diff --git a/common/lib/xmodule/xmodule/lti_module.py b/common/lib/xmodule/xmodule/lti_module.py
index fa9624dde7..cb25fc1504 100644
--- a/common/lib/xmodule/xmodule/lti_module.py
+++ b/common/lib/xmodule/xmodule/lti_module.py
@@ -83,6 +83,7 @@ class LTIModule(LTIFields, XModule):
         # with 'Content-Type': 'application/x-www-form-urlencoded'
         # so '='' becomes '%3D', but server waits for unencoded signature.
         # Decode signature back:
+        # may be it may be encoded by browser again... check
         params[u'oauth_signature'] = urllib.unquote(params[u'oauth_signature']).decode('utf8')
         return params
 
diff --git a/lms/djangoapps/courseware/features/lti.feature b/lms/djangoapps/courseware/features/lti.feature
new file mode 100644
index 0000000000..e17144f545
--- /dev/null
+++ b/lms/djangoapps/courseware/features/lti.feature
@@ -0,0 +1,10 @@
+Feature: LTI component
+  As a student, I want to view LTI component in LMS.
+
+  Scenario: LTI component in LMS is not rendered
+  Given the course has a LTI component with empty fields
+  Then I view the LTI and it is not rendered
+
+  Scenario: LTI component in LMS is rendered
+  Given the course has a LTI component filled with correct data
+  Then I view the LTI and it is rendered
diff --git a/lms/djangoapps/courseware/features/lti.py b/lms/djangoapps/courseware/features/lti.py
new file mode 100644
index 0000000000..da6d14e759
--- /dev/null
+++ b/lms/djangoapps/courseware/features/lti.py
@@ -0,0 +1,98 @@
+#pylint: disable=C0111
+
+from lettuce import world, step
+from lettuce.django import django_url
+from common import i_am_registered_for_the_course, section_location
+
+
+@step('I view the LTI and it is not rendered')
+def lti_is_not_rendered(_step):
+    # lti div has no class rendered
+    assert world.is_css_not_present('div.lti.rendered')
+
+    # error is shown
+    assert world.css_visible('.error_message')
+
+    # iframe is not visible
+    assert (not world.css_visible('iframe'))
+
+    #inside iframe test content is not presented
+    with world.browser.get_iframe('ltiLaunchFrame') as iframe:
+        # iframe does not contain functions from terrain/ui_helpers.py
+        assert iframe.is_element_not_present_by_css('.result', wait_time=5)
+
+
+@step('I view the LTI and it is rendered')
+def lti_is_rendered(_step):
+    # lti div has class rendered
+    assert world.is_css_present('div.lti.rendered')
+
+    # error is hidden
+    assert (not world.css_visible('.error_message'))
+
+    # iframe is visible
+    assert world.css_visible('iframe')
+
+    #inside iframe test content is presented
+    with world.browser.get_iframe('ltiLaunchFrame') as iframe:
+        # iframe does not contain functions from terrain/ui_helpers.py
+        assert iframe.is_element_present_by_css('.result', wait_time=5)
+
+
+@step('the course has a LTI component filled with correct data')
+def view_lti_with_data(_step):
+    coursenum = 'test_course'
+    i_am_registered_for_the_course(_step, coursenum)
+
+    add_correct_lti_to_course(coursenum)
+    chapter_name = world.scenario_dict['SECTION'].display_name.replace(
+        " ", "_")
+    section_name = chapter_name
+    url = django_url('/courses/%s/%s/%s/courseware/%s/%s' % (
+        world.scenario_dict['COURSE'].org,
+        world.scenario_dict['COURSE'].number,
+        world.scenario_dict['COURSE'].display_name.replace(' ', '_'),
+        chapter_name, section_name,)
+    )
+    world.browser.visit(url)
+
+
+@step('the course has a LTI component with empty fields')
+def view_default_lti(_step):
+    coursenum = 'test_course'
+    i_am_registered_for_the_course(_step, coursenum)
+
+    add_default_lti_to_course(coursenum)
+    chapter_name = world.scenario_dict['SECTION'].display_name.replace(
+        " ", "_")
+    section_name = chapter_name
+    url = django_url('/courses/%s/%s/%s/courseware/%s/%s' % (
+        world.scenario_dict['COURSE'].org,
+        world.scenario_dict['COURSE'].number,
+        world.scenario_dict['COURSE'].display_name.replace(' ', '_'),
+        chapter_name, section_name,)
+    )
+    world.browser.visit(url)
+
+
+def add_correct_lti_to_course(course):
+    category = 'lti'
+    world.ItemFactory.create(
+        parent_location=section_location(course),
+        category=category,
+        display_name='LTI',
+        metadata={
+            'client_key': 'client_key',
+            'clent_secret': 'client_secret',
+            'lti_url': 'http://127.0.0.1:{}/correct_lti_endpoint'.format(world.lti_server_port)
+        }
+    )
+
+
+def add_default_lti_to_course(course):
+    category = 'lti'
+    world.ItemFactory.create(
+        parent_location=section_location(course),
+        category=category,
+        display_name='LTI'
+    )
diff --git a/lms/djangoapps/courseware/features/lti_setup.py b/lms/djangoapps/courseware/features/lti_setup.py
new file mode 100644
index 0000000000..e3cf7b2c7c
--- /dev/null
+++ b/lms/djangoapps/courseware/features/lti_setup.py
@@ -0,0 +1,40 @@
+#pylint: disable=C0111
+#pylint: disable=W0621
+
+from courseware.mock_lti_server.mock_lti_server import MockLTIServer
+from lettuce import before, after, world
+from django.conf import settings
+import threading
+
+from logging import getLogger
+logger = getLogger(__name__)
+
+
+@before.all
+def setup_mock_lti_server():
+
+    # Add +1 to XQUEUE random port number
+    server_port = settings.XQUEUE_PORT + 1
+
+    # Create the mock server instance
+    server = MockLTIServer(server_port)
+    logger.debug("LTI server started at {} port".format(str(server_port)))
+    # Start the server running in a separate daemon thread
+    # Because the thread is a daemon, it will terminate
+    # when the main thread terminates.
+    server_thread = threading.Thread(target=server.serve_forever)
+    server_thread.daemon = True
+    server_thread.start()
+
+    # Store the server instance in lettuce's world
+    # so that other steps can access it
+    # (and we can shut it down later)
+    world.lti_server = server
+    world.lti_server_port = server_port
+
+
+@after.all
+def teardown_mock_lti_server(total):
+
+    # Stop the LTI server and free up the port
+    world.lti_server.shutdown()
diff --git a/lms/djangoapps/courseware/mock_lti_server/__init__.py b/lms/djangoapps/courseware/mock_lti_server/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/lms/djangoapps/courseware/mock_lti_server/mock_lti_server.py b/lms/djangoapps/courseware/mock_lti_server/mock_lti_server.py
new file mode 100644
index 0000000000..8fb1cf4393
--- /dev/null
+++ b/lms/djangoapps/courseware/mock_lti_server/mock_lti_server.py
@@ -0,0 +1,158 @@
+from BaseHTTPServer import HTTPServer, BaseHTTPRequestHandler
+import json
+import urllib
+import urlparse
+import threading
+
+from logging import getLogger
+logger = getLogger(__name__)
+
+
+# todo - implement oauth
+
+class MockLTIRequestHandler(BaseHTTPRequestHandler):
+    '''
+    A handler for LTI POST requests.
+    '''
+
+    protocol = "HTTP/1.0"
+
+    def do_HEAD(self):
+        self._send_head()
+
+    def do_POST(self):
+        '''
+        Handle a POST request from the client and sends response back.
+        '''
+        self._send_head()
+
+        post_dict = self._post_dict()  # Retrieve the POST data
+
+        # Log the request
+        logger.debug("LTI provider received POST request {} to path {}".format(
+            str(post_dict),
+            self.path)
+        )
+        # Respond only to requests with correct lti endpoint:
+        if self._is_correct_lti_request():
+            correct_dict = {
+                'user_id': 'default_user_id',
+                'oauth_nonce': '22990037033121997701377766132',
+                'oauth_timestamp': '1377766132',
+                'oauth_consumer_key': 'client_key',
+                'lti_version': 'LTI-1p0',
+                'oauth_signature_method': 'HMAC-SHA1',
+                'oauth_version': '1.0',
+                'oauth_signature': 'HGYMAU/G5EMxd0CDOvWubsqxLIY=',
+                'lti_message_type': 'basic-lti-launch-request',
+                'oauth_callback': 'about:blank'
+            }
+
+            if sorted(correct_dict.keys()) != sorted(post_dict.keys()):
+                error_message = "Incorrect LTI header"
+            else:
+                error_message = "This is LTI tool."
+        else:
+            error_message = "Invalid request URL"
+
+        self._send_response(error_message)
+
+    def _send_head(self):
+        '''
+        Send the response code and MIME headers
+        '''
+        if self._is_correct_lti_request():
+            self.send_response(200)
+        else:
+            self.send_response(500)
+
+        self.send_header('Content-type', 'text/html')
+        self.end_headers()
+
+    def _post_dict(self):
+        '''
+        Retrieve the POST parameters from the client as a dictionary
+        '''
+        try:
+            length = int(self.headers.getheader('content-length'))
+            post_dict = urlparse.parse_qs(self.rfile.read(length))
+            # The POST dict will contain a list of values for each key.
+            # None of our parameters are lists, however, so we map [val] --> val.
+            #I f the list contains multiple entries, we pick the first one
+            post_dict = dict(
+                map(
+                    lambda (key, list_val): (key, list_val[0]),
+                    post_dict.items()
+                )
+            )
+        except:
+            # We return an empty dict here, on the assumption
+            # that when we later check that the request has
+            # the correct fields, it won't find them,
+            # and will therefore send an error response
+            return {}
+        return post_dict
+
+    def _send_response(self, message):
+        '''
+        Send message back to the client
+        '''
+        response_str = """<html><head><title>TEST TITLE</title></head>
+        <body>
+        <div><h2>IFrame loaded</h2> \
+        <h3>Server response is:</h3>\
+        <h3 class="result">{}</h3></div>
+        </body></html>""".format(message)
+
+        # Log the response
+        logger.debug("LTI: sent response {}".format(response_str))
+
+        self.wfile.write(response_str)
+
+    def _is_correct_lti_request(self):
+        '''If url to get LTI is correct.'''
+        return 'correct_lti_endpoint' in self.path
+
+
+class MockLTIServer(HTTPServer):
+    '''
+    A mock LTI provider server that responds
+    to POST requests to localhost.
+    '''
+
+    def __init__(self, port_num, oauth={}):
+        '''
+        Initialize the mock XQueue server instance.
+
+        *port_num* is the localhost port to listen to
+
+        *grade_response_dict* is a dictionary that will be JSON-serialized
+            and sent in response to XQueue grading requests.
+        '''
+
+        self.clent_key = oauth.get('client_key', '')
+        self.clent_secret = oauth.get('client_secret', '')
+        self.check_oauth()
+
+        handler = MockLTIRequestHandler
+        address = ('', port_num)
+        HTTPServer.__init__(self, address, handler)
+
+    def shutdown(self):
+        '''
+        Stop the server and free up the port
+        '''
+        # First call superclass shutdown()
+        HTTPServer.shutdown(self)
+
+        # We also need to manually close the socket
+        self.socket.close()
+
+    def get_oauth_signature(self):
+        '''test'''
+        return self._signature
+
+    def check_oauth(self):
+        ''' generate oauth signature '''
+        self._signature = '12345'
+
diff --git a/lms/djangoapps/courseware/mock_lti_server/test_mock_lti_server.py b/lms/djangoapps/courseware/mock_lti_server/test_mock_lti_server.py
new file mode 100644
index 0000000000..8d556286c3
--- /dev/null
+++ b/lms/djangoapps/courseware/mock_lti_server/test_mock_lti_server.py
@@ -0,0 +1,72 @@
+import mock
+import unittest
+import threading
+import json
+import urllib
+import time
+from mock_lti_server import MockLTIServer, MockLTIRequestHandler
+
+from nose.plugins.skip import SkipTest
+
+
+class MockLTIServerTest(unittest.TestCase):
+    '''
+    A mock version of the LTI provider server that listens on a local
+    port and responds with pre-defined grade messages.
+
+    Used for lettuce BDD tests in lms/courseware/features/lti.feature
+    '''
+
+    def setUp(self):
+
+        # This is a test of the test setup,
+        # so it does not need to run as part of the unit test suite
+        # You can re-enable it by commenting out the line below
+        # raise SkipTest
+
+        # Create the server
+        server_port = 8034
+        self.server_url = 'http://127.0.0.1:%d' % server_port
+        self.server = MockLTIServer(server_port, {'client_key': '', 'client_secret': ''})
+
+        # Start the server in a separate daemon thread
+        server_thread = threading.Thread(target=self.server.serve_forever)
+        server_thread.daemon = True
+        server_thread.start()
+
+    def tearDown(self):
+
+        # Stop the server, freeing up the port
+        self.server.shutdown()
+
+    def test_oauth_request(self):
+
+        # Send a grade request
+        header = {
+            'Content-Type': 'application/x-www-form-urlencoded',
+            u'Authorization': u'OAuth oauth_nonce="151177408427657509491377691584", \
+oauth_timestamp="1377691584", oauth_version="1.0", \
+oauth_signature_method="HMAC-SHA1", oauth_consumer_key="", \
+oauth_signature="wc1unKXxsX5e4HXJu%2FuiQ1KbrVo%3D"',
+            'launch_presentation_return_url': '',
+            'user_id': 'default_user_id',
+            'lis_result_sourcedid': '',
+            'lti_version': 'LTI-1p0',
+            'lis_outcome_service_url': '',
+            'lti_message_type': 'basic-lti-launch-request',
+            'oauth_callback': 'about:blank'
+        }
+        body = {}
+        request = {
+            'header': json.dumps(header),
+            'body': json.dumps(body)}
+        response_handle = urllib.urlopen(
+            self.server_url + '/correct_lti_endpoint',
+            urllib.urlencode(request)
+        )
+
+        response_dict = json.loads(response_handle.read())
+        # Expect that the response is success
+        self.assertEqual(response_dict['return_code'], 0)
+        # self.assertEqual(response_dict['return_code'], 0)
+