diff --git a/service-t/src/com/android/server/net/NetworkStatsObservers.java b/service-t/src/com/android/server/net/NetworkStatsObservers.java
index cab29e3..21cf351 100644
--- a/service-t/src/com/android/server/net/NetworkStatsObservers.java
+++ b/service-t/src/com/android/server/net/NetworkStatsObservers.java
@@ -32,6 +32,7 @@
 import android.net.NetworkTemplate;
 import android.net.netstats.IUsageCallback;
 import android.os.Handler;
+import android.os.HandlerThread;
 import android.os.IBinder;
 import android.os.Looper;
 import android.os.Message;
@@ -45,7 +46,6 @@
 import com.android.internal.annotations.VisibleForTesting;
 import com.android.net.module.util.PerUidCounter;
 
-import java.util.Objects;
 import java.util.concurrent.atomic.AtomicInteger;
 
 /**
@@ -78,11 +78,8 @@
     // Sequence number of DataUsageRequests
     private final AtomicInteger mNextDataUsageRequestId = new AtomicInteger();
 
-    private final Handler mHandler;
-
-    NetworkStatsObservers(@NonNull Looper looper) {
-        mHandler = new Handler(Objects.requireNonNull(looper), mHandlerCallback);
-    }
+    // Lazily instantiated when an observer is registered.
+    private volatile Handler mHandler;
 
     /**
      * Creates a wrapper that contains the caller context and a normalized request.
@@ -103,7 +100,7 @@
         if (LOG) Log.d(TAG, "Registering observer for " + requestInfo);
         mDataUsageRequestsPerUid.incrementCountOrThrow(callingUid);
 
-        mHandler.sendMessage(mHandler.obtainMessage(MSG_REGISTER, requestInfo));
+        getHandler().sendMessage(mHandler.obtainMessage(MSG_REGISTER, requestInfo));
         return request;
     }
 
@@ -113,7 +110,7 @@
      * <p>It will unregister the observer asynchronously, so it is safe to call from any thread.
      */
     public void unregister(DataUsageRequest request, int callingUid) {
-        mHandler.sendMessage(mHandler.obtainMessage(MSG_UNREGISTER, callingUid, 0 /* ignore */,
+        getHandler().sendMessage(mHandler.obtainMessage(MSG_UNREGISTER, callingUid, 0 /* ignore */,
                 request));
     }
 
@@ -128,10 +125,34 @@
                 long currentTime) {
         StatsContext statsContext = new StatsContext(xtSnapshot, uidSnapshot, activeIfaces,
                 activeUidIfaces, currentTime);
-        mHandler.sendMessage(mHandler.obtainMessage(MSG_UPDATE_STATS, statsContext));
+        getHandler().sendMessage(mHandler.obtainMessage(MSG_UPDATE_STATS, statsContext));
     }
 
-    private final Handler.Callback mHandlerCallback = new Handler.Callback() {
+    private Handler getHandler() {
+        if (mHandler == null) {
+            synchronized (this) {
+                if (mHandler == null) {
+                    if (LOGV) Log.v(TAG, "Creating handler");
+                    mHandler = new Handler(getHandlerLooperLocked(), mHandlerCallback);
+                }
+            }
+        }
+        return mHandler;
+    }
+
+    @VisibleForTesting
+    protected Looper getHandlerLooperLocked() {
+        // TODO: Currently, callbacks are dispatched on this thread if the caller register
+        //  callback without supplying a Handler. To ensure that the service handler thread
+        //  is not blocked by client code, the observers must create their own thread. Once
+        //  all callbacks are dispatched outside of the handler thread, the service handler
+        //  thread can be used here.
+        HandlerThread handlerThread = new HandlerThread(TAG);
+        handlerThread.start();
+        return handlerThread.getLooper();
+    }
+
+    private Handler.Callback mHandlerCallback = new Handler.Callback() {
         @Override
         public boolean handleMessage(Message msg) {
             switch (msg.what) {
diff --git a/service-t/src/com/android/server/net/NetworkStatsService.java b/service-t/src/com/android/server/net/NetworkStatsService.java
index 64b17eb..9684d18 100644
--- a/service-t/src/com/android/server/net/NetworkStatsService.java
+++ b/service-t/src/com/android/server/net/NetworkStatsService.java
@@ -593,7 +593,7 @@
                 INetd.Stub.asInterface((IBinder) context.getSystemService(Context.NETD_SERVICE)),
                 alarmManager, wakeLock, getDefaultClock(),
                 new DefaultNetworkStatsSettings(), new NetworkStatsFactory(context),
-                new Dependencies());
+                new NetworkStatsObservers(), new Dependencies());
 
         return service;
     }
@@ -603,7 +603,8 @@
     @VisibleForTesting
     NetworkStatsService(Context context, INetd netd, AlarmManager alarmManager,
             PowerManager.WakeLock wakeLock, Clock clock, NetworkStatsSettings settings,
-            NetworkStatsFactory factory, @NonNull Dependencies deps) {
+            NetworkStatsFactory factory, NetworkStatsObservers statsObservers,
+            @NonNull Dependencies deps) {
         mContext = Objects.requireNonNull(context, "missing Context");
         mNetd = Objects.requireNonNull(netd, "missing Netd");
         mAlarmManager = Objects.requireNonNull(alarmManager, "missing AlarmManager");
@@ -611,6 +612,7 @@
         mSettings = Objects.requireNonNull(settings, "missing NetworkStatsSettings");
         mWakeLock = Objects.requireNonNull(wakeLock, "missing WakeLock");
         mStatsFactory = Objects.requireNonNull(factory, "missing factory");
+        mStatsObservers = Objects.requireNonNull(statsObservers, "missing NetworkStatsObservers");
         mDeps = Objects.requireNonNull(deps, "missing Dependencies");
         mStatsDir = mDeps.getOrCreateStatsDir();
         if (!mStatsDir.exists()) {
@@ -620,7 +622,6 @@
         final HandlerThread handlerThread = mDeps.makeHandlerThread();
         handlerThread.start();
         mHandler = new NetworkStatsHandler(handlerThread.getLooper());
-        mStatsObservers = new NetworkStatsObservers(handlerThread.getLooper());
         mNetworkStatsSubscriptionsMonitor = deps.makeSubscriptionsMonitor(mContext,
                 (command) -> mHandler.post(command) , this);
         mContentResolver = mContext.getContentResolver();
diff --git a/tests/unit/java/com/android/server/net/NetworkStatsObserversTest.java b/tests/unit/java/com/android/server/net/NetworkStatsObserversTest.java
index 0bbc34c..e62ac74 100644
--- a/tests/unit/java/com/android/server/net/NetworkStatsObserversTest.java
+++ b/tests/unit/java/com/android/server/net/NetworkStatsObserversTest.java
@@ -47,6 +47,7 @@
 import android.net.NetworkTemplate;
 import android.os.HandlerThread;
 import android.os.IBinder;
+import android.os.Looper;
 import android.os.Process;
 import android.os.UserHandle;
 import android.telephony.TelephonyManager;
@@ -126,7 +127,13 @@
 
         mObserverHandlerThread = new HandlerThread("NetworkStatsObserversTest");
         mObserverHandlerThread.start();
-        mStatsObservers = new NetworkStatsObservers(mObserverHandlerThread.getLooper());
+        final Looper observerLooper = mObserverHandlerThread.getLooper();
+        mStatsObservers = new NetworkStatsObservers() {
+            @Override
+            protected Looper getHandlerLooperLocked() {
+                return observerLooper;
+            }
+        };
 
         mActiveIfaces = new ArrayMap<>();
         mActiveUidIfaces = new ArrayMap<>();
diff --git a/tests/unit/java/com/android/server/net/NetworkStatsServiceTest.java b/tests/unit/java/com/android/server/net/NetworkStatsServiceTest.java
index 3d7ad66..3ed51bc 100644
--- a/tests/unit/java/com/android/server/net/NetworkStatsServiceTest.java
+++ b/tests/unit/java/com/android/server/net/NetworkStatsServiceTest.java
@@ -123,6 +123,7 @@
 import android.os.Handler;
 import android.os.HandlerThread;
 import android.os.IBinder;
+import android.os.Looper;
 import android.os.PowerManager;
 import android.os.SimpleClock;
 import android.provider.Settings;
@@ -292,6 +293,7 @@
     private String mCompareStatsResult = null;
     private @Mock Resources mResources;
     private Boolean mIsDebuggable;
+    private HandlerThread mObserverHandlerThread;
     final TestDependencies mDeps = new TestDependencies();
 
     private class MockContext extends BroadcastInterceptingContext {
@@ -375,8 +377,21 @@
                 powerManager.newWakeLock(PowerManager.PARTIAL_WAKE_LOCK, TAG);
 
         mHandlerThread = new HandlerThread("NetworkStatsServiceTest-HandlerThread");
+        // Create a separate thread for observers to run on. This thread cannot be the same
+        // as the handler thread, because the observer callback is fired on this thread, and
+        // it should not be blocked by client code. Additionally, creating the observers
+        // object requires a looper, which can only be obtained after a thread has been started.
+        mObserverHandlerThread = new HandlerThread("NetworkStatsServiceTest-ObserversThread");
+        mObserverHandlerThread.start();
+        final Looper observerLooper = mObserverHandlerThread.getLooper();
+        final NetworkStatsObservers statsObservers = new NetworkStatsObservers() {
+            @Override
+            protected Looper getHandlerLooperLocked() {
+                return observerLooper;
+            }
+        };
         mService = new NetworkStatsService(mServiceContext, mNetd, mAlarmManager, wakeLock,
-                mClock, mSettings, mStatsFactory, mDeps);
+                mClock, mSettings, mStatsFactory, statsObservers, mDeps);
 
         mElapsedRealtime = 0L;
 
@@ -574,6 +589,10 @@
             mHandlerThread.quitSafely();
             mHandlerThread.join();
         }
+        if (mObserverHandlerThread != null) {
+            mObserverHandlerThread.quitSafely();
+            mObserverHandlerThread.join();
+        }
     }
 
     private void initWifiStats(NetworkStateSnapshot snapshot) throws Exception {