diff --git a/bin/reth/src/node/mod.rs b/bin/reth/src/node/mod.rs
index 7169993283..45bf5d7eb8 100644
--- a/bin/reth/src/node/mod.rs
+++ b/bin/reth/src/node/mod.rs
@@ -23,7 +23,8 @@ use reth_primitives::{BlockNumber, ChainSpec, NodeRecord, H256};
 use reth_stages::{
     metrics::HeaderMetrics,
     stages::{
-        bodies::BodyStage, execution::ExecutionStage, headers::HeaderStage,
+        bodies::BodyStage, execution::ExecutionStage, hashing_account::AccountHashingStage,
+        hashing_storage::StorageHashingStage, headers::HeaderStage, merkle::MerkleStage,
         sender_recovery::SenderRecoveryStage, total_difficulty::TotalDifficultyStage,
     },
     PipelineEvent, StageId,
@@ -181,7 +182,13 @@ impl Command {
             .push(ExecutionStage {
                 chain_spec: self.chain.clone(),
                 commit_threshold: config.stages.execution.commit_threshold,
-            });
+            })
+            // This Merkle stage is used only on unwind
+            .push(MerkleStage { is_execute: false })
+            .push(AccountHashingStage { clean_threshold: 500_000, commit_threshold: 100_000 })
+            .push(StorageHashingStage { clean_threshold: 500_000, commit_threshold: 100_000 })
+            // This merkle stage is used only for execute
+            .push(MerkleStage { is_execute: true });
 
         if let Some(tip) = self.tip {
             debug!(target: "reth::cli", %tip, "Tip manually set");
diff --git a/crates/interfaces/src/test_utils/generators.rs b/crates/interfaces/src/test_utils/generators.rs
index 8624478f5c..d6e6c2e650 100644
--- a/crates/interfaces/src/test_utils/generators.rs
+++ b/crates/interfaces/src/test_utils/generators.rs
@@ -1,7 +1,7 @@
 use rand::{distributions::uniform::SampleRange, thread_rng, Rng};
 use reth_primitives::{
-    proofs, Address, Bytes, Header, SealedBlock, SealedHeader, Signature, Transaction,
-    TransactionKind, TransactionSigned, TxLegacy, H256, U256,
+    proofs, Account, Address, Bytes, Header, SealedBlock, SealedHeader, Signature, Transaction,
+    TransactionKind, TransactionSigned, TxLegacy, H160, H256, U256,
 };
 use secp256k1::{KeyPair, Message as SecpMessage, Secp256k1, SecretKey};
 
@@ -164,6 +164,24 @@ pub fn random_block_range(
     blocks
 }
 
+/// Generate random Externaly Owned Account (EOA account without contract).
+pub fn random_eoa_account() -> (Address, Account) {
+    let nonce: u64 = rand::random();
+    let balance = U256::from(rand::random::<u32>());
+    let addr = H160::from(rand::random::<u64>());
+
+    (addr, Account { nonce, balance, bytecode_hash: None })
+}
+
+/// Docs
+pub fn random_eoa_account_range(acc_range: &mut std::ops::Range<u64>) -> Vec<(Address, Account)> {
+    let mut accounts = Vec::with_capacity(acc_range.end.saturating_sub(acc_range.start) as usize);
+    for _ in acc_range {
+        accounts.push(random_eoa_account())
+    }
+    accounts
+}
+
 #[cfg(test)]
 mod test {
     use std::str::FromStr;
diff --git a/crates/stages/src/stages/hashing_account.rs b/crates/stages/src/stages/hashing_account.rs
new file mode 100644
index 0000000000..06b1e55405
--- /dev/null
+++ b/crates/stages/src/stages/hashing_account.rs
@@ -0,0 +1,398 @@
+use crate::{
+    db::Transaction, ExecInput, ExecOutput, Stage, StageError, StageId, UnwindInput, UnwindOutput,
+};
+use reth_db::{
+    cursor::{DbCursorRO, DbCursorRW},
+    database::Database,
+    tables,
+    transaction::{DbTx, DbTxMut},
+};
+use reth_primitives::{keccak256, Account, Address, H160};
+use std::{
+    collections::{BTreeMap, BTreeSet},
+    fmt::Debug,
+};
+use tracing::*;
+
+const ACCOUNT_HASHING: StageId = StageId("AccountHashingStage");
+
+/// Account hashing stage hashes plain account.
+/// This is preparation before generating intermediate hashes and calculating Merkle tree root.
+#[derive(Debug)]
+pub struct AccountHashingStage {
+    /// The threshold for switching from incremental hashing
+    /// of changes to whole storage hashing. Num of transitions.
+    pub clean_threshold: u64,
+    /// The size of inserted items after which the control
+    /// flow will be returned to the pipeline for commit.
+    pub commit_threshold: u64,
+}
+
+#[async_trait::async_trait]
+impl<DB: Database> Stage<DB> for AccountHashingStage {
+    /// Return the id of the stage
+    fn id(&self) -> StageId {
+        ACCOUNT_HASHING
+    }
+
+    /// Execute the stage.
+    async fn execute(
+        &mut self,
+        tx: &mut Transaction<'_, DB>,
+        input: ExecInput,
+    ) -> Result<ExecOutput, StageError> {
+        let stage_progress = input.stage_progress.unwrap_or_default();
+        let previous_stage_progress = input.previous_stage_progress();
+
+        // read account changeset, merge it into one changeset and calculate account hashes.
+        let from_transition = tx.get_block_transition(stage_progress)?;
+        let to_transition = tx.get_block_transition(previous_stage_progress)?;
+
+        // if there are more blocks then threshold it is faster to go over Plain state and hash all
+        // account otherwise take changesets aggregate the sets and apply hashing to
+        // AccountHashing table
+        if to_transition - from_transition > self.clean_threshold {
+            // clear table, load all accounts and hash it
+            tx.clear::<tables::HashedAccount>()?;
+            tx.commit()?;
+
+            let mut first_key = H160::zero();
+            loop {
+                let next_key = {
+                    let mut accounts = tx.cursor_read::<tables::PlainAccountState>()?;
+
+                    let hashed_batch = accounts
+                        .walk(first_key)?
+                        .take(self.commit_threshold as usize)
+                        .map(|res| res.map(|(address, account)| (keccak256(address), account)))
+                        .collect::<Result<BTreeMap<_, _>, _>>()?;
+
+                    // next key of iterator
+                    let next_key = accounts.next()?;
+
+                    let mut hashes = tx.cursor_write::<tables::HashedAccount>()?;
+                    // iterate and append presorted hashed accounts
+                    hashed_batch.into_iter().try_for_each(|(k, v)| hashes.append(k, v))?;
+                    next_key
+                };
+                tx.commit()?;
+                if let Some((next_key, _)) = next_key {
+                    first_key = next_key;
+                    continue
+                }
+                break
+            }
+        } else {
+            // Aggregate all transition changesets and and make list of account that have been
+            // changed.
+            tx.cursor_read::<tables::AccountChangeSet>()?
+                .walk(from_transition)?
+                .take_while(|res| res.as_ref().map(|(k, _)| *k < to_transition).unwrap_or_default())
+                .collect::<Result<Vec<_>, _>>()?
+                .into_iter()
+                // fold all account to one set of changed accounts
+                .fold(BTreeSet::new(), |mut accounts: BTreeSet<Address>, (_, account_before)| {
+                    accounts.insert(account_before.address);
+                    accounts
+                })
+                .into_iter()
+                // iterate over plain state and get newest value.
+                // Assumption we are okay to make is that plainstate represent
+                // `previous_stage_progress` state.
+                .map(|address| tx.get::<tables::PlainAccountState>(address).map(|a| (address, a)))
+                .collect::<Result<Vec<_>, _>>()?
+                .into_iter()
+                .try_for_each(|(address, account)| {
+                    let hashed_address = keccak256(address);
+                    if let Some(account) = account {
+                        tx.put::<tables::HashedAccount>(hashed_address, account)
+                    } else {
+                        tx.delete::<tables::HashedAccount>(hashed_address, None).map(|_| ())
+                    }
+                })?;
+        }
+
+        info!(target: "sync::stages::hashing_account", "Stage finished");
+        Ok(ExecOutput { stage_progress: input.previous_stage_progress(), done: true })
+    }
+
+    /// Unwind the stage.
+    async fn unwind(
+        &mut self,
+        tx: &mut Transaction<'_, DB>,
+        input: UnwindInput,
+    ) -> Result<UnwindOutput, StageError> {
+        // There is no threshold on account unwind, we will always take changesets and
+        // apply past values to HashedAccount table.
+
+        let from_transition_rev = tx.get_block_transition(input.unwind_to)?;
+        let to_transition_rev = tx.get_block_transition(input.stage_progress)?;
+
+        // Aggregate all transition changesets and and make list of account that have been changed.
+        tx.cursor_read::<tables::AccountChangeSet>()?
+            .walk(from_transition_rev)?
+            .take_while(|res| res.as_ref().map(|(k, _)| *k < to_transition_rev).unwrap_or_default())
+            .collect::<Result<Vec<_>, _>>()?
+            .into_iter()
+            .rev()
+            // fold all account to get the old balance/nonces and account that needs to be removed
+            .fold(
+                BTreeMap::new(),
+                |mut accounts: BTreeMap<Address, Option<Account>>, (_, account_before)| {
+                    accounts.insert(account_before.address, account_before.info);
+                    accounts
+                },
+            )
+            .into_iter()
+            // hash addresses and collect it inside sorted BTreeMap.
+            // We are doing keccak only once per address.
+            .map(|(address, account)| (keccak256(address), account))
+            .collect::<BTreeMap<_, _>>()
+            .into_iter()
+            // Apply values to HashedState (if Account is None remove it);
+            .try_for_each(|(hashed_address, account)| {
+                if let Some(account) = account {
+                    tx.put::<tables::HashedAccount>(hashed_address, account)
+                } else {
+                    tx.delete::<tables::HashedAccount>(hashed_address, None).map(|_| ())
+                }
+            })?;
+
+        Ok(UnwindOutput { stage_progress: input.unwind_to })
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use crate::test_utils::{
+        stage_test_suite_ext, ExecuteStageTestRunner, TestRunnerError, UnwindStageTestRunner,
+        PREV_STAGE_ID,
+    };
+    use assert_matches::assert_matches;
+    use reth_interfaces::test_utils::generators::random_block_range;
+    use reth_primitives::{Account, SealedBlock, H256, U256};
+    use reth_provider::insert_canonical_block;
+    use test_utils::*;
+
+    stage_test_suite_ext!(AccountHashingTestRunner);
+
+    #[tokio::test]
+    async fn execute_below_clean_threshold() {
+        let (previous_stage, stage_progress) = (20, 10);
+        // Set up the runner
+        let mut runner = AccountHashingTestRunner::default();
+        runner.set_clean_threshold(1);
+
+        let input = ExecInput {
+            previous_stage: Some((PREV_STAGE_ID, previous_stage)),
+            stage_progress: Some(stage_progress),
+        };
+
+        runner.seed_execution(input).expect("failed to seed execution");
+
+        let rx = runner.execute(input);
+        let result = rx.await.unwrap();
+
+        assert_matches!(result, Ok(ExecOutput {done, stage_progress}) if done && stage_progress == previous_stage);
+
+        // Validate the stage execution
+        assert!(runner.validate_execution(input, result.ok()).is_ok(), "execution validation");
+    }
+
+    mod test_utils {
+        use super::*;
+        use crate::{
+            stages::hashing_account::AccountHashingStage,
+            test_utils::{StageTestRunner, TestTransaction},
+            ExecInput, ExecOutput, UnwindInput,
+        };
+        use reth_db::{
+            cursor::DbCursorRO,
+            models::AccountBeforeTx,
+            tables,
+            transaction::{DbTx, DbTxMut},
+        };
+        use reth_interfaces::test_utils::generators::random_eoa_account_range;
+
+        pub(crate) struct AccountHashingTestRunner {
+            pub(crate) tx: TestTransaction,
+            commit_threshold: u64,
+            clean_threshold: u64,
+        }
+
+        impl AccountHashingTestRunner {
+            pub(crate) fn set_clean_threshold(&mut self, threshold: u64) {
+                self.clean_threshold = threshold;
+            }
+
+            #[allow(dead_code)]
+            pub(crate) fn set_commit_threshold(&mut self, threshold: u64) {
+                self.commit_threshold = threshold;
+            }
+
+            pub(crate) fn insert_blocks(
+                &self,
+                blocks: Vec<SealedBlock>,
+            ) -> Result<(), TestRunnerError> {
+                let mut blocks_iter = blocks.iter();
+                while let Some(block) = blocks_iter.next() {
+                    self.tx.commit(|tx| {
+                        insert_canonical_block(tx, block, true).unwrap();
+                        Ok(())
+                    })?;
+                }
+
+                Ok(())
+            }
+
+            pub(crate) fn insert_accounts(
+                &self,
+                accounts: &Vec<(Address, Account)>,
+            ) -> Result<(), TestRunnerError> {
+                let mut accs_iter = accounts.iter();
+                while let Some((addr, acc)) = accs_iter.next() {
+                    self.tx.commit(|tx| {
+                        tx.put::<tables::PlainAccountState>(*addr, *acc)?;
+                        Ok(())
+                    })?;
+                }
+
+                Ok(())
+            }
+
+            /// Iterates over PlainAccount table and checks that the accounts match the ones
+            /// in the HashedAccount table
+            pub(crate) fn check_hashed_accounts(&self) -> Result<(), TestRunnerError> {
+                self.tx.query(|tx| {
+                    let mut acc_cursor = tx.cursor_read::<tables::PlainAccountState>()?;
+                    let mut hashed_acc_cursor = tx.cursor_read::<tables::HashedAccount>()?;
+
+                    while let Some((address, account)) = acc_cursor.next()? {
+                        let hashed_addr = keccak256(address);
+                        if let Some((_, acc)) = hashed_acc_cursor.seek_exact(hashed_addr)? {
+                            assert_eq!(acc, account)
+                        }
+                    }
+                    Ok(())
+                })?;
+
+                Ok(())
+            }
+
+            /// Same as check_hashed_accounts, only that checks with the old account state,
+            /// namely, the same account with nonce - 1 and balance - 1.
+            pub(crate) fn check_old_hashed_accounts(&self) -> Result<(), TestRunnerError> {
+                self.tx.query(|tx| {
+                    let mut acc_cursor = tx.cursor_read::<tables::PlainAccountState>()?;
+                    let mut hashed_acc_cursor = tx.cursor_read::<tables::HashedAccount>()?;
+
+                    while let Some((address, account)) = acc_cursor.next()? {
+                        let Account { nonce, balance, .. } = account;
+                        let old_acc = Account {
+                            nonce: nonce - 1,
+                            balance: balance - U256::from(1),
+                            bytecode_hash: None,
+                        };
+                        let hashed_addr = keccak256(address);
+                        if let Some((_, acc)) = hashed_acc_cursor.seek_exact(hashed_addr)? {
+                            assert_eq!(acc, old_acc)
+                        }
+                    }
+                    Ok(())
+                })?;
+
+                Ok(())
+            }
+        }
+
+        impl Default for AccountHashingTestRunner {
+            fn default() -> Self {
+                Self {
+                    tx: TestTransaction::default(),
+                    commit_threshold: 1000,
+                    clean_threshold: 1000,
+                }
+            }
+        }
+
+        impl StageTestRunner for AccountHashingTestRunner {
+            type S = AccountHashingStage;
+
+            fn tx(&self) -> &TestTransaction {
+                &self.tx
+            }
+
+            fn stage(&self) -> Self::S {
+                Self::S {
+                    commit_threshold: self.commit_threshold,
+                    clean_threshold: self.clean_threshold,
+                }
+            }
+        }
+
+        #[async_trait::async_trait]
+        impl ExecuteStageTestRunner for AccountHashingTestRunner {
+            type Seed = Vec<(Address, Account)>;
+
+            fn seed_execution(&mut self, input: ExecInput) -> Result<Self::Seed, TestRunnerError> {
+                let end = input.previous_stage_progress() + 1;
+
+                let blocks = random_block_range(0..end, H256::zero(), 0..3);
+                self.insert_blocks(blocks)?;
+
+                let n_accounts = 2;
+                let accounts = random_eoa_account_range(&mut (0..n_accounts));
+                self.insert_accounts(&accounts)?;
+
+                // seed account changeset
+                self.tx
+                    .commit(|tx| {
+                        let (_, last_transition) =
+                            tx.cursor_read::<tables::BlockTransitionIndex>()?.last()?.unwrap();
+
+                        let first_transition =
+                            last_transition.checked_sub(n_accounts).unwrap_or_default();
+
+                        for (t, (addr, acc)) in (first_transition..last_transition).zip(&accounts) {
+                            let Account { nonce, balance, .. } = acc;
+                            let prev_acc = Account {
+                                nonce: nonce - 1,
+                                balance: balance - U256::from(1),
+                                bytecode_hash: None,
+                            };
+                            let acc_before_tx =
+                                AccountBeforeTx { address: *addr, info: Some(prev_acc) };
+                            tx.put::<tables::AccountChangeSet>(t, acc_before_tx)?;
+                        }
+
+                        Ok(())
+                    })
+                    .unwrap();
+
+                Ok(accounts)
+            }
+
+            fn validate_execution(
+                &self,
+                input: ExecInput,
+                output: Option<ExecOutput>,
+            ) -> Result<(), TestRunnerError> {
+                if let Some(output) = output {
+                    let start_block = input.stage_progress.unwrap_or_default() + 1;
+                    let end_block = output.stage_progress;
+                    if start_block > end_block {
+                        return Ok(())
+                    }
+                }
+                self.check_hashed_accounts()
+            }
+        }
+
+        impl UnwindStageTestRunner for AccountHashingTestRunner {
+            fn validate_unwind(&self, _input: UnwindInput) -> Result<(), TestRunnerError> {
+                self.check_old_hashed_accounts()
+            }
+        }
+    }
+}
diff --git a/crates/stages/src/stages/hashing_storage.rs b/crates/stages/src/stages/hashing_storage.rs
new file mode 100644
index 0000000000..f902d1851f
--- /dev/null
+++ b/crates/stages/src/stages/hashing_storage.rs
@@ -0,0 +1,475 @@
+use crate::{
+    db::Transaction, ExecInput, ExecOutput, Stage, StageError, StageId, UnwindInput, UnwindOutput,
+};
+use reth_db::{
+    cursor::{DbCursorRO, DbCursorRW, DbDupCursorRO, DbDupCursorRW},
+    database::Database,
+    models::TransitionIdAddress,
+    tables,
+    transaction::{DbTx, DbTxMut},
+};
+use reth_primitives::{keccak256, Address, StorageEntry, H160, H256, U256};
+use std::{collections::BTreeMap, fmt::Debug};
+use tracing::*;
+
+const STORAGE_HASHING: StageId = StageId("StorageHashingStage");
+
+/// Storage hashing stage hashes plain storage.
+/// This is preparation before generating intermediate hashes and calculating Merkle tree root.
+#[derive(Debug)]
+pub struct StorageHashingStage {
+    /// The threshold for switching from incremental hashing
+    /// of changes to whole storage hashing. Num of transitions.
+    pub clean_threshold: u64,
+    /// The size of inserted items after which the control
+    /// flow will be returned to the pipeline for commit
+    pub commit_threshold: u64,
+}
+
+#[async_trait::async_trait]
+impl<DB: Database> Stage<DB> for StorageHashingStage {
+    /// Return the id of the stage
+    fn id(&self) -> StageId {
+        STORAGE_HASHING
+    }
+
+    /// Execute the stage.
+    async fn execute(
+        &mut self,
+        tx: &mut Transaction<'_, DB>,
+        input: ExecInput,
+    ) -> Result<ExecOutput, StageError> {
+        let stage_progress = input.stage_progress.unwrap_or_default();
+        let previous_stage_progress = input.previous_stage_progress();
+
+        // read storage changeset, merge it into one changeset and calculate storage hashes.
+        let from_transition = tx.get_block_transition(stage_progress)? + 1;
+        let to_transition = tx.get_block_transition(previous_stage_progress)? + 1;
+
+        // if there are more blocks then threshold it is faster to go over Plain state and hash all
+        // account otherwise take changesets aggregate the sets and apply hashing to
+        // AccountHashing table
+        if to_transition - from_transition > self.clean_threshold {
+            tx.clear::<tables::HashedStorage>()?;
+            tx.commit()?;
+
+            let mut first_key = H160::zero();
+            loop {
+                let next_key = {
+                    let mut storage = tx.cursor_dup_read::<tables::PlainStorageState>()?;
+
+                    let hashed_batch = storage
+                        .walk(first_key)?
+                        .take(self.commit_threshold as usize)
+                        .map(|res| {
+                            res.map(|(address, mut slot)| {
+                                // both account address and storage slot key are hashed for merkle
+                                // tree.
+                                slot.key = keccak256(slot.key);
+                                (keccak256(address), slot)
+                            })
+                        })
+                        .collect::<Result<BTreeMap<_, _>, _>>()?;
+
+                    // next key of iterator
+                    let next_key = storage.next()?;
+
+                    let mut hashes = tx.cursor_write::<tables::HashedStorage>()?;
+                    // iterate and append presorted hashed slots
+                    hashed_batch.into_iter().try_for_each(|(k, v)| hashes.append(k, v))?;
+                    next_key
+                };
+                tx.commit()?;
+                if let Some((next_key, _)) = next_key {
+                    first_key = next_key;
+                    continue
+                }
+                break
+            }
+        } else {
+            let mut plain_storage = tx.cursor_dup_read::<tables::PlainStorageState>()?;
+
+            // Aggregate all transition changesets and and make list of storages that have been
+            // changed.
+            tx.cursor_read::<tables::StorageChangeSet>()?
+                .walk((from_transition, H160::zero()).into())?
+                .take_while(|res| {
+                    res.as_ref().map(|(k, _)| k.0 .0 < to_transition).unwrap_or_default()
+                })
+                .collect::<Result<Vec<_>, _>>()?
+                .into_iter()
+                // fold all storages and save its old state so we can remove it from HashedStorage
+                // it is needed as it is dup table.
+                .fold(
+                    BTreeMap::new(),
+                    |mut accounts: BTreeMap<Address, BTreeMap<H256, U256>>,
+                     (TransitionIdAddress((_, address)), storage_entry)| {
+                        accounts
+                            .entry(address)
+                            .or_default()
+                            .insert(storage_entry.key, storage_entry.value);
+                        accounts
+                    },
+                )
+                .into_iter()
+                // iterate over plain state and get newest storage value.
+                // Assumption we are okay with is that plain state represent
+                // `previous_stage_progress` state.
+                .map(|(address, storage)| {
+                    storage
+                        .into_iter()
+                        .map(|(key, val)| {
+                            plain_storage
+                                .seek_by_key_subkey(address, key)
+                                .map(|ret| (key, (val, ret.map(|e| e.value))))
+                        })
+                        .collect::<Result<BTreeMap<_, _>, _>>()
+                        .map(|storage| (address, storage))
+                })
+                .collect::<Result<Vec<_>, _>>()?
+                .into_iter()
+                // Hash the address and key and apply them to HashedStorage (if Storage is None
+                // just remove it);
+                .try_for_each(|(address, storage)| {
+                    let hashed_address = keccak256(address);
+                    storage.into_iter().try_for_each(
+                        |(key, (old_val, new_val))| -> Result<(), StageError> {
+                            let key = keccak256(key);
+                            tx.delete::<tables::HashedStorage>(
+                                hashed_address,
+                                Some(StorageEntry { key, value: old_val }),
+                            )?;
+                            if let Some(value) = new_val {
+                                let val = StorageEntry { key, value };
+                                tx.put::<tables::HashedStorage>(hashed_address, val)?
+                            }
+                            Ok(())
+                        },
+                    )
+                })?;
+        }
+
+        info!(target: "sync::stages::hashing_storage", "Stage finished");
+        Ok(ExecOutput { stage_progress: input.previous_stage_progress(), done: true })
+    }
+
+    /// Unwind the stage.
+    async fn unwind(
+        &mut self,
+        tx: &mut Transaction<'_, DB>,
+        input: UnwindInput,
+    ) -> Result<UnwindOutput, StageError> {
+        let from_transition_rev = tx.get_block_transition(input.unwind_to)? + 1;
+        let to_transition_rev = tx.get_block_transition(input.stage_progress)? + 1;
+
+        let mut hashed_storage = tx.cursor_dup_write::<tables::HashedStorage>()?;
+
+        // Aggregate all transition changesets and make list of accounts that have been changed.
+        tx.cursor_read::<tables::StorageChangeSet>()?
+            .walk((from_transition_rev, H160::zero()).into())?
+            .take_while(|res| {
+                res.as_ref()
+                    .map(|(TransitionIdAddress((k, _)), _)| *k < to_transition_rev)
+                    .unwrap_or_default()
+            })
+            .collect::<Result<Vec<_>, _>>()?
+            .into_iter()
+            .rev()
+            // fold all account to get the old balance/nonces and account that needs to be removed
+            .fold(
+                BTreeMap::new(),
+                |mut accounts: BTreeMap<(Address, H256), U256>,
+                 (TransitionIdAddress((_, address)), storage_entry)| {
+                    accounts.insert((address, storage_entry.key), storage_entry.value);
+                    accounts
+                },
+            )
+            .into_iter()
+            // hash addresses and collect it inside sorted BTreeMap.
+            // We are doing keccak only once per address.
+            .map(|((address, key), value)| ((keccak256(address), keccak256(key)), value))
+            .collect::<BTreeMap<_, _>>()
+            .into_iter()
+            // Apply values to HashedStorage (if Value is zero remove it);
+            .try_for_each(|((address, key), value)| -> Result<(), StageError> {
+                hashed_storage.seek_by_key_subkey(address, key)?;
+                hashed_storage.delete_current()?;
+
+                if value != U256::ZERO {
+                    hashed_storage.append_dup(address, StorageEntry { key, value })?;
+                }
+                Ok(())
+            })?;
+
+        Ok(UnwindOutput { stage_progress: input.unwind_to })
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use crate::test_utils::{
+        stage_test_suite_ext, ExecuteStageTestRunner, StageTestRunner, TestRunnerError,
+        TestTransaction, UnwindStageTestRunner, PREV_STAGE_ID,
+    };
+    use assert_matches::assert_matches;
+    use reth_db::{
+        cursor::DbCursorRW,
+        mdbx::{tx::Tx, WriteMap, RW},
+        models::{BlockNumHash, StoredBlockBody, TransitionIdAddress},
+    };
+    use reth_interfaces::test_utils::generators::random_block_range;
+    use reth_primitives::{
+        SealedBlock, StorageEntry, Transaction, TransactionKind, TxLegacy, H256, U256,
+    };
+
+    stage_test_suite_ext!(StorageHashingTestRunner);
+
+    /// Execute with low clean threshold so as to hash whole storage
+    #[tokio::test]
+    async fn execute_clean() {
+        let (previous_stage, stage_progress) = (500, 100);
+
+        // Set up the runner
+        let mut runner = StorageHashingTestRunner::default();
+        // set low threshold so we hash the whole storage
+        runner.set_clean_threshold(1);
+        let input = ExecInput {
+            previous_stage: Some((PREV_STAGE_ID, previous_stage)),
+            stage_progress: Some(stage_progress),
+        };
+
+        runner.seed_execution(input).expect("failed to seed execution");
+
+        let rx = runner.execute(input);
+
+        // Assert the successful result
+        let result = rx.await.unwrap();
+        assert_matches!(
+            result,
+            Ok(ExecOutput { done, stage_progress })
+                if done && stage_progress == previous_stage
+        );
+
+        // Validate the stage execution
+        assert!(runner.validate_execution(input, result.ok()).is_ok(), "execution validation");
+    }
+
+    struct StorageHashingTestRunner {
+        tx: TestTransaction,
+        commit_threshold: u64,
+        clean_threshold: u64,
+    }
+
+    impl Default for StorageHashingTestRunner {
+        fn default() -> Self {
+            Self { tx: TestTransaction::default(), commit_threshold: 1000, clean_threshold: 1000 }
+        }
+    }
+
+    impl StageTestRunner for StorageHashingTestRunner {
+        type S = StorageHashingStage;
+
+        fn tx(&self) -> &TestTransaction {
+            &self.tx
+        }
+
+        fn stage(&self) -> Self::S {
+            Self::S {
+                commit_threshold: self.commit_threshold,
+                clean_threshold: self.clean_threshold,
+            }
+        }
+    }
+
+    #[async_trait::async_trait]
+    impl ExecuteStageTestRunner for StorageHashingTestRunner {
+        type Seed = Vec<SealedBlock>;
+
+        fn seed_execution(&mut self, input: ExecInput) -> Result<Self::Seed, TestRunnerError> {
+            let stage_progress = input.stage_progress.unwrap_or_default();
+            let end = input.previous_stage_progress() + 1;
+
+            let blocks = random_block_range(stage_progress..end, H256::zero(), 0..3);
+
+            self.tx.insert_headers(blocks.iter().map(|block| &block.header))?;
+
+            let mut iter = blocks.iter();
+            let (mut transition_id, mut tx_id) = (0, 0);
+
+            while let Some(progress) = iter.next() {
+                // Insert last progress data
+                self.tx.commit(|tx| {
+                    let key: BlockNumHash = (progress.number, progress.hash()).into();
+
+                    let body = StoredBlockBody {
+                        start_tx_id: tx_id,
+                        tx_count: progress.body.len() as u64,
+                    };
+
+                    progress.body.iter().try_for_each(|transaction| {
+                        tx.put::<tables::TxHashNumber>(transaction.hash(), tx_id)?;
+                        tx.put::<tables::Transactions>(tx_id, transaction.clone())?;
+                        tx.put::<tables::TxTransitionIndex>(tx_id, transition_id)?;
+                        tx_id += 1;
+                        transition_id += 1;
+                        let (to, value) = match transaction.transaction {
+                            Transaction::Legacy(TxLegacy {
+                                to: TransactionKind::Call(to),
+                                value,
+                                ..
+                            }) => (to, value),
+                            _ => unreachable!(),
+                        };
+                        let new_entry =
+                            StorageEntry { key: keccak256("transfers"), value: U256::from(value) };
+                        self.insert_storage_entry(
+                            tx,
+                            (transition_id, to).into(),
+                            new_entry,
+                            progress.header.number == stage_progress,
+                        )
+                    })?;
+
+                    // Randomize rewards
+                    let has_reward: bool = rand::random();
+                    if has_reward {
+                        transition_id += 1;
+                        self.insert_storage_entry(
+                            tx,
+                            (transition_id, Address::random()).into(),
+                            StorageEntry {
+                                key: keccak256("mining"),
+                                value: U256::from(rand::random::<u32>()),
+                            },
+                            progress.header.number == stage_progress,
+                        )?;
+                    }
+
+                    tx.put::<tables::BlockTransitionIndex>(key.number(), transition_id)?;
+                    tx.put::<tables::BlockBodies>(key, body)
+                })?;
+            }
+
+            Ok(blocks)
+        }
+
+        fn validate_execution(
+            &self,
+            input: ExecInput,
+            output: Option<ExecOutput>,
+        ) -> Result<(), TestRunnerError> {
+            if let Some(output) = output {
+                let start_block = input.stage_progress.unwrap_or_default() + 1;
+                let end_block = output.stage_progress;
+                if start_block > end_block {
+                    return Ok(())
+                }
+            }
+            self.check_hashed_storage()
+        }
+    }
+
+    impl UnwindStageTestRunner for StorageHashingTestRunner {
+        fn validate_unwind(&self, input: UnwindInput) -> Result<(), TestRunnerError> {
+            self.unwind_storage(input)?;
+            self.check_hashed_storage()
+        }
+    }
+
+    impl StorageHashingTestRunner {
+        fn set_clean_threshold(&mut self, threshold: u64) {
+            self.clean_threshold = threshold;
+        }
+
+        fn check_hashed_storage(&self) -> Result<(), TestRunnerError> {
+            self.tx
+                .query(|tx| {
+                    let mut storage_cursor = tx.cursor_dup_read::<tables::PlainStorageState>()?;
+                    let mut hashed_storage_cursor =
+                        tx.cursor_dup_read::<tables::HashedStorage>()?;
+
+                    let mut expected = 0;
+
+                    while let Some((address, entry)) = storage_cursor.next()? {
+                        let key = keccak256(entry.key);
+                        let got =
+                            hashed_storage_cursor.seek_by_key_subkey(keccak256(address), key)?;
+                        assert_eq!(
+                            got,
+                            Some(StorageEntry { key, ..entry }),
+                            "{expected}: {address:?}"
+                        );
+                        expected += 1;
+                    }
+                    let count = tx
+                        .cursor_dup_read::<tables::HashedStorage>()?
+                        .walk([0; 32].into())?
+                        .count();
+
+                    assert_eq!(count, expected);
+                    Ok(())
+                })
+                .map_err(|e| e.into())
+        }
+
+        fn insert_storage_entry(
+            &self,
+            tx: &Tx<'_, RW, WriteMap>,
+            tid_address: TransitionIdAddress,
+            entry: StorageEntry,
+            hash: bool,
+        ) -> Result<(), reth_db::Error> {
+            let mut storage_cursor = tx.cursor_dup_write::<tables::PlainStorageState>()?;
+            let prev_entry = storage_cursor
+                .seek_by_key_subkey(tid_address.address(), entry.key)?
+                .and_then(|e| {
+                    storage_cursor.delete_current().expect("failed to delete entry");
+                    Some(e)
+                })
+                .unwrap_or(StorageEntry { key: entry.key, value: U256::from(0) });
+            if hash {
+                tx.cursor_dup_write::<tables::HashedStorage>()?.append_dup(
+                    keccak256(tid_address.address()),
+                    StorageEntry { key: keccak256(entry.key), value: entry.value },
+                )?;
+            }
+            storage_cursor.append_dup(tid_address.address(), entry)?;
+
+            tx.cursor_dup_write::<tables::StorageChangeSet>()?
+                .append_dup(tid_address, prev_entry)?;
+            Ok(())
+        }
+
+        fn unwind_storage(&self, input: UnwindInput) -> Result<(), TestRunnerError> {
+            tracing::debug!("unwinding storage...");
+            let target_transition = self
+                .tx
+                .inner()
+                .get_block_transition(input.unwind_to)
+                .map_err(|e| TestRunnerError::Internal(Box::new(e)))?;
+            self.tx.commit(|tx| {
+                let mut storage_cursor = tx.cursor_dup_write::<tables::PlainStorageState>()?;
+                let mut changeset_cursor = tx.cursor_dup_read::<tables::StorageChangeSet>()?;
+                let mut row = changeset_cursor.last()?;
+
+                while let Some((tid_address, entry)) = row {
+                    if tid_address.transition_id() <= target_transition {
+                        break
+                    }
+
+                    storage_cursor.seek_by_key_subkey(tid_address.address(), entry.key)?;
+                    storage_cursor.delete_current()?;
+
+                    if entry.value != U256::ZERO {
+                        storage_cursor.append_dup(tid_address.address(), entry)?;
+                    }
+
+                    row = changeset_cursor.prev()?;
+                }
+                Ok(())
+            })?;
+            Ok(())
+        }
+    }
+}
diff --git a/crates/stages/src/stages/merkle.rs b/crates/stages/src/stages/merkle.rs
new file mode 100644
index 0000000000..73f4cc4004
--- /dev/null
+++ b/crates/stages/src/stages/merkle.rs
@@ -0,0 +1,64 @@
+use crate::{
+    db::Transaction, ExecInput, ExecOutput, Stage, StageError, StageId, UnwindInput, UnwindOutput,
+};
+use reth_db::database::Database;
+use std::fmt::Debug;
+use tracing::*;
+
+const MERKLE_EXECUTION: StageId = StageId("MerkleExecuteStage");
+const MERKLE_UNWIND: StageId = StageId("MerkleUnwindStage");
+
+/// Merkle stage uses input from [AccountHashingStage] and [StorageHashingStage] stages
+/// and calculated intermediate hashed and state root.
+/// This stage depends on the Account and Storage stages. It will be executed after them during
+/// execution, and before them during unwinding.
+#[derive(Debug)]
+pub struct MerkleStage {
+    /// Flag if true would do `execute` but skip unwind but if it false it would skip execution but
+    /// do unwind.
+    pub is_execute: bool,
+}
+
+#[async_trait::async_trait]
+impl<DB: Database> Stage<DB> for MerkleStage {
+    /// Return the id of the stage
+    fn id(&self) -> StageId {
+        if self.is_execute {
+            MERKLE_EXECUTION
+        } else {
+            MERKLE_UNWIND
+        }
+    }
+
+    /// Execute the stage.
+    async fn execute(
+        &mut self,
+        _tx: &mut Transaction<'_, DB>,
+        input: ExecInput,
+    ) -> Result<ExecOutput, StageError> {
+        if !self.is_execute {
+            info!(target: "sync::stages::merkle::unwind", "Stage is always skipped");
+            return Ok(ExecOutput { stage_progress: input.previous_stage_progress(), done: true })
+        }
+
+        // Iterate over changeset (similar to Hashing stages) and take new values
+
+        info!(target: "sync::stages::merkle::exec", "Stage finished");
+        Ok(ExecOutput { stage_progress: input.previous_stage_progress(), done: true })
+    }
+
+    /// Unwind the stage.
+    async fn unwind(
+        &mut self,
+        _tx: &mut Transaction<'_, DB>,
+        input: UnwindInput,
+    ) -> Result<UnwindOutput, StageError> {
+        if self.is_execute {
+            info!(target: "sync::stages::merkle::exec", "Stage is always skipped");
+            return Ok(UnwindOutput { stage_progress: input.unwind_to })
+        }
+
+        info!(target: "sync::stages::merkle::unwind", "Stage finished");
+        Ok(UnwindOutput { stage_progress: input.unwind_to })
+    }
+}
diff --git a/crates/stages/src/stages/mod.rs b/crates/stages/src/stages/mod.rs
index 4bc1860a8d..88dd5e17a2 100644
--- a/crates/stages/src/stages/mod.rs
+++ b/crates/stages/src/stages/mod.rs
@@ -2,8 +2,14 @@
 pub mod bodies;
 /// The execution stage that generates state diff.
 pub mod execution;
+/// Account hashing stage.
+pub mod hashing_account;
+/// Storage hashing stage.
+pub mod hashing_storage;
 /// The headers stage.
 pub mod headers;
+/// Intermediate hashes and creating merkle root
+pub mod merkle;
 /// The sender recovery stage.
 pub mod sender_recovery;
 /// The total difficulty stage
diff --git a/crates/storage/db/src/tables/mod.rs b/crates/storage/db/src/tables/mod.rs
index 69b4db2479..df1e9333d6 100644
--- a/crates/storage/db/src/tables/mod.rs
+++ b/crates/storage/db/src/tables/mod.rs
@@ -33,7 +33,7 @@ pub enum TableType {
 }
 
 /// Default tables that should be present inside database.
-pub const TABLES: [(TableType, &str); 23] = [
+pub const TABLES: [(TableType, &str); 25] = [
     (TableType::Table, CanonicalHeaders::const_name()),
     (TableType::Table, HeaderTD::const_name()),
     (TableType::Table, HeaderNumbers::const_name()),
@@ -54,6 +54,8 @@ pub const TABLES: [(TableType, &str); 23] = [
     (TableType::Table, StorageHistory::const_name()),
     (TableType::DupSort, AccountChangeSet::const_name()),
     (TableType::DupSort, StorageChangeSet::const_name()),
+    (TableType::Table, HashedAccount::const_name()),
+    (TableType::DupSort, HashedStorage::const_name()),
     (TableType::Table, TxSenders::const_name()),
     (TableType::Table, Config::const_name()),
     (TableType::Table, SyncStage::const_name()),
@@ -163,11 +165,6 @@ table!(
     ( Logs ) TxNumber | Receipt
 );
 
-table!(
-    /// Stores the current state of an [`Account`].
-    ( PlainAccountState ) Address | Account
-);
-
 table!(
     /// Stores all smart contract bytecodes.
     /// There will be multiple accounts that have same bytecode
@@ -190,6 +187,11 @@ table!(
     ( TxTransitionIndex ) TxNumber | TransitionId
 );
 
+table!(
+    /// Stores the current state of an [`Account`].
+    ( PlainAccountState ) Address | Account
+);
+
 dupsort!(
     /// Stores the current value of a storage key.
     ( PlainStorageState ) Address | [H256] StorageEntry
@@ -260,6 +262,22 @@ dupsort!(
     ( StorageChangeSet ) TransitionIdAddress | [H256] StorageEntry
 );
 
+table!(
+    /// Stores the current state of an [`Account`] indexed with `keccak256(Address)`
+    /// This table is in preparation for merkelization and calculation of state root.
+    /// We are saving whole account data as it is needed for partial update when
+    /// part of storage is changed. Benefit for merkelization is that hashed addresses are sorted.
+    ( HashedAccount ) H256 | Account
+);
+
+dupsort!(
+    /// Stores the current storage values indexed with `keccak256(Address)` and
+    /// hash of storage key `keccak256(key)`.
+    /// This table is in preparation for merkelization and calculation of state root.
+    /// Benefit for merklization is that hashed addresses/keys are sorted.
+    ( HashedStorage ) H256 | [H256] StorageEntry
+);
+
 table!(
     /// Stores the transaction sender for each transaction.
     /// It is needed to speed up execution stage and allows fetching signer without doing