diff --git a/pom.xml b/pom.xml
index c3f40bb297..33b8869742 100644
--- a/pom.xml
+++ b/pom.xml
@@ -59,6 +59,7 @@
     <clover.license>${user.home}/clover.license</clover.license>
     <guava.version>32.0.1-jre</guava.version>
     <hadoop.version>3.2.3.3.2.3.3-2</hadoop.version>
+    <mockito-core.version>4.3.1</mockito-core.version>
     <netty.version>4.1.94.Final</netty.version>
     <pig.version>0.13.0</pig.version>
     <jersey.version>1.19</jersey.version>
@@ -848,7 +849,7 @@
       <dependency>
         <groupId>org.mockito</groupId>
         <artifactId>mockito-core</artifactId>
-        <version>4.3.1</version>
+        <version>${mockito-core.version}</version>
       </dependency>
       <dependency>
         <groupId>org.apache.commons</groupId>
diff --git a/tez-runtime-library/src/main/java/org/apache/tez/runtime/library/common/shuffle/impl/ShuffleInputEventHandlerImpl.java b/tez-runtime-library/src/main/java/org/apache/tez/runtime/library/common/shuffle/impl/ShuffleInputEventHandlerImpl.java
index bcb7bb58ea..f718aea8d6 100644
--- a/tez-runtime-library/src/main/java/org/apache/tez/runtime/library/common/shuffle/impl/ShuffleInputEventHandlerImpl.java
+++ b/tez-runtime-library/src/main/java/org/apache/tez/runtime/library/common/shuffle/impl/ShuffleInputEventHandlerImpl.java
@@ -171,8 +171,6 @@ public void logProgress(boolean updateOnClose) {
   private void processDataMovementEvent(DataMovementEvent dme, DataMovementEventPayloadProto shufflePayload, BitSet emptyPartitionsBitSet) throws IOException {
     int srcIndex = dme.getSourceIndex();
 
-    String hostIdentifier = shufflePayload.getHost() + ":" + shufflePayload.getPort();
-
     if (LOG.isDebugEnabled()) {
       LOG.debug("DME srcIdx: " + srcIndex + ", targetIndex: " + dme.getTargetIndex()
           + ", attemptNum: " + dme.getVersion() + ", payload: " + ShuffleUtils
@@ -198,20 +196,7 @@ private void processDataMovementEvent(DataMovementEvent dme, DataMovementEventPa
     CompositeInputAttemptIdentifier srcAttemptIdentifier = constructInputAttemptIdentifier(dme.getTargetIndex(), 1, dme.getVersion(),
         shufflePayload, (useSharedInputs && srcIndex == 0));
 
-    if (shufflePayload.hasData()) {
-      DataProto dataProto = shufflePayload.getData();
-
-      FetchedInput fetchedInput =
-          inputAllocator.allocate(dataProto.getRawLength(),
-              dataProto.getCompressedLength(), srcAttemptIdentifier);
-      moveDataToFetchedInput(dataProto, fetchedInput, hostIdentifier);
-      shuffleManager.addCompletedInputWithData(srcAttemptIdentifier, fetchedInput);
-
-      LOG.debug("Payload via DME : " + srcAttemptIdentifier);
-    } else {
-      shuffleManager.addKnownInput(shufflePayload.getHost(), shufflePayload.getPort(),
-              srcAttemptIdentifier, srcIndex);
-    }
+    processShufflePayload(shufflePayload, srcAttemptIdentifier, srcIndex);
   }
 
   private void moveDataToFetchedInput(DataProto dataProto,
@@ -274,7 +259,25 @@ private void processCompositeRoutedDataMovementEvent(CompositeRoutedDataMovement
     CompositeInputAttemptIdentifier srcAttemptIdentifier = constructInputAttemptIdentifier(crdme.getTargetIndex(), crdme.getCount(), crdme.getVersion(),
         shufflePayload, (useSharedInputs && partitionId == 0));
 
-    shuffleManager.addKnownInput(shufflePayload.getHost(), shufflePayload.getPort(), srcAttemptIdentifier, partitionId);
+    processShufflePayload(shufflePayload, srcAttemptIdentifier, partitionId);
+  }
+
+  private void processShufflePayload(DataMovementEventPayloadProto shufflePayload,
+      CompositeInputAttemptIdentifier srcAttemptIdentifier, int srcIndex) throws IOException {
+    if (shufflePayload.hasData()) {
+      DataProto dataProto = shufflePayload.getData();
+      String hostIdentifier = shufflePayload.getHost() + ":" + shufflePayload.getPort();
+      FetchedInput fetchedInput =
+              inputAllocator.allocate(dataProto.getRawLength(),
+                      dataProto.getCompressedLength(), srcAttemptIdentifier);
+      moveDataToFetchedInput(dataProto, fetchedInput, hostIdentifier);
+      shuffleManager.addCompletedInputWithData(srcAttemptIdentifier, fetchedInput);
+
+      LOG.debug("Payload via DME : " + srcAttemptIdentifier);
+    } else {
+      shuffleManager.addKnownInput(shufflePayload.getHost(), shufflePayload.getPort(),
+              srcAttemptIdentifier, srcIndex);
+    }
   }
 
   private void processInputFailedEvent(InputFailedEvent ife) {
diff --git a/tez-runtime-library/src/test/java/org/apache/tez/runtime/library/common/shuffle/impl/TestShuffleInputEventHandlerImpl.java b/tez-runtime-library/src/test/java/org/apache/tez/runtime/library/common/shuffle/impl/TestShuffleInputEventHandlerImpl.java
index 51dc172df3..229573f70c 100644
--- a/tez-runtime-library/src/test/java/org/apache/tez/runtime/library/common/shuffle/impl/TestShuffleInputEventHandlerImpl.java
+++ b/tez-runtime-library/src/test/java/org/apache/tez/runtime/library/common/shuffle/impl/TestShuffleInputEventHandlerImpl.java
@@ -26,12 +26,14 @@
 import static org.mockito.Mockito.doReturn;
 import static org.mockito.Mockito.eq;
 import static org.mockito.Mockito.mock;
+import static org.mockito.Mockito.mockStatic;
 import static org.mockito.Mockito.spy;
 import static org.mockito.Mockito.times;
 import static org.mockito.Mockito.verify;
 import static org.mockito.Mockito.when;
 
 import java.io.IOException;
+import java.io.InputStream;
 import java.nio.ByteBuffer;
 import java.util.BitSet;
 import java.util.Collections;
@@ -42,6 +44,7 @@
 import org.apache.hadoop.conf.Configuration;
 import org.apache.hadoop.fs.Path;
 import org.apache.hadoop.io.DataOutputBuffer;
+import org.apache.hadoop.io.compress.CompressionCodec;
 import org.apache.hadoop.security.token.Token;
 import org.apache.tez.common.TezCommonUtils;
 import org.apache.tez.common.TezExecutors;
@@ -56,15 +59,20 @@
 import org.apache.tez.runtime.api.Event;
 import org.apache.tez.runtime.api.ExecutionContext;
 import org.apache.tez.runtime.api.InputContext;
+import org.apache.tez.runtime.api.events.CompositeRoutedDataMovementEvent;
 import org.apache.tez.runtime.api.events.DataMovementEvent;
 import org.apache.tez.runtime.library.common.CompositeInputAttemptIdentifier;
 import org.apache.tez.runtime.library.common.InputAttemptIdentifier;
+import org.apache.tez.runtime.library.common.shuffle.FetchedInput;
 import org.apache.tez.runtime.library.common.shuffle.FetchedInputAllocator;
+import org.apache.tez.runtime.library.common.shuffle.MemoryFetchedInput;
 import org.apache.tez.runtime.library.common.shuffle.ShuffleUtils;
+import org.apache.tez.runtime.library.shuffle.impl.ShuffleUserPayloads;
 import org.apache.tez.runtime.library.shuffle.impl.ShuffleUserPayloads.DataMovementEventPayloadProto;
 import org.junit.After;
 import org.junit.Before;
 import org.junit.Test;
+import org.mockito.MockedStatic;
 import org.mockito.invocation.InvocationOnMock;
 import org.mockito.stubbing.Answer;
 
@@ -342,6 +350,53 @@ public void testPipelinedShuffleEvents_WithEmptyPartitions() throws IOException
     verify(inputContext).killSelf(any(), anyString());
   }
 
+  /**
+   * Verify that data movement events with shuffle data are processed properly.
+   *
+   * @throws IOException
+   */
+  @Test(timeout = 5000)
+  public void testDataMovementEventsWithShuffleData() throws IOException {
+    InputContext inputContext = mock(InputContext.class);
+    ShuffleManager shuffleManager = mock(ShuffleManager.class);
+    ShuffleManager compositeFetchShuffleManager = mock(ShuffleManager.class);
+    FetchedInputAllocator inputAllocator = mock(FetchedInputAllocator.class);
+    MemoryFetchedInput memoryFetchedInput = mock(MemoryFetchedInput.class);
+
+    when(memoryFetchedInput.getType()).thenReturn(FetchedInput.Type.MEMORY);
+    when(memoryFetchedInput.getBytes()).thenReturn("data".getBytes());
+    when(inputAllocator.allocate(anyLong(), anyLong(), any(InputAttemptIdentifier.class)))
+        .thenReturn(memoryFetchedInput);
+
+    ShuffleInputEventHandlerImpl eventHandler = new ShuffleInputEventHandlerImpl(inputContext,
+        shuffleManager, inputAllocator, null, true, 4, false);
+
+    ShuffleInputEventHandlerImpl compositeFetchEventHandler = new ShuffleInputEventHandlerImpl(inputContext,
+        compositeFetchShuffleManager, inputAllocator, null, true, 4, true);
+
+    DataMovementEvent dataMovementEvent = (DataMovementEvent) createDataMovementEventWithShuffleData(false);
+    CompositeRoutedDataMovementEvent compositeRoutedDataMovementEvent =
+        (CompositeRoutedDataMovementEvent) createDataMovementEventWithShuffleData(true);
+
+    List<Event> eventListWithDme = new LinkedList<>();
+    eventListWithDme.add(dataMovementEvent);
+    eventListWithDme.add(compositeRoutedDataMovementEvent);
+
+    try (MockedStatic<ShuffleUtils> shuffleUtils = mockStatic(ShuffleUtils.class)) {
+      shuffleUtils.when(() -> ShuffleUtils
+          .shuffleToMemory(any(byte[].class), any(InputStream.class), anyInt(), anyInt(), any(CompressionCodec.class),
+              anyBoolean(), anyInt(), any(), any(InputAttemptIdentifier.class)))
+          .thenAnswer((Answer<Void>) invocation -> null);
+      eventHandler.handleEvents(eventListWithDme);
+      compositeFetchEventHandler.handleEvents(eventListWithDme);
+
+      verify(shuffleManager, times(2))
+          .addCompletedInputWithData(any(InputAttemptIdentifier.class), any(FetchedInput.class));
+      verify(compositeFetchShuffleManager, times(2))
+          .addCompletedInputWithData(any(InputAttemptIdentifier.class), any(FetchedInput.class));
+    }
+  }
+
   private Event createDataMovementEvent(boolean addSpillDetails, int srcIdx, int targetIdx,
       int spillId, boolean isLastSpill, BitSet emptyPartitions, int numPartitions, int attemptNum)
       throws IOException {
@@ -397,4 +452,19 @@ private ByteString createEmptyPartitionByteString(int... emptyPartitions) throws
     return emptyPartitionsBytesString;
   }
 
+  private Event createDataMovementEventWithShuffleData(boolean isComposite) {
+    DataMovementEventPayloadProto.Builder builder = DataMovementEventPayloadProto.newBuilder();
+    builder.setHost(HOST);
+    builder.setPort(PORT);
+    builder.setPathComponent(PATH_COMPONENT);
+    ShuffleUserPayloads.DataProto.Builder dataProtoBuilder = ShuffleUserPayloads.DataProto.newBuilder()
+            .setData(ByteString.copyFromUtf8("data"));
+    builder.setData(dataProtoBuilder);
+
+    Event dme = isComposite?
+        CompositeRoutedDataMovementEvent.create(0, 1,  1, 0, builder.build().toByteString().asReadOnlyByteBuffer()):
+        DataMovementEvent.create(0, 1, 0, builder.build().toByteString().asReadOnlyByteBuffer());
+    return dme;
+  }
+
 }
diff --git a/tez-runtime-library/src/test/resources/mockito-extensions/org.mockito.plugins.MockMaker b/tez-runtime-library/src/test/resources/mockito-extensions/org.mockito.plugins.MockMaker
new file mode 100644
index 0000000000..a258d79ad3
--- /dev/null
+++ b/tez-runtime-library/src/test/resources/mockito-extensions/org.mockito.plugins.MockMaker
@@ -0,0 +1,13 @@
+#   Licensed under the Apache License, Version 2.0 (the "License");
+#   you may not use this file except in compliance with the License.
+#   You may obtain a copy of the License at
+#
+#       http://www.apache.org/licenses/LICENSE-2.0
+#
+#   Unless required by applicable law or agreed to in writing, software
+#   distributed under the License is distributed on an "AS IS" BASIS,
+#   WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+#   See the License for the specific language governing permissions and
+#   limitations under the License.
+
+mock-maker-inline