diff --git a/pkg/epp/handlers/request_test.go b/pkg/epp/handlers/request_test.go
new file mode 100644
index 00000000..8675b64c
--- /dev/null
+++ b/pkg/epp/handlers/request_test.go
@@ -0,0 +1,184 @@
+/*
+Copyright 2025 The Kubernetes Authors.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package handlers
+
+import (
+	"context"
+	"strings"
+	"testing"
+	"time"
+
+	"github.com/google/go-cmp/cmp"
+	corev1 "k8s.io/api/core/v1"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	clientgoscheme "k8s.io/client-go/kubernetes/scheme"
+	"sigs.k8s.io/controller-runtime/pkg/client/fake"
+	"sigs.k8s.io/gateway-api-inference-extension/api/v1alpha2"
+	backendmetrics "sigs.k8s.io/gateway-api-inference-extension/pkg/epp/backend/metrics"
+	"sigs.k8s.io/gateway-api-inference-extension/pkg/epp/datastore"
+	"sigs.k8s.io/gateway-api-inference-extension/pkg/epp/scheduling"
+	errutil "sigs.k8s.io/gateway-api-inference-extension/pkg/epp/util/error"
+	logutil "sigs.k8s.io/gateway-api-inference-extension/pkg/epp/util/logging"
+	testutil "sigs.k8s.io/gateway-api-inference-extension/pkg/epp/util/testing"
+)
+
+const (
+	DefaultDestinationEndpointHintMetadataNamespace = "envoy.lb"                       // default for --destinationEndpointHintMetadataNamespace
+	DefaultDestinationEndpointHintKey               = "x-gateway-destination-endpoint" // default for --destinationEndpointHintKey
+)
+
+func TestHandleRequestBody(t *testing.T) {
+	ctx := logutil.NewTestLoggerIntoContext(context.Background())
+
+	// Setup datastore
+	tsModel := "food-review"
+	modelWithTarget := "food-review-0"
+	model1 := testutil.MakeInferenceModel("model1").
+		CreationTimestamp(metav1.Unix(1000, 0)).
+		ModelName(tsModel).ObjRef()
+	model2 := testutil.MakeInferenceModel("model2").
+		CreationTimestamp(metav1.Unix(1000, 0)).
+		ModelName(modelWithTarget).ObjRef()
+	pmf := backendmetrics.NewPodMetricsFactory(&backendmetrics.FakePodMetricsClient{}, time.Second)
+	ds := datastore.NewDatastore(t.Context(), pmf)
+	ds.ModelSetIfOlder(model1)
+	ds.ModelSetIfOlder(model2)
+
+	pool := &v1alpha2.InferencePool{
+		Spec: v1alpha2.InferencePoolSpec{
+			TargetPortNumber: int32(8000),
+			Selector: map[v1alpha2.LabelKey]v1alpha2.LabelValue{
+				"some-key": "some-val",
+			},
+		},
+	}
+	pod := &corev1.Pod{ObjectMeta: metav1.ObjectMeta{Name: "pod1"}, Status: corev1.PodStatus{PodIP: "address-1"}}
+	scheme := runtime.NewScheme()
+	_ = clientgoscheme.AddToScheme(scheme)
+	fakeClient := fake.NewClientBuilder().
+		WithScheme(scheme).
+		Build()
+	if err := ds.PoolSet(ctx, fakeClient, pool); err != nil {
+		t.Error(err, "Error while setting inference pool")
+	}
+	ds.PodUpdateOrAddIfNotExist(pod)
+
+	tests := []struct {
+		name         string
+		reqBodyMap   map[string]interface{}
+		wantErrCode  string
+		wantReqCtx   *RequestContext
+		wantRespBody map[string]interface{}
+	}{
+		{
+			name: "successful request",
+			reqBodyMap: map[string]interface{}{
+				"model":  tsModel,
+				"prompt": "test prompt",
+			},
+			wantReqCtx: &RequestContext{
+				Model:               tsModel,
+				ResolvedTargetModel: tsModel,
+				TargetPod:           "/pod1",
+				TargetEndpoint:      "address-1:8000",
+			},
+			wantRespBody: map[string]interface{}{
+				"model":  tsModel,
+				"prompt": "test prompt",
+			},
+		},
+		{
+			name: "successful request with target model",
+			reqBodyMap: map[string]interface{}{
+				"model":  modelWithTarget,
+				"prompt": "test prompt",
+			},
+			wantReqCtx: &RequestContext{
+				Model:               modelWithTarget,
+				ResolvedTargetModel: modelWithTarget,
+				TargetPod:           "/pod1",
+				TargetEndpoint:      "address-1:8000",
+			},
+			wantRespBody: map[string]interface{}{
+				"model":  modelWithTarget,
+				"prompt": "test prompt",
+			},
+		},
+		{
+			name:        "no model defined, expect err",
+			wantErrCode: errutil.BadRequest,
+		},
+		{
+			name: "invalid model defined, expect err",
+			reqBodyMap: map[string]interface{}{
+				"model":  "non-existent-model",
+				"prompt": "test prompt",
+			},
+			wantErrCode: errutil.BadConfiguration,
+		},
+		{
+			name: "invalid target defined, expect err",
+			reqBodyMap: map[string]interface{}{
+				"model":  "food-review-1",
+				"prompt": "test prompt",
+			},
+			wantErrCode: errutil.BadConfiguration,
+		},
+	}
+
+	for _, test := range tests {
+		t.Run(test.name, func(t *testing.T) {
+			server := NewStreamingServer(scheduling.NewScheduler(ds), DefaultDestinationEndpointHintMetadataNamespace, DefaultDestinationEndpointHintKey, ds)
+			reqCtx := &RequestContext{
+				Request: &Request{
+					Body: test.reqBodyMap,
+				},
+			}
+			reqCtx, err := server.HandleRequestBody(ctx, reqCtx)
+
+			if test.wantErrCode != "" {
+				if err == nil {
+					t.Fatalf("HandleRequestBody should have returned an error containing '%s', but got nil", test.wantErrCode)
+				}
+				if !strings.Contains(err.Error(), test.wantErrCode) {
+					t.Fatalf("HandleRequestBody returned error '%v', which does not contain expected substring '%s'", err, test.wantErrCode)
+				}
+				return
+			}
+
+			if err != nil {
+				t.Fatalf("HandleRequestBody returned unexpected error: %v", err)
+			}
+
+			if test.wantReqCtx != nil {
+				if diff := cmp.Diff(test.wantReqCtx.Model, reqCtx.Model); diff != "" {
+					t.Errorf("HandleRequestBody returned unexpected reqCtx.Model, diff(-want, +got): %v", diff)
+				}
+				if diff := cmp.Diff(test.wantReqCtx.ResolvedTargetModel, reqCtx.ResolvedTargetModel); diff != "" {
+					t.Errorf("HandleRequestBody returned unexpected reqCtx.ResolvedTargetModel, diff(-want, +got): %v", diff)
+				}
+				if diff := cmp.Diff(test.wantReqCtx.TargetPod, reqCtx.TargetPod); diff != "" {
+					t.Errorf("HandleRequestBody returned unexpected reqCtx.TargetPod, diff(-want, +got): %v", diff)
+				}
+				if diff := cmp.Diff(test.wantReqCtx.TargetEndpoint, reqCtx.TargetEndpoint); diff != "" {
+					t.Errorf("HandleRequestBody returned unexpected reqCtx.TargetEndpoint, diff(-want, +got): %v", diff)
+				}
+			}
+		})
+	}
+}