diff --git a/tests/dataset/distributed_dataset_iter.py b/tests/dataset/distributed_dataset_iter.py
new file mode 100644
index 0000000..8dfa709
--- /dev/null
+++ b/tests/dataset/distributed_dataset_iter.py
@@ -0,0 +1,114 @@
+import os
+import multiprocessing
+import glob
+import shutil
+from datetime import timedelta
+import torch
+import signal
+import random
+import numpy
+from accelerate import Accelerator, logging, InitProcessGroupKwargs
+import hashlib
+from datasets.iterable_dataset import IterableDataset
+from chemlactica.jsonl_dataset import samples_generator
+from chemlactica.utils.utils import (
+    signal_handler,
+)
+
+from accelerate.state import PartialState
+
+distributed_state = PartialState()
+torch.manual_seed(42)
+random.seed(42)
+numpy.random.seed(42)
+logger = logging.get_logger("transformers")
+
+signal.signal(signal.SIGINT, signal_handler)
+signal.signal(signal.SIGTERM, signal_handler)
+
+
+def run():
+    kwargs = InitProcessGroupKwargs(timeout=timedelta(seconds=7200))
+    accelerator = Accelerator(
+        kwargs_handlers=[kwargs], log_with="all", project_dir=None
+    )
+
+    directory_name = ".tmp"
+    if distributed_state.is_main_process:
+        if os.path.exists(directory_name):
+            print(f"test directory '{directory_name}' already exists. Clearing it now")
+            shutil.rmtree(directory_name)
+        os.makedirs(directory_name)
+        print(f"test directory '{directory_name}' created successfully.")
+    num_files = 5
+    num_lines = 100
+
+    for i in range(num_files):
+        file_name = os.path.join(directory_name, f"test_file_{i}.jsonl")
+        with open(file_name, "w") as file:
+            for j in range(num_lines):
+                sha3_hash = hashlib.sha3_256(
+                    str.encode(f"test_file_{i}.jsonl - Line {j}")
+                ).hexdigest()
+                file.write(f"{sha3_hash}\n")
+    accelerator.wait_for_everyone()
+    with multiprocessing.Manager() as manager:
+        shared_jsonl_files = manager.dict()
+
+        training_data_files = glob.glob(directory_name + "/*.jsonl")
+        training_data_files = [os.path.abspath(path) for path in training_data_files]
+
+        print(training_data_files)
+
+        accelerator.wait_for_everyone()
+        dataset = IterableDataset.from_generator(
+            samples_generator,
+            gen_kwargs={
+                "files": training_data_files,
+                "shared_jsonl_files": shared_jsonl_files,
+            },
+        )
+
+        file_name_mapping = {}
+        for process_index in range(distributed_state.num_processes):
+            file_name_mapping[process_index] = f"dataload_proc{process_index}.jsonl"
+
+        for example in dataset:
+            file_to_write = file_name_mapping[distributed_state.process_index]
+            with open(file_to_write, "a") as f:
+                f.write(example["text"] + "\n")
+    accelerator.wait_for_everyone()
+    file_line_sets = []
+
+    # for process_index in range(distributed_state.num_processes):
+    if distributed_state.is_main_process:
+        for process_index, file_to_check in file_name_mapping.items():
+            file_lines = load_file_contents(file_to_check)
+            file_line_set = set(file_lines)
+            file_line_sets.append(file_line_set)
+            print(f"file line set length {len(file_line_set)}")
+            print(f"file line length {len(file_lines)}")
+            assert len(file_lines) == len(file_line_set)
+
+    num_sets = len(file_line_sets)
+    for i in range(num_sets):
+        for j in range(i + 1, num_sets):
+            set1 = file_line_sets[i]
+            set2 = file_line_sets[j]
+            assert set1.isdisjoint(set2)
+
+    accelerator.wait_for_everyone()
+    if distributed_state.is_main_process:
+        for process_index in file_name_mapping:
+            file_to_check = file_name_mapping[process_index]
+            os.remove(file_to_check)
+
+
+def load_file_contents(file):
+    with open(file, "r") as f:
+        lines = [line.strip() for line in f.readlines()]
+    return lines
+
+
+if __name__ == "__main__":
+    run()
diff --git a/tests/dataset/test_line_by_line_dataset.py b/tests/dataset/test_line_by_line_dataset.py
new file mode 100644
index 0000000..0755754
--- /dev/null
+++ b/tests/dataset/test_line_by_line_dataset.py
@@ -0,0 +1,20 @@
+import unittest
+import subprocess
+from test_utils import create_train_command
+
+
+class TestLineByLineDataloader(unittest.TestCase):
+    def test_line_by_line_dataloader(self):
+        command = create_train_command(
+            module="accelerate.commands.launch",
+            module_args={
+                "config_file": "chemlactica/config/test_configs/fsdp_config.yaml"
+            },
+            script="tests/dataset/distributed_dataset_iter.py",
+            script_args={},
+        )
+
+        print(f"Running command: {command}")
+        out = subprocess.run(command, shell=True, capture_output=False)
+        if out.returncode != 0:
+            raise Exception(out.stderr.decode())