diff --git a/python/packages/autogen-ext/tests/models/test_azure_ai_model_client.py b/python/packages/autogen-ext/tests/models/test_azure_ai_model_client.py
index e69de29bb2d..fd888d7f4b4 100644
--- a/python/packages/autogen-ext/tests/models/test_azure_ai_model_client.py
+++ b/python/packages/autogen-ext/tests/models/test_azure_ai_model_client.py
@@ -0,0 +1,158 @@
+import asyncio
+from datetime import datetime
+from typing import AsyncGenerator, Any
+
+import pytest
+from azure.ai.inference.aio import (
+    ChatCompletionsClient,
+)
+
+from azure.ai.inference.models import (
+    ChatChoice,
+    ChatResponseMessage,
+    CompletionsUsage,
+
+)
+from azure.ai.inference.models import (ChatCompletions,
+                                       StreamingChatCompletionsUpdate, StreamingChatChoiceUpdate,
+                                       StreamingChatResponseMessageUpdate)
+
+from azure.core.credentials import AzureKeyCredential
+
+from autogen_core import CancellationToken
+from autogen_core.models import UserMessage
+from autogen_ext.models.azure import AzureAIChatCompletionClient
+
+
+async def _mock_create_stream(*args: Any, **kwargs: Any) -> AsyncGenerator[StreamingChatCompletionsUpdate, None]:
+    mock_chunks_content = ["Hello", " Another Hello", " Yet Another Hello"]
+
+    mock_chunks = [
+        StreamingChatChoiceUpdate(
+            index=0,
+            finish_reason="stop",
+            delta=StreamingChatResponseMessageUpdate(role="assistant", content=chunk_content),
+        ) for chunk_content in mock_chunks_content
+    ]
+
+    for mock_chunk in mock_chunks:
+        await asyncio.sleep(0.1)
+        yield StreamingChatCompletionsUpdate(
+            id="id",
+            choices=[mock_chunk],
+            created=datetime.now(),
+            model="model",
+            usage=CompletionsUsage(prompt_tokens=0, completion_tokens=0, total_tokens=0),
+        )
+
+
+async def _mock_create(*args: Any, **kwargs: Any) -> ChatCompletions | AsyncGenerator[StreamingChatCompletionsUpdate, None]:
+    stream = kwargs.get("stream", False)
+
+    if not stream:
+        await asyncio.sleep(0.1)
+        return ChatCompletions(
+            id="id",
+            created=datetime.now(),
+            model='model',
+            choices=[
+                ChatChoice(
+                    index=0,
+                    finish_reason="stop",
+                    message=ChatResponseMessage(content="Hello", role="assistant")
+                )
+            ],
+            usage=CompletionsUsage(prompt_tokens=0, completion_tokens=0, total_tokens=0),
+        )
+    else:
+        return _mock_create_stream(*args, **kwargs)
+
+
+
+@pytest.mark.asyncio
+async def test_azure_ai_chat_completion_client() -> None:
+    client = AzureAIChatCompletionClient(
+        endpoint="endpoint",
+        credential=AzureKeyCredential("api_key"),
+        model_capabilities = {
+            "json_output": False,
+            "function_calling": False,
+            "vision": False,
+        },
+    )
+    assert client
+
+@pytest.mark.asyncio
+async def test_azure_ai_chat_completion_client_create(monkeypatch: pytest.MonkeyPatch) -> None:
+    # monkeypatch.setattr(AsyncCompletions, "create", _mock_create)
+    monkeypatch.setattr(ChatCompletionsClient, "complete", _mock_create)
+    client = AzureAIChatCompletionClient(
+        endpoint="endpoint",
+        credential=AzureKeyCredential("api_key"),
+        model_capabilities = {
+            "json_output": False,
+            "function_calling": False,
+            "vision": False,
+        },
+    )
+    result = await client.create(messages=[UserMessage(content="Hello", source="user")])
+    assert result.content == "Hello"
+
+@pytest.mark.asyncio
+async def test_azure_ai_chat_completion_client_create_stream(monkeypatch:pytest.MonkeyPatch) -> None:
+    monkeypatch.setattr(ChatCompletionsClient, "complete", _mock_create)
+    chunks = []
+    client = AzureAIChatCompletionClient(
+        endpoint="endpoint",
+        credential=AzureKeyCredential("api_key"),
+        model_capabilities = {
+            "json_output": False,
+            "function_calling": False,
+            "vision": False,
+        },
+    )
+    async for chunk in client.create_stream(messages=[UserMessage(content="Hello", source="user")]):
+        chunks.append(chunk)
+
+    assert chunks[0] == "Hello"
+    assert chunks[1] == " Another Hello"
+    assert chunks[2] == " Yet Another Hello"
+
+@pytest.mark.asyncio
+async def test_azure_ai_chat_completion_client_create_cancel(monkeypatch: pytest.MonkeyPatch) -> None:
+    monkeypatch.setattr(ChatCompletionsClient, "complete", _mock_create)
+    cancellation_token = CancellationToken()
+    client = AzureAIChatCompletionClient(
+        endpoint="endpoint",
+        credential=AzureKeyCredential("api_key"),
+        model_capabilities={
+            "json_output": False,
+            "function_calling": False,
+            "vision": False,
+        },
+    )
+    task = asyncio.create_task(
+        client.create(messages=[UserMessage(content="Hello", source="user")], cancellation_token=cancellation_token)
+    )
+    cancellation_token.cancel()
+    with pytest.raises(asyncio.CancelledError):
+        await task
+
+@pytest.mark.asyncio
+async def test_azure_ai_chat_completion_client_create_stream_cancel(monkeypatch: pytest.MonkeyPatch) -> None:
+    monkeypatch.setattr(ChatCompletionsClient, "complete", _mock_create)
+    cancellation_token = CancellationToken()
+    client = AzureAIChatCompletionClient(
+        endpoint="endpoint",
+        credential=AzureKeyCredential("api_key"),
+        model_capabilities={
+            "json_output": False,
+            "function_calling": False,
+            "vision": False,
+        },
+    )
+    stream=client.create_stream(messages=[UserMessage(content="Hello", source="user")], cancellation_token=cancellation_token)
+    cancellation_token.cancel()
+    with pytest.raises(asyncio.CancelledError):
+        async for _ in stream:
+            pass