diff --git a/core/state_transition_test.go b/core/state_transition_test.go
new file mode 100644
index 0000000000..75b240a72f
--- /dev/null
+++ b/core/state_transition_test.go
@@ -0,0 +1,231 @@
+// Copyright 2023 The go-ethereum Authors
+// This file is part of the go-ethereum library.
+//
+// The go-ethereum library is free software: you can redistribute it and/or modify
+// it under the terms of the GNU Lesser General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+//
+// The go-ethereum library is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the
+// GNU Lesser General Public License for more details.
+//
+// You should have received a copy of the GNU Lesser General Public License
+// along with the go-ethereum library. If not, see <http://www.gnu.org/licenses/>.
+
+package core
+
+import (
+	"crypto/ecdsa"
+	"math/big"
+	"testing"
+
+	"github.com/ethereum/go-ethereum/common"
+	"github.com/ethereum/go-ethereum/core/state"
+	"github.com/ethereum/go-ethereum/core/tracing"
+	"github.com/ethereum/go-ethereum/core/types"
+	"github.com/ethereum/go-ethereum/core/vm"
+	"github.com/ethereum/go-ethereum/crypto"
+	"github.com/ethereum/go-ethereum/params"
+	"github.com/holiman/uint256"
+)
+
+// setupStateTransition creates a minimal environment for testing stateTransition
+func setupStateTransition(t *testing.T) (*stateTransition, *ecdsa.PrivateKey) {
+	// Create a private key for signing authorizations
+	key, err := crypto.GenerateKey()
+	if err != nil {
+		t.Fatalf("failed to generate key: %v", err)
+	}
+	address := crypto.PubkeyToAddress(key.PublicKey)
+
+	// Create state
+	statedb, _ := state.New(common.Hash{}, state.NewDatabaseForTesting())
+	// Set nonce for address
+	statedb.SetNonce(address, 5, tracing.NonceChangeUnspecified)
+
+	// Create EVM
+	chainConfig := params.TestChainConfig
+	chainConfig.ChainID = big.NewInt(1)
+
+	// Create EVM with minimal configuration
+	context := vm.BlockContext{
+		BlockNumber: new(big.Int).SetUint64(1),
+	}
+	evm := vm.NewEVM(context, statedb, chainConfig, vm.Config{})
+
+	// Create message
+	msg := &Message{
+		From:     address,
+		GasLimit: 1000000,
+	}
+
+	// Create GasPool
+	gp := new(GasPool).AddGas(10000000)
+
+	// Create stateTransition
+	st := newStateTransition(evm, msg, gp)
+	st.gasRemaining = 1000000
+	st.initialGas = 1000000
+
+	return st, key
+}
+
+// TestValidateAuthorization tests the code authorization validation logic
+func TestValidateAuthorization(t *testing.T) {
+	st, key := setupStateTransition(t)
+
+	// Get address from key
+	address := crypto.PubkeyToAddress(key.PublicKey)
+
+	// Test 1: Valid authorization
+	auth := types.SetCodeAuthorization{
+		ChainID: *uint256.NewInt(1), // matches chain in setupStateTransition
+		Address: common.HexToAddress("0x1234567890123456789012345678901234567890"),
+		Nonce:   5, // matches nonce in setupStateTransition
+	}
+
+	// Sign the authorization
+	signedAuth, err := types.SignSetCode(key, auth)
+	if err != nil {
+		t.Fatalf("failed to sign authorization: %v", err)
+	}
+
+	// Check validation
+	authAddress, err := st.validateAuthorization(&signedAuth)
+	if err != nil {
+		t.Errorf("valid authorization failed validation: %v", err)
+	}
+	if authAddress != address {
+		t.Errorf("wrong authority address: got %v, want %v", authAddress, address)
+	}
+
+	// Test 2: Wrong Chain ID
+	invalidChainIDAuth := signedAuth
+	invalidChainIDAuth.ChainID = *uint256.NewInt(999) // doesn't match chain
+	_, err = st.validateAuthorization(&invalidChainIDAuth)
+	if err != ErrAuthorizationWrongChainID {
+		t.Errorf("wrong chain ID error: got %v, want %v", err, ErrAuthorizationWrongChainID)
+	}
+
+	// Test 3: Wrong nonce
+	invalidNonceAuth := signedAuth
+	invalidNonceAuth.ChainID = *uint256.NewInt(1) // restore correct chain ID
+	invalidNonceAuth.Nonce = 999                  // doesn't match state nonce
+	_, err = st.validateAuthorization(&invalidNonceAuth)
+	if err != ErrAuthorizationNonceMismatch {
+		t.Errorf("wrong nonce error: got %v, want %v", err, ErrAuthorizationNonceMismatch)
+	}
+
+	// Test 4: Nonce overflow
+	overflowNonceAuth := signedAuth
+	overflowNonceAuth.Nonce = ^uint64(0) // max uint64 value
+	_, err = st.validateAuthorization(&overflowNonceAuth)
+	if err != ErrAuthorizationNonceOverflow {
+		t.Errorf("nonce overflow error: got %v, want %v", err, ErrAuthorizationNonceOverflow)
+	}
+
+	// Test 5: Account with code (not delegation)
+	codeAccount := crypto.PubkeyToAddress(key.PublicKey)
+	// Set arbitrary code for account
+	st.state.SetCode(codeAccount, []byte{0x01, 0x02, 0x03})
+	_, err = st.validateAuthorization(&signedAuth)
+	if err != ErrAuthorizationDestinationHasCode {
+		t.Errorf("account with code error: got %v, want %v", err, ErrAuthorizationDestinationHasCode)
+	}
+}
+
+// TestApplyAuthorization tests the code authorization application logic
+func TestApplyAuthorization(t *testing.T) {
+	st, key := setupStateTransition(t)
+
+	// Get address from key
+	address := crypto.PubkeyToAddress(key.PublicKey)
+
+	// Test 1: Set delegation to another address
+	delegationTarget := common.HexToAddress("0x1234567890123456789012345678901234567890")
+	auth := types.SetCodeAuthorization{
+		ChainID: *uint256.NewInt(1),
+		Address: delegationTarget,
+		Nonce:   5,
+	}
+
+	// Sign the authorization
+	signedAuth, err := types.SignSetCode(key, auth)
+	if err != nil {
+		t.Fatalf("failed to sign authorization: %v", err)
+	}
+
+	// Apply the authorization
+	err = st.applyAuthorization(&signedAuth)
+	if err != nil {
+		t.Errorf("failed to apply valid authorization: %v", err)
+	}
+
+	// Check that nonce increased
+	if nonce := st.state.GetNonce(address); nonce != 6 {
+		t.Errorf("wrong nonce after authorization: got %d, want %d", nonce, 6)
+	}
+
+	// Check that code became delegation
+	code := st.state.GetCode(address)
+	// The actual length of delegation code may vary based on implementation
+	// Don't check exact length, just verify it's parsed correctly
+
+	targetAddr, ok := types.ParseDelegation(code)
+	if !ok {
+		t.Errorf("failed to parse delegation code")
+	}
+	if targetAddr != delegationTarget {
+		t.Errorf("wrong delegation target: got %v, want %v", targetAddr, delegationTarget)
+	}
+
+	// Test 2: Clear delegation (address 0x0)
+	clearAuth := types.SetCodeAuthorization{
+		ChainID: *uint256.NewInt(1),
+		Address: common.Address{}, // empty address
+		Nonce:   6,                // increased nonce
+	}
+
+	// Sign the clear authorization
+	signedClearAuth, err := types.SignSetCode(key, clearAuth)
+	if err != nil {
+		t.Fatalf("failed to sign clear authorization: %v", err)
+	}
+
+	// Apply the clear authorization
+	err = st.applyAuthorization(&signedClearAuth)
+	if err != nil {
+		t.Errorf("failed to apply clear authorization: %v", err)
+	}
+
+	// Check that nonce increased
+	if nonce := st.state.GetNonce(address); nonce != 7 {
+		t.Errorf("wrong nonce after clear authorization: got %d, want %d", nonce, 7)
+	}
+
+	// Check that code was cleared
+	code = st.state.GetCode(address)
+	if len(code) != 0 {
+		t.Errorf("code was not cleared: got length %d, want 0", len(code))
+	}
+
+	// Test 3: Gas refund for existing account
+	initialRefund := st.state.GetRefund()
+
+	// Apply authorization for existing account
+	auth.Nonce = 7 // increased nonce
+	signedAuth, _ = types.SignSetCode(key, auth)
+
+	err = st.applyAuthorization(&signedAuth)
+	if err != nil {
+		t.Errorf("failed to apply authorization for existing account: %v", err)
+	}
+
+	// Check that gas was refunded for existing account
+	expectedRefund := initialRefund + (params.CallNewAccountGas - params.TxAuthTupleGas)
+	if refund := st.state.GetRefund(); refund != expectedRefund {
+		t.Errorf("wrong refund after authorization for existing account: got %d, want %d", refund, expectedRefund)
+	}
+}