diff --git a/swift-sdk.xcodeproj/project.pbxproj b/swift-sdk.xcodeproj/project.pbxproj
index 0d2b838f..d3e1062f 100644
--- a/swift-sdk.xcodeproj/project.pbxproj
+++ b/swift-sdk.xcodeproj/project.pbxproj
@@ -11,6 +11,7 @@
 		00B6FACE210E88ED007535CF /* prod-1.mobileprovision in Resources */ = {isa = PBXBuildFile; fileRef = 00B6FACD210E874D007535CF /* prod-1.mobileprovision */; };
 		00B6FAD1210E8D90007535CF /* dev-1.mobileprovision in Resources */ = {isa = PBXBuildFile; fileRef = 00B6FAD0210E8D90007535CF /* dev-1.mobileprovision */; };
 		00CB31B621096129004ACDEC /* TestUtils.swift in Sources */ = {isa = PBXBuildFile; fileRef = 00CB31B4210960C4004ACDEC /* TestUtils.swift */; };
+		092D01942D3038F600E3066A /* NotificationObserverTests.swift in Sources */ = {isa = PBXBuildFile; fileRef = 092D01932D3038F600E3066A /* NotificationObserverTests.swift */; };
 		1CBFFE1A2A97AEEF00ED57EE /* EmbeddedManagerTests.swift in Sources */ = {isa = PBXBuildFile; fileRef = 1CBFFE162A97AEEE00ED57EE /* EmbeddedManagerTests.swift */; };
 		1CBFFE1B2A97AEEF00ED57EE /* EmbeddedMessagingProcessorTests.swift in Sources */ = {isa = PBXBuildFile; fileRef = 1CBFFE172A97AEEE00ED57EE /* EmbeddedMessagingProcessorTests.swift */; };
 		1CBFFE1C2A97AEEF00ED57EE /* EmbeddedSessionManagerTests.swift in Sources */ = {isa = PBXBuildFile; fileRef = 1CBFFE182A97AEEE00ED57EE /* EmbeddedSessionManagerTests.swift */; };
@@ -543,6 +544,7 @@
 		00B6FACD210E874D007535CF /* prod-1.mobileprovision */ = {isa = PBXFileReference; lastKnownFileType = file; path = "prod-1.mobileprovision"; sourceTree = "<group>"; };
 		00B6FAD0210E8D90007535CF /* dev-1.mobileprovision */ = {isa = PBXFileReference; lastKnownFileType = file; path = "dev-1.mobileprovision"; sourceTree = "<group>"; };
 		00CB31B4210960C4004ACDEC /* TestUtils.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = TestUtils.swift; sourceTree = "<group>"; };
+		092D01932D3038F600E3066A /* NotificationObserverTests.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = NotificationObserverTests.swift; sourceTree = "<group>"; };
 		1CBFFE162A97AEEE00ED57EE /* EmbeddedManagerTests.swift */ = {isa = PBXFileReference; fileEncoding = 4; lastKnownFileType = sourcecode.swift; path = EmbeddedManagerTests.swift; sourceTree = "<group>"; };
 		1CBFFE172A97AEEE00ED57EE /* EmbeddedMessagingProcessorTests.swift */ = {isa = PBXFileReference; fileEncoding = 4; lastKnownFileType = sourcecode.swift; path = EmbeddedMessagingProcessorTests.swift; sourceTree = "<group>"; };
 		1CBFFE182A97AEEE00ED57EE /* EmbeddedSessionManagerTests.swift */ = {isa = PBXFileReference; fileEncoding = 4; lastKnownFileType = sourcecode.swift; path = EmbeddedSessionManagerTests.swift; sourceTree = "<group>"; };
@@ -936,6 +938,7 @@
 		552A0AA9280E249C00A80963 /* notification-tests */ = {
 			isa = PBXGroup;
 			children = (
+				092D01932D3038F600E3066A /* NotificationObserverTests.swift */,
 				55B37FC32297135F0042F13A /* NotificationMetadataTests.swift */,
 				AC2C667F20D31B1F00D46CC9 /* NotificationResponseTests.swift */,
 			);
@@ -2186,6 +2189,7 @@
 				5588DFD128C0465E000697D7 /* MockAPNSTypeChecker.swift in Sources */,
 				00B6FACC210E8484007535CF /* APNSTypeCheckerTests.swift in Sources */,
 				AC8F35A2239806B500302994 /* InboxViewControllerViewModelTests.swift in Sources */,
+				092D01942D3038F600E3066A /* NotificationObserverTests.swift in Sources */,
 				AC995F9A2166EEB50099A184 /* CommonMocks.swift in Sources */,
 				5588DFE128C046B7000697D7 /* MockLocalStorage.swift in Sources */,
 				1CBFFE1B2A97AEEF00ED57EE /* EmbeddedMessagingProcessorTests.swift in Sources */,
diff --git a/tests/unit-tests/Mocks.swift b/tests/unit-tests/Mocks.swift
index a76afc55..8e254ab5 100644
--- a/tests/unit-tests/Mocks.swift
+++ b/tests/unit-tests/Mocks.swift
@@ -10,19 +10,19 @@ import XCTest
 
 // Note: This is used only by swift tests. So can't put this in Common
 class MockNotificationStateProvider: NotificationStateProviderProtocol {
-    func isNotificationsEnabled(withCallback callback: @escaping (Bool) -> Void) {
-        callback(enabled)
-    }
-
-    func registerForRemoteNotifications() {
-        expectation?.fulfill()
-    }
+    var enabled: Bool
+    private let expectation: XCTestExpectation?
     
     init(enabled: Bool, expectation: XCTestExpectation? = nil) {
         self.enabled = enabled
         self.expectation = expectation
     }
     
-    private let enabled: Bool
-    private let expectation: XCTestExpectation?
+    func isNotificationsEnabled(withCallback callback: @escaping (Bool) -> Void) {
+        callback(enabled)
+    }
+    
+    func registerForRemoteNotifications() {
+        expectation?.fulfill()
+    }
 }
diff --git a/tests/unit-tests/NotificationObserverTests.swift b/tests/unit-tests/NotificationObserverTests.swift
new file mode 100644
index 00000000..67109e3b
--- /dev/null
+++ b/tests/unit-tests/NotificationObserverTests.swift
@@ -0,0 +1,44 @@
+import XCTest
+@testable import IterableSDK
+
+class NotificationObserverTests: XCTestCase {
+    private var internalAPI: InternalIterableAPI!
+    private var mockNotificationStateProvider: MockNotificationStateProvider!
+    private var mockLocalStorage: MockLocalStorage!
+    private var mockNotificationCenter: MockNotificationCenter!
+    
+    override func setUp() {
+        super.setUp()
+        
+        mockNotificationStateProvider = MockNotificationStateProvider(enabled: false)
+        mockLocalStorage = MockLocalStorage()
+        mockNotificationCenter = MockNotificationCenter()
+        
+        let config = IterableConfig()
+        internalAPI = InternalIterableAPI.initializeForTesting(
+            config: config,
+            notificationStateProvider: mockNotificationStateProvider,
+            localStorage: mockLocalStorage,
+            notificationCenter: mockNotificationCenter
+        )
+    }
+    
+    func testNotificationStateChangeUpdatesStorage() {
+        // Arrange
+        mockLocalStorage.isNotificationsEnabled = false
+        mockNotificationStateProvider.enabled = true
+        
+        // Act
+        mockNotificationCenter.post(name: UIApplication.didBecomeActiveNotification, object: nil, userInfo: nil)
+        
+        // Small delay to allow async operation to complete
+        let expectation = XCTestExpectation(description: "Wait for state update")
+        DispatchQueue.main.asyncAfter(deadline: .now() + 0.1) {
+            expectation.fulfill()
+        }
+        wait(for: [expectation], timeout: 1.0)
+        
+        // Assert
+        XCTAssertTrue(mockLocalStorage.isNotificationsEnabled)
+    }
+}