diff --git a/cluster/shard_test.go b/cluster/shard_test.go
new file mode 100644
index 0000000..1128f23
--- /dev/null
+++ b/cluster/shard_test.go
@@ -0,0 +1,713 @@
+package cluster
+
+import (
+	"fmt"
+	"testing"
+)
+
+func TestNewShardManager(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	if sm == nil {
+		t.Fatal("NewShardManager returned nil")
+	}
+	if sm.shardCount != 16 {
+		t.Errorf("expected shardCount 16, got %d", sm.shardCount)
+	}
+	if sm.replication != 3 {
+		t.Errorf("expected replication 3, got %d", sm.replication)
+	}
+	if sm.shardMap == nil {
+		t.Error("shardMap is nil")
+	}
+	if sm.placement == nil {
+		t.Error("placement strategy is nil")
+	}
+}
+
+func TestNewShardManager_DefaultsForZeroValues(t *testing.T) {
+	sm := NewShardManagerWithConfig(ShardConfig{})
+
+	if sm.shardCount != DefaultNumShards {
+		t.Errorf("expected default shardCount %d, got %d", DefaultNumShards, sm.shardCount)
+	}
+	if sm.replication != 1 {
+		t.Errorf("expected default replication 1, got %d", sm.replication)
+	}
+}
+
+func TestNewShardManagerWithConfig_CustomValues(t *testing.T) {
+	config := ShardConfig{
+		ShardCount:        256,
+		ReplicationFactor: 2,
+	}
+	sm := NewShardManagerWithConfig(config)
+
+	if sm.shardCount != 256 {
+		t.Errorf("expected shardCount 256, got %d", sm.shardCount)
+	}
+	if sm.replication != 2 {
+		t.Errorf("expected replication 2, got %d", sm.replication)
+	}
+}
+
+func TestGetShard_ReturnsCorrectShardForActor(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	// Test that GetShard returns consistent results
+	actorID := "actor-123"
+	shard1 := sm.GetShard(actorID)
+	shard2 := sm.GetShard(actorID)
+
+	if shard1 != shard2 {
+		t.Errorf("GetShard not consistent: got %d and %d for same actor", shard1, shard2)
+	}
+
+	// Verify shard is within valid range
+	if shard1 < 0 || shard1 >= 16 {
+		t.Errorf("shard %d is out of range [0, 16)", shard1)
+	}
+}
+
+func TestGetShard_DifferentActorsCanMapToDifferentShards(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	// With enough actors, we should see different shards
+	shardsSeen := make(map[int]bool)
+	for i := 0; i < 100; i++ {
+		actorID := fmt.Sprintf("actor-%d", i)
+		shard := sm.GetShard(actorID)
+		shardsSeen[shard] = true
+	}
+
+	// We should see multiple different shards
+	if len(shardsSeen) < 2 {
+		t.Errorf("expected multiple different shards, got %d unique shards", len(shardsSeen))
+	}
+}
+
+func TestGetShard_DistributesActorsAcrossShards(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	distribution := make(map[int]int)
+	numActors := 1000
+
+	for i := 0; i < numActors; i++ {
+		actorID := fmt.Sprintf("actor-%d", i)
+		shard := sm.GetShard(actorID)
+		distribution[shard]++
+	}
+
+	// Verify all shards are within valid range
+	for shard := range distribution {
+		if shard < 0 || shard >= 16 {
+			t.Errorf("shard %d is out of range [0, 16)", shard)
+		}
+	}
+
+	// With good hashing, we should see fairly even distribution
+	expectedPerShard := numActors / 16
+	for shard, count := range distribution {
+		deviation := float64(count-expectedPerShard) / float64(expectedPerShard)
+		if deviation > 0.5 || deviation < -0.5 {
+			t.Logf("shard %d has %d actors (%.1f%% deviation)", shard, count, deviation*100)
+		}
+	}
+}
+
+func TestGetShardNodes_EmptyShard(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	nodes := sm.GetShardNodes(0)
+
+	if nodes == nil {
+		t.Error("GetShardNodes returned nil, expected empty slice")
+	}
+	if len(nodes) != 0 {
+		t.Errorf("expected empty slice for unassigned shard, got %v", nodes)
+	}
+}
+
+func TestGetShardNodes_ReturnsAssignedNodes(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	// Assign nodes to shard
+	sm.AssignShard(0, []string{"node-1", "node-2", "node-3"})
+
+	nodes := sm.GetShardNodes(0)
+
+	if len(nodes) != 3 {
+		t.Errorf("expected 3 nodes, got %d", len(nodes))
+	}
+	if nodes[0] != "node-1" || nodes[1] != "node-2" || nodes[2] != "node-3" {
+		t.Errorf("unexpected nodes: %v", nodes)
+	}
+}
+
+func TestGetShardNodes_NonExistentShard(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	// Query a shard that has no assignments
+	nodes := sm.GetShardNodes(999)
+
+	if len(nodes) != 0 {
+		t.Errorf("expected empty slice for non-existent shard, got %v", nodes)
+	}
+}
+
+func TestAssignShard_CreatesNewAssignment(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	sm.AssignShard(5, []string{"node-a"})
+
+	nodes := sm.GetShardNodes(5)
+	if len(nodes) != 1 || nodes[0] != "node-a" {
+		t.Errorf("expected [node-a], got %v", nodes)
+	}
+}
+
+func TestAssignShard_UpdatesExistingAssignment(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	sm.AssignShard(5, []string{"node-a"})
+	sm.AssignShard(5, []string{"node-b", "node-c"})
+
+	nodes := sm.GetShardNodes(5)
+	if len(nodes) != 2 {
+		t.Errorf("expected 2 nodes, got %d", len(nodes))
+	}
+	if nodes[0] != "node-b" || nodes[1] != "node-c" {
+		t.Errorf("expected [node-b, node-c], got %v", nodes)
+	}
+}
+
+func TestAssignShard_MultipleShards(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	sm.AssignShard(0, []string{"node-1"})
+	sm.AssignShard(1, []string{"node-2"})
+	sm.AssignShard(2, []string{"node-3"})
+
+	if nodes := sm.GetShardNodes(0); len(nodes) != 1 || nodes[0] != "node-1" {
+		t.Errorf("shard 0: expected [node-1], got %v", nodes)
+	}
+	if nodes := sm.GetShardNodes(1); len(nodes) != 1 || nodes[0] != "node-2" {
+		t.Errorf("shard 1: expected [node-2], got %v", nodes)
+	}
+	if nodes := sm.GetShardNodes(2); len(nodes) != 1 || nodes[0] != "node-3" {
+		t.Errorf("shard 2: expected [node-3], got %v", nodes)
+	}
+}
+
+func TestGetPrimaryNode(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	sm.AssignShard(0, []string{"primary", "replica1", "replica2"})
+
+	primary := sm.GetPrimaryNode(0)
+	if primary != "primary" {
+		t.Errorf("expected 'primary', got %q", primary)
+	}
+}
+
+func TestGetPrimaryNode_EmptyShard(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	primary := sm.GetPrimaryNode(0)
+	if primary != "" {
+		t.Errorf("expected empty string for unassigned shard, got %q", primary)
+	}
+}
+
+func TestGetReplicaNodes(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	sm.AssignShard(0, []string{"primary", "replica1", "replica2"})
+
+	replicas := sm.GetReplicaNodes(0)
+	if len(replicas) != 2 {
+		t.Errorf("expected 2 replicas, got %d", len(replicas))
+	}
+	if replicas[0] != "replica1" || replicas[1] != "replica2" {
+		t.Errorf("expected [replica1, replica2], got %v", replicas)
+	}
+}
+
+func TestGetReplicaNodes_SingleNode(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	sm.AssignShard(0, []string{"only-node"})
+
+	replicas := sm.GetReplicaNodes(0)
+	if len(replicas) != 0 {
+		t.Errorf("expected no replicas for single-node shard, got %v", replicas)
+	}
+}
+
+func TestGetReplicaNodes_EmptyShard(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	replicas := sm.GetReplicaNodes(0)
+	if len(replicas) != 0 {
+		t.Errorf("expected empty slice for unassigned shard, got %v", replicas)
+	}
+}
+
+func TestPlaceActor_NoNodes(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	_, err := sm.PlaceActor("actor-1", map[string]*NodeInfo{})
+
+	if err == nil {
+		t.Error("expected error when no nodes available")
+	}
+}
+
+func TestPlaceActor_SingleNode(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1", Status: NodeStatusActive},
+	}
+
+	nodeID, err := sm.PlaceActor("actor-1", nodes)
+
+	if err != nil {
+		t.Errorf("unexpected error: %v", err)
+	}
+	if nodeID != "node-1" {
+		t.Errorf("expected node-1, got %q", nodeID)
+	}
+}
+
+func TestPlaceActor_ReturnsValidNode(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1", Status: NodeStatusActive},
+		"node-2": {ID: "node-2", Status: NodeStatusActive},
+		"node-3": {ID: "node-3", Status: NodeStatusActive},
+	}
+
+	// PlaceActor should always return one of the available nodes
+	for i := 0; i < 100; i++ {
+		nodeID, err := sm.PlaceActor(fmt.Sprintf("actor-%d", i), nodes)
+		if err != nil {
+			t.Errorf("unexpected error: %v", err)
+		}
+		if _, exists := nodes[nodeID]; !exists {
+			t.Errorf("PlaceActor returned invalid node: %q", nodeID)
+		}
+	}
+}
+func TestPlaceActor_DistributesAcrossNodes(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1", Status: NodeStatusActive},
+		"node-2": {ID: "node-2", Status: NodeStatusActive},
+		"node-3": {ID: "node-3", Status: NodeStatusActive},
+	}
+
+	distribution := make(map[string]int)
+	for i := 0; i < 100; i++ {
+		nodeID, _ := sm.PlaceActor(fmt.Sprintf("actor-%d", i), nodes)
+		distribution[nodeID]++
+	}
+
+	// Should use multiple nodes
+	if len(distribution) < 2 {
+		t.Errorf("expected distribution across multiple nodes, got %v", distribution)
+	}
+}
+
+func TestUpdateShardMap(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	newMap := &ShardMap{
+		Version: 5,
+		Shards: map[int][]string{
+			0: {"node-a", "node-b"},
+			1: {"node-c"},
+		},
+		Nodes: map[string]NodeInfo{
+			"node-a": {ID: "node-a"},
+			"node-b": {ID: "node-b"},
+			"node-c": {ID: "node-c"},
+		},
+	}
+
+	sm.UpdateShardMap(newMap)
+
+	result := sm.GetShardMap()
+	if result.Version != 5 {
+		t.Errorf("expected version 5, got %d", result.Version)
+	}
+	if len(result.Shards[0]) != 2 {
+		t.Errorf("expected 2 nodes for shard 0, got %d", len(result.Shards[0]))
+	}
+}
+
+func TestGetShardMap_ReturnsDeepCopy(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	sm.AssignShard(0, []string{"node-1", "node-2"})
+
+	copy1 := sm.GetShardMap()
+	copy2 := sm.GetShardMap()
+
+	// Modify copy1
+	copy1.Shards[0][0] = "modified"
+	copy1.Version = 999
+
+	// copy2 should be unaffected
+	if copy2.Shards[0][0] == "modified" {
+		t.Error("GetShardMap did not return a deep copy (shard nodes modified)")
+	}
+	if copy2.Version == 999 {
+		t.Error("GetShardMap did not return a deep copy (version modified)")
+	}
+
+	// Original should be unaffected
+	nodes := sm.GetShardNodes(0)
+	if nodes[0] == "modified" {
+		t.Error("original shard map was modified through copy")
+	}
+}
+
+func TestGetShardCount(t *testing.T) {
+	sm := NewShardManager(64, 1)
+
+	if sm.GetShardCount() != 64 {
+		t.Errorf("expected 64, got %d", sm.GetShardCount())
+	}
+}
+
+func TestGetReplicationFactor(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	if sm.GetReplicationFactor() != 3 {
+		t.Errorf("expected 3, got %d", sm.GetReplicationFactor())
+	}
+}
+
+func TestRebalanceShards_NoPlacementStrategy(t *testing.T) {
+	sm := NewShardManager(16, 1)
+	sm.placement = nil // Remove placement strategy
+
+	_, err := sm.RebalanceShards(map[string]*NodeInfo{})
+
+	if err == nil {
+		t.Error("expected error when no placement strategy configured")
+	}
+}
+
+func TestRebalanceShards_WithNodes(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1", Status: NodeStatusActive},
+		"node-2": {ID: "node-2", Status: NodeStatusActive},
+	}
+
+	result, err := sm.RebalanceShards(nodes)
+
+	if err != nil {
+		t.Errorf("unexpected error: %v", err)
+	}
+	if result == nil {
+		t.Error("expected non-nil result")
+	}
+}
+
+// Test shard assignment with node failures
+func TestShardAssignment_NodeFailure(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	// Initial assignment with 3 replicas
+	sm.AssignShard(0, []string{"node-1", "node-2", "node-3"})
+
+	// Simulate node failure by reassigning without the failed node
+	sm.AssignShard(0, []string{"node-1", "node-3"})
+
+	nodes := sm.GetShardNodes(0)
+	if len(nodes) != 2 {
+		t.Errorf("expected 2 nodes after failure, got %d", len(nodes))
+	}
+
+	// Verify primary is still correct
+	primary := sm.GetPrimaryNode(0)
+	if primary != "node-1" {
+		t.Errorf("expected node-1 as primary, got %q", primary)
+	}
+
+	// Verify replica count
+	replicas := sm.GetReplicaNodes(0)
+	if len(replicas) != 1 || replicas[0] != "node-3" {
+		t.Errorf("expected [node-3] as replicas, got %v", replicas)
+	}
+}
+
+func TestShardAssignment_AllNodesFailExceptOne(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	sm.AssignShard(0, []string{"node-1", "node-2", "node-3"})
+
+	// Simulate all but one node failing
+	sm.AssignShard(0, []string{"node-3"})
+
+	nodes := sm.GetShardNodes(0)
+	if len(nodes) != 1 || nodes[0] != "node-3" {
+		t.Errorf("expected [node-3], got %v", nodes)
+	}
+
+	primary := sm.GetPrimaryNode(0)
+	if primary != "node-3" {
+		t.Errorf("expected node-3 as primary, got %q", primary)
+	}
+
+	replicas := sm.GetReplicaNodes(0)
+	if len(replicas) != 0 {
+		t.Errorf("expected no replicas, got %v", replicas)
+	}
+}
+
+// Test replication factor is respected
+func TestReplicationFactor_Respected(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	if sm.GetReplicationFactor() != 3 {
+		t.Errorf("expected replication factor 3, got %d", sm.GetReplicationFactor())
+	}
+
+	// Assign with exactly the replication factor
+	sm.AssignShard(0, []string{"node-1", "node-2", "node-3"})
+
+	nodes := sm.GetShardNodes(0)
+	if len(nodes) != 3 {
+		t.Errorf("expected 3 nodes matching replication factor, got %d", len(nodes))
+	}
+}
+
+func TestReplicationFactor_CanExceed(t *testing.T) {
+	// Note: ShardManager doesn't enforce max replication, it just tracks what's assigned
+	sm := NewShardManager(16, 2)
+
+	// Assign more nodes than replication factor
+	sm.AssignShard(0, []string{"node-1", "node-2", "node-3", "node-4"})
+
+	nodes := sm.GetShardNodes(0)
+	if len(nodes) != 4 {
+		t.Errorf("expected 4 nodes, got %d", len(nodes))
+	}
+}
+
+func TestReplicationFactor_LessThanFactor(t *testing.T) {
+	sm := NewShardManager(16, 3)
+
+	// Assign fewer nodes than replication factor (possible during degraded state)
+	sm.AssignShard(0, []string{"node-1"})
+
+	nodes := sm.GetShardNodes(0)
+	if len(nodes) != 1 {
+		t.Errorf("expected 1 node, got %d", len(nodes))
+	}
+
+	// System should track that we're under-replicated
+	// (in practice, cluster manager would handle this)
+}
+
+// Mock VM registry for testing GetActorsInShard
+type mockVMRegistry struct {
+	activeVMs map[string]VirtualMachine
+}
+
+func (m *mockVMRegistry) GetActiveVMs() map[string]VirtualMachine {
+	return m.activeVMs
+}
+
+func (m *mockVMRegistry) GetShard(actorID string) int {
+	// This would use the same logic as ShardManager
+	return 0
+}
+
+type mockVM struct {
+	id      string
+	actorID string
+	state   VMState
+}
+
+func (m *mockVM) GetID() string      { return m.id }
+func (m *mockVM) GetActorID() string { return m.actorID }
+func (m *mockVM) GetState() VMState  { return m.state }
+
+func TestGetActorsInShard_NilRegistry(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	actors := sm.GetActorsInShard(0, "node-1", nil)
+
+	if len(actors) != 0 {
+		t.Errorf("expected empty slice for nil registry, got %v", actors)
+	}
+}
+
+func TestGetActorsInShard_WithActors(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	// Create mock VMs - need to find actors that map to the same shard
+	// First, find some actor IDs that map to shard 0
+	var actorsInShard0 []string
+	for i := 0; i < 100; i++ {
+		actorID := fmt.Sprintf("actor-%d", i)
+		if sm.GetShard(actorID) == 0 {
+			actorsInShard0 = append(actorsInShard0, actorID)
+			if len(actorsInShard0) >= 3 {
+				break
+			}
+		}
+	}
+
+	activeVMs := make(map[string]VirtualMachine)
+	for _, actorID := range actorsInShard0 {
+		activeVMs[actorID] = &mockVM{
+			id:      "vm-" + actorID,
+			actorID: actorID,
+			state:   VMStateRunning,
+		}
+	}
+
+	registry := &mockVMRegistry{activeVMs: activeVMs}
+
+	actors := sm.GetActorsInShard(0, "node-1", registry)
+
+	if len(actors) != len(actorsInShard0) {
+		t.Errorf("expected %d actors in shard 0, got %d", len(actorsInShard0), len(actors))
+	}
+}
+
+func TestGetActorsInShard_EmptyRegistry(t *testing.T) {
+	sm := NewShardManager(16, 1)
+
+	registry := &mockVMRegistry{activeVMs: make(map[string]VirtualMachine)}
+
+	actors := sm.GetActorsInShard(0, "node-1", registry)
+
+	if len(actors) != 0 {
+		t.Errorf("expected empty slice for empty registry, got %v", actors)
+	}
+}
+
+// Tests for ConsistentHashPlacement
+func TestConsistentHashPlacement_PlaceActor_NoNodes(t *testing.T) {
+	placement := &ConsistentHashPlacement{}
+	shardMap := &ShardMap{}
+
+	_, err := placement.PlaceActor("actor-1", shardMap, map[string]*NodeInfo{})
+
+	if err == nil {
+		t.Error("expected error when no nodes available")
+	}
+}
+
+func TestConsistentHashPlacement_PlaceActor_SingleNode(t *testing.T) {
+	placement := &ConsistentHashPlacement{}
+	shardMap := &ShardMap{}
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1"},
+	}
+
+	nodeID, err := placement.PlaceActor("actor-1", shardMap, nodes)
+
+	if err != nil {
+		t.Errorf("unexpected error: %v", err)
+	}
+	if nodeID != "node-1" {
+		t.Errorf("expected node-1, got %q", nodeID)
+	}
+}
+
+func TestConsistentHashPlacement_PlaceActor_ReturnsValidNode(t *testing.T) {
+	placement := &ConsistentHashPlacement{}
+	shardMap := &ShardMap{}
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1"},
+		"node-2": {ID: "node-2"},
+		"node-3": {ID: "node-3"},
+	}
+
+	// PlaceActor should always return one of the available nodes
+	for i := 0; i < 100; i++ {
+		nodeID, err := placement.PlaceActor(fmt.Sprintf("actor-%d", i), shardMap, nodes)
+		if err != nil {
+			t.Errorf("unexpected error: %v", err)
+		}
+		if _, exists := nodes[nodeID]; !exists {
+			t.Errorf("PlaceActor returned invalid node: %q", nodeID)
+		}
+	}
+}
+func TestConsistentHashPlacement_RebalanceShards(t *testing.T) {
+	placement := &ConsistentHashPlacement{}
+	currentMap := &ShardMap{
+		Version: 1,
+		Shards:  map[int][]string{0: {"node-1"}},
+	}
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1"},
+		"node-2": {ID: "node-2"},
+	}
+
+	result, err := placement.RebalanceShards(currentMap, nodes)
+
+	if err != nil {
+		t.Errorf("unexpected error: %v", err)
+	}
+	// Current implementation returns unchanged map
+	if result != currentMap {
+		t.Error("expected same map returned (simplified implementation)")
+	}
+}
+
+// Benchmark tests
+func BenchmarkGetShard(b *testing.B) {
+	sm := NewShardManager(1024, 1)
+
+	actorIDs := make([]string, 1000)
+	for i := range actorIDs {
+		actorIDs[i] = fmt.Sprintf("actor-%d", i)
+	}
+
+	b.ResetTimer()
+	for i := 0; i < b.N; i++ {
+		sm.GetShard(actorIDs[i%len(actorIDs)])
+	}
+}
+
+func BenchmarkAssignShard(b *testing.B) {
+	sm := NewShardManager(1024, 1)
+	nodes := []string{"node-1", "node-2", "node-3"}
+
+	b.ResetTimer()
+	for i := 0; i < b.N; i++ {
+		sm.AssignShard(i%1024, nodes)
+	}
+}
+
+func BenchmarkPlaceActor(b *testing.B) {
+	sm := NewShardManager(1024, 1)
+	nodes := map[string]*NodeInfo{
+		"node-1": {ID: "node-1"},
+		"node-2": {ID: "node-2"},
+		"node-3": {ID: "node-3"},
+	}
+
+	actorIDs := make([]string, 1000)
+	for i := range actorIDs {
+		actorIDs[i] = fmt.Sprintf("actor-%d", i)
+	}
+
+	b.ResetTimer()
+	for i := 0; i < b.N; i++ {
+		sm.PlaceActor(actorIDs[i%len(actorIDs)], nodes)
+	}
+}