diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/ILearning.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/ILearning.java
index e6c803bd2..3c4c94c6b 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/ILearning.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/ILearning.java
@@ -26,7 +26,7 @@ import org.deeplearning4j.rl4j.space.Encodable;
  *
  * A common interface that any training method should implement
  */
-public interface ILearning<O extends Encodable, A, AS extends ActionSpace<A>> extends StepCountable {
+public interface ILearning<O, A, AS extends ActionSpace<A>> extends StepCountable {
 
     IPolicy<O, A> getPolicy();
 
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/Learning.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/Learning.java
index 2a8c80608..780a73752 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/Learning.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/Learning.java
@@ -39,7 +39,7 @@ import org.nd4j.linalg.factory.Nd4j;
  *
  */
 @Slf4j
-public abstract class Learning<O extends Encodable, A, AS extends ActionSpace<A>, NN extends NeuralNet>
+public abstract class Learning<O, A, AS extends ActionSpace<A>, NN extends NeuralNet>
                 implements ILearning<O, A, AS>, NeuralNetFetchable<NN> {
 
     @Getter @Setter
@@ -53,8 +53,8 @@ public abstract class Learning<O extends Encodable, A, AS extends ActionSpace<A>
         return Nd4j.argMax(vector, Integer.MAX_VALUE).getInt(0);
     }
 
-    public static <O extends Encodable, A, AS extends ActionSpace<A>> INDArray getInput(MDP<O, A, AS> mdp, O obs) {
-        INDArray arr = Nd4j.create(obs.toArray());
+    public static <O, A, AS extends ActionSpace<A>> INDArray getInput(MDP<O, A, AS> mdp, O obs) {
+        INDArray arr = Nd4j.create(((Encodable)obs).toArray());
         int[] shape = mdp.getObservationSpace().getShape();
         if (shape.length == 1)
             return arr.reshape(new long[] {1, arr.length()});
@@ -62,7 +62,7 @@ public abstract class Learning<O extends Encodable, A, AS extends ActionSpace<A>
             return arr.reshape(shape);
     }
 
-    public static <O extends Encodable, A, AS extends ActionSpace<A>> InitMdp<O> initMdp(MDP<O, A, AS> mdp,
+    public static <O, A, AS extends ActionSpace<A>> InitMdp<O> initMdp(MDP<O, A, AS> mdp,
                     IHistoryProcessor hp) {
 
         O obs = mdp.reset();
@@ -138,15 +138,6 @@ public abstract class Learning<O extends Encodable, A, AS extends ActionSpace<A>
         this.historyProcessor = historyProcessor;
     }
 
-    public INDArray getInput(O obs) {
-        return getInput(getMdp(), obs);
-    }
-
-    public InitMdp<O> initMdp() {
-        getNeuralNet().reset();
-        return initMdp(getMdp(), getHistoryProcessor());
-    }
-
     @AllArgsConstructor
     @Value
     public static class InitMdp<O> {
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/SyncLearning.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/SyncLearning.java
index 35cc9e136..ed5d73a75 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/SyncLearning.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/SyncLearning.java
@@ -36,7 +36,7 @@ import org.deeplearning4j.rl4j.util.IDataManager;
  * @author Alexandre Boulanger
  */
 @Slf4j
-public abstract class SyncLearning<O extends Encodable, A, AS extends ActionSpace<A>, NN extends NeuralNet>
+public abstract class SyncLearning<O, A, AS extends ActionSpace<A>, NN extends NeuralNet>
         extends Learning<O, A, AS, NN> implements IEpochTrainer {
 
     private final TrainingListenerList listeners = new TrainingListenerList();
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/Transition.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/Transition.java
index 7242dd64b..509b28a88 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/Transition.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/Transition.java
@@ -16,27 +16,56 @@
 
 package org.deeplearning4j.rl4j.learning.sync;
 
-import lombok.AllArgsConstructor;
 import lombok.Value;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.factory.Nd4j;
+import org.nd4j.linalg.indexing.INDArrayIndex;
+import org.nd4j.linalg.indexing.NDArrayIndex;
+
+import java.util.List;
 
 /**
- * @author rubenfiszel (ruben.fiszel@epfl.ch) 7/12/16.
  *
  * A transition is a SARS tuple
  * State, Action, Reward, (isTerminal), State
+ *
+ * @author rubenfiszel (ruben.fiszel@epfl.ch) 7/12/16.
+ * @author Alexandre Boulanger
+ *
  */
 @Value
-@AllArgsConstructor
 public class Transition<A> {
 
-    INDArray[] observation;
+    Observation observation;
     A action;
     double reward;
     boolean isTerminal;
     INDArray nextObservation;
 
+    public Transition(Observation observation, A action, double reward, boolean isTerminal, Observation nextObservation) {
+        this.observation = observation;
+        this.action = action;
+        this.reward = reward;
+        this.isTerminal = isTerminal;
+
+        // To conserve memory, only the most recent frame of the next observation is kept (if history is used).
+        // The full nextObservation will be re-build from observation when needed.
+        long[] nextObservationShape = nextObservation.getData().shape().clone();
+        nextObservationShape[0] = 1;
+        this.nextObservation = nextObservation.getData()
+                .get(new INDArrayIndex[] {NDArrayIndex.point(0)})
+                .reshape(nextObservationShape);
+    }
+
+    private Transition(Observation observation, A action, double reward, boolean isTerminal, INDArray nextObservation) {
+        this.observation = observation;
+        this.action = action;
+        this.reward = reward;
+        this.isTerminal = isTerminal;
+        this.nextObservation = nextObservation;
+    }
+
     /**
      * concat an array history into a single INDArry of as many channel
      * as element in the history array
@@ -53,36 +82,80 @@ public class Transition<A> {
      * @return this transition duplicated
      */
     public Transition<A> dup() {
-        INDArray[] dupObservation = dup(observation);
+        Observation dupObservation = observation.dup();
         INDArray nextObs = nextObservation.dup();
 
-        return new Transition<>(dupObservation, action, reward, isTerminal, nextObs);
+        return new Transition<A>(dupObservation, action, reward, isTerminal, nextObs);
     }
 
     /**
-     * Duplicate an history
-     * @param history the history to duplicate
-     * @return a duplicate of the history
+     * Stack along the 0-dimension all the observations of the batch in a INDArray.
+     *
+     * @param transitions A list of the transitions of the batch
+     * @param <A> The type of the Action
+     * @return A INDArray of all of the batch's observations stacked along the 0-dimension.
      */
-    public static INDArray[] dup(INDArray[] history) {
-        INDArray[] dupHistory = new INDArray[history.length];
-        for (int i = 0; i < history.length; i++) {
-            dupHistory[i] = history[i].dup();
+    public static <A> INDArray buildStackedObservations(List<Transition<A>> transitions) {
+        int size = transitions.size();
+        long[] shape = getShape(transitions);
+
+        INDArray[] array = new INDArray[size];
+        for (int i = 0; i < size; i++) {
+            array[i] = transitions.get(i).getObservation().getData();
         }
-        return dupHistory;
+
+        return  Nd4j.concat(0, array).reshape(shape);
     }
 
     /**
-     * append a pixel frame to an history (throwing the last frame)
-     * @param history the history on which to append
-     * @param append the pixel frame to append
-     * @return the appended history
+     * Stack along the 0-dimension all the next observations of the batch in a INDArray.
+     *
+     * @param transitions A list of the transitions of the batch
+     * @param <A> The type of the Action
+     * @return A INDArray of all of the batch's next observations stacked along the 0-dimension.
      */
-    public static INDArray[] append(INDArray[] history, INDArray append) {
-        INDArray[] appended = new INDArray[history.length];
-        appended[0] = append;
-        System.arraycopy(history, 0, appended, 1, history.length - 1);
-        return appended;
+    public static <A> INDArray buildStackedNextObservations(List<Transition<A>> transitions) {
+        int size = transitions.size();
+        long[] shape = getShape(transitions);
+
+        INDArray[] array = new INDArray[size];
+
+        for (int i = 0; i < size; i++) {
+            Transition<A> trans = transitions.get(i);
+            INDArray obs = trans.getObservation().getData();
+            long historyLength = obs.shape()[0];
+
+            if(historyLength != 1) {
+                // To conserve memory, only the most recent frame of the next observation is kept (if history is used).
+                // We need to rebuild the frame-stack in addition to builing the batch-stack.
+                INDArray historyPart = obs.get(new INDArrayIndex[]{NDArrayIndex.interval(0, historyLength - 1)});
+                array[i] = Nd4j.concat(0, trans.getNextObservation(), historyPart);
+            }
+            else {
+                array[i] = trans.getNextObservation();
+            }
+        }
+
+        return  Nd4j.concat(0, array).reshape(shape);
+    }
+
+    private static <A> long[] getShape(List<Transition<A>> transitions) {
+        INDArray observations = transitions.get(0).getObservation().getData();
+        long[] observationShape = observations.shape();
+        long[] stackedShape;
+        if(observationShape[0] == 1) {
+            // FIXME: Currently RL4J doesn't support 1D observations. So if we have a shape with 1 in the first dimension, we can use that dimension and don't need to add another one.
+            stackedShape = new long[observationShape.length];
+            System.arraycopy(observationShape, 0, stackedShape, 0, observationShape.length);
+        }
+        else {
+            stackedShape = new long[observationShape.length + 1];
+            System.arraycopy(observationShape, 1, stackedShape, 2, observationShape.length - 1);
+            stackedShape[1] = observationShape[1];
+        }
+        stackedShape[0] = transitions.size();
+
+        return stackedShape;
     }
 
 }
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/QLearning.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/QLearning.java
index 98c62e565..098aefeaa 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/QLearning.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/QLearning.java
@@ -21,15 +21,20 @@ import com.fasterxml.jackson.databind.annotation.JsonPOJOBuilder;
 import lombok.*;
 import lombok.extern.slf4j.Slf4j;
 import org.deeplearning4j.gym.StepReply;
+import org.deeplearning4j.rl4j.learning.IHistoryProcessor;
+import org.deeplearning4j.rl4j.learning.Learning;
 import org.deeplearning4j.rl4j.learning.sync.ExpReplay;
 import org.deeplearning4j.rl4j.learning.sync.IExpReplay;
 import org.deeplearning4j.rl4j.learning.sync.SyncLearning;
 import org.deeplearning4j.rl4j.mdp.MDP;
 import org.deeplearning4j.rl4j.network.dqn.IDQN;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.deeplearning4j.rl4j.policy.EpsGreedy;
 import org.deeplearning4j.rl4j.space.ActionSpace;
 import org.deeplearning4j.rl4j.space.Encodable;
 import org.deeplearning4j.rl4j.util.IDataManager.StatEntry;
+import org.deeplearning4j.rl4j.util.LegacyMDPWrapper;
+import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.factory.Nd4j;
 import org.nd4j.linalg.api.rng.Random;
 
@@ -53,6 +58,8 @@ public abstract class QLearning<O extends Encodable, A, AS extends ActionSpace<A
     @Setter(AccessLevel.PROTECTED)
     protected IExpReplay<A> expReplay;
 
+    protected abstract LegacyMDPWrapper<O, A, AS> getLegacyMDPWrapper();
+
     public QLearning(QLConfiguration conf) {
         this(conf, getSeededRandom(conf.getSeed()));
     }
@@ -95,11 +102,11 @@ public abstract class QLearning<O extends Encodable, A, AS extends ActionSpace<A
 
     protected abstract void postEpoch();
 
-    protected abstract QLStepReturn<O> trainStep(O obs);
+    protected abstract QLStepReturn<Observation> trainStep(Observation obs);
 
     protected StatEntry trainEpoch() {
-        InitMdp<O> initMdp = initMdp();
-        O obs = initMdp.getLastObs();
+        InitMdp<Observation> initMdp = refacInitMdp();
+        Observation obs = initMdp.getLastObs();
 
         double reward = initMdp.getReward();
         int step = initMdp.getSteps();
@@ -114,7 +121,7 @@ public abstract class QLearning<O extends Encodable, A, AS extends ActionSpace<A
                 updateTargetNetwork();
             }
 
-            QLStepReturn<O> stepR = trainStep(obs);
+            QLStepReturn<Observation> stepR = trainStep(obs);
 
             if (!stepR.getMaxQ().isNaN()) {
                 if (startQ.isNaN())
@@ -142,6 +149,36 @@ public abstract class QLearning<O extends Encodable, A, AS extends ActionSpace<A
 
     }
 
+    private InitMdp<Observation> refacInitMdp() {
+        LegacyMDPWrapper<O, A, AS> mdp = getLegacyMDPWrapper();
+        IHistoryProcessor hp = getHistoryProcessor();
+
+        Observation observation = mdp.reset();
+
+        int step = 0;
+        double reward = 0;
+
+        boolean isHistoryProcessor = hp != null;
+
+        int skipFrame = isHistoryProcessor ? hp.getConf().getSkipFrame() : 1;
+        int requiredFrame = isHistoryProcessor ? skipFrame * (hp.getConf().getHistoryLength() - 1) : 0;
+
+        while (step < requiredFrame && !mdp.isDone()) {
+
+            A action = mdp.getActionSpace().noOp(); //by convention should be the NO_OP
+
+            StepReply<Observation> stepReply = mdp.step(action);
+            reward += stepReply.getReward();
+            observation = stepReply.getObservation();
+
+            step++;
+
+        }
+
+        return new InitMdp(step, observation, reward);
+
+    }
+
     @AllArgsConstructor
     @Builder
     @Value
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscrete.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscrete.java
index 796780fb9..4d089d1ee 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscrete.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscrete.java
@@ -26,10 +26,12 @@ import org.deeplearning4j.rl4j.learning.sync.qlearning.QLearning;
 import org.deeplearning4j.rl4j.learning.sync.qlearning.discrete.TDTargetAlgorithm.*;
 import org.deeplearning4j.rl4j.mdp.MDP;
 import org.deeplearning4j.rl4j.network.dqn.IDQN;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.deeplearning4j.rl4j.policy.DQNPolicy;
 import org.deeplearning4j.rl4j.policy.EpsGreedy;
 import org.deeplearning4j.rl4j.space.DiscreteSpace;
 import org.deeplearning4j.rl4j.space.Encodable;
+import org.deeplearning4j.rl4j.util.LegacyMDPWrapper;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.api.rng.Random;
 import org.nd4j.linalg.dataset.api.DataSet;
@@ -51,8 +53,7 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
 
     @Getter
     final private QLConfiguration configuration;
-    @Getter
-    final private MDP<O, Integer, DiscreteSpace> mdp;
+    private final LegacyMDPWrapper<O, Integer, DiscreteSpace> mdp;
     @Getter
     private DQNPolicy<O> policy;
     @Getter
@@ -65,11 +66,14 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
     private IDQN targetQNetwork;
 
     private int lastAction;
-    private INDArray[] history = null;
     private double accuReward = 0;
 
     ITDTargetAlgorithm tdTargetAlgorithm;
 
+    protected LegacyMDPWrapper<O, Integer, DiscreteSpace> getLegacyMDPWrapper() {
+        return mdp;
+    }
+
     public QLearningDiscrete(MDP<O, Integer, DiscreteSpace> mdp, IDQN dqn, QLConfiguration conf,
                              int epsilonNbStep) {
         this(mdp, dqn, conf, epsilonNbStep, Nd4j.getRandomFactory().getNewRandomInstance(conf.getSeed()));
@@ -79,7 +83,7 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
                              int epsilonNbStep, Random random) {
         super(conf);
         this.configuration = conf;
-        this.mdp = mdp;
+        this.mdp = new LegacyMDPWrapper<O, Integer, DiscreteSpace>(mdp, this);
         qNetwork = dqn;
         targetQNetwork = dqn.clone();
         policy = new DQNPolicy(getQNetwork());
@@ -92,6 +96,10 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
 
     }
 
+    public MDP<O, Integer, DiscreteSpace> getMdp() {
+        return mdp.getWrappedMDP();
+    }
+
     public void postEpoch() {
 
         if (getHistoryProcessor() != null)
@@ -100,7 +108,6 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
     }
 
     public void preEpoch() {
-        history = null;
         lastAction = 0;
         accuReward = 0;
     }
@@ -110,10 +117,9 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
      * @param obs last obs
      * @return relevant info for next step
      */
-    protected QLStepReturn<O> trainStep(O obs) {
+    protected QLStepReturn<Observation> trainStep(Observation obs) {
 
         Integer action;
-        INDArray input = getInput(obs);
         boolean isHistoryProcessor = getHistoryProcessor() != null;
 
 
@@ -128,50 +134,25 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
         if (getStepCounter() % skipFrame != 0) {
             action = lastAction;
         } else {
-            if (history == null) {
-                if (isHistoryProcessor) {
-                    getHistoryProcessor().add(input);
-                    history = getHistoryProcessor().getHistory();
-                } else
-                    history = new INDArray[] {input};
-            }
-            //concat the history into a single INDArray input
-            INDArray hstack = Transition.concat(Transition.dup(history));
-            if (isHistoryProcessor) {
-                hstack.muli(1.0 / getHistoryProcessor().getScale());
-            }
-
-            //if input is not 2d, you have to append that the batch is 1 length high
-            if (hstack.shape().length > 2)
-                hstack = hstack.reshape(Learning.makeShape(1, ArrayUtil.toInts(hstack.shape())));
-
-            INDArray qs = getQNetwork().output(hstack);
+            INDArray qs = getQNetwork().output(obs);
             int maxAction = Learning.getMaxAction(qs);
-
             maxQ = qs.getDouble(maxAction);
-            action = getEgPolicy().nextAction(hstack);
+
+            action = getEgPolicy().nextAction(obs);
         }
 
         lastAction = action;
 
-        StepReply<O> stepReply = getMdp().step(action);
+        StepReply<Observation> stepReply = mdp.step(action);
 
-        INDArray ninput = getInput(stepReply.getObservation());
-
-        if (isHistoryProcessor)
-            getHistoryProcessor().record(ninput);
+        Observation nextObservation = stepReply.getObservation();
 
         accuReward += stepReply.getReward() * configuration.getRewardFactor();
 
         //if it's not a skipped frame, you can do a step of training
         if (getStepCounter() % skipFrame == 0 || stepReply.isDone()) {
 
-            if (isHistoryProcessor)
-                getHistoryProcessor().add(ninput);
-
-            INDArray[] nhistory = isHistoryProcessor ? getHistoryProcessor().getHistory() : new INDArray[] {ninput};
-
-            Transition<Integer> trans = new Transition(history, action, accuReward, stepReply.isDone(), nhistory[0]);
+            Transition<Integer> trans = new Transition(obs, action, accuReward, stepReply.isDone(), nextObservation);
             getExpReplay().store(trans);
 
             if (getStepCounter() > updateStart) {
@@ -179,27 +160,16 @@ public abstract class QLearningDiscrete<O extends Encodable> extends QLearning<O
                 getQNetwork().fit(targets.getFeatures(), targets.getLabels());
             }
 
-            history = nhistory;
             accuReward = 0;
         }
 
-        return new QLStepReturn<O>(maxQ, getQNetwork().getLatestScore(), stepReply);
+        return new QLStepReturn<Observation>(maxQ, getQNetwork().getLatestScore(), stepReply);
     }
 
     protected DataSet setTarget(ArrayList<Transition<Integer>> transitions) {
         if (transitions.size() == 0)
             throw new IllegalArgumentException("too few transitions");
 
-        // TODO: Remove once we use DataSets in observations
-        int[] shape = getHistoryProcessor() == null ? getMdp().getObservationSpace().getShape()
-                : getHistoryProcessor().getConf().getShape();
-        ((BaseTDTargetAlgorithm) tdTargetAlgorithm).setNShape(makeShape(transitions.size(), shape));
-
-        // TODO: Remove once we use DataSets in observations
-        if(getHistoryProcessor() != null) {
-            ((BaseTDTargetAlgorithm) tdTargetAlgorithm).setScale(getHistoryProcessor().getScale());
-        }
-
         return tdTargetAlgorithm.computeTDTargets(transitions);
     }
 }
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/BaseTDTargetAlgorithm.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/BaseTDTargetAlgorithm.java
index f4f143ee9..ca4beb47e 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/BaseTDTargetAlgorithm.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/BaseTDTargetAlgorithm.java
@@ -16,14 +16,10 @@
 
 package org.deeplearning4j.rl4j.learning.sync.qlearning.discrete.TDTargetAlgorithm;
 
-import lombok.Setter;
 import org.deeplearning4j.rl4j.learning.sync.Transition;
 import org.deeplearning4j.rl4j.learning.sync.qlearning.QNetworkSource;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.dataset.api.DataSet;
-import org.nd4j.linalg.factory.Nd4j;
-import org.nd4j.linalg.indexing.INDArrayIndex;
-import org.nd4j.linalg.indexing.NDArrayIndex;
 
 import java.util.List;
 
@@ -40,11 +36,6 @@ public abstract class BaseTDTargetAlgorithm implements ITDTargetAlgorithm<Intege
     private final double errorClamp;
     private final boolean isClamped;
 
-    @Setter
-    private int[] nShape; // TODO: Remove once we use DataSets in observations
-    @Setter
-    private double scale = 1.0; // TODO: Remove once we use DataSets in observations
-
     /**
      *
      * @param qNetworkSource The source of the Q-Network
@@ -93,37 +84,8 @@ public abstract class BaseTDTargetAlgorithm implements ITDTargetAlgorithm<Intege
 
         int size = transitions.size();
 
-        INDArray observations = Nd4j.create(nShape);
-        INDArray nextObservations = Nd4j.create(nShape);
-
-        // TODO: Remove once we use DataSets in observations
-        for (int i = 0; i < size; i++) {
-            Transition<Integer> trans = transitions.get(i);
-
-            INDArray[] obsArray = trans.getObservation();
-            if (observations.rank() == 2) {
-                observations.putRow(i, obsArray[0]);
-            } else {
-                for (int j = 0; j < obsArray.length; j++) {
-                    observations.put(new INDArrayIndex[] {NDArrayIndex.point(i), NDArrayIndex.point(j)}, obsArray[j]);
-                }
-            }
-
-            INDArray[] nextObsArray = Transition.append(trans.getObservation(), trans.getNextObservation());
-            if (nextObservations.rank() == 2) {
-                nextObservations.putRow(i, nextObsArray[0]);
-            } else {
-                for (int j = 0; j < nextObsArray.length; j++) {
-                    nextObservations.put(new INDArrayIndex[] {NDArrayIndex.point(i), NDArrayIndex.point(j)}, nextObsArray[j]);
-                }
-            }
-        }
-
-        // TODO: Remove once we use DataSets in observations
-        if(scale != 1.0) {
-            observations.muli(1.0 / scale);
-            nextObservations.muli(1.0 / scale);
-        }
+        INDArray observations = Transition.buildStackedObservations(transitions);
+        INDArray nextObservations = Transition.buildStackedNextObservations(transitions);
 
         initComputation(observations, nextObservations);
 
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/DQN.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/DQN.java
index f73be3b21..b3293c1b6 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/DQN.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/DQN.java
@@ -22,6 +22,7 @@ import org.deeplearning4j.nn.gradient.Gradient;
 import org.deeplearning4j.nn.multilayer.MultiLayerNetwork;
 import org.deeplearning4j.nn.workspace.LayerWorkspaceMgr;
 import org.deeplearning4j.optimize.api.TrainingListener;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.deeplearning4j.util.ModelSerializer;
 import org.nd4j.linalg.api.ndarray.INDArray;
 
@@ -70,6 +71,10 @@ public class DQN<NN extends DQN> implements IDQN<NN> {
         return mln.output(batch);
     }
 
+    public INDArray output(Observation observation) {
+        return this.output(observation.getData());
+    }
+
     public INDArray[] outputAll(INDArray batch) {
         return new INDArray[] {output(batch)};
     }
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/IDQN.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/IDQN.java
index c6ae2f5ac..af295d202 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/IDQN.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/network/dqn/IDQN.java
@@ -18,6 +18,7 @@ package org.deeplearning4j.rl4j.network.dqn;
 
 import org.deeplearning4j.nn.gradient.Gradient;
 import org.deeplearning4j.rl4j.network.NeuralNet;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.nd4j.linalg.api.ndarray.INDArray;
 
 /**
@@ -37,6 +38,7 @@ public interface IDQN<NN extends IDQN> extends NeuralNet<NN> {
     void fit(INDArray input, INDArray[] labels);
 	
     INDArray output(INDArray batch);
+    INDArray output(Observation observation);
 
     INDArray[] outputAll(INDArray batch);
 
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/observation/Observation.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/observation/Observation.java
new file mode 100644
index 000000000..7ca63baaf
--- /dev/null
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/observation/Observation.java
@@ -0,0 +1,51 @@
+/*******************************************************************************
+ * Copyright (c) 2015-2019 Skymind, Inc.
+ *
+ * This program and the accompanying materials are made available under the
+ * terms of the Apache License, Version 2.0 which is available at
+ * https://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.
+ *
+ * SPDX-License-Identifier: Apache-2.0
+ ******************************************************************************/
+
+package org.deeplearning4j.rl4j.observation;
+
+import org.nd4j.linalg.api.ndarray.INDArray;
+import org.nd4j.linalg.dataset.api.DataSet;
+import org.nd4j.linalg.factory.Nd4j;
+
+/**
+ * Presently only a dummy container. Will contain observation channels when done.
+ */
+public class Observation {
+    // TODO: Presently only a dummy container. Will contain observation channels when done.
+
+    private final DataSet data;
+
+    public Observation(INDArray[] data) {
+        this(new org.nd4j.linalg.dataset.DataSet(Nd4j.concat(0, data), null));
+    }
+
+    // FIXME: Remove -- only used in unit tests
+    public Observation(INDArray data) {
+        this.data = new org.nd4j.linalg.dataset.DataSet(data, null);
+    }
+
+    private Observation(DataSet data) {
+        this.data = data;
+    }
+
+    public Observation dup() {
+        return new Observation(new org.nd4j.linalg.dataset.DataSet(data.getFeatures().dup(), null));
+    }
+
+    public INDArray getData() {
+        return data.getFeatures();
+    }
+}
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/EpsGreedy.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/EpsGreedy.java
index a7be53596..732ce1a0e 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/EpsGreedy.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/EpsGreedy.java
@@ -21,8 +21,8 @@ import lombok.extern.slf4j.Slf4j;
 import org.deeplearning4j.rl4j.learning.StepCountable;
 import org.deeplearning4j.rl4j.mdp.MDP;
 import org.deeplearning4j.rl4j.network.NeuralNet;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.deeplearning4j.rl4j.space.ActionSpace;
-import org.deeplearning4j.rl4j.space.Encodable;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.api.rng.Random;
 
@@ -38,7 +38,7 @@ import org.nd4j.linalg.api.rng.Random;
  */
 @AllArgsConstructor
 @Slf4j
-public class EpsGreedy<O extends Encodable, A, AS extends ActionSpace<A>> extends Policy<O, A> {
+public class EpsGreedy<O, A, AS extends ActionSpace<A>> extends Policy<O, A> {
 
     final private Policy<O, A> policy;
     final private MDP<O, A, AS> mdp;
@@ -61,8 +61,10 @@ public class EpsGreedy<O extends Encodable, A, AS extends ActionSpace<A>> extend
             return policy.nextAction(input);
         else
             return mdp.getActionSpace().randomAction();
+    }
 
-
+    public A nextAction(Observation observation) {
+        return this.nextAction(observation.getData());
     }
 
     public float getEpsilon() {
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/IPolicy.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/IPolicy.java
index 1b5ae67af..885fa36a2 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/IPolicy.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/IPolicy.java
@@ -6,7 +6,7 @@ import org.deeplearning4j.rl4j.space.ActionSpace;
 import org.deeplearning4j.rl4j.space.Encodable;
 import org.nd4j.linalg.api.ndarray.INDArray;
 
-public interface IPolicy<O extends Encodable, A> {
+public interface IPolicy<O, A> {
     <AS extends ActionSpace<A>> double play(MDP<O, A, AS> mdp, IHistoryProcessor hp);
     A nextAction(INDArray input);
 }
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/Policy.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/Policy.java
index 946bdca7b..84ef26f25 100644
--- a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/Policy.java
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/policy/Policy.java
@@ -35,7 +35,7 @@ import org.nd4j.linalg.util.ArrayUtil;
  *
  * A Policy responsability is to choose the next action given a state
  */
-public abstract class Policy<O extends Encodable, A> implements IPolicy<O, A> {
+public abstract class Policy<O, A> implements IPolicy<O, A> {
 
     public abstract NeuralNet getNeuralNet();
 
diff --git a/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/util/LegacyMDPWrapper.java b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/util/LegacyMDPWrapper.java
new file mode 100644
index 000000000..efbf29603
--- /dev/null
+++ b/rl4j/rl4j-core/src/main/java/org/deeplearning4j/rl4j/util/LegacyMDPWrapper.java
@@ -0,0 +1,139 @@
+package org.deeplearning4j.rl4j.util;
+
+import lombok.Getter;
+import org.deeplearning4j.gym.StepReply;
+import org.deeplearning4j.rl4j.learning.IHistoryProcessor;
+import org.deeplearning4j.rl4j.learning.ILearning;
+import org.deeplearning4j.rl4j.mdp.MDP;
+import org.deeplearning4j.rl4j.observation.Observation;
+import org.deeplearning4j.rl4j.space.ActionSpace;
+import org.deeplearning4j.rl4j.space.Encodable;
+import org.deeplearning4j.rl4j.space.ObservationSpace;
+import org.nd4j.linalg.api.ndarray.INDArray;
+import org.nd4j.linalg.factory.Nd4j;
+
+public class LegacyMDPWrapper<O extends Encodable, A, AS extends ActionSpace<A>> implements MDP<Observation, A, AS> {
+
+    @Getter
+    private final MDP<O, A, AS> wrappedMDP;
+    @Getter
+    private final WrapperObservationSpace observationSpace;
+    private final ILearning learning;
+    private int skipFrame;
+
+    private int step = 0;
+
+    public LegacyMDPWrapper(MDP<O, A, AS> wrappedMDP, ILearning learning) {
+        this.wrappedMDP = wrappedMDP;
+        this.observationSpace = new WrapperObservationSpace(wrappedMDP.getObservationSpace().getShape());
+        this.learning = learning;
+    }
+
+    @Override
+    public AS getActionSpace() {
+        return wrappedMDP.getActionSpace();
+    }
+
+    @Override
+    public Observation reset() {
+        INDArray rawObservation = getInput(wrappedMDP.reset());
+
+        IHistoryProcessor historyProcessor = learning.getHistoryProcessor();
+        if(historyProcessor != null) {
+            historyProcessor.record(rawObservation.dup());
+            rawObservation.muli(1.0 / historyProcessor.getScale());
+        }
+
+        Observation observation = new Observation(new INDArray[] { rawObservation });
+
+        if(historyProcessor != null) {
+            skipFrame = historyProcessor.getConf().getSkipFrame();
+            historyProcessor.add(rawObservation);
+        }
+        step = 0;
+
+        return observation;
+    }
+
+    @Override
+    public void close() {
+        wrappedMDP.close();
+    }
+
+    @Override
+    public StepReply<Observation> step(A a) {
+        IHistoryProcessor historyProcessor = learning.getHistoryProcessor();
+
+        StepReply<O> rawStepReply = wrappedMDP.step(a);
+        INDArray rawObservation = getInput(rawStepReply.getObservation());
+
+        ++step;
+
+        int requiredFrame = 0;
+        if(historyProcessor != null) {
+            historyProcessor.record(rawObservation.dup());
+            rawObservation.muli(1.0 / historyProcessor.getScale());
+
+            requiredFrame = skipFrame * (historyProcessor.getConf().getHistoryLength() - 1);
+            if ((learning.getStepCounter() % skipFrame == 0 && step >= requiredFrame)
+            || (step % skipFrame == 0 && step < requiredFrame )){
+                historyProcessor.add(rawObservation);
+            }
+        }
+
+        Observation observation;
+        if(historyProcessor != null && step >= requiredFrame) {
+            observation = new Observation(historyProcessor.getHistory());
+        }
+        else {
+            observation = new Observation(new INDArray[] { rawObservation });
+        }
+
+        return new StepReply<Observation>(observation, rawStepReply.getReward(), rawStepReply.isDone(), rawStepReply.getInfo());
+    }
+
+    @Override
+    public boolean isDone() {
+        return wrappedMDP.isDone();
+    }
+
+    @Override
+    public MDP<Observation, A, AS> newInstance() {
+        return new LegacyMDPWrapper<O, A, AS>(wrappedMDP.newInstance(), learning);
+    }
+
+    private INDArray getInput(O obs) {
+        INDArray arr = Nd4j.create(obs.toArray());
+        int[] shape = observationSpace.getShape();
+        if (shape.length == 1)
+            return arr.reshape(new long[] {1, arr.length()});
+        else
+            return arr.reshape(shape);
+    }
+
+    public static class WrapperObservationSpace implements ObservationSpace<Observation> {
+
+        @Getter
+        private final int[] shape;
+
+        public WrapperObservationSpace(int[] shape) {
+
+            this.shape = shape;
+        }
+
+        @Override
+        public String getName() {
+            return null;
+        }
+
+        @Override
+        public INDArray getLow() {
+            return null;
+        }
+
+        @Override
+        public INDArray getHigh() {
+            return null;
+        }
+    }
+}
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/async/AsyncThreadDiscreteTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/async/AsyncThreadDiscreteTest.java
index 1d6a9e909..e3658b8dd 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/async/AsyncThreadDiscreteTest.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/async/AsyncThreadDiscreteTest.java
@@ -50,7 +50,7 @@ public class AsyncThreadDiscreteTest {
         assertEquals(1, asyncGlobalMock.enqueueCallCount);
 
         // HistoryProcessor
-        assertEquals(10, hpMock.addCallCount);
+        assertEquals(10, hpMock.addCalls.size());
         double[] expectedRecordValues = new double[] { 123.0, 0.0, 1.0, 2.0, 3.0 };
         assertEquals(expectedRecordValues.length, hpMock.recordCalls.size());
         for(int i = 0; i < expectedRecordValues.length; ++i) {
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/ExpReplayTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/ExpReplayTest.java
index 44271adde..373c4b189 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/ExpReplayTest.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/ExpReplayTest.java
@@ -1,5 +1,6 @@
 package org.deeplearning4j.rl4j.learning.sync;
 
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.deeplearning4j.rl4j.support.MockRandom;
 import org.junit.Test;
 import org.nd4j.linalg.api.ndarray.INDArray;
@@ -17,7 +18,8 @@ public class ExpReplayTest {
         ExpReplay<Integer> sut = new ExpReplay<Integer>(2, 1, randomMock);
 
         // Act
-        Transition<Integer> transition = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 123, 234, false, Nd4j.create(1));
+        Transition<Integer> transition = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                123, 234, false, new Observation(Nd4j.create(1)));
         sut.store(transition);
         List<Transition<Integer>> results = sut.getBatch(1);
 
@@ -34,9 +36,12 @@ public class ExpReplayTest {
         ExpReplay<Integer> sut = new ExpReplay<Integer>(2, 1, randomMock);
 
         // Act
-        Transition<Integer> transition1 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 1, 2, false, Nd4j.create(1));
-        Transition<Integer> transition2 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 3, 4, false, Nd4j.create(1));
-        Transition<Integer> transition3 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 5, 6, false, Nd4j.create(1));
+        Transition<Integer> transition1 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                1, 2, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition2 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                3, 4, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition3 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                5, 6, false, new Observation(Nd4j.create(1)));
         sut.store(transition1);
         sut.store(transition2);
         sut.store(transition3);
@@ -73,9 +78,12 @@ public class ExpReplayTest {
         ExpReplay<Integer> sut = new ExpReplay<Integer>(5, 1, randomMock);
 
         // Act
-        Transition<Integer> transition1 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 1, 2, false, Nd4j.create(1));
-        Transition<Integer> transition2 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 3, 4, false, Nd4j.create(1));
-        Transition<Integer> transition3 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 5, 6, false, Nd4j.create(1));
+        Transition<Integer> transition1 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                1, 2, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition2 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                3, 4, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition3 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                5, 6, false, new Observation(Nd4j.create(1)));
         sut.store(transition1);
         sut.store(transition2);
         sut.store(transition3);
@@ -92,9 +100,12 @@ public class ExpReplayTest {
         ExpReplay<Integer> sut = new ExpReplay<Integer>(5, 1, randomMock);
 
         // Act
-        Transition<Integer> transition1 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 1, 2, false, Nd4j.create(1));
-        Transition<Integer> transition2 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 3, 4, false, Nd4j.create(1));
-        Transition<Integer> transition3 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 5, 6, false, Nd4j.create(1));
+        Transition<Integer> transition1 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                1, 2, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition2 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                3, 4, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition3 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                5, 6, false, new Observation(Nd4j.create(1)));
         sut.store(transition1);
         sut.store(transition2);
         sut.store(transition3);
@@ -120,11 +131,16 @@ public class ExpReplayTest {
         ExpReplay<Integer> sut = new ExpReplay<Integer>(5, 1, randomMock);
 
         // Act
-        Transition<Integer> transition1 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 1, 2, false, Nd4j.create(1));
-        Transition<Integer> transition2 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 3, 4, false, Nd4j.create(1));
-        Transition<Integer> transition3 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 5, 6, false, Nd4j.create(1));
-        Transition<Integer> transition4 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 7, 8, false, Nd4j.create(1));
-        Transition<Integer> transition5 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 9, 10, false, Nd4j.create(1));
+        Transition<Integer> transition1 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                1, 2, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition2 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                3, 4, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition3 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                5, 6, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition4 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                7, 8, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition5 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                9, 10, false, new Observation(Nd4j.create(1)));
         sut.store(transition1);
         sut.store(transition2);
         sut.store(transition3);
@@ -152,11 +168,16 @@ public class ExpReplayTest {
         ExpReplay<Integer> sut = new ExpReplay<Integer>(5, 1, randomMock);
 
         // Act
-        Transition<Integer> transition1 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 1, 2, false, Nd4j.create(1));
-        Transition<Integer> transition2 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 3, 4, false, Nd4j.create(1));
-        Transition<Integer> transition3 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 5, 6, false, Nd4j.create(1));
-        Transition<Integer> transition4 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 7, 8, false, Nd4j.create(1));
-        Transition<Integer> transition5 = new Transition<Integer>(new INDArray[] { Nd4j.create(1) }, 9, 10, false, Nd4j.create(1));
+        Transition<Integer> transition1 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                1, 2, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition2 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                3, 4, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition3 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                5, 6, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition4 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                7, 8, false, new Observation(Nd4j.create(1)));
+        Transition<Integer> transition5 = new Transition<Integer>(new Observation(new INDArray[] { Nd4j.create(1) }),
+                9, 10, false, new Observation(Nd4j.create(1)));
         sut.store(transition1);
         sut.store(transition2);
         sut.store(transition3);
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/TransitionTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/TransitionTest.java
new file mode 100644
index 000000000..b74ebac11
--- /dev/null
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/TransitionTest.java
@@ -0,0 +1,255 @@
+package org.deeplearning4j.rl4j.learning.sync;
+
+import org.deeplearning4j.rl4j.observation.Observation;
+import org.junit.Test;
+import org.nd4j.linalg.api.ndarray.INDArray;
+import org.nd4j.linalg.factory.Nd4j;
+
+import java.util.ArrayList;
+import java.util.List;
+
+import static org.junit.Assert.assertEquals;
+
+public class TransitionTest {
+    @Test
+    public void when_callingCtorWithoutHistory_expect_2DObservationAndNextObservation() {
+        // Arrange
+        double[] obs = new double[] { 1.0, 2.0, 3.0 };
+        Observation observation = buildObservation(obs);
+
+        double[] nextObs = new double[] { 10.0, 20.0, 30.0 };
+        Observation nextObservation = buildObservation(nextObs);
+
+        // Act
+        Transition transition = new Transition(observation, 123, 234.0, false, nextObservation);
+
+        // Assert
+        double[][] expectedObservation = new double[][] { obs };
+        assertExpected(expectedObservation, transition.getObservation().getData());
+
+        double[][] expectedNextObservation = new double[][] { nextObs };
+        assertExpected(expectedNextObservation, transition.getNextObservation());
+
+        assertEquals(123, transition.getAction());
+        assertEquals(234.0, transition.getReward(), 0.0001);
+    }
+
+    @Test
+    public void when_callingCtorWithHistory_expect_ObservationWithHistoryAndNextObservationWithout() {
+        // Arrange
+        double[][] obs = new double[][] {
+                { 0.0, 1.0, 2.0 },
+                { 3.0, 4.0, 5.0 },
+                { 6.0, 7.0, 8.0 },
+        };
+        Observation observation = buildObservation(obs);
+
+        double[][] nextObs = new double[][] {
+                { 10.0, 11.0, 12.0 },
+                { 0.0, 1.0, 2.0 },
+                { 3.0, 4.0, 5.0 },
+        };
+        Observation nextObservation = buildObservation(nextObs);
+
+        // Act
+        Transition transition = new Transition(observation, 123, 234.0, false, nextObservation);
+
+        // Assert
+        assertExpected(obs, transition.getObservation().getData());
+
+        assertExpected(nextObs[0], transition.getNextObservation());
+
+        assertEquals(123, transition.getAction());
+        assertEquals(234.0, transition.getReward(), 0.0001);
+    }
+
+    @Test
+    public void when_CallingBuildStackedObservationsAndShapeRankIs2_expect_2DResultWithObservationsStackedOnDimension0() {
+        // Arrange
+        List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>();
+
+        double[] obs1 = new double[] { 0.0, 1.0, 2.0 };
+        Observation observation1 = buildObservation(obs1);
+        Observation nextObservation1 = buildObservation(new double[] { 100.0, 101.0, 102.0 });
+        transitions.add(new Transition(observation1,0, 0.0, false, nextObservation1));
+
+        double[] obs2 = new double[] { 10.0, 11.0, 12.0 };
+        Observation observation2 = buildObservation(obs2);
+        Observation nextObservation2 = buildObservation(new double[] { 110.0, 111.0, 112.0 });
+        transitions.add(new Transition(observation2, 0, 0.0, false, nextObservation2));
+
+        // Act
+        INDArray result = Transition.buildStackedObservations(transitions);
+
+        // Assert
+        double[][] expected = new double[][] { obs1, obs2 };
+        assertExpected(expected, result);
+    }
+
+    @Test
+    public void when_CallingBuildStackedObservationsAndShapeRankIsGreaterThan2_expect_ResultWithOneMoreDimensionAndObservationsStackedOnDimension0() {
+        // Arrange
+        List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>();
+
+        double[][] obs1 = new double[][] {
+                { 0.0, 1.0, 2.0 },
+                { 3.0, 4.0, 5.0 },
+                { 6.0, 7.0, 8.0 },
+        };
+        Observation observation1 = buildObservation(obs1);
+
+        double[] nextObs1 = new double[] { 100.0, 101.0, 102.0 };
+        Observation nextObservation1 = buildNextObservation(obs1, nextObs1);
+
+        transitions.add(new Transition(observation1, 0, 0.0, false, nextObservation1));
+
+        double[][] obs2 = new double[][] {
+                { 10.0, 11.0, 12.0 },
+                { 13.0, 14.0, 15.0 },
+                { 16.0, 17.0, 18.0 },
+        };
+        Observation observation2 = buildObservation(obs2);
+
+        double[] nextObs2 = new double[] { 110.0, 111.0, 112.0 };
+        Observation nextObservation2 = buildNextObservation(obs2, nextObs2);
+        transitions.add(new Transition(observation2, 0, 0.0, false, nextObservation2));
+
+        // Act
+        INDArray result = Transition.buildStackedObservations(transitions);
+
+        // Assert
+        double[][][] expected = new double[][][] { obs1, obs2 };
+        assertExpected(expected, result);
+    }
+
+    @Test
+    public void when_CallingBuildStackedNextObservationsAndShapeRankIs2_expect_2DResultWithObservationsStackedOnDimension0() {
+        // Arrange
+        List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>();
+
+        double[] obs1 = new double[] { 0.0, 1.0, 2.0 };
+        double[] nextObs1 = new double[] { 100.0, 101.0, 102.0 };
+        Observation observation1 = buildObservation(obs1);
+        Observation nextObservation1 = buildObservation(nextObs1);
+        transitions.add(new Transition(observation1, 0, 0.0, false, nextObservation1));
+
+        double[] obs2 = new double[] { 10.0, 11.0, 12.0 };
+        double[] nextObs2 = new double[] { 110.0, 111.0, 112.0 };
+        Observation observation2 = buildObservation(obs2);
+        Observation nextObservation2 = buildObservation(nextObs2);
+        transitions.add(new Transition(observation2, 0, 0.0, false, nextObservation2));
+
+        // Act
+        INDArray result = Transition.buildStackedNextObservations(transitions);
+
+        // Assert
+        double[][] expected = new double[][] { nextObs1, nextObs2 };
+        assertExpected(expected, result);
+    }
+
+    @Test
+    public void when_CallingBuildStackedNextObservationsAndShapeRankIsGreaterThan2_expect_ResultWithOneMoreDimensionAndObservationsStackedOnDimension0() {
+        // Arrange
+        List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>();
+
+        double[][] obs1 = new double[][] {
+                { 0.0, 1.0, 2.0 },
+                { 3.0, 4.0, 5.0 },
+                { 6.0, 7.0, 8.0 },
+        };
+        Observation observation1 = buildObservation(obs1);
+
+        double[] nextObs1 = new double[] { 100.0, 101.0, 102.0 };
+        Observation nextObservation1 = buildNextObservation(obs1, nextObs1);
+
+        transitions.add(new Transition(observation1, 0, 0.0, false, nextObservation1));
+
+        double[][] obs2 = new double[][] {
+                { 10.0, 11.0, 12.0 },
+                { 13.0, 14.0, 15.0 },
+                { 16.0, 17.0, 18.0 },
+        };
+        Observation observation2 = buildObservation(obs2);
+
+        double[] nextObs2 = new double[] { 110.0, 111.0, 112.0 };
+        Observation nextObservation2 = buildNextObservation(obs2, nextObs2);
+
+        transitions.add(new Transition(observation2, 0, 0.0, false, nextObservation2));
+
+        // Act
+        INDArray result = Transition.buildStackedNextObservations(transitions);
+
+        // Assert
+        double[][][] expected = new double[][][] {
+                new double[][] { nextObs1, obs1[0], obs1[1] },
+                new double[][] { nextObs2, obs2[0], obs2[1] }
+        };
+        assertExpected(expected, result);
+    }
+
+    private Observation buildObservation(double[][] obs) {
+        INDArray[] history = new INDArray[] {
+                Nd4j.create(obs[0]).reshape(1, 3),
+                Nd4j.create(obs[1]).reshape(1, 3),
+                Nd4j.create(obs[2]).reshape(1, 3),
+        };
+        return new Observation(history);
+    }
+
+    private Observation buildObservation(double[] obs) {
+        return new Observation(new INDArray[] { Nd4j.create(obs).reshape(1, 3) });
+    }
+
+    private Observation buildNextObservation(double[][] obs, double[] nextObs) {
+        INDArray[] nextHistory = new INDArray[] {
+                Nd4j.create(nextObs).reshape(1, 3),
+                Nd4j.create(obs[0]).reshape(1, 3),
+                Nd4j.create(obs[1]).reshape(1, 3),
+        };
+        return new Observation(nextHistory);
+
+    }
+
+    private void assertExpected(double[] expected, INDArray actual) {
+        long[] shape = actual.shape();
+        assertEquals(2, shape.length);
+        assertEquals(1, shape[0]);
+        assertEquals(expected.length, shape[1]);
+        for(int i = 0; i < expected.length; ++i) {
+            assertEquals(expected[i], actual.getDouble(0, i), 0.0001);
+        }
+    }
+
+    private void assertExpected(double[][] expected, INDArray actual) {
+        long[] shape = actual.shape();
+        assertEquals(2, shape.length);
+        assertEquals(expected.length, shape[0]);
+        assertEquals(expected[0].length, shape[1]);
+
+        for(int i = 0; i < expected.length; ++i) {
+            double[] expectedLine = expected[i];
+            for(int j = 0; j < expectedLine.length; ++j) {
+                assertEquals(expectedLine[j], actual.getDouble(i, j), 0.0001);
+            }
+        }
+    }
+
+    private void assertExpected(double[][][] expected, INDArray actual) {
+        long[] shape = actual.shape();
+        assertEquals(3, shape.length);
+        assertEquals(expected.length, shape[0]);
+        assertEquals(expected[0].length, shape[1]);
+        assertEquals(expected[0][0].length, shape[2]);
+
+        for(int i = 0; i < expected.length; ++i) {
+            double[][] expected2D = expected[i];
+            for(int j = 0; j < expected2D.length; ++j) {
+                double[] expectedLine = expected2D[j];
+                for (int k = 0; k < expectedLine.length; ++k) {
+                    assertEquals(expectedLine[k], actual.getDouble(i, j, k), 0.0001);
+                }
+            }
+        }
+
+    }
+}
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscreteTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscreteTest.java
index f36a5f197..59c28551b 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscreteTest.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/QLearningDiscreteTest.java
@@ -40,7 +40,7 @@ public class QLearningDiscreteTest {
             new int[] { 1, 2, 3, 4, 1, 2, 3, 4, 1, 2, 3, 4, 1, 2, 3, 4 });
         MockMDP mdp = new MockMDP(observationSpace, random);
 
-        QLearning.QLConfiguration conf = new QLearning.QLConfiguration(0, 0, 0, 5, 1, 0,
+        QLearning.QLConfiguration conf = new QLearning.QLConfiguration(0, 24, 0, 5, 1, 1000,
                 0, 1.0, 0, 0, 0, 0, true);
         MockDataManager dataManager = new MockDataManager(false);
         MockExpReplay expReplay = new MockExpReplay();
@@ -48,15 +48,10 @@ public class QLearningDiscreteTest {
         IHistoryProcessor.Configuration hpConf = new IHistoryProcessor.Configuration(5, 4, 4, 4, 4, 0, 0, 2);
         MockHistoryProcessor hp = new MockHistoryProcessor(hpConf);
         sut.setHistoryProcessor(hp);
-        MockEncodable obs = new MockEncodable(-100);
         List<QLearning.QLStepReturn<MockEncodable>> results = new ArrayList<>();
 
         // Act
-        sut.initMdp();
-        for(int step = 0; step < 16; ++step) {
-            results.add(sut.trainStep(obs));
-            sut.incrementStep();
-        }
+        IDataManager.StatEntry result = sut.trainEpoch();
 
         // Assert
         // HistoryProcessor calls
@@ -65,7 +60,11 @@ public class QLearningDiscreteTest {
         for(int i = 0; i < expectedRecords.length; ++i) {
             assertEquals(expectedRecords[i], hp.recordCalls.get(i).getDouble(0), 0.0001);
         }
-        assertEquals(13, hp.addCallCount);
+        double[] expectedAdds = new double[] { 0.0, 2.0, 4.0, 6.0, 8.0, 9.0, 11.0, 13.0, 15.0, 17.0, 19.0, 21.0, 23.0 };
+        assertEquals(expectedAdds.length, hp.addCalls.size());
+        for(int i = 0; i < expectedAdds.length; ++i) {
+            assertEquals(expectedAdds[i], 255.0 * hp.addCalls.get(i).getDouble(0), 0.0001);
+        }
         assertEquals(0, hp.startMonitorCallCount);
         assertEquals(0, hp.stopMonitorCallCount);
 
@@ -75,14 +74,14 @@ public class QLearningDiscreteTest {
         assertEquals(234.0, dqn.fitParams.get(0).getSecond().getDouble(0), 0.001);
         assertEquals(14, dqn.outputParams.size());
         double[][] expectedDQNOutput = new double[][] {
-                new double[] { 0.0, 2.0, 4.0, 6.0, -100.0 },
-                new double[] { 2.0, 4.0, 6.0, -100.0, 9.0 },
-                new double[] { 2.0, 4.0, 6.0, -100.0, 9.0 },
-                new double[] { 4.0, 6.0, -100.0, 9.0, 11.0 },
-                new double[] { 6.0, -100.0, 9.0, 11.0, 13.0 },
-                new double[] { 6.0, -100.0, 9.0, 11.0, 13.0 },
-                new double[] { -100.0, 9.0, 11.0, 13.0, 15.0 },
-                new double[] { -100.0, 9.0, 11.0, 13.0, 15.0 },
+                new double[] { 0.0, 2.0, 4.0, 6.0, 8.0 },
+                new double[] { 2.0, 4.0, 6.0, 8.0, 9.0 },
+                new double[] { 2.0, 4.0, 6.0, 8.0, 9.0 },
+                new double[] { 4.0, 6.0, 8.0, 9.0, 11.0 },
+                new double[] { 6.0, 8.0, 9.0, 11.0, 13.0 },
+                new double[] { 6.0, 8.0, 9.0, 11.0, 13.0 },
+                new double[] { 8.0, 9.0, 11.0, 13.0, 15.0 },
+                new double[] { 8.0, 9.0, 11.0, 13.0, 15.0 },
                 new double[] { 9.0, 11.0, 13.0, 15.0, 17.0 },
                 new double[] { 9.0, 11.0, 13.0, 15.0, 17.0 },
                 new double[] { 11.0, 13.0, 15.0, 17.0, 19.0 },
@@ -108,13 +107,13 @@ public class QLearningDiscreteTest {
         // ExpReplay calls
         double[] expectedTrRewards = new double[] { 9.0, 21.0, 25.0, 29.0, 33.0, 37.0, 41.0, 45.0 };
         int[] expectedTrActions = new int[] { 1, 4, 2, 4, 4, 4, 4, 4 };
-        double[] expectedTrNextObservation = new double[] { 2.0, 4.0, 6.0, -100.0, 9.0, 11.0, 13.0, 15.0 };
+        double[] expectedTrNextObservation = new double[] { 2.0, 4.0, 6.0, 8.0, 9.0, 11.0, 13.0, 15.0 };
         double[][] expectedTrObservations = new double[][] {
-                new double[] { 0.0, 2.0, 4.0, 6.0, -100.0 },
-                new double[] { 2.0, 4.0, 6.0, -100.0, 9.0 },
-                new double[] { 4.0, 6.0, -100.0, 9.0, 11.0 },
-                new double[] { 6.0, -100.0, 9.0, 11.0, 13.0 },
-                new double[] { -100.0, 9.0, 11.0, 13.0, 15.0 },
+                new double[] { 0.0, 2.0, 4.0, 6.0, 8.0 },
+                new double[] { 2.0, 4.0, 6.0, 8.0, 9.0 },
+                new double[] { 4.0, 6.0, 8.0, 9.0, 11.0 },
+                new double[] { 6.0, 8.0, 9.0, 11.0, 13.0 },
+                new double[] { 8.0, 9.0, 11.0, 13.0, 15.0 },
                 new double[] { 9.0, 11.0, 13.0, 15.0, 17.0 },
                 new double[] { 11.0, 13.0, 15.0, 17.0, 19.0 },
                 new double[] { 13.0, 15.0, 17.0, 19.0, 21.0 },
@@ -123,26 +122,15 @@ public class QLearningDiscreteTest {
             Transition tr = expReplay.transitions.get(i);
             assertEquals(expectedTrRewards[i], tr.getReward(), 0.0001);
             assertEquals(expectedTrActions[i], tr.getAction());
-            assertEquals(expectedTrNextObservation[i], tr.getNextObservation().getDouble(0), 0.0001);
+            assertEquals(expectedTrNextObservation[i], 255.0 * tr.getNextObservation().getDouble(0), 0.0001);
             for(int j = 0; j < expectedTrObservations[i].length; ++j) {
-                assertEquals("row: "+ i + " col: " + j, expectedTrObservations[i][j], tr.getObservation()[j].getDouble(0), 0.0001);
+                assertEquals("row: "+ i + " col: " + j, expectedTrObservations[i][j], 255.0 * tr.getObservation().getData().getDouble(j, 0), 0.0001);
             }
         }
 
-        // trainStep results
-        assertEquals(16, results.size());
-        double[] expectedMaxQ = new double[] { 6.0, 9.0, 11.0, 13.0, 15.0, 17.0, 19.0, 21.0 };
-        double[] expectedRewards = new double[] { 9.0, 11.0, 13.0, 15.0, 17.0, 19.0, 21.0, 23.0 };
-        for(int i=0; i < 16; ++i) {
-            QLearning.QLStepReturn<MockEncodable> result = results.get(i);
-            if(i % 2 == 0) {
-                assertEquals(expectedMaxQ[i/2], 255.0 * result.getMaxQ(), 0.001);
-                assertEquals(expectedRewards[i/2], result.getStepReply().getReward(), 0.001);
-            }
-            else {
-                assertTrue(result.getMaxQ().isNaN());
-            }
-        }
+        // trainEpoch result
+        assertEquals(16, result.getStepCounter());
+        assertEquals(300.0, result.getReward(), 0.00001);
     }
 
     public static class TestQLearningDiscrete extends QLearningDiscrete<MockEncodable> {
@@ -163,5 +151,9 @@ public class QLearningDiscreteTest {
             this.expReplay = exp;
         }
 
+        @Override
+        public IDataManager.StatEntry trainEpoch() {
+            return super.trainEpoch();
+        }
     }
 }
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/DoubleDQNTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/DoubleDQNTest.java
index e598b66ca..bb8af1950 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/DoubleDQNTest.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/DoubleDQNTest.java
@@ -3,6 +3,7 @@ package org.deeplearning4j.rl4j.learning.sync.qlearning.discrete.TDTargetAlgorit
 import org.deeplearning4j.rl4j.learning.sync.Transition;
 import org.deeplearning4j.rl4j.learning.sync.support.MockDQN;
 import org.deeplearning4j.rl4j.learning.sync.support.MockTargetQNetworkSource;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.junit.Test;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.dataset.api.DataSet;
@@ -25,12 +26,12 @@ public class DoubleDQNTest {
 
         List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>() {
             {
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{1.1, 2.2})}, 0, 1.0, true, Nd4j.create(new double[]{11.0, 22.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{1.1, 2.2}),
+                        0, 1.0, true, buildObservation(new double[]{11.0, 22.0})));
             }
         };
 
         DoubleDQN sut = new DoubleDQN(targetQNetworkSource, 0.5);
-        sut.setNShape(new int[] { 1, 2 });
 
         // Act
         DataSet result = sut.computeTDTargets(transitions);
@@ -51,12 +52,12 @@ public class DoubleDQNTest {
 
         List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>() {
             {
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{1.1, 2.2})}, 0, 1.0, false, Nd4j.create(new double[]{11.0, 22.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{1.1, 2.2}),
+                        0, 1.0, false, buildObservation(new double[]{11.0, 22.0})));
             }
         };
 
         DoubleDQN sut = new DoubleDQN(targetQNetworkSource, 0.5);
-        sut.setNShape(new int[] { 1, 2 });
 
         // Act
         DataSet result = sut.computeTDTargets(transitions);
@@ -77,14 +78,16 @@ public class DoubleDQNTest {
 
         List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>() {
             {
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{1.1, 2.2})}, 0, 1.0, false, Nd4j.create(new double[]{11.0, 22.0})));
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{3.3, 4.4})}, 1, 2.0, false, Nd4j.create(new double[]{33.0, 44.0})));
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{5.5, 6.6})}, 0, 3.0, true, Nd4j.create(new double[]{55.0, 66.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{1.1, 2.2}),
+                        0, 1.0, false, buildObservation(new double[]{11.0, 22.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{3.3, 4.4}),
+                        1, 2.0, false, buildObservation(new double[]{33.0, 44.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{5.5, 6.6}),
+                        0, 3.0, true, buildObservation(new double[]{55.0, 66.0})));
             }
         };
 
         DoubleDQN sut = new DoubleDQN(targetQNetworkSource, 0.5);
-        sut.setNShape(new int[] { 3, 2 });
 
         // Act
         DataSet result = sut.computeTDTargets(transitions);
@@ -102,4 +105,7 @@ public class DoubleDQNTest {
 
     }
 
+    private Observation buildObservation(double[] data) {
+        return new Observation(new INDArray[]{Nd4j.create(data).reshape(1, 2)});
+    }
 }
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/StandardDQNTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/StandardDQNTest.java
index 02dcdf6fd..d2608437d 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/StandardDQNTest.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/qlearning/discrete/TDTargetAlgorithm/StandardDQNTest.java
@@ -3,6 +3,7 @@ package org.deeplearning4j.rl4j.learning.sync.qlearning.discrete.TDTargetAlgorit
 import org.deeplearning4j.rl4j.learning.sync.Transition;
 import org.deeplearning4j.rl4j.learning.sync.support.MockDQN;
 import org.deeplearning4j.rl4j.learning.sync.support.MockTargetQNetworkSource;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.junit.Test;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.dataset.api.DataSet;
@@ -24,12 +25,12 @@ public class StandardDQNTest {
 
         List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>() {
             {
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{1.1, 2.2})}, 0, 1.0, true, Nd4j.create(new double[]{11.0, 22.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{1.1, 2.2}),
+                        0, 1.0, true, buildObservation(new double[]{11.0, 22.0})));
             }
         };
 
         StandardDQN sut = new StandardDQN(targetQNetworkSource, 0.5);
-        sut.setNShape(new int[] { 1, 2 });
 
         // Act
         DataSet result = sut.computeTDTargets(transitions);
@@ -50,12 +51,12 @@ public class StandardDQNTest {
 
         List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>() {
             {
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{1.1, 2.2})}, 0, 1.0, false, Nd4j.create(new double[]{11.0, 22.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{1.1, 2.2}),
+                        0, 1.0, false, buildObservation(new double[]{11.0, 22.0})));
             }
         };
 
         StandardDQN sut = new StandardDQN(targetQNetworkSource, 0.5);
-        sut.setNShape(new int[] { 1, 2 });
 
         // Act
         DataSet result = sut.computeTDTargets(transitions);
@@ -76,14 +77,16 @@ public class StandardDQNTest {
 
         List<Transition<Integer>> transitions = new ArrayList<Transition<Integer>>() {
             {
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{1.1, 2.2})}, 0, 1.0, false, Nd4j.create(new double[]{11.0, 22.0})));
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{3.3, 4.4})}, 1, 2.0, false, Nd4j.create(new double[]{33.0, 44.0})));
-                add(new Transition<Integer>(new INDArray[]{Nd4j.create(new double[]{5.5, 6.6})}, 0, 3.0, true, Nd4j.create(new double[]{55.0, 66.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{1.1, 2.2}),
+                        0, 1.0, false, buildObservation(new double[]{11.0, 22.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{3.3, 4.4}),
+                        1, 2.0, false, buildObservation(new double[]{33.0, 44.0})));
+                add(new Transition<Integer>(buildObservation(new double[]{5.5, 6.6}),
+                        0, 3.0, true, buildObservation(new double[]{55.0, 66.0})));
             }
         };
 
         StandardDQN sut = new StandardDQN(targetQNetworkSource, 0.5);
-        sut.setNShape(new int[] { 3, 2 });
 
         // Act
         DataSet result = sut.computeTDTargets(transitions);
@@ -101,4 +104,8 @@ public class StandardDQNTest {
 
     }
 
+    private Observation buildObservation(double[] data) {
+        return new Observation(new INDArray[]{Nd4j.create(data).reshape(1, 2)});
+    }
+
 }
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/support/MockDQN.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/support/MockDQN.java
index 08957fee5..e5a87cb93 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/support/MockDQN.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/learning/sync/support/MockDQN.java
@@ -1,12 +1,11 @@
 package org.deeplearning4j.rl4j.learning.sync.support;
 
-import lombok.Setter;
 import org.deeplearning4j.nn.api.NeuralNetwork;
 import org.deeplearning4j.nn.gradient.Gradient;
 import org.deeplearning4j.rl4j.network.NeuralNet;
 import org.deeplearning4j.rl4j.network.dqn.IDQN;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.nd4j.linalg.api.ndarray.INDArray;
-import org.nd4j.linalg.factory.Nd4j;
 
 import java.io.IOException;
 import java.io.OutputStream;
@@ -57,6 +56,11 @@ public class MockDQN implements IDQN {
         return batch;
     }
 
+    @Override
+    public INDArray output(Observation observation) {
+        return this.output(observation.getData());
+    }
+
     @Override
     public INDArray[] outputAll(INDArray batch) {
         return new INDArray[0];
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/policy/PolicyTest.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/policy/PolicyTest.java
index 2ea50dd9d..ffb3680bb 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/policy/PolicyTest.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/policy/PolicyTest.java
@@ -197,7 +197,7 @@ public class PolicyTest {
         assertEquals(465.0, totalReward, 0.0001);
 
         // HistoryProcessor
-        assertEquals(27, hp.addCallCount);
+        assertEquals(27, hp.addCalls.size());
         assertEquals(31, hp.recordCalls.size());
         for(int i=0; i <= 30; ++i) {
             assertEquals((double)i, hp.recordCalls.get(i).getDouble(0), 0.0001);
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockDQN.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockDQN.java
index f4080c57f..680f9a653 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockDQN.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockDQN.java
@@ -4,6 +4,7 @@ import org.deeplearning4j.nn.api.NeuralNetwork;
 import org.deeplearning4j.nn.gradient.Gradient;
 import org.deeplearning4j.rl4j.network.NeuralNet;
 import org.deeplearning4j.rl4j.network.dqn.IDQN;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.primitives.Pair;
 
@@ -48,6 +49,11 @@ public class MockDQN implements IDQN {
         return batch;
     }
 
+    @Override
+    public INDArray output(Observation observation) {
+        return this.output(observation.getData());
+    }
+
     @Override
     public INDArray[] outputAll(INDArray batch) {
         return new INDArray[0];
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockHistoryProcessor.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockHistoryProcessor.java
index dbdb1f6a9..da435c0da 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockHistoryProcessor.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockHistoryProcessor.java
@@ -2,6 +2,7 @@ package org.deeplearning4j.rl4j.support;
 
 import org.apache.commons.collections4.queue.CircularFifoQueue;
 import org.deeplearning4j.rl4j.learning.IHistoryProcessor;
+import org.deeplearning4j.rl4j.observation.Observation;
 import org.nd4j.linalg.api.ndarray.INDArray;
 import org.nd4j.linalg.factory.Nd4j;
 
@@ -9,7 +10,6 @@ import java.util.ArrayList;
 
 public class MockHistoryProcessor implements IHistoryProcessor {
 
-    public int addCallCount = 0;
     public int startMonitorCallCount = 0;
     public int stopMonitorCallCount = 0;
 
@@ -17,12 +17,14 @@ public class MockHistoryProcessor implements IHistoryProcessor {
     private final CircularFifoQueue<INDArray> history;
 
     public final ArrayList<INDArray> recordCalls;
+    public final ArrayList<INDArray> addCalls;
 
     public MockHistoryProcessor(Configuration config) {
 
         this.config = config;
         history = new CircularFifoQueue<>(config.getHistoryLength());
         recordCalls = new ArrayList<INDArray>();
+        addCalls = new ArrayList<INDArray>();
     }
 
     @Override
@@ -46,7 +48,7 @@ public class MockHistoryProcessor implements IHistoryProcessor {
 
     @Override
     public void add(INDArray image) {
-        ++addCallCount;
+        addCalls.add(image);
         history.add(image);
     }
 
diff --git a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockMDP.java b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockMDP.java
index 5deb72b2a..c0ac23a2d 100644
--- a/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockMDP.java
+++ b/rl4j/rl4j-core/src/test/java/org/deeplearning4j/rl4j/support/MockMDP.java
@@ -2,7 +2,6 @@ package org.deeplearning4j.rl4j.support;
 
 import org.deeplearning4j.gym.StepReply;
 import org.deeplearning4j.rl4j.mdp.MDP;
-import org.deeplearning4j.rl4j.space.ActionSpace;
 import org.deeplearning4j.rl4j.space.DiscreteSpace;
 import org.deeplearning4j.rl4j.space.ObservationSpace;
 import org.nd4j.linalg.api.rng.Random;