110,7 @@ func (r *Inputer) InputRoomEvents(
 	ctx context.Context,
 	request *api.InputRoomEventsRequest,
 	response *api.InputRoomEventsResponse,
-) error {
+) {
 	// Create a wait group. Each task that we dispatch will call Done on
 	// this wait group so that we know when all of our events have been
 	// processed.
@@ -156,8 +156,10 @@ func (r *Inputer) InputRoomEvents(
 	// that back to the caller.
 	for _, task := range tasks {
 		if task.err != nil {
-			return task.err
+			response.ErrMsg = task.err.Error()
+			_, rejected := task.err.(*gomatrixserverlib.NotAllowed)
+			response.NotAllowed = rejected
+			return
 		}
 	}
-	return nil
 }
diff --git a/roomserver/internal/input/input_events.go b/roomserver/internal/input/input_events.go
index daf1afcd..0558cd76 100644
--- a/roomserver/internal/input/input_events.go
+++ b/roomserver/internal/input/input_events.go
@@ -46,10 +46,11 @@ func (r *Inputer) processRoomEvent(
 
 	// Check that the event passes authentication checks and work out
 	// the numeric IDs for the auth events.
-	authEventNIDs, err := helpers.CheckAuthEvents(ctx, r.DB, headered, input.AuthEventIDs)
-	if err != nil {
-		logrus.WithError(err).WithField("event_id", event.EventID()).WithField("auth_event_ids", input.AuthEventIDs).Error("processRoomEvent.checkAuthEvents failed for event")
-		return
+	isRejected := false
+	authEventNIDs, rejectionErr := helpers.CheckAuthEvents(ctx, r.DB, headered, input.AuthEventIDs)
+	if rejectionErr != nil {
+		logrus.WithError(rejectionErr).WithField("event_id", event.EventID()).WithField("auth_event_ids", input.AuthEventIDs).Error("processRoomEvent.checkAuthEvents failed for event, rejecting event")
+		isRejected = true
 	}
 
 	// If we don't have a transaction ID then get one.
@@ -65,12 +66,13 @@ func (r *Inputer) processRoomEvent(
 	}
 
 	// Store the event.
-	_, stateAtEvent, redactionEvent, redactedEventID, err := r.DB.StoreEvent(ctx, event, input.TransactionID, authEventNIDs)
+	_, stateAtEvent, redactionEvent, redactedEventID, err := r.DB.StoreEvent(ctx, event, input.TransactionID, authEventNIDs, isRejected)
 	if err != nil {
 		return "", fmt.Errorf("r.DB.StoreEvent: %w", err)
 	}
+
 	// if storing this event results in it being redacted then do so.
-	if redactedEventID == event.EventID() {
+	if !isRejected && redactedEventID == event.EventID() {
 		r, rerr := eventutil.RedactEvent(redactionEvent, &event)
 		if rerr != nil {
 			return "", fmt.Errorf("eventutil.RedactEvent: %w", rerr)
@@ -101,12 +103,22 @@ func (r *Inputer) processRoomEvent(
 	if stateAtEvent.BeforeStateSnapshotNID == 0 {
 		// We haven't calculated a state for this event yet.
 		// Lets calculate one.
-		err = r.calculateAndSetState(ctx, input, *roomInfo, &stateAtEvent, event)
+		err = r.calculateAndSetState(ctx, input, *roomInfo, &stateAtEvent, event, isRejected)
 		if err != nil {
 			return "", fmt.Errorf("r.calculateAndSetState: %w", err)
 		}
 	}
 
+	// We stop here if the event is rejected: We've stored it but won't update forward extremities or notify anyone about it.
+	if isRejected {
+		logrus.WithFields(logrus.Fields{
+			"event_id": event.EventID(),
+			"type":     event.Type(),
+			"room":     event.RoomID(),
+		}).Debug("Stored rejected event")
+		return event.EventID(), rejectionErr
+	}
+
 	if input.Kind == api.KindRewrite {
 		logrus.WithFields(logrus.Fields{
 			"event_id": event.EventID(),
@@ -157,11 +169,12 @@ func (r *Inputer) calculateAndSetState(
 	roomInfo types.RoomInfo,
 	stateAtEvent *types.StateAtEvent,
 	event gomatrixserverlib.Event,
+	isRejected bool,
 ) error {
 	var err error
 	roomState := state.NewStateResolution(r.DB, roomInfo)
 
-	if input.HasState {
+	if input.HasState && !isRejected {
 		// Check here if we think we're in the room already.
 		stateAtEvent.Overwrite = true
 		var joinEventNIDs []types.EventNID
@@ -188,7 +201,7 @@ func (r *Inputer) calculateAndSetState(
 		stateAtEvent.Overwrite = false
 
 		// We haven't been told what the state at the event is so we need to calculate it from the prev_events
-		if stateAtEvent.BeforeStateSnapshotNID, err = roomState.CalculateAndStoreStateBeforeEvent(ctx, event); err != nil {
+		if stateAtEvent.BeforeStateSnapshotNID, err = roomState.CalculateAndStoreStateBeforeEvent(ctx, event, isRejected); err != nil {
 			return fmt.Errorf("roomState.CalculateAndStoreStateBeforeEvent: %w", err)
 		}
 	}
diff --git a/roomserver/internal/perform/perform_backfill.go b/roomserver/internal/perform/perform_backfill.go
index 668c8078..eb1aa99b 100644
--- a/roomserver/internal/perform/perform_backfill.go
+++ b/roomserver/internal/perform/perform_backfill.go
@@ -535,7 +535,7 @@ func persistEvents(ctx context.Context, db storage.Database, events []gomatrixse
 		var stateAtEvent types.StateAtEvent
 		var redactedEventID string
 		var redactionEvent *gomatrixserverlib.Event
-		roomNID, stateAtEvent, redactionEvent, redactedEventID, err = db.StoreEvent(ctx, ev.Unwrap(), nil, authNids)
+		roomNID, stateAtEvent, redactionEvent, redactedEventID, err = db.StoreEvent(ctx, ev.Unwrap(), nil, authNids, false)
 		if err != nil {
 			logrus.WithError(err).WithField("event_id", ev.EventID()).Error("Failed to persist event")
 			continue
diff --git a/roomserver/internal/perform/perform_invite.go b/roomserver/internal/perform/perform_invite.go
index e06ad062..d6a64e7e 100644
--- a/roomserver/internal/perform/perform_invite.go
+++ b/roomserver/internal/perform/perform_invite.go
@@ -183,7 +183,8 @@ func (r *Inviter) PerformInvite(
 			},
 		}
 		inputRes := &api.InputRoomEventsResponse{}
-		if err = r.Inputer.InputRoomEvents(context.Background(), inputReq, inputRes); err != nil {
+		r.Inputer.InputRoomEvents(context.Background(), inputReq, inputRes)
+		if err = inputRes.Err(); err != nil {
 			return nil, fmt.Errorf("r.InputRoomEvents: %w", err)
 		}
 	} else {
diff --git a/roomserver/internal/perform/perform_join.go b/roomserver/internal/perform/perform_join.go
index f76806c7..e9aebb83 100644
--- a/roomserver/internal/perform/perform_join.go
+++ b/roomserver/internal/perform/perform_join.go
@@ -247,7 +247,8 @@ func (r *Joiner) performJoinRoomByID(
 				},
 			}
 			inputRes := api.InputRoomEventsResponse{}
-			if err = r.Inputer.InputRoomEvents(ctx, &inputReq, &inputRes); err != nil {
+			r.Inputer.InputRoomEvents(ctx, &inputReq, &inputRes)
+			if err = inputRes.Err(); err != nil {
 				var notAllowed *gomatrixserverlib.NotAllowed
 				if errors.As(err, &notAllowed) {
 					return "", &api.PerformError{
diff --git a/roomserver/internal/perform/perform_leave.go b/roomserver/internal/perform/perform_leave.go
index aaa3b5b1..6aaf1bf3 100644
--- a/roomserver/internal/perform/perform_leave.go
+++ b/roomserver/internal/perform/perform_leave.go
@@ -139,7 +139,8 @@ func (r *Leaver) performLeaveRoomByID(
 		},
 	}
 	inputRes := api.InputRoomEventsResponse{}
-	if err = r.Inputer.InputRoomEvents(ctx, &inputReq, &inputRes); err != nil {
+	r.Inputer.InputRoomEvents(ctx, &inputReq, &inputRes)
+	if err = inputRes.Err(); err != nil {
 		return nil, fmt.Errorf("r.InputRoomEvents: %w", err)
 	}
 
diff --git a/roomserver/internal/query/query.go b/roomserver/internal/query/query.go
index b34ae770..fb981447 100644
--- a/roomserver/internal/query/query.go
+++ b/roomserver/internal/query/query.go
@@ -70,6 +70,7 @@ func (r *Queryer) QueryStateAfterEvents(
 	if err != nil {
 		switch err.(type) {
 		case types.MissingEventError:
+			util.GetLogger(ctx).Errorf("QueryStateAfterEvents: MissingEventError: %s", err)
 			return nil
 		default:
 			return err
diff --git a/roomserver/inthttp/client.go b/roomserver/inthttp/client.go
index 1ff1fc82..f2510c75 100644
--- a/roomserver/inthttp/client.go
+++ b/roomserver/inthttp/client.go
@@ -149,12 +149,15 @@ func (h *httpRoomserverInternalAPI) InputRoomEvents(
 	ctx context.Context,
 	request *api.InputRoomEventsRequest,
 	response *api.InputRoomEventsResponse,
-) error {
+) {
 	span, ctx := opentracing.StartSpanFromContext(ctx, "InputRoomEvents")
 	defer span.Finish()
 
 	apiURL := h.roomserverURL + RoomserverInputRoomEventsPath
-	return httputil.PostJSON(ctx, span, h.httpClient, apiURL, request, response)
+	err := httputil.PostJSON(ctx, span, h.httpClient, apiURL, request, response)
+	if err != nil {
+		response.ErrMsg = err.Error()
+	}
 }
 
 func (h *httpRoomserverInternalAPI) PerformInvite(
diff --git a/roomserver/inthttp/server.go b/roomserver/inthttp/server.go
index 5816d4d8..8ffa9cf9 100644
--- a/roomserver/inthttp/server.go
+++ b/roomserver/inthttp/server.go
@@ -20,9 +20,7 @@ func AddRoutes(r api.RoomserverInternalAPI, internalAPIMux *mux.Router) {
 			if err := json.NewDecoder(req.Body).Decode(&request); err != nil {
 				return util.MessageResponse(http.StatusBadRequest, err.Error())
 			}
-			if err := r.InputRoomEvents(req.Context(), &request, &response); err != nil {
-				return util.ErrorResponse(err)
-			}
+			r.InputRoomEvents(req.Context(), &request, &response)
 			return util.JSONResponse{Code: http.StatusOK, JSON: &response}
 		}),
 	)
diff --git a/roomserver/roomserver_test.go b/roomserver/roomserver_test.go
index ef590100..912c5852 100644
--- a/roomserver/roomserver_test.go
+++ b/roomserver/roomserver_test.go
@@ -140,14 +140,6 @@ func mustCreateEvents(t *testing.T, roomVer gomatrixserverlib.RoomVersion, event
 	return
 }
 
-func eventsJSON(events []gomatrixserverlib.Event) []json.RawMessage {
-	result := make([]json.RawMessage, len(events))
-	for i := range events {
-		result[i] = events[i].JSON()
-	}
-	return result
-}
-
 func mustLoadRawEvents(t *testing.T, ver gomatrixserverlib.RoomVersion, events []json.RawMessage) []gomatrixserverlib.HeaderedEvent {
 	t.Helper()
 	hs := make([]gomatrixserverlib.HeaderedEvent, len(events))
diff --git a/roomserver/state/state.go b/roomserver/state/state.go
index 37e6807a..9ee6f40d 100644
--- a/roomserver/state/state.go
+++ b/roomserver/state/state.go
@@ -159,7 +159,7 @@ func (v StateResolution) LoadCombinedStateAfterEvents(
 			}
 			fullState = append(fullState, entries...)
 		}
-		if prevState.IsStateEvent() {
+		if prevState.IsStateEvent() && !prevState.IsRejected {
 			// If the prev event was a state event then add an entry for the event itself
 			// so that we get the state after the event rather than the state before.
 			fullState = append(fullState, prevState.StateEntry)
@@ -523,6 +523,7 @@ func init() {
 func (v StateResolution) CalculateAndStoreStateBeforeEvent(
 	ctx context.Context,
 	event gomatrixserverlib.Event,
+	isRejected bool,
 ) (types.StateSnapshotNID, error) {
 	// Load the state at the prev events.
 	prevEventRefs := event.PrevEvents()
@@ -561,7 +562,7 @@ func (v StateResolution) CalculateAndStoreStateAfterEvents(
 
 	if len(prevStates) == 1 {
 		prevState := prevStates[0]
-		if prevState.EventStateKeyNID == 0 {
+		if prevState.EventStateKeyNID == 0 || prevState.IsRejected {
 			// 3) None of the previous events were state events and they all
 			// have the same state, so this event has exactly the same state
 			// as the previous events.
diff --git a/roomserver/storage/interface.go b/roomserver/storage/interface.go
index be724da6..10a380e8 100644
--- a/roomserver/storage/interface.go
+++ b/roomserver/storage/interface.go
@@ -70,6 +70,7 @@ type Database interface {
 	// Stores a matrix room event in the database. Returns the room NID, the state snapshot and the redacted event ID if any, or an error.
 	StoreEvent(
 		ctx context.Context, event gomatrixserverlib.Event, txnAndSessionID *api.TransactionID, authEventNIDs []types.EventNID,
+		isRejected bool,
 	) (types.RoomNID, types.StateAtEvent, *gomatrixserverlib.Event, string, error)
 	// Look up the state entries for a list of string event IDs
 	// Returns an error if the there is an error talking to the database
diff --git a/roomserver/storage/postgres/events_table.go b/roomserver/storage/postgres/events_table.go
index e66efb09..c8eb8e2d 100644
--- a/roomserver/storage/postgres/events_table.go
+++ b/roomserver/storage/postgres/events_table.go
@@ -65,13 +65,14 @@ CREATE TABLE IF NOT EXISTS roomserver_events (
     -- Needed for setting reference hashes when sending new events.
     reference_sha256 BYTEA NOT NULL,
     -- A list of numeric IDs for events that can authenticate this event.
-    auth_event_nids BIGINT[] NOT NULL
+	auth_event_nids BIGINT[] NOT NULL,
+	is_rejected BOOLEAN NOT NULL DEFAULT FALSE
 );
 `
 
 const insertEventSQL = "" +
-	"INSERT INTO roomserver_events (room_nid, event_type_nid, event_state_key_nid, event_id, reference_sha256, auth_event_nids, depth)" +
-	" VALUES ($1, $2, $3, $4, $5, $6, $7)" +
+	"INSERT INTO roomserver_events (room_nid, event_type_nid, event_state_key_nid, event_id, reference_sha256, auth_event_nids, depth, is_rejected)" +
+	" VALUES ($1, $2, $3, $4, $5, $6, $7, $8)" +
 	" ON CONFLICT ON CONSTRAINT roomserver_event_id_unique" +
 	" DO NOTHING" +
 	" RETURNING event_nid, state_snapshot_nid"
@@ -88,7 +89,7 @@ const bulkSelectStateEventByIDSQL = "" +
 	" ORDER BY event_type_nid, event_state_key_nid ASC"
 
 const bulkSelectStateAtEventByIDSQL = "" +
-	"SELECT event_type_nid, event_state_key_nid, event_nid, state_snapshot_nid FROM roomserver_events" +
+	"SELECT event_type_nid, event_state_key_nid, event_nid, state_snapshot_nid, is_rejected FROM roomserver_events" +
 	" WHERE event_id = ANY($1)"
 
 const updateEventStateSQL = "" +
@@ -174,12 +175,14 @@ func (s *eventStatements) InsertEvent(
 	referenceSHA256 []byte,
 	authEventNIDs []types.EventNID,
 	depth int64,
+	isRejected bool,
 ) (types.EventNID, types.StateSnapshotNID, error) {
 	var eventNID int64
 	var stateNID int64
 	err := s.insertEventStmt.QueryRowContext(
 		ctx, int64(roomNID), int64(eventTypeNID), int64(eventStateKeyNID),
 		eventID, referenceSHA256, eventNIDsAsArray(authEventNIDs), depth,
+		isRejected,
 	).Scan(&eventNID, &stateNID)
 	return types.EventNID(eventNID), types.StateSnapshotNID(stateNID), err
 }
@@ -255,6 +258,7 @@ func (s *eventStatements) BulkSelectStateAtEventByID(
 			&result.EventStateKeyNID,
 			&result.EventNID,
 			&result.BeforeStateSnapshotNID,
+			&result.IsRejected,
 		); err != nil {
 			return nil, err
 		}
diff --git a/roomserver/storage/shared/storage.go b/roomserver/storage/shared/storage.go
index 262b0f2f..e710b99b 100644
--- a/roomserver/storage/shared/storage.go
+++ b/roomserver/storage/shared/storage.go
@@ -382,7 +382,7 @@ func (d *Database) GetLatestEventsForUpdate(
 // nolint:gocyclo
 func (d *Database) StoreEvent(
 	ctx context.Context, event gomatrixserverlib.Event,
-	txnAndSessionID *api.TransactionID, authEventNIDs []types.EventNID,
+	txnAndSessionID *api.TransactionID, authEventNIDs []types.EventNID, isRejected bool,
 ) (types.RoomNID, types.StateAtEvent, *gomatrixserverlib.Event, string, error) {
 	var (
 		roomNID          types.RoomNID
@@ -446,6 +446,7 @@ func (d *Database) StoreEvent(
 			event.EventReference().EventSHA256,
 			authEventNIDs,
 			event.Depth(),
+			isRejected,
 		); err != nil {
 			if err == sql.ErrNoRows {
 				// We've already inserted the event so select the numeric event ID
@@ -459,7 +460,9 @@ func (d *Database) StoreEvent(
 		if err = d.EventJSONTable.InsertEventJSON(ctx, txn, eventNID, event.JSON()); err != nil {
 			return fmt.Errorf("d.EventJSONTable.InsertEventJSON: %w", err)
 		}
-		redactionEvent, redactedEventID, err = d.handleRedactions(ctx, txn, eventNID, event)
+		if !isRejected { // ignore rejected redaction events
+			redactionEvent, redactedEventID, err = d.handleRedactions(ctx, txn, eventNID, event)
+		}
 		return nil
 	})
 	if err != nil {
diff --git a/roomserver/storage/sqlite3/events_table.go b/roomserver/storage/sqlite3/events_table.go
index a866c85d..773e9ade 100644
--- a/roomserver/storage/sqlite3/events_table.go
+++ b/roomserver/storage/sqlite3/events_table.go
@@ -41,13 +41,14 @@ const eventsSchema = `
     depth INTEGER NOT NULL,
     event_id TEXT NOT NULL UNIQUE,
     reference_sha256 BLOB NOT NULL,
-    auth_event_nids TEXT NOT NULL DEFAULT '[]'
+	auth_event_nids TEXT NOT NULL DEFAULT '[]',
+	is_rejected BOOLEAN NOT NULL DEFAULT FALSE
   );
 `
 
 const insertEventSQL = `
-	INSERT INTO roomserver_events (room_nid, event_type_nid, event_state_key_nid, event_id, reference_sha256, auth_event_nids, depth)
-	  VALUES ($1, $2, $3, $4, $5, $6, $7)
+	INSERT INTO roomserver_events (room_nid, event_type_nid, event_state_key_nid, event_id, reference_sha256, auth_event_nids, depth, is_rejected)
+	  VALUES ($1, $2, $3, $4, $5, $6, $7, $8)
 	  ON CONFLICT DO NOTHING;
 `
 
@@ -63,7 +64,7 @@ const bulkSelectStateEventByIDSQL = "" +
 	" ORDER BY event_type_nid, event_state_key_nid ASC"
 
 const bulkSelectStateAtEventByIDSQL = "" +
-	"SELECT event_type_nid, event_state_key_nid, event_nid, state_snapshot_nid FROM roomserver_events" +
+	"SELECT event_type_nid, event_state_key_nid, event_nid, state_snapshot_nid, is_rejected FROM roomserver_events" +
 	" WHERE event_id IN ($1)"
 
 const updateEventStateSQL = "" +
@@ -150,13 +151,14 @@ func (s *eventStatements) InsertEvent(
 	referenceSHA256 []byte,
 	authEventNIDs []types.EventNID,
 	depth int64,
+	isRejected bool,
 ) (types.EventNID, types.StateSnapshotNID, error) {
 	// attempt to insert: the last_row_id is the event NID
 	var eventNID int64
 	insertStmt := sqlutil.TxStmt(txn, s.insertEventStmt)
 	result, err := insertStmt.ExecContext(
 		ctx, int64(roomNID), int64(eventTypeNID), int64(eventStateKeyNID),
-		eventID, referenceSHA256, eventNIDsAsArray(authEventNIDs), depth,
+		eventID, referenceSHA256, eventNIDsAsArray(authEventNIDs), depth, isRejected,
 	)
 	if err != nil {
 		return 0, 0, err
@@ -261,6 +263,7 @@ func (s *eventStatements) BulkSelectStateAtEventByID(
 			&result.EventStateKeyNID,
 			&result.EventNID,
 			&result.BeforeStateSnapshotNID,
+			&result.IsRejected,
 		); err != nil {
 			return nil, err
 		}
diff --git a/roomserver/storage/tables/interface.go b/roomserver/storage/tables/interface.go
index adb06212..eba878ba 100644
--- a/roomserver/storage/tables/interface.go
+++ b/roomserver/storage/tables/interface.go
@@ -34,7 +34,10 @@ type EventStateKeys interface {
 }
 
 type Events interface {
-	InsertEvent(c context.Context, txn *sql.Tx, i types.RoomNID, j types.EventTypeNID, k types.EventStateKeyNID, eventID string, referenceSHA256 []byte, authEventNIDs []types.EventNID, depth int64) (types.EventNID, types.StateSnapshotNID, error)
+	InsertEvent(
+		ctx context.Context, txn *sql.Tx, i types.RoomNID, j types.EventTypeNID, k types.EventStateKeyNID, eventID string,
+		referenceSHA256 []byte, authEventNIDs []types.EventNID, depth int64, isRejected bool,
+	) (types.EventNID, types.StateSnapshotNID, error)
 	SelectEvent(ctx context.Context, txn *sql.Tx, eventID string) (types.EventNID, types.StateSnapshotNID, error)
 	// bulkSelectStateEventByID lookups a list of state events by event ID.
 	// If any of the requested events are missing from the database it returns a types.MissingEventError
diff --git a/roomserver/types/types.go b/roomserver/types/types.go
index f5b45763..c0fcef65 100644
--- a/roomserver/types/types.go
+++ b/roomserver/types/types.go
@@ -101,6 +101,9 @@ type StateAtEvent struct {
 	Overwrite bool
 	// The state before the event.
 	BeforeStateSnapshotNID StateSnapshotNID
+	// True if this StateEntry is rejected. State resolution should then treat this
+	// StateEntry as being a message event (not a state event).
+	IsRejected bool
 	// The state entry for the event itself, allows us to calculate the state after the event.
 	StateEntry
 }
diff --git a/sytest-blacklist b/sytest-blacklist
index 705c9ff4..246e6830 100644
--- a/sytest-blacklist
+++ b/sytest-blacklist
@@ -40,11 +40,6 @@ Ignore invite in incremental sync
 New room members see their own join event
 Existing members see new members' join events
 
-# Blacklisted because the federation work for these hasn't been finished yet. 
-Can recv device messages over federation
-Device messages over federation wake up /sync
-Wildcard device messages over federation wake up /sync
-
 # See https://github.com/matrix-org/sytest/pull/901
 Remote invited user can see room metadata
 
@@ -56,8 +51,8 @@ Inbound federation accepts a second soft-failed event
 # Caused by https://github.com/matrix-org/sytest/pull/911
 Outbound federation requests missing prev_events and then asks for /state_ids and resolves the state
 
-# We don't implement device lists yet
-Device list doesn't change if remote server is down
-
 # We don't implement lazy membership loading yet.
 The only membership state included in a gapped incremental sync is for senders in the timeline
+
+# flakey since implementing rejected events
+Inbound federation correctly soft fails events
\ No newline at end of file
diff --git a/sytest-whitelist b/sytest-whitelist
index 0adeaee6..91516428 100644
--- a/sytest-whitelist
+++ b/sytest-whitelist
@@ -470,4 +470,6 @@ We can't peek into rooms with shared history_visibility
 We can't peek into rooms with invited history_visibility
 We can't peek into rooms with joined history_visibility
 Local users can peek by room alias
-Peeked rooms only turn up in the sync for the device who peeked them
\ No newline at end of file
+Peeked rooms only turn up in the sync for the device who peeked them
+Room state at a rejected message event is the same as its predecessor
+Room state at a rejected state event is the same as its predecessor
\ No newline at end of file