diff --git a/src/backend/distributed/Makefile b/src/backend/distributed/Makefile
index f946adadd..6ee2cc9a7 100644
--- a/src/backend/distributed/Makefile
+++ b/src/backend/distributed/Makefile
@@ -15,7 +15,7 @@ DATA_built = $(foreach v,$(EXTVERSIONS),$(EXTENSION)--$(v).sql)
 SCRIPTS = ../../bin/scripts/copy_to_distributed_table
 
 # directories with source files
-SUBDIRS = . commands executor master planner relay test utils worker
+SUBDIRS = . commands executor master planner relay test transaction utils worker
 
 # That patsubst rule searches all directories listed in SUBDIRS for .c
 # files, and adds the corresponding .o files to OBJS
diff --git a/src/backend/distributed/commands/multi_copy.c b/src/backend/distributed/commands/multi_copy.c
index 4fe427247..adfe5791d 100644
--- a/src/backend/distributed/commands/multi_copy.c
+++ b/src/backend/distributed/commands/multi_copy.c
@@ -71,6 +71,7 @@
 #include "commands/copy.h"
 #include "commands/defrem.h"
 #include "distributed/citus_ruleutils.h"
+#include "distributed/commit_protocol.h"
 #include "distributed/connection_cache.h"
 #include "distributed/listutils.h"
 #include "distributed/metadata_cache.h"
@@ -79,7 +80,7 @@
 #include "distributed/metadata_cache.h"
 #include "distributed/multi_copy.h"
 #include "distributed/multi_physical_planner.h"
-#include "distributed/multi_transaction.h"
+#include "distributed/multi_shard_transaction.h"
 #include "distributed/pg_dist_partition.h"
 #include "distributed/resource_lock.h"
 #include "distributed/shardinterval_utils.h"
diff --git a/src/backend/distributed/executor/multi_utility.c b/src/backend/distributed/executor/multi_utility.c
index ab0e1c2c2..40b81daee 100644
--- a/src/backend/distributed/executor/multi_utility.c
+++ b/src/backend/distributed/executor/multi_utility.c
@@ -18,11 +18,15 @@
 #include "commands/defrem.h"
 #include "commands/tablecmds.h"
 #include "distributed/citus_ruleutils.h"
+#include "distributed/commit_protocol.h"
+#include "distributed/connection_cache.h"
 #include "distributed/master_protocol.h"
 #include "distributed/metadata_cache.h"
 #include "distributed/multi_copy.h"
 #include "distributed/multi_utility.h"
 #include "distributed/multi_join_order.h"
+#include "distributed/multi_shard_transaction.h"
+#include "distributed/resource_lock.h"
 #include "distributed/transmit.h"
 #include "distributed/worker_manager.h"
 #include "distributed/worker_protocol.h"
@@ -36,12 +40,14 @@
 #include "utils/builtins.h"
 #include "utils/inval.h"
 #include "utils/lsyscache.h"
+#include "utils/memutils.h"
 #include "utils/rel.h"
 #include "utils/syscache.h"
 
 
 bool EnableDDLPropagation = true; /* ddl propagation is enabled */
 
+
 /*
  * This struct defines the state for the callback for drop statements.
  * It is copied as it is from commands/tablecmds.c in Postgres source.
@@ -62,11 +68,11 @@ static void VerifyTransmitStmt(CopyStmt *copyStatement);
 static Node * ProcessCopyStmt(CopyStmt *copyStatement, char *completionTag,
 							  bool *commandMustRunAsOwner);
 static Node * ProcessIndexStmt(IndexStmt *createIndexStatement,
-							   const char *createIndexCommand);
+							   const char *createIndexCommand, bool isTopLevel);
 static Node * ProcessDropIndexStmt(DropStmt *dropIndexStatement,
-								   const char *dropIndexCommand);
+								   const char *dropIndexCommand, bool isTopLevel);
 static Node * ProcessAlterTableStmt(AlterTableStmt *alterTableStatement,
-									const char *alterTableCommand);
+									const char *alterTableCommand, bool isTopLevel);
 
 /* Local functions forward declarations for unsupported command checks */
 static void ErrorIfUnsupportedIndexStmt(IndexStmt *createIndexStatement);
@@ -77,9 +83,12 @@ static void ErrorIfDistributedRenameStmt(RenameStmt *renameStatement);
 /* Local functions forward declarations for helper functions */
 static void CreateLocalTable(RangeVar *relation, char *nodeName, int32 nodePort);
 static bool IsAlterTableRenameStmt(RenameStmt *renameStatement);
-static void ExecuteDistributedDDLCommand(Oid relationId, const char *ddlCommandString);
-static bool ExecuteCommandOnWorkerShards(Oid relationId, const char *commandString,
-										 List **failedPlacementList);
+static void ExecuteDistributedDDLCommand(Oid relationId, const char *ddlCommandString,
+										 bool isTopLevel);
+static void SetLocalCommitProtocolTo2PC(void);
+static bool ExecuteCommandOnWorkerShards(Oid relationId, const char *commandString);
+static void ExecuteCommandOnShardPlacements(StringInfo applyCommand, uint64 shardId,
+											ShardConnections *shardConnections);
 static bool AllFinalizedPlacementsAccessible(Oid relationId);
 static void RangeVarCallbackForDropIndex(const RangeVar *rel, Oid relOid, Oid oldRelOid,
 										 void *arg);
@@ -150,9 +159,12 @@ multi_ProcessUtility(Node *parsetree,
 	/* ddl commands are propagated to workers only if EnableDDLPropagation is set */
 	if (EnableDDLPropagation)
 	{
+		bool isTopLevel = (context == PROCESS_UTILITY_TOPLEVEL);
+
 		if (IsA(parsetree, IndexStmt))
 		{
-			parsetree = ProcessIndexStmt((IndexStmt *) parsetree, queryString);
+			parsetree = ProcessIndexStmt((IndexStmt *) parsetree, queryString,
+										 isTopLevel);
 		}
 
 		if (IsA(parsetree, DropStmt))
@@ -160,7 +172,7 @@ multi_ProcessUtility(Node *parsetree,
 			DropStmt *dropStatement = (DropStmt *) parsetree;
 			if (dropStatement->removeType == OBJECT_INDEX)
 			{
-				parsetree = ProcessDropIndexStmt(dropStatement, queryString);
+				parsetree = ProcessDropIndexStmt(dropStatement, queryString, isTopLevel);
 			}
 		}
 
@@ -169,7 +181,8 @@ multi_ProcessUtility(Node *parsetree,
 			AlterTableStmt *alterTableStmt = (AlterTableStmt *) parsetree;
 			if (alterTableStmt->relkind == OBJECT_TABLE)
 			{
-				parsetree = ProcessAlterTableStmt(alterTableStmt, queryString);
+				parsetree = ProcessAlterTableStmt(alterTableStmt, queryString,
+												  isTopLevel);
 			}
 		}
 
@@ -457,7 +470,8 @@ ProcessCopyStmt(CopyStmt *copyStatement, char *completionTag, bool *commandMustR
  * master node table.
  */
 static Node *
-ProcessIndexStmt(IndexStmt *createIndexStatement, const char *createIndexCommand)
+ProcessIndexStmt(IndexStmt *createIndexStatement, const char *createIndexCommand,
+				 bool isTopLevel)
 {
 	/*
 	 * We first check whether a distributed relation is affected. For that, we need to
@@ -504,7 +518,7 @@ ProcessIndexStmt(IndexStmt *createIndexStatement, const char *createIndexCommand
 			ErrorIfUnsupportedIndexStmt(createIndexStatement);
 
 			/* if it is supported, go ahead and execute the command */
-			ExecuteDistributedDDLCommand(relationId, createIndexCommand);
+			ExecuteDistributedDDLCommand(relationId, createIndexCommand, isTopLevel);
 		}
 	}
 
@@ -521,7 +535,8 @@ ProcessIndexStmt(IndexStmt *createIndexStatement, const char *createIndexCommand
  * master node table.
  */
 static Node *
-ProcessDropIndexStmt(DropStmt *dropIndexStatement, const char *dropIndexCommand)
+ProcessDropIndexStmt(DropStmt *dropIndexStatement, const char *dropIndexCommand,
+					 bool isTopLevel)
 {
 	ListCell *dropObjectCell = NULL;
 	Oid distributedIndexId = InvalidOid;
@@ -590,7 +605,7 @@ ProcessDropIndexStmt(DropStmt *dropIndexStatement, const char *dropIndexCommand)
 		ErrorIfUnsupportedDropIndexStmt(dropIndexStatement);
 
 		/* if it is supported, go ahead and execute the command */
-		ExecuteDistributedDDLCommand(distributedRelationId, dropIndexCommand);
+		ExecuteDistributedDDLCommand(distributedRelationId, dropIndexCommand, isTopLevel);
 	}
 
 	return (Node *) dropIndexStatement;
@@ -606,7 +621,8 @@ ProcessDropIndexStmt(DropStmt *dropIndexStatement, const char *dropIndexCommand)
  * master node table.
  */
 static Node *
-ProcessAlterTableStmt(AlterTableStmt *alterTableStatement, const char *alterTableCommand)
+ProcessAlterTableStmt(AlterTableStmt *alterTableStatement, const char *alterTableCommand,
+					  bool isTopLevel)
 {
 	/* first check whether a distributed relation is affected */
 	if (alterTableStatement->relation != NULL)
@@ -621,7 +637,7 @@ ProcessAlterTableStmt(AlterTableStmt *alterTableStatement, const char *alterTabl
 				ErrorIfUnsupportedAlterTableStmt(alterTableStatement);
 
 				/* if it is supported, go ahead and execute the command */
-				ExecuteDistributedDDLCommand(relationId, alterTableCommand);
+				ExecuteDistributedDDLCommand(relationId, alterTableCommand, isTopLevel);
 			}
 		}
 	}
@@ -985,18 +1001,23 @@ IsAlterTableRenameStmt(RenameStmt *renameStmt)
 
 /*
  * ExecuteDistributedDDLCommand applies a given DDL command to the given
- * distributed table. If the function is unable to access all the finalized
- * shard placements, then it fails early and errors out. If the command
- * successfully executed on any finalized shard placement, and failed on
- * others, then it marks the placements on which execution failed as invalid.
+ * distributed table in a distributed transaction. For the transaction, the value of
+ * citus.multi_shard_commit_protocol is set to '2pc' so that two phase commit mechanism
+ * is used, regardless of the actual value of citus.multi_shard_commit_protocol. In
+ * the commit protocol, a BEGIN is sent after connection to each shard placement
+ * and COMMIT/ROLLBACK is handled by CompleteShardPlacementTransactions function.
  */
 static void
-ExecuteDistributedDDLCommand(Oid relationId, const char *ddlCommandString)
+ExecuteDistributedDDLCommand(Oid relationId, const char *ddlCommandString,
+							 bool isTopLevel)
 {
-	List *failedPlacementList = NIL;
 	bool executionOK = false;
+	bool allPlacementsAccessible = false;
 
-	bool allPlacementsAccessible = AllFinalizedPlacementsAccessible(relationId);
+	PreventTransactionChain(true, "distributed DDL commands");
+	SetLocalCommitProtocolTo2PC();
+
+	allPlacementsAccessible = AllFinalizedPlacementsAccessible(relationId);
 	if (!allPlacementsAccessible)
 	{
 		ereport(ERROR, (errmsg("cannot execute command: %s", ddlCommandString),
@@ -1007,31 +1028,13 @@ ExecuteDistributedDDLCommand(Oid relationId, const char *ddlCommandString)
 	/* make sure we don't process cancel signals */
 	HOLD_INTERRUPTS();
 
-	executionOK = ExecuteCommandOnWorkerShards(relationId, ddlCommandString,
-											   &failedPlacementList);
+	executionOK = ExecuteCommandOnWorkerShards(relationId, ddlCommandString);
 
 	/* if command could not be executed on any finalized shard placement, error out */
 	if (!executionOK)
 	{
 		ereport(ERROR, (errmsg("could not execute DDL command on worker node shards")));
 	}
-	else
-	{
-		/* else, mark failed placements as inactive */
-		ListCell *failedPlacementCell = NULL;
-		foreach(failedPlacementCell, failedPlacementList)
-		{
-			ShardPlacement *placement = (ShardPlacement *) lfirst(failedPlacementCell);
-			uint64 shardId = placement->shardId;
-			char *workerName = placement->nodeName;
-			uint32 workerPort = placement->nodePort;
-			uint64 oldShardLength = placement->shardLength;
-
-			DeleteShardPlacementRow(shardId, workerName, workerPort);
-			InsertShardPlacementRow(shardId, FILE_INACTIVE, oldShardLength,
-									workerName, workerPort);
-		}
-	}
 
 	if (QueryCancelPending)
 	{
@@ -1043,93 +1046,152 @@ ExecuteDistributedDDLCommand(Oid relationId, const char *ddlCommandString)
 }
 
 
+/*
+ * SwitchTo2PCForTransaction sets the citus.multi_shard_commit_protocol value
+ * to '2pc' for the current transaction, in order to force 2PC even the value
+ * of citus.multi_shard_commit_protocol is '1pc';
+ */
+static void
+SetLocalCommitProtocolTo2PC(void)
+{
+	if (MultiShardCommitProtocol != COMMIT_PROTOCOL_2PC)
+	{
+		ereport(DEBUG2, (errmsg("switching to 2PC for the transaction")));
+
+#if (PG_VERSION_NUM >= 90500)
+		set_config_option("citus.multi_shard_commit_protocol",
+						  "2pc",
+						  PGC_USERSET,
+						  PGC_S_SESSION,
+						  GUC_ACTION_LOCAL,
+						  true, 0, false);
+#else
+		set_config_option("citus.multi_shard_commit_protocol",
+						  "2pc",
+						  PGC_USERSET,
+						  PGC_S_SESSION,
+						  GUC_ACTION_LOCAL,
+						  true, 0);
+#endif
+	}
+}
+
+
 /*
  * ExecuteCommandOnWorkerShards executes a given command on all the finalized
- * shard placements of the given table. If the remote command errors out on the
- * first attempted placement, the function returns false. Otherwise, it returns
- * true.
+ * shard placements of the given table within a distributed transaction. The
+ * value of citus.multi_shard_commit_protocol is set to '2pc' by the caller
+ * ExecuteDistributedDDLCommand function so that two phase commit protocol is used.
  *
- * If the remote query errors out on the first attempted placement, it is very
- * likely that the command is going to fail on other placements too. This is
- * because most errors here will be PostgreSQL errors. Hence, the function fails
- * fast to avoid marking a high number of placements as failed. If the command
- * succeeds on at least one placement before failing on others, then the list of
- * failed placements is returned in failedPlacementList.
+ * ExecuteCommandOnWorkerShards opens an individual connection for each of the
+ * shard placement. After all connections are opened, a BEGIN command followed by
+ * a proper "SELECT worker_apply_shard_ddl_command(<shardId>, <DDL Command>)" is
+ * sent to all open connections in a serial manner.
+ *
+ * The opened transactions are handled by the CompleteShardPlacementTransactions
+ * function.
  *
  * Note: There are certain errors which would occur on few nodes and not on the
  * others. For example, adding a column with a type which exists on some nodes
- * and not on the others. In that case, this function might still end up returning
- * a large number of placements as failed.
+ * and not on the others.
+ *
+ * Note: The execution will be blocked if a prepared transaction from previous
+ * executions exist on the workers. In this case, those prepared transactions should
+ * be removed by either COMMIT PREPARED or ROLLBACK PREPARED.
  */
 static bool
-ExecuteCommandOnWorkerShards(Oid relationId, const char *commandString,
-							 List **failedPlacementList)
+ExecuteCommandOnWorkerShards(Oid relationId, const char *commandString)
 {
-	bool isFirstPlacement = true;
-	ListCell *shardCell = NULL;
-	List *shardList = NIL;
-	char *relationOwner = TableOwner(relationId);
+	List *shardIntervalList = LoadShardIntervalList(relationId);
+	char *tableOwner = TableOwner(relationId);
+	HTAB *shardConnectionHash = NULL;
+	ListCell *shardIntervalCell = NULL;
 
-	shardList = LoadShardList(relationId);
-	foreach(shardCell, shardList)
+	MemoryContext oldContext = MemoryContextSwitchTo(TopTransactionContext);
+
+	LockShards(shardIntervalList, ShareLock);
+
+	shardConnectionHash = OpenTransactionsToAllShardPlacements(shardIntervalList,
+															   tableOwner);
+
+	MemoryContextSwitchTo(oldContext);
+
+	foreach(shardIntervalCell, shardIntervalList)
 	{
-		List *shardPlacementList = NIL;
-		ListCell *shardPlacementCell = NULL;
-		uint64 *shardIdPointer = (uint64 *) lfirst(shardCell);
-		uint64 shardId = (*shardIdPointer);
+		ShardInterval *shardInterval = (ShardInterval *) lfirst(shardIntervalCell);
+		uint64 shardId = shardInterval->shardId;
+		ShardConnections *shardConnections = NULL;
+		bool shardConnectionsFound = false;
+		char *escapedCommandString = NULL;
+		StringInfo applyCommand = makeStringInfo();
+
+		shardConnections = GetShardConnections(shardConnectionHash,
+											   shardId,
+											   &shardConnectionsFound);
+		Assert(shardConnectionsFound);
 
 		/* build the shard ddl command */
-		char *escapedCommandString = quote_literal_cstr(commandString);
-		StringInfo applyCommand = makeStringInfo();
+		escapedCommandString = quote_literal_cstr(commandString);
 		appendStringInfo(applyCommand, WORKER_APPLY_SHARD_DDL_COMMAND, shardId,
 						 escapedCommandString);
 
-		shardPlacementList = FinalizedShardPlacementList(shardId);
-		foreach(shardPlacementCell, shardPlacementList)
-		{
-			ShardPlacement *placement = (ShardPlacement *) lfirst(shardPlacementCell);
-			char *workerName = placement->nodeName;
-			uint32 workerPort = placement->nodePort;
-
-			List *queryResultList = ExecuteRemoteQuery(workerName, workerPort,
-													   relationOwner, applyCommand);
-			if (queryResultList == NIL)
-			{
-				/*
-				 * If we failed on the first placement, return false. We return
-				 * here instead of exiting at the end to avoid breaking through
-				 * multiple loops.
-				 */
-				if (isFirstPlacement)
-				{
-					return false;
-				}
-
-				ereport(WARNING, (errmsg("could not apply command on shard "
-										 UINT64_FORMAT " on node %s:%d", shardId,
-										 workerName, workerPort),
-								  errdetail("Shard placement will be marked as "
-											"inactive.")));
-
-				*failedPlacementList = lappend(*failedPlacementList, placement);
-			}
-			else
-			{
-				ereport(DEBUG2, (errmsg("applied command on shard " UINT64_FORMAT
-										" on node %s:%d", shardId, workerName,
-										workerPort)));
-			}
-
-			isFirstPlacement = false;
-		}
+		ExecuteCommandOnShardPlacements(applyCommand, shardId, shardConnections);
 
 		FreeStringInfo(applyCommand);
 	}
 
+	/* check for cancellation one last time before returning */
+	CHECK_FOR_INTERRUPTS();
+
 	return true;
 }
 
 
+/*
+ * ExecuteCommandOnShardPlacements executes the given ddl command on the
+ * placements of the given shard, using the given shard connections.
+ */
+static void
+ExecuteCommandOnShardPlacements(StringInfo applyCommand, uint64 shardId,
+								ShardConnections *shardConnections)
+{
+	List *connectionList = shardConnections->connectionList;
+	ListCell *connectionCell = NULL;
+
+	Assert(connectionList != NIL);
+
+	foreach(connectionCell, connectionList)
+	{
+		TransactionConnection *transactionConnection =
+			(TransactionConnection *) lfirst(connectionCell);
+		PGconn *connection = transactionConnection->connection;
+		PGresult *result = NULL;
+
+		/* send the query */
+		result = PQexec(connection, applyCommand->data);
+		if (PQresultStatus(result) != PGRES_TUPLES_OK)
+		{
+			WarnRemoteError(connection, result);
+			ereport(ERROR, (errmsg("could not execute DDL command on worker "
+								   "node shards")));
+		}
+		else
+		{
+			char *workerName = ConnectionGetOptionValue(connection, "host");
+			char *workerPort = ConnectionGetOptionValue(connection, "port");
+
+			ereport(DEBUG2, (errmsg("applied command on shard " UINT64_FORMAT
+									" on node %s:%s", shardId, workerName,
+									workerPort)));
+		}
+
+		PQclear(result);
+
+		transactionConnection->transactionState = TRANSACTION_STATE_OPEN;
+	}
+}
+
+
 /*
  * AllFinalizedPlacementsAccessible returns true if all the finalized shard
  * placements for a given relation are accessible. Otherwise, the function
@@ -1529,6 +1591,7 @@ ReplicateGrantStmt(Node *parsetree)
 		RangeVar *relvar = (RangeVar *) lfirst(objectCell);
 		Oid relOid = RangeVarGetRelid(relvar, NoLock, false);
 		const char *grantOption = "";
+		bool isTopLevel = true;
 
 		if (!IsDistributedTable(relOid))
 		{
@@ -1561,7 +1624,7 @@ ReplicateGrantStmt(Node *parsetree)
 							 granteesString.data);
 		}
 
-		ExecuteDistributedDDLCommand(relOid, ddlString.data);
+		ExecuteDistributedDDLCommand(relOid, ddlString.data, isTopLevel);
 		resetStringInfo(&ddlString);
 	}
 }
diff --git a/src/backend/distributed/master/master_modify_multiple_shards.c b/src/backend/distributed/master/master_modify_multiple_shards.c
index 6c7cf7833..008909e09 100644
--- a/src/backend/distributed/master/master_modify_multiple_shards.c
+++ b/src/backend/distributed/master/master_modify_multiple_shards.c
@@ -26,6 +26,7 @@
 #include "commands/event_trigger.h"
 #include "distributed/citus_clauses.h"
 #include "distributed/citus_ruleutils.h"
+#include "distributed/commit_protocol.h"
 #include "distributed/connection_cache.h"
 #include "distributed/listutils.h"
 #include "distributed/master_metadata_utility.h"
@@ -36,7 +37,7 @@
 #include "distributed/multi_router_executor.h"
 #include "distributed/multi_router_planner.h"
 #include "distributed/multi_server_executor.h"
-#include "distributed/multi_transaction.h"
+#include "distributed/multi_shard_transaction.h"
 #include "distributed/pg_dist_shard.h"
 #include "distributed/pg_dist_partition.h"
 #include "distributed/resource_lock.h"
@@ -51,13 +52,12 @@
 #include "utils/datum.h"
 #include "utils/inval.h"
 #include "utils/lsyscache.h"
+#include "utils/memutils.h"
 
 
 static void LockShardsForModify(List *shardIntervalList);
 static bool HasReplication(List *shardIntervalList);
-static int SendQueryToShards(Query *query, List *shardIntervalList);
-static HTAB * OpenConnectionsToAllShardPlacements(List *shardIntervalList);
-static void OpenConnectionsToShardPlacements(uint64 shardId, HTAB *shardConnectionHash);
+static int SendQueryToShards(Query *query, List *shardIntervalList, Oid relationId);
 static int SendQueryToPlacements(char *shardQueryString,
 								 ShardConnections *shardConnections);
 
@@ -137,7 +137,8 @@ master_modify_multiple_shards(PG_FUNCTION_ARGS)
 
 	LockShardsForModify(prunedShardIntervalList);
 
-	affectedTupleCount = SendQueryToShards(modifyQuery, prunedShardIntervalList);
+	affectedTupleCount = SendQueryToShards(modifyQuery, prunedShardIntervalList,
+										   relationId);
 
 	PG_RETURN_INT32(affectedTupleCount);
 }
@@ -162,7 +163,7 @@ LockShardsForModify(List *shardIntervalList)
 	{
 		lockMode = ShareLock;
 	}
-	else if (!HasReplication(shardIntervalList)) /* check if any shards have >1 replica */
+	else if (!HasReplication(shardIntervalList))
 	{
 		lockMode = ShareLock;
 	}
@@ -209,153 +210,55 @@ HasReplication(List *shardIntervalList)
  * the shards when necessary before calling SendQueryToShards.
  */
 static int
-SendQueryToShards(Query *query, List *shardIntervalList)
+SendQueryToShards(Query *query, List *shardIntervalList, Oid relationId)
 {
 	int affectedTupleCount = 0;
-	HTAB *shardConnectionHash = OpenConnectionsToAllShardPlacements(shardIntervalList);
-	List *allShardsConnectionList = ConnectionList(shardConnectionHash);
+	char *relationOwner = TableOwner(relationId);
+	HTAB *shardConnectionHash = NULL;
+	ListCell *shardIntervalCell = NULL;
 
-	PG_TRY();
+	MemoryContext oldContext = MemoryContextSwitchTo(TopTransactionContext);
+
+	shardConnectionHash = OpenTransactionsToAllShardPlacements(shardIntervalList,
+															   relationOwner);
+
+	MemoryContextSwitchTo(oldContext);
+
+	foreach(shardIntervalCell, shardIntervalList)
 	{
-		ListCell *shardIntervalCell = NULL;
+		ShardInterval *shardInterval = (ShardInterval *) lfirst(
+			shardIntervalCell);
+		Oid relationId = shardInterval->relationId;
+		uint64 shardId = shardInterval->shardId;
+		bool shardConnectionsFound = false;
+		ShardConnections *shardConnections = NULL;
+		StringInfo shardQueryString = makeStringInfo();
+		char *shardQueryStringData = NULL;
+		int shardAffectedTupleCount = -1;
 
-		foreach(shardIntervalCell, shardIntervalList)
-		{
-			ShardInterval *shardInterval = (ShardInterval *) lfirst(
-				shardIntervalCell);
-			Oid relationId = shardInterval->relationId;
-			uint64 shardId = shardInterval->shardId;
-			bool shardConnectionsFound = false;
-			ShardConnections *shardConnections = NULL;
-			StringInfo shardQueryString = makeStringInfo();
-			char *shardQueryStringData = NULL;
-			int shardAffectedTupleCount = -1;
+		shardConnections = GetShardConnections(shardConnectionHash,
+											   shardId,
+											   &shardConnectionsFound);
+		Assert(shardConnectionsFound);
 
-			shardConnections = GetShardConnections(shardConnectionHash,
-												   shardId,
-												   &shardConnectionsFound);
-			Assert(shardConnectionsFound);
-
-			deparse_shard_query(query, relationId, shardId, shardQueryString);
-			shardQueryStringData = shardQueryString->data;
-			shardAffectedTupleCount = SendQueryToPlacements(shardQueryStringData,
-															shardConnections);
-			affectedTupleCount += shardAffectedTupleCount;
-		}
-
-		if (MultiShardCommitProtocol == COMMIT_PROTOCOL_2PC)
-		{
-			PrepareRemoteTransactions(allShardsConnectionList);
-		}
-
-		/* check for cancellation one last time before returning */
-		CHECK_FOR_INTERRUPTS();
+		deparse_shard_query(query, relationId, shardId, shardQueryString);
+		shardQueryStringData = shardQueryString->data;
+		shardAffectedTupleCount = SendQueryToPlacements(shardQueryStringData,
+														shardConnections);
+		affectedTupleCount += shardAffectedTupleCount;
 	}
-	PG_CATCH();
-	{
-		/* roll back all transactions */
-		AbortRemoteTransactions(allShardsConnectionList);
-		CloseConnections(allShardsConnectionList);
 
-		PG_RE_THROW();
-	}
-	PG_END_TRY();
-
-	CommitRemoteTransactions(allShardsConnectionList, false);
-	CloseConnections(allShardsConnectionList);
+	/* check for cancellation one last time before returning */
+	CHECK_FOR_INTERRUPTS();
 
 	return affectedTupleCount;
 }
 
 
-/*
- * OpenConnectionsToAllShardPlacement opens connections to all placements of
- * the given shard list and returns the hash table containing the connections.
- * The resulting hash table maps shardId to ShardConnection struct.
- */
-static HTAB *
-OpenConnectionsToAllShardPlacements(List *shardIntervalList)
-{
-	HTAB *shardConnectionHash = CreateShardConnectionHash();
-
-	ListCell *shardIntervalCell = NULL;
-
-	foreach(shardIntervalCell, shardIntervalList)
-	{
-		ShardInterval *shardInterval = (ShardInterval *) lfirst(shardIntervalCell);
-		uint64 shardId = shardInterval->shardId;
-
-		OpenConnectionsToShardPlacements(shardId, shardConnectionHash);
-	}
-
-	return shardConnectionHash;
-}
-
-
-/*
- * OpenConnectionsToShardPlacements opens connections to all placements of the
- * shard with the given shardId and populates the shardConnectionHash table
- * accordingly.
- */
-static void
-OpenConnectionsToShardPlacements(uint64 shardId, HTAB *shardConnectionHash)
-{
-	bool shardConnectionsFound = false;
-
-	/* get existing connections to the shard placements, if any */
-	ShardConnections *shardConnections = GetShardConnections(shardConnectionHash,
-															 shardId,
-															 &shardConnectionsFound);
-
-	List *shardPlacementList = FinalizedShardPlacementList(shardId);
-	ListCell *shardPlacementCell = NULL;
-	List *connectionList = NIL;
-
-	Assert(!shardConnectionsFound);
-
-	if (shardPlacementList == NIL)
-	{
-		ereport(ERROR, (errmsg("could not find any shard placements for the shard "
-							   UINT64_FORMAT, shardId)));
-	}
-
-	foreach(shardPlacementCell, shardPlacementList)
-	{
-		ShardPlacement *shardPlacement = (ShardPlacement *) lfirst(
-			shardPlacementCell);
-		char *workerName = shardPlacement->nodeName;
-		uint32 workerPort = shardPlacement->nodePort;
-		char *nodeUser = CurrentUserName();
-		PGconn *connection = ConnectToNode(workerName, workerPort, nodeUser);
-		TransactionConnection *transactionConnection = NULL;
-
-		if (connection == NULL)
-		{
-			List *abortConnectionList = ConnectionList(shardConnectionHash);
-			CloseConnections(abortConnectionList);
-
-			ereport(ERROR, (errmsg("could not establish a connection to all "
-								   "placements")));
-		}
-
-		transactionConnection = palloc0(sizeof(TransactionConnection));
-
-		transactionConnection->connectionId = shardConnections->shardId;
-		transactionConnection->transactionState = TRANSACTION_STATE_INVALID;
-		transactionConnection->connection = connection;
-
-		connectionList = lappend(connectionList, transactionConnection);
-	}
-
-	shardConnections->connectionList = connectionList;
-}
-
-
 /*
  * SendQueryToPlacements sends the given query string to all given placement
- * connections of a shard. The query is sent with a BEGIN before the the actual
- * query so, CommitRemoteTransactions or AbortRemoteTransactions should be
- * called after all queries have been sent successfully.
+ * connections of a shard. CommitRemoteTransactions or AbortRemoteTransactions
+ * should be called after all queries have been sent successfully.
  */
 static int
 SendQueryToPlacements(char *shardQueryString, ShardConnections *shardConnections)
@@ -379,13 +282,6 @@ SendQueryToPlacements(char *shardQueryString, ShardConnections *shardConnections
 		CHECK_FOR_INTERRUPTS();
 
 		/* send the query */
-		result = PQexec(connection, "BEGIN");
-		if (PQresultStatus(result) != PGRES_COMMAND_OK)
-		{
-			WarnRemoteError(connection, result);
-			ereport(ERROR, (errmsg("could not send query to shard placement")));
-		}
-
 		result = PQexec(connection, shardQueryString);
 		if (PQresultStatus(result) != PGRES_COMMAND_OK)
 		{
diff --git a/src/backend/distributed/shared_library_init.c b/src/backend/distributed/shared_library_init.c
index ba959f860..921500609 100644
--- a/src/backend/distributed/shared_library_init.c
+++ b/src/backend/distributed/shared_library_init.c
@@ -18,6 +18,7 @@
 
 #include "commands/explain.h"
 #include "executor/executor.h"
+#include "distributed/commit_protocol.h"
 #include "distributed/master_protocol.h"
 #include "distributed/multi_copy.h"
 #include "distributed/multi_executor.h"
@@ -28,7 +29,6 @@
 #include "distributed/multi_router_executor.h"
 #include "distributed/multi_router_planner.h"
 #include "distributed/multi_server_executor.h"
-#include "distributed/multi_transaction.h"
 #include "distributed/multi_utility.h"
 #include "distributed/task_tracker.h"
 #include "distributed/worker_manager.h"
diff --git a/src/backend/distributed/utils/multi_transaction.c b/src/backend/distributed/transaction/commit_protocol.c
similarity index 76%
rename from src/backend/distributed/utils/multi_transaction.c
rename to src/backend/distributed/transaction/commit_protocol.c
index 7204dfd92..a1c7ff839 100644
--- a/src/backend/distributed/utils/multi_transaction.c
+++ b/src/backend/distributed/transaction/commit_protocol.c
@@ -1,6 +1,6 @@
 /*-------------------------------------------------------------------------
  *
- * multi_transaction.c
+ * commit_protocol.c
  *     This file contains functions for managing 1PC or 2PC transactions
  *     across many shard placements.
  *
@@ -9,20 +9,19 @@
  *-------------------------------------------------------------------------
  */
 
+
 #include "postgres.h"
 #include "libpq-fe.h"
 #include "miscadmin.h"
 
-#include "access/xact.h"
+#include "distributed/commit_protocol.h"
 #include "distributed/connection_cache.h"
-#include "distributed/multi_transaction.h"
+#include "distributed/master_metadata_utility.h"
+#include "distributed/multi_shard_transaction.h"
 #include "lib/stringinfo.h"
 #include "nodes/pg_list.h"
 
 
-#define INITIAL_CONNECTION_CACHE_SIZE 1001
-
-
 /* Local functions forward declarations */
 static uint32 DistributedTransactionId = 0;
 
@@ -46,6 +45,66 @@ InitializeDistributedTransaction(void)
 }
 
 
+/*
+ * CompleteShardPlacementTransactions commits or aborts pending shard placement
+ * transactions when the local transaction commits or aborts.
+ */
+void
+CompleteShardPlacementTransactions(XactEvent event, void *arg)
+{
+	if (shardPlacementConnectionList == NIL)
+	{
+		/* nothing to do */
+		return;
+	}
+	else if (event == XACT_EVENT_PRE_COMMIT)
+	{
+		/*
+		 * Any failure here will cause local changes to be rolled back,
+		 * and remote changes to either roll back (1PC) or, in case of
+		 * connection or node failure, leave a prepared transaction
+		 * (2PC).
+		 */
+
+		if (MultiShardCommitProtocol == COMMIT_PROTOCOL_2PC)
+		{
+			PrepareRemoteTransactions(shardPlacementConnectionList);
+		}
+
+		return;
+	}
+	else if (event == XACT_EVENT_COMMIT)
+	{
+		/*
+		 * A failure here will cause some remote changes to either
+		 * roll back (1PC) or, in case of connection or node failure,
+		 * leave a prepared transaction (2PC). However, the local
+		 * changes have already been committed.
+		 */
+
+		CommitRemoteTransactions(shardPlacementConnectionList, false);
+	}
+	else if (event == XACT_EVENT_ABORT)
+	{
+		/*
+		 * A failure here will cause some remote changes to either
+		 * roll back (1PC) or, in case of connection or node failure,
+		 * leave a prepared transaction (2PC). The local changes have
+		 * already been rolled back.
+		 */
+
+		AbortRemoteTransactions(shardPlacementConnectionList);
+	}
+	else
+	{
+		return;
+	}
+
+	CloseConnections(shardPlacementConnectionList);
+	shardPlacementConnectionList = NIL;
+}
+
+
 /*
  * PrepareRemoteTransactions prepares all transactions on connections in
  * connectionList for commit if the 2PC commit protocol is enabled.
@@ -82,6 +141,9 @@ PrepareRemoteTransactions(List *connectionList)
 							errmsg("failed to prepare transaction")));
 		}
 
+		ereport(DEBUG2, (errmsg("sent PREPARE TRANSACTION over connection %ld",
+								connectionId)));
+
 		PQclear(result);
 
 		transactionConnection->transactionState = TRANSACTION_STATE_PREPARED;
@@ -126,6 +188,8 @@ AbortRemoteTransactions(List *connectionList)
 										  command->data, nodeName, nodePort)));
 			}
 
+			ereport(DEBUG2, (errmsg("sent ROLLBACK over connection %ld", connectionId)));
+
 			PQclear(result);
 		}
 		else if (transactionConnection->transactionState == TRANSACTION_STATE_OPEN)
@@ -197,6 +261,9 @@ CommitRemoteTransactions(List *connectionList, bool stopOnFailure)
 											  command->data, nodeName, nodePort)));
 				}
 			}
+
+			ereport(DEBUG2, (errmsg("sent COMMIT PREPARED over connection %ld",
+									connectionId)));
 		}
 		else
 		{
@@ -224,6 +291,8 @@ CommitRemoteTransactions(List *connectionList, bool stopOnFailure)
 											 nodeName, nodePort)));
 				}
 			}
+
+			ereport(DEBUG2, (errmsg("sent COMMIT over connection %ld", connectionId)));
 		}
 
 		PQclear(result);
@@ -253,97 +322,3 @@ BuildTransactionName(int connectionId)
 
 	return commandString;
 }
-
-
-/*
- * CloseConnections closes all connections in connectionList.
- */
-void
-CloseConnections(List *connectionList)
-{
-	ListCell *connectionCell = NULL;
-
-	foreach(connectionCell, connectionList)
-	{
-		TransactionConnection *transactionConnection =
-			(TransactionConnection *) lfirst(connectionCell);
-		PGconn *connection = transactionConnection->connection;
-
-		PQfinish(connection);
-	}
-}
-
-
-/*
- * CreateShardConnectionHash constructs a hash table used for shardId->Connection
- * mapping.
- */
-HTAB *
-CreateShardConnectionHash(void)
-{
-	HTAB *shardConnectionsHash = NULL;
-	int hashFlags = 0;
-	HASHCTL info;
-
-	memset(&info, 0, sizeof(info));
-	info.keysize = sizeof(int64);
-	info.entrysize = sizeof(ShardConnections);
-	info.hash = tag_hash;
-
-	hashFlags = HASH_ELEM | HASH_FUNCTION | HASH_CONTEXT;
-	shardConnectionsHash = hash_create("Shard Connections Hash",
-									   INITIAL_CONNECTION_CACHE_SIZE, &info,
-									   hashFlags);
-
-	return shardConnectionsHash;
-}
-
-
-/*
- * GetShardConnections finds existing connections for a shard in the hash.
- * If not found, then a ShardConnections structure with empty connectionList
- * is returned.
- */
-ShardConnections *
-GetShardConnections(HTAB *shardConnectionHash, int64 shardId,
-					bool *shardConnectionsFound)
-{
-	ShardConnections *shardConnections = NULL;
-
-	shardConnections = (ShardConnections *) hash_search(shardConnectionHash,
-														&shardId,
-														HASH_ENTER,
-														shardConnectionsFound);
-	if (!*shardConnectionsFound)
-	{
-		shardConnections->shardId = shardId;
-		shardConnections->connectionList = NIL;
-	}
-
-	return shardConnections;
-}
-
-
-/*
- * ConnectionList flattens the connection hash to a list of placement connections.
- */
-List *
-ConnectionList(HTAB *connectionHash)
-{
-	List *connectionList = NIL;
-	HASH_SEQ_STATUS status;
-	ShardConnections *shardConnections = NULL;
-
-	hash_seq_init(&status, connectionHash);
-
-	shardConnections = (ShardConnections *) hash_seq_search(&status);
-	while (shardConnections != NULL)
-	{
-		List *shardConnectionsList = list_copy(shardConnections->connectionList);
-		connectionList = list_concat(connectionList, shardConnectionsList);
-
-		shardConnections = (ShardConnections *) hash_seq_search(&status);
-	}
-
-	return connectionList;
-}
diff --git a/src/backend/distributed/transaction/multi_shard_transaction.c b/src/backend/distributed/transaction/multi_shard_transaction.c
new file mode 100644
index 000000000..b11019be0
--- /dev/null
+++ b/src/backend/distributed/transaction/multi_shard_transaction.c
@@ -0,0 +1,243 @@
+/*-------------------------------------------------------------------------
+ *
+ * multi_shard_transaction.c
+ *     This file contains functions for managing 1PC or 2PC transactions
+ *     across many shard placements.
+ *
+ * Copyright (c) 2016, Citus Data, Inc.
+ *
+ *-------------------------------------------------------------------------
+ */
+
+
+#include "libpq-fe.h"
+#include "postgres.h"
+
+#include "distributed/commit_protocol.h"
+#include "distributed/connection_cache.h"
+#include "distributed/master_metadata_utility.h"
+#include "distributed/multi_shard_transaction.h"
+#include "nodes/pg_list.h"
+
+
+#define INITIAL_CONNECTION_CACHE_SIZE 1001
+
+
+List *shardPlacementConnectionList = NIL;
+
+static void RegisterShardPlacementXactCallback(void);
+
+static bool isXactCallbackRegistered = false;
+
+
+/*
+ * OpenTransactionsToAllShardPlacements opens connections to all placements of
+ * the given shard Id Pointer List and returns the hash table containing the connections.
+ * The resulting hash table maps shardIds to ShardConnection structs.
+ */
+HTAB *
+OpenTransactionsToAllShardPlacements(List *shardIntervalList, char *userName)
+{
+	HTAB *shardConnectionHash = CreateShardConnectionHash();
+	ListCell *shardIntervalCell = NULL;
+	ListCell *connectionCell = NULL;
+	List *connectionList = NIL;
+
+	foreach(shardIntervalCell, shardIntervalList)
+	{
+		ShardInterval *shardInterval = (ShardInterval *) lfirst(shardIntervalCell);
+		uint64 shardId = shardInterval->shardId;
+
+		OpenConnectionsToShardPlacements(shardId, shardConnectionHash, userName);
+	}
+
+	connectionList = ConnectionList(shardConnectionHash);
+
+	foreach(connectionCell, connectionList)
+	{
+		TransactionConnection *transactionConnection =
+			(TransactionConnection *) lfirst(connectionCell);
+		PGconn *connection = transactionConnection->connection;
+		PGresult *result = NULL;
+
+		result = PQexec(connection, "BEGIN");
+		if (PQresultStatus(result) != PGRES_COMMAND_OK)
+		{
+			ReraiseRemoteError(connection, result);
+		}
+	}
+
+	shardPlacementConnectionList = ConnectionList(shardConnectionHash);
+
+	RegisterShardPlacementXactCallback();
+
+	return shardConnectionHash;
+}
+
+
+/*
+ * CreateShardConnectionHash constructs a hash table used for shardId->Connection
+ * mapping.
+ */
+HTAB *
+CreateShardConnectionHash(void)
+{
+	HTAB *shardConnectionsHash = NULL;
+	int hashFlags = 0;
+	HASHCTL info;
+
+	memset(&info, 0, sizeof(info));
+	info.keysize = sizeof(int64);
+	info.entrysize = sizeof(ShardConnections);
+	info.hash = tag_hash;
+
+	hashFlags = HASH_ELEM | HASH_FUNCTION | HASH_CONTEXT;
+	shardConnectionsHash = hash_create("Shard Connections Hash",
+									   INITIAL_CONNECTION_CACHE_SIZE, &info,
+									   hashFlags);
+
+	return shardConnectionsHash;
+}
+
+
+/*
+ * OpenConnectionsToShardPlacements opens connections to all placements of the
+ * shard with the given shardId and populates the shardConnectionHash table
+ * accordingly.
+ */
+void
+OpenConnectionsToShardPlacements(uint64 shardId, HTAB *shardConnectionHash,
+								 char *userName)
+{
+	bool shardConnectionsFound = false;
+
+	/* get existing connections to the shard placements, if any */
+	ShardConnections *shardConnections = GetShardConnections(shardConnectionHash,
+															 shardId,
+															 &shardConnectionsFound);
+
+	List *shardPlacementList = FinalizedShardPlacementList(shardId);
+	ListCell *shardPlacementCell = NULL;
+	List *connectionList = NIL;
+
+	Assert(!shardConnectionsFound);
+
+	if (shardPlacementList == NIL)
+	{
+		ereport(ERROR, (errmsg("could not find any shard placements for the shard "
+							   UINT64_FORMAT, shardId)));
+	}
+
+	foreach(shardPlacementCell, shardPlacementList)
+	{
+		ShardPlacement *shardPlacement = (ShardPlacement *) lfirst(
+			shardPlacementCell);
+		char *workerName = shardPlacement->nodeName;
+		uint32 workerPort = shardPlacement->nodePort;
+		PGconn *connection = ConnectToNode(workerName, workerPort, userName);
+		TransactionConnection *transactionConnection = NULL;
+
+		if (connection == NULL)
+		{
+			List *abortConnectionList = ConnectionList(shardConnectionHash);
+			CloseConnections(abortConnectionList);
+
+			ereport(ERROR, (errmsg("could not establish a connection to all "
+								   "placements of shard %lu", shardId)));
+		}
+
+		transactionConnection = palloc0(sizeof(TransactionConnection));
+
+		transactionConnection->connectionId = shardConnections->shardId;
+		transactionConnection->transactionState = TRANSACTION_STATE_INVALID;
+		transactionConnection->connection = connection;
+
+		connectionList = lappend(connectionList, transactionConnection);
+	}
+
+	shardConnections->connectionList = connectionList;
+}
+
+
+/*
+ * GetShardConnections finds existing connections for a shard in the hash.
+ * If not found, then a ShardConnections structure with empty connectionList
+ * is returned.
+ */
+ShardConnections *
+GetShardConnections(HTAB *shardConnectionHash, int64 shardId,
+					bool *shardConnectionsFound)
+{
+	ShardConnections *shardConnections = NULL;
+
+	shardConnections = (ShardConnections *) hash_search(shardConnectionHash,
+														&shardId,
+														HASH_ENTER,
+														shardConnectionsFound);
+	if (!*shardConnectionsFound)
+	{
+		shardConnections->shardId = shardId;
+		shardConnections->connectionList = NIL;
+	}
+
+	return shardConnections;
+}
+
+
+/*
+ * ConnectionList flattens the connection hash to a list of placement connections.
+ */
+List *
+ConnectionList(HTAB *connectionHash)
+{
+	List *connectionList = NIL;
+	HASH_SEQ_STATUS status;
+	ShardConnections *shardConnections = NULL;
+
+	hash_seq_init(&status, connectionHash);
+
+	shardConnections = (ShardConnections *) hash_seq_search(&status);
+	while (shardConnections != NULL)
+	{
+		List *shardConnectionsList = list_copy(shardConnections->connectionList);
+		connectionList = list_concat(connectionList, shardConnectionsList);
+
+		shardConnections = (ShardConnections *) hash_seq_search(&status);
+	}
+
+	return connectionList;
+}
+
+
+/*
+ * EnableXactCallback ensures the XactCallback for committing/aborting
+ * remote worker transactions is registered.
+ */
+void
+RegisterShardPlacementXactCallback(void)
+{
+	if (!isXactCallbackRegistered)
+	{
+		RegisterXactCallback(CompleteShardPlacementTransactions, NULL);
+		isXactCallbackRegistered = true;
+	}
+}
+
+
+/*
+ * CloseConnections closes all connections in connectionList.
+ */
+void
+CloseConnections(List *connectionList)
+{
+	ListCell *connectionCell = NULL;
+
+	foreach(connectionCell, connectionList)
+	{
+		TransactionConnection *transactionConnection =
+			(TransactionConnection *) lfirst(connectionCell);
+		PGconn *connection = transactionConnection->connection;
+
+		PQfinish(connection);
+	}
+}
diff --git a/src/include/distributed/multi_transaction.h b/src/include/distributed/commit_protocol.h
similarity index 71%
rename from src/include/distributed/multi_transaction.h
rename to src/include/distributed/commit_protocol.h
index 7a50eb274..346de8ca9 100644
--- a/src/include/distributed/multi_transaction.h
+++ b/src/include/distributed/commit_protocol.h
@@ -1,6 +1,6 @@
 /*-------------------------------------------------------------------------
  *
- * multi_transaction.h
+ * commit_protocol.h
  *	  Type and function declarations used in performing transactions across
  *	  shard placements.
  *
@@ -9,10 +9,11 @@
  *-------------------------------------------------------------------------
  */
 
-#ifndef MULTI_TRANSACTION_H
-#define MULTI_TRANSACTION_H
+#ifndef COMMIT_PROTOCOL_H
+#define COMMIT_PROTOCOL_H
 
 
+#include "access/xact.h"
 #include "libpq-fe.h"
 #include "lib/stringinfo.h"
 #include "nodes/pg_list.h"
@@ -47,29 +48,15 @@ typedef struct TransactionConnection
 } TransactionConnection;
 
 
-/* ShardConnections represents a set of connections for each placement of a shard */
-typedef struct ShardConnections
-{
-	int64 shardId;
-	List *connectionList;
-} ShardConnections;
-
-
 /* config variable managed via guc.c */
 extern int MultiShardCommitProtocol;
 
 
 /* Functions declarations for transaction and connection management */
 extern void InitializeDistributedTransaction(void);
+extern void CompleteShardPlacementTransactions(XactEvent event, void *arg);
 extern void PrepareRemoteTransactions(List *connectionList);
 extern void AbortRemoteTransactions(List *connectionList);
 extern void CommitRemoteTransactions(List *connectionList, bool stopOnFailure);
-extern void CloseConnections(List *connectionList);
-extern HTAB * CreateShardConnectionHash(void);
-extern ShardConnections * GetShardConnections(HTAB *shardConnectionHash,
-											  int64 shardId,
-											  bool *shardConnectionsFound);
-extern List * ConnectionList(HTAB *connectionHash);
 
-
-#endif /* MULTI_TRANSACTION_H */
+#endif /* COMMIT_PROTOCOL_H */
diff --git a/src/include/distributed/multi_copy.h b/src/include/distributed/multi_copy.h
index 3cc44092b..d27926bbf 100644
--- a/src/include/distributed/multi_copy.h
+++ b/src/include/distributed/multi_copy.h
@@ -15,11 +15,6 @@
 
 #include "nodes/parsenodes.h"
 
-
-/* config variable managed via guc.c */
-extern int MultiShardCommitProtocol;
-
-
 /*
  * A smaller version of copy.c's CopyStateData, trimmed to the elements
  * necessary to copy out results. While it'd be a bit nicer to share code,
diff --git a/src/include/distributed/multi_shard_transaction.h b/src/include/distributed/multi_shard_transaction.h
new file mode 100644
index 000000000..2f7c30fd9
--- /dev/null
+++ b/src/include/distributed/multi_shard_transaction.h
@@ -0,0 +1,43 @@
+/*-------------------------------------------------------------------------
+ *
+ * multi_shard_transaction.h
+ *	  Type and function declarations used in performing transactions across
+ *	  shard placements.
+ *
+ * Copyright (c) 2016, Citus Data, Inc.
+ *
+ *-------------------------------------------------------------------------
+ */
+
+#ifndef MULTI_SHARD_TRANSACTION_H
+#define MULTI_SHARD_TRANSACTION_H
+
+
+#include "access/xact.h"
+#include "utils/hsearch.h"
+#include "nodes/pg_list.h"
+
+
+/* ShardConnections represents a set of connections for each placement of a shard */
+typedef struct ShardConnections
+{
+	int64 shardId;
+	List *connectionList;
+} ShardConnections;
+
+
+extern List *shardPlacementConnectionList;
+
+
+extern HTAB * OpenTransactionsToAllShardPlacements(List *shardIdList,
+												   char *relationOwner);
+extern HTAB * CreateShardConnectionHash(void);
+extern void OpenConnectionsToShardPlacements(uint64 shardId, HTAB *shardConnectionHash,
+											 char *nodeUser);
+extern ShardConnections * GetShardConnections(HTAB *shardConnectionHash,
+											  int64 shardId,
+											  bool *shardConnectionsFound);
+extern List * ConnectionList(HTAB *connectionHash);
+extern void CloseConnections(List *connectionList);
+
+#endif /* MULTI_SHARD_TRANSACTION_H */
diff --git a/src/test/regress/expected/multi_join_order_additional.out b/src/test/regress/expected/multi_join_order_additional.out
index 20698676a..aaf2165e6 100644
--- a/src/test/regress/expected/multi_join_order_additional.out
+++ b/src/test/regress/expected/multi_join_order_additional.out
@@ -42,9 +42,14 @@ SELECT master_create_worker_shards('lineitem_hash', 2, 1);
 (1 row)
 
 CREATE INDEX lineitem_hash_time_index ON lineitem_hash (l_shipdate);
+DEBUG:  switching to 2PC for the transaction
 DEBUG:  applied command on shard 650000 on node localhost:57637
 DEBUG:  applied command on shard 650001 on node localhost:57638
 DEBUG:  building index "lineitem_hash_time_index" on table "lineitem_hash"
+DEBUG:  sent PREPARE TRANSACTION over connection 650000
+DEBUG:  sent PREPARE TRANSACTION over connection 650001
+DEBUG:  sent COMMIT PREPARED over connection 650000
+DEBUG:  sent COMMIT PREPARED over connection 650001
 CREATE TABLE orders_hash (
 	o_orderkey bigint not null,
 	o_custkey integer not null,
diff --git a/src/test/regress/expected/multi_shard_modify.out b/src/test/regress/expected/multi_shard_modify.out
index 1394563d3..fc4866d04 100644
--- a/src/test/regress/expected/multi_shard_modify.out
+++ b/src/test/regress/expected/multi_shard_modify.out
@@ -103,6 +103,10 @@ SELECT master_modify_multiple_shards('DELETE FROM multi_shard_modify_test WHERE
 DEBUG:  predicate pruning for shardId 350001
 DEBUG:  predicate pruning for shardId 350002
 DEBUG:  predicate pruning for shardId 350003
+DEBUG:  sent PREPARE TRANSACTION over connection 350000
+DEBUG:  sent PREPARE TRANSACTION over connection 350000
+DEBUG:  sent COMMIT PREPARED over connection 350000
+DEBUG:  sent COMMIT PREPARED over connection 350000
  master_modify_multiple_shards 
 -------------------------------
                              1
diff --git a/src/test/regress/input/multi_alter_table_statements.source b/src/test/regress/input/multi_alter_table_statements.source
index 3df73f6db..4584c31fd 100644
--- a/src/test/regress/input/multi_alter_table_statements.source
+++ b/src/test/regress/input/multi_alter_table_statements.source
@@ -156,6 +156,42 @@ ALTER TABLE IF EXISTS lineitem_alter RENAME l_orderkey TO l_orderkey_renamed;
 -- node
 \d lineitem_alter
 
+-- verify that non-propagated ddl commands are allowed inside a transaction block
+SET citus.enable_ddl_propagation to false;
+BEGIN;
+CREATE INDEX temp_index_1 ON lineitem_alter(l_linenumber);
+COMMIT;
+SELECT indexname, tablename FROM pg_indexes WHERE tablename = 'lineitem_alter';
+DROP INDEX temp_index_1;
+
+-- verify that distributed ddl commands are not allowed inside a transaction block
+SET citus.enable_ddl_propagation to true;
+BEGIN;
+CREATE INDEX temp_index_2 ON lineitem_alter(l_orderkey);
+COMMIT;
+SELECT indexname, tablename FROM pg_indexes WHERE tablename = 'lineitem_alter';
+DROP INDEX temp_index_2;
+
+-- verify that distributed ddl commands use 2PC, even the value of citus.multi_shard_commit_protocol is '1pc'
+SET citus.multi_shard_commit_protocol TO '1pc';
+SET client_min_messages TO DEBUG2;
+CREATE INDEX temp_index_3 ON lineitem_alter(l_orderkey);
+RESET client_min_messages;
+DROP INDEX temp_index_3;
+
+-- verify that citus.multi_shard_commit_protocol value is not changed
+SHOW citus.multi_shard_commit_protocol;
+
+-- verify that not any of shard placements are marked as failed when a query failure occurs
+CREATE TABLE test_ab (a int, b int);
+SELECT master_create_distributed_table('test_ab', 'a', 'hash');
+SELECT master_create_worker_shards('test_ab', 8, 2);
+INSERT INTO test_ab VALUES (2, 10);
+INSERT INTO test_ab VALUES (2, 11);
+CREATE UNIQUE INDEX temp_unique_index_1 ON test_ab(a);
+SELECT shardid FROM pg_dist_shard_placement NATURAL JOIN pg_dist_shard 
+WHERE logicalrelid='test_ab'::regclass AND shardstate=3;
+
 -- Check that the schema on the worker still looks reasonable
 \c - - - :worker_1_port
 SELECT attname, atttypid::regtype
diff --git a/src/test/regress/output/multi_alter_table_statements.source b/src/test/regress/output/multi_alter_table_statements.source
index 2688ce896..5af6ff985 100644
--- a/src/test/regress/output/multi_alter_table_statements.source
+++ b/src/test/regress/output/multi_alter_table_statements.source
@@ -412,6 +412,127 @@ ERROR:  renaming distributed tables or their objects is currently unsupported
  l_comment       | character varying(44) | not null
  null_column     | integer               | 
 
+-- verify that non-propagated ddl commands are allowed inside a transaction block
+SET citus.enable_ddl_propagation to false;
+BEGIN;
+CREATE INDEX temp_index_1 ON lineitem_alter(l_linenumber);
+COMMIT;
+SELECT indexname, tablename FROM pg_indexes WHERE tablename = 'lineitem_alter';
+  indexname   |   tablename    
+--------------+----------------
+ temp_index_1 | lineitem_alter
+(1 row)
+
+DROP INDEX temp_index_1;
+-- verify that distributed ddl commands are not allowed inside a transaction block
+SET citus.enable_ddl_propagation to true;
+BEGIN;
+CREATE INDEX temp_index_2 ON lineitem_alter(l_orderkey);
+ERROR:  distributed DDL commands cannot run inside a transaction block
+COMMIT;
+SELECT indexname, tablename FROM pg_indexes WHERE tablename = 'lineitem_alter';
+ indexname | tablename 
+-----------+-----------
+(0 rows)
+
+DROP INDEX temp_index_2;
+ERROR:  index "temp_index_2" does not exist
+-- verify that distributed ddl commands use 2PC, even the value of citus.multi_shard_commit_protocol is '1pc'
+SET citus.multi_shard_commit_protocol TO '1pc';
+SET client_min_messages TO DEBUG2;
+CREATE INDEX temp_index_3 ON lineitem_alter(l_orderkey);
+DEBUG:  switching to 2PC for the transaction
+DEBUG:  applied command on shard 220000 on node localhost:57638
+DEBUG:  applied command on shard 220000 on node localhost:57637
+DEBUG:  applied command on shard 220003 on node localhost:57637
+DEBUG:  applied command on shard 220003 on node localhost:57638
+DEBUG:  applied command on shard 220007 on node localhost:57637
+DEBUG:  applied command on shard 220007 on node localhost:57638
+DEBUG:  applied command on shard 220004 on node localhost:57638
+DEBUG:  applied command on shard 220004 on node localhost:57637
+DEBUG:  applied command on shard 220008 on node localhost:57638
+DEBUG:  applied command on shard 220008 on node localhost:57637
+DEBUG:  applied command on shard 220001 on node localhost:57637
+DEBUG:  applied command on shard 220001 on node localhost:57638
+DEBUG:  applied command on shard 220002 on node localhost:57638
+DEBUG:  applied command on shard 220002 on node localhost:57637
+DEBUG:  applied command on shard 220005 on node localhost:57637
+DEBUG:  applied command on shard 220005 on node localhost:57638
+DEBUG:  applied command on shard 220009 on node localhost:57637
+DEBUG:  applied command on shard 220009 on node localhost:57638
+DEBUG:  building index "temp_index_3" on table "lineitem_alter"
+DEBUG:  sent PREPARE TRANSACTION over connection 220007
+DEBUG:  sent PREPARE TRANSACTION over connection 220007
+DEBUG:  sent PREPARE TRANSACTION over connection 220002
+DEBUG:  sent PREPARE TRANSACTION over connection 220002
+DEBUG:  sent PREPARE TRANSACTION over connection 220004
+DEBUG:  sent PREPARE TRANSACTION over connection 220004
+DEBUG:  sent PREPARE TRANSACTION over connection 220000
+DEBUG:  sent PREPARE TRANSACTION over connection 220000
+DEBUG:  sent PREPARE TRANSACTION over connection 220008
+DEBUG:  sent PREPARE TRANSACTION over connection 220008
+DEBUG:  sent PREPARE TRANSACTION over connection 220009
+DEBUG:  sent PREPARE TRANSACTION over connection 220009
+DEBUG:  sent PREPARE TRANSACTION over connection 220001
+DEBUG:  sent PREPARE TRANSACTION over connection 220001
+DEBUG:  sent PREPARE TRANSACTION over connection 220005
+DEBUG:  sent PREPARE TRANSACTION over connection 220005
+DEBUG:  sent PREPARE TRANSACTION over connection 220003
+DEBUG:  sent PREPARE TRANSACTION over connection 220003
+DEBUG:  sent COMMIT PREPARED over connection 220007
+DEBUG:  sent COMMIT PREPARED over connection 220007
+DEBUG:  sent COMMIT PREPARED over connection 220002
+DEBUG:  sent COMMIT PREPARED over connection 220002
+DEBUG:  sent COMMIT PREPARED over connection 220004
+DEBUG:  sent COMMIT PREPARED over connection 220004
+DEBUG:  sent COMMIT PREPARED over connection 220000
+DEBUG:  sent COMMIT PREPARED over connection 220000
+DEBUG:  sent COMMIT PREPARED over connection 220008
+DEBUG:  sent COMMIT PREPARED over connection 220008
+DEBUG:  sent COMMIT PREPARED over connection 220009
+DEBUG:  sent COMMIT PREPARED over connection 220009
+DEBUG:  sent COMMIT PREPARED over connection 220001
+DEBUG:  sent COMMIT PREPARED over connection 220001
+DEBUG:  sent COMMIT PREPARED over connection 220005
+DEBUG:  sent COMMIT PREPARED over connection 220005
+DEBUG:  sent COMMIT PREPARED over connection 220003
+DEBUG:  sent COMMIT PREPARED over connection 220003
+RESET client_min_messages;
+DROP INDEX temp_index_3;
+-- verify that citus.multi_shard_commit_protocol value is not changed
+SHOW citus.multi_shard_commit_protocol;
+ citus.multi_shard_commit_protocol 
+-----------------------------------
+ 1pc
+(1 row)
+
+-- verify that not any of shard placements are marked as failed when a query failure occurs
+CREATE TABLE test_ab (a int, b int);
+SELECT master_create_distributed_table('test_ab', 'a', 'hash');
+ master_create_distributed_table 
+---------------------------------
+ 
+(1 row)
+
+SELECT master_create_worker_shards('test_ab', 8, 2);
+ master_create_worker_shards 
+-----------------------------
+ 
+(1 row)
+
+INSERT INTO test_ab VALUES (2, 10);
+INSERT INTO test_ab VALUES (2, 11);
+CREATE UNIQUE INDEX temp_unique_index_1 ON test_ab(a);
+WARNING:  could not create unique index "temp_unique_index_1_220016"
+DETAIL:  Key (a)=(2) is duplicated.
+CONTEXT:  while executing command on localhost:57638
+ERROR:  could not execute DDL command on worker node shards
+SELECT shardid FROM pg_dist_shard_placement NATURAL JOIN pg_dist_shard 
+WHERE logicalrelid='test_ab'::regclass AND shardstate=3;
+ shardid 
+---------
+(0 rows)
+
 -- Check that the schema on the worker still looks reasonable
 \c - - - :worker_1_port
 SELECT attname, atttypid::regtype