diff --git a/install_action_unittest.cc b/install_action_unittest.cc
new file mode 100644
index 0000000..dde15ea
--- /dev/null
+++ b/install_action_unittest.cc
@@ -0,0 +1,188 @@
+// Copyright (c) 2009 The Chromium Authors. All rights reserved.
+// Use of this source code is governed by a BSD-style license that can be
+// found in the LICENSE file.
+
+#include <sys/stat.h>
+#include <sys/types.h>
+#include <errno.h>
+#include <set>
+#include <string>
+#include <vector>
+#include "base/string_util.h"
+#include <gtest/gtest.h>
+#include "update_engine/delta_diff_generator.h"
+#include "update_engine/filesystem_iterator.h"
+#include "update_engine/install_action.h"
+#include "update_engine/test_utils.h"
+#include "update_engine/utils.h"
+
+using chromeos_update_engine::System;
+using std::set;
+using std::string;
+using std::vector;
+
+namespace {
+void GenerateFilesAtPath(const string& base) {
+  EXPECT_EQ(0, System(StringPrintf("echo hi > %s/hi", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("mkdir -p %s/dir", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("echo hello > %s/dir/hello", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("echo -n > %s/dir/newempty", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("rm -f %s/dir/bdev", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("mknod %s/dir/bdev b 3 1", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("rm -f %s/cdev", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("mknod %s/cdev c 2 1", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("mkdir -p %s/dir/subdir", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("mkdir -p %s/dir/emptydir", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("echo -n foo > %s/dir/bigfile",
+                                   base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("chown 501:503 %s/dir/emptydir",
+                                   base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("rm -f %s/dir/subdir/fifo", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("mkfifo %s/dir/subdir/fifo", base.c_str())));
+  EXPECT_EQ(0, System(StringPrintf("ln -f -s /target %s/dir/subdir/link",
+                                   base.c_str())));
+}
+
+// Returns true if files at paths a, b are equal and there are no errors.
+bool FilesEqual(const string& a, const string& b) {
+  struct stat a_stbuf;
+  struct stat b_stbuf;
+
+  int r = lstat(a.c_str(), &a_stbuf);
+  TEST_AND_RETURN_FALSE_ERRNO(r == 0);
+  r = lstat(b.c_str(), &b_stbuf);
+  TEST_AND_RETURN_FALSE_ERRNO(r == 0);
+
+  TEST_AND_RETURN_FALSE(a_stbuf.st_mode == b_stbuf.st_mode);
+  if (S_ISBLK(a_stbuf.st_mode) || S_ISCHR(a_stbuf.st_mode))
+    TEST_AND_RETURN_FALSE(a_stbuf.st_rdev == b_stbuf.st_rdev);
+  if (!S_ISREG(a_stbuf.st_mode)) {
+    return true;
+  }
+  // Compare files
+  TEST_AND_RETURN_FALSE(a_stbuf.st_size == b_stbuf.st_size);
+  vector<char> a_data;
+  TEST_AND_RETURN_FALSE(chromeos_update_engine::utils::ReadFile(a, &a_data));
+  vector<char> b_data;
+  TEST_AND_RETURN_FALSE(chromeos_update_engine::utils::ReadFile(b, &b_data));
+  TEST_AND_RETURN_FALSE(a_data == b_data);
+  return true;
+}
+
+class ScopedLoopDevUnmapper {
+ public:
+  explicit ScopedLoopDevUnmapper(const string& dev) : dev_(dev) {}
+  ~ScopedLoopDevUnmapper() {
+    EXPECT_EQ(0, System(string("losetup -d ") + dev_));
+  }
+ private:
+  string dev_;
+};
+
+}
+
+namespace chromeos_update_engine {
+
+class InstallActionTest : public ::testing::Test { };
+
+TEST(InstallActionTest, RunAsRootDiffTest) {
+  ASSERT_EQ(0, getuid());
+  string loop_dev = GetUnusedLoopDevice();
+  ScopedLoopDevUnmapper loop_dev_unmapper(loop_dev);
+  LOG(INFO) << "Using loop device: " << loop_dev;
+  const string original_image("orig.image");
+  const string original_dir("orig");
+  const string new_dir("new");
+
+  ASSERT_EQ(0, System(string("dd if=/dev/zero of=") + original_image +
+                      " bs=5M count=1"));
+  ASSERT_EQ(0, System(string("mkfs.ext3 -F ") + original_image));
+  ASSERT_EQ(0, System(string("losetup ") + loop_dev + " " + original_image));
+  ASSERT_EQ(0, System(string("mkdir ") + original_dir));
+  ASSERT_EQ(0, System(string("mount ") + loop_dev + " " + original_dir));
+  ASSERT_EQ(0, System(string("mkdir ") + new_dir));
+
+  GenerateFilesAtPath(original_dir);
+  GenerateFilesAtPath(new_dir);
+
+  {
+    // Fill bigfile w/ some data in the new folder
+    vector<char> buf(100 * 1024);
+    for (unsigned int i = 0; i < buf.size(); i++) {
+      buf[i] = static_cast<char>(i);
+    }
+    EXPECT_TRUE(WriteFileVector(new_dir + "/dir/bigfile", buf));
+  }
+  // Make a diff
+  DeltaArchiveManifest* delta =
+      DeltaDiffGenerator::EncodeMetadataToProtoBuffer(new_dir.c_str());
+  EXPECT_TRUE(NULL != delta);
+  EXPECT_TRUE(DeltaDiffGenerator::EncodeDataToDeltaFile(delta,
+                                                        original_dir,
+                                                        new_dir,
+                                                        "delta"));
+
+  ASSERT_EQ(0, System(string("umount ") + original_dir));
+
+  ObjectFeederAction<InstallPlan> feeder_action;
+  InstallAction install_action;
+  ObjectCollectorAction<string> collector_action;
+
+  BondActions(&feeder_action, &install_action);
+  BondActions(&install_action, &collector_action);
+
+  ActionProcessor processor;
+  processor.EnqueueAction(&feeder_action);
+  processor.EnqueueAction(&install_action);
+  processor.EnqueueAction(&collector_action);
+
+  InstallPlan install_plan(false, "", "", "delta", loop_dev);
+  feeder_action.set_obj(install_plan);
+
+  processor.StartProcessing();
+  EXPECT_FALSE(processor.IsRunning()) << "Update to handle async actions";
+
+  EXPECT_EQ(loop_dev, collector_action.object());
+
+  ASSERT_EQ(0, System(string("mount ") + loop_dev + " " + original_dir));
+
+  // Check that original_dir and new_dir are equal
+  int original_count = 0;
+  LOG(INFO) << "checking old";
+  {
+    FilesystemIterator iter(original_dir,
+                            utils::SetWithValue<string>("/lost+found"));
+    for (; !iter.IsEnd(); iter.Increment()) {
+      original_count++;
+      LOG(INFO) << "checking path: " << iter.GetPartialPath();
+      EXPECT_TRUE(FilesEqual(original_dir + iter.GetPartialPath(),
+                             new_dir + iter.GetPartialPath()));
+    }
+    EXPECT_FALSE(iter.IsErr());
+  }
+  LOG(INFO) << "checking new";
+  int new_count = 0;
+  {
+    FilesystemIterator iter(new_dir, set<string>());
+    for (; !iter.IsEnd(); iter.Increment()) {
+      new_count++;
+      LOG(INFO) << "checking path: " << iter.GetPartialPath();
+      EXPECT_TRUE(FilesEqual(original_dir + iter.GetPartialPath(),
+                             new_dir + iter.GetPartialPath()));
+    }
+    EXPECT_FALSE(iter.IsErr());
+  }
+  LOG(INFO) << "new_count = " << new_count;
+  EXPECT_EQ(new_count, original_count);
+  EXPECT_EQ(12, original_count);  // 12 files in each dir
+
+  ASSERT_EQ(0, System(string("umount ") + original_dir));
+
+  // Cleanup generated files
+  ASSERT_EQ(0, System(string("rm -rf ") + original_dir));
+  ASSERT_EQ(0, System(string("rm -rf ") + new_dir));
+  EXPECT_EQ(0, System(string("rm -f ") + original_image));
+  ASSERT_EQ(0, system("rm -f delta"));
+}
+
+}  // namespace chromeos_update_engine