diff --git a/hadoop-hdds/client/src/test/java/org/apache/hadoop/hdds/scm/TestXceiverClientGrpcChannel.java b/hadoop-hdds/client/src/test/java/org/apache/hadoop/hdds/scm/TestXceiverClientGrpcChannel.java
new file mode 100644
index 000000000000..7b84dff590d8
--- /dev/null
+++ b/hadoop-hdds/client/src/test/java/org/apache/hadoop/hdds/scm/TestXceiverClientGrpcChannel.java
@@ -0,0 +1,68 @@
+/*
+ * Licensed to the Apache Software Foundation (ASF) under one or more
+ * contributor license agreements. See the NOTICE file distributed with
+ * this work for additional information regarding copyright ownership.
+ * The ASF licenses this file to You 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.
+ */
+
+package org.apache.hadoop.hdds.scm;
+
+import static org.assertj.core.api.Assertions.assertThat;
+
+import java.io.IOException;
+import java.util.Collections;
+import java.util.concurrent.TimeUnit;
+import org.apache.hadoop.hdds.HddsConfigKeys;
+import org.apache.hadoop.hdds.conf.OzoneConfiguration;
+import org.apache.hadoop.hdds.protocol.DatanodeDetails;
+import org.apache.hadoop.hdds.protocol.DatanodeID;
+import org.apache.hadoop.hdds.protocol.MockDatanodeDetails;
+import org.apache.hadoop.hdds.scm.pipeline.MockPipeline;
+import org.apache.hadoop.hdds.scm.pipeline.Pipeline;
+import org.apache.ratis.thirdparty.io.grpc.ManagedChannel;
+import org.junit.jupiter.params.ParameterizedTest;
+import org.junit.jupiter.params.provider.ValueSource;
+
+class TestXceiverClientGrpcChannel {
+
+  private static final int PORT = 9882;
+  private static final String HOSTNAME = "dn-host.example.com";
+  private static final String IP_ADDRESS = "192.168.1.100";
+
+  @ParameterizedTest(name = "useDatanodeHostname={0}")
+  @ValueSource(booleans = {false, true})
+  void createChannelUsesConfiguredAddress(boolean useHostname) throws IOException, InterruptedException {
+    OzoneConfiguration conf = new OzoneConfiguration();
+    conf.setBoolean(HddsConfigKeys.HDDS_DATANODE_USE_DN_HOSTNAME, useHostname);
+
+    DatanodeDetails dn = datanodeWithDistinctHostAndIp();
+    Pipeline pipeline = MockPipeline.createPipeline(Collections.singletonList(dn));
+
+    try (XceiverClientGrpc client = new XceiverClientGrpc(pipeline, conf)) {
+      ManagedChannel channel = client.createChannel(dn, PORT).build();
+      try {
+        String expectedHost = useHostname ? HOSTNAME : IP_ADDRESS;
+        assertThat(channel.authority()).isEqualTo(expectedHost + ":" + PORT);
+      } finally {
+        channel.shutdownNow();
+        channel.awaitTermination(5, TimeUnit.SECONDS);
+      }
+    }
+  }
+
+  private static DatanodeDetails datanodeWithDistinctHostAndIp() {
+    return MockDatanodeDetails.createDatanodeDetails(
+        DatanodeID.randomID(), HOSTNAME, IP_ADDRESS, "/rack");
+  }
+
+}