diff --git a/ethcore/light/src/client/header_chain.rs b/ethcore/light/src/client/header_chain.rs
new file mode 100644
index 000000000..11e7ea79e
--- /dev/null
+++ b/ethcore/light/src/client/header_chain.rs
@@ -0,0 +1,185 @@
+// Copyright 2015, 2016 Parity Technologies (UK) Ltd.
+// This file is part of Parity.
+
+// Parity is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Parity is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+// You should have received a copy of the GNU General Public License
+// along with Parity.  If not, see <http://www.gnu.org/licenses/>.
+
+//! Light client header chain.
+//!
+//! Unlike a full node's `BlockChain` this doesn't store much in the database.
+//! It stores candidates for the last 2048-4096 blocks as well as CHT roots for
+//! historical blocks all the way to the genesis.
+//!
+//! This is separate from the `BlockChain` for two reasons:
+//!   - It stores only headers (and a pruned subset of them)
+//!   - To allow for flexibility in the database layout once that's incorporated.
+// TODO: use DB instead of memory.
+
+use std::collections::{BTreeMap, HashMap};
+
+use ethcore::header::Header;
+use ethcore::error::BlockError;
+use ethcore::ids::BlockId;
+use ethcore::views::HeaderView;
+use util::{Bytes, H256, U256, Mutex, RwLock};
+
+/// Delay this many blocks before producing a CHT.
+const CHT_DELAY: u64 = 2048;
+
+/// Generate CHT roots of this size.
+// TODO: move into more generic module.
+const CHT_SIZE: u64 = 2048;
+
+#[derive(Debug, Clone)]
+struct BestBlock {
+	hash: H256,
+	number: u64,
+	total_difficulty: U256,
+}
+
+// candidate block description.
+struct Candidate {
+	hash: H256,
+	parent_hash: H256,
+	total_difficulty: U256,
+}
+
+struct Entry {
+	candidates: Vec<Candidate>,
+	canonical_hash: H256,
+}
+
+/// Header chain. See module docs for more details.
+pub struct HeaderChain {
+	genesis_header: Bytes, // special-case the genesis.
+	candidates: RwLock<BTreeMap<u64, Entry>>,
+	headers: RwLock<HashMap<H256, Bytes>>,
+	best_block: RwLock<BestBlock>,
+	cht_roots: Mutex<Vec<H256>>,
+}
+
+impl HeaderChain {
+	/// Create a new header chain given this genesis block.
+	pub fn new(genesis: &[u8]) -> Self {
+		let g_view = HeaderView::new(genesis);
+
+		HeaderChain {
+			genesis_header: genesis.to_owned(),
+			best_block: RwLock::new(BestBlock {
+				hash: g_view.hash(),
+				number: 0,
+				total_difficulty: g_view.difficulty(),
+			}),
+			candidates: RwLock::new(BTreeMap::new()),
+			headers: RwLock::new(HashMap::new()),
+			cht_roots: Mutex::new(Vec::new()),
+		}
+	}
+
+	/// Insert a pre-verified header.
+	pub fn insert(&self, header: Bytes) -> Result<(), BlockError> {
+		let view = HeaderView::new(&header);
+		let hash = view.hash();
+		let number = view.number();
+		let parent_hash = view.parent_hash();
+
+		// find parent details.
+		let parent_td = {
+			if number == 1 {
+				let g_view = HeaderView::new(&self.genesis_header);
+				g_view.difficulty()
+			} else {
+				let maybe_td = self.candidates.read().get(&(number - 1))
+					.and_then(|entry| entry.candidates.iter().find(|c| c.hash == parent_hash))
+					.map(|c| c.total_difficulty);
+
+				match maybe_td {
+					Some(td) => td,
+					None => return Err(BlockError::UnknownParent(parent_hash)),
+				}
+			}
+		};
+
+		let total_difficulty = parent_td + view.difficulty();
+
+		// insert headers and candidates entries.
+		let mut candidates = self.candidates.write();
+		candidates.entry(number).or_insert_with(|| Entry { candidates: Vec::new(), canonical_hash: hash})
+			.candidates.push(Candidate {
+				hash: hash,
+				parent_hash: parent_hash,
+				total_difficulty: total_difficulty,
+		});
+
+		self.headers.write().insert(hash, header.clone());
+
+		// reorganize ancestors so canonical entries are first in their
+		// respective candidates vectors.
+		if self.best_block.read().total_difficulty < total_difficulty {
+			let mut canon_hash = hash;
+			for (_, entry) in candidates.iter_mut().rev().skip_while(|&(height, _)| *height > number) {
+				if entry.canonical_hash == canon_hash { break; }
+
+				let canon = entry.candidates.iter().find(|x| x.hash == canon_hash)
+					.expect("blocks are only inserted if parent is present; or this is the block we just added; qed");
+
+				// what about reorgs > CHT_SIZE + CHT_DELAY?
+				canon_hash = canon.parent_hash;
+			}
+
+			*self.best_block.write() = BestBlock {
+				hash: hash,
+				number: number,
+				total_difficulty: total_difficulty,
+			};
+
+			// produce next CHT root if it's time.
+			let earliest_era = *candidates.keys().next().expect("at least one era just created; qed");
+			if earliest_era + CHT_DELAY + CHT_SIZE < number {
+				let values: Vec<_> = (0..CHT_SIZE).map(|x| x + earliest_era)
+					.map(|x| candidates.remove(&x).map(|entry| (x, entry)))
+					.map(|x| x.expect("all eras stored are sequential with no gaps; qed"))
+					.map(|(x, entry)| (::rlp::encode(&x), ::rlp::encode(&entry.canonical_hash)))
+					.map(|(k, v)| (k.to_vec(), v.to_vec()))
+					.collect();
+
+				let cht_root = ::util::triehash::trie_root(values);
+				debug!(target: "chain", "Produced CHT {} root: {:?}", (earliest_era - 1) % CHT_SIZE, cht_root);
+
+				self.cht_roots.lock().push(cht_root);
+			}
+		}
+
+		Ok(())
+	}
+
+	/// Get a block header. In the case of query by number, only canonical blocks
+	/// will be returned.
+	pub fn block_header(&self, id: BlockId) -> Option<Bytes> {
+		match id {
+			BlockId::Earliest | BlockId::Number(0) => Some(self.genesis_header.clone()),
+			BlockId::Hash(hash) => self.headers.read().get(&hash).map(|x| x.to_vec()),
+			BlockId::Number(num) => {
+				if self.best_block.read().number < num { return None }
+
+				self.candidates.read().get(&num).map(|entry| entry.canonical_hash)
+					.and_then(|hash| self.headers.read().get(&hash).map(|x| x.to_vec()))
+			}
+			BlockId::Latest | BlockId::Pending => {
+				let hash = self.best_block.read().hash;
+				self.headers.read().get(&hash).map(|x| x.to_vec())
+			}
+		}
+	}
+
+}
diff --git a/ethcore/light/src/client.rs b/ethcore/light/src/client/mod.rs
similarity index 93%
rename from ethcore/light/src/client.rs
rename to ethcore/light/src/client/mod.rs
index 73e85b31c..206e7652a 100644
--- a/ethcore/light/src/client.rs
+++ b/ethcore/light/src/client/mod.rs
@@ -34,6 +34,8 @@ use util::{Bytes, Mutex};
 use provider::Provider;
 use request;
 
+mod header_chain;
+
 /// Light client implementation.
 pub struct Client {
 	_engine: Arc<Engine>,
@@ -58,7 +60,7 @@ impl Client {
 	/// Import a local transaction.
 	pub fn import_own_transaction(&self, tx: SignedTransaction) {
 		self.tx_pool.lock().insert(tx.hash(), tx);
-	} 
+	}
 
 	/// Fetch a vector of all pending transactions.
 	pub fn pending_transactions(&self) -> Vec<SignedTransaction> {
@@ -74,6 +76,16 @@ impl Client {
 	pub fn queue_info(&self) -> QueueInfo {
 		self.header_queue.queue_info()
 	}
+
+	/// Best block number.
+	pub fn best_block_number(&self) -> u64 {
+		0
+	}
+
+	/// Best block hash.
+	pub fn best_block_hash(&self) -> u64 {
+		unimplemented!()
+	}
 }
 
 // dummy implementation -- may draw from canonical cache further on.
@@ -115,6 +127,6 @@ impl Provider for Client {
 	}
 
 	fn pending_transactions(&self) -> Vec<SignedTransaction> {
-		Vec::new()
+		Client::pending_transactions(self)
 	}
-}
\ No newline at end of file
+}