diff --git a/heat_tempest_plugin/common/test.py b/heat_tempest_plugin/common/test.py
index c1108e2..7db874b 100644
--- a/heat_tempest_plugin/common/test.py
+++ b/heat_tempest_plugin/common/test.py
@@ -297,11 +297,15 @@
             return False
         return res.resource_status == status
 
-    def _verify_status(self, stack, stack_identifier, status, fail_regexp):
+    def _verify_status(self, stack, stack_identifier, status,
+                       fail_regexp, is_action_cancelled=False):
         if stack.stack_status == status:
             # Handle UPDATE_COMPLETE/FAILED case: Make sure we don't
             # wait for a stale UPDATE_COMPLETE/FAILED status.
             if status in ('UPDATE_FAILED', 'UPDATE_COMPLETE'):
+                if is_action_cancelled:
+                    return True
+
                 if self.updated_time.get(
                         stack_identifier) != stack.updated_time:
                     self.updated_time[stack_identifier] = stack.updated_time
@@ -335,7 +339,8 @@
                                failure_pattern=None,
                                success_on_not_found=False,
                                signal_required=False,
-                               resources_to_signal=None):
+                               resources_to_signal=None,
+                               is_action_cancelled=False):
         """Waits for a Stack to reach a given status.
 
         Note this compares the full $action_$status, e.g
@@ -365,7 +370,7 @@
                 # been created yet
             else:
                 if self._verify_status(stack, stack_identifier, status,
-                                       fail_regexp):
+                                       fail_regexp, is_action_cancelled):
                     return
             if signal_required:
                 self.signal_resources(resources_to_signal)
@@ -436,7 +441,7 @@
 
         self._wait_for_stack_status(**kwargs)
 
-    def cancel_update_stack(self, stack_identifier,
+    def cancel_update_stack(self, stack_identifier, rollback=True,
                             expected_status='ROLLBACK_COMPLETE'):
 
         stack_name = stack_identifier.split('/')[0]
@@ -444,10 +449,16 @@
         self.updated_time[stack_identifier] = self.client.stacks.get(
             stack_identifier, resolve_outputs=False).updated_time
 
-        self.client.actions.cancel_update(stack_name)
+        if rollback:
+            self.client.actions.cancel_update(stack_name)
+        else:
+            self.client.actions.cancel_without_rollback(stack_name)
 
         kwargs = {'stack_identifier': stack_identifier,
                   'status': expected_status}
+        if expected_status == 'UPDATE_FAILED':
+            kwargs['is_action_cancelled'] = True
+
         if expected_status in ['ROLLBACK_COMPLETE']:
             # To trigger rollback you would intentionally fail the stack
             # Hence check for rollback failures
diff --git a/heat_tempest_plugin/tests/functional/test_stack_cancel.py b/heat_tempest_plugin/tests/functional/test_stack_cancel.py
new file mode 100644
index 0000000..ba5e989
--- /dev/null
+++ b/heat_tempest_plugin/tests/functional/test_stack_cancel.py
@@ -0,0 +1,92 @@
+#    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.
+
+import copy
+import eventlet
+
+from heat_tempest_plugin.common import test
+from heat_tempest_plugin.tests.functional import functional_base
+
+
+template = {
+    'heat_template_version': 'pike',
+    'resources': {
+        'test1': {
+            'type': 'OS::Heat::TestResource',
+            'properties': {
+                'value': 'Test1',
+                'action_wait_secs': {
+                    'update': 30,
+                }
+            }
+        },
+        'test2': {
+            'type': 'OS::Heat::TestResource',
+            'properties': {
+                'value': 'Test1',
+                },
+            'depends_on': ['test1']
+        },
+    }
+}
+
+
+def get_templates(delay_s=None):
+    before = copy.deepcopy(template)
+    after = copy.deepcopy(before)
+    for r in after['resources'].values():
+        r['properties']['value'] = 'Test2'
+
+    if delay_s:
+        before_props = before['resources']['test1']['properties']
+        before_props['action_wait_secs']['create'] = delay_s
+    return before, after
+
+
+class StackCancelTest(functional_base.FunctionalTestsBase):
+
+    def _test_cancel_update(self, rollback=True,
+                            expected_status='ROLLBACK_COMPLETE'):
+        before, after = get_templates()
+        stack_id = self.stack_create(template=before)
+        self.update_stack(stack_id, template=after,
+                          expected_status='UPDATE_IN_PROGRESS')
+        self._wait_for_resource_status(stack_id, 'test1', 'UPDATE_IN_PROGRESS')
+        self.cancel_update_stack(stack_id, rollback, expected_status)
+        return stack_id
+
+    def test_cancel_update_with_rollback(self):
+        self._test_cancel_update()
+
+    def test_cancel_update_without_rollback(self):
+        stack_id = self._test_cancel_update(rollback=False,
+                                            expected_status='UPDATE_FAILED')
+        self.assertTrue(test.call_until_true(
+            60, 2, self.verify_resource_status,
+            stack_id, 'test1', 'UPDATE_COMPLETE'))
+        eventlet.sleep(2)
+        self.assertTrue(self.verify_resource_status(stack_id, 'test2',
+                                                    'CREATE_COMPLETE'))
+
+    def test_cancel_create_without_rollback(self):
+        before, after = get_templates(delay_s=30)
+        stack_id = self.stack_create(template=before,
+                                     expected_status='CREATE_IN_PROGRESS')
+        self._wait_for_resource_status(stack_id, 'test1', 'CREATE_IN_PROGRESS')
+        self.cancel_update_stack(stack_id, rollback=False,
+                                 expected_status='CREATE_FAILED')
+        self.assertTrue(test.call_until_true(
+            60, 2, self.verify_resource_status,
+            stack_id, 'test1', 'CREATE_COMPLETE'))
+        eventlet.sleep(2)
+        self.assertTrue(self.verify_resource_status(stack_id, 'test2',
+                                                    'INIT_COMPLETE'))