diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
index 9409b1ef1..f91b9554d 100644
--- a/.pre-commit-config.yaml
+++ b/.pre-commit-config.yaml
@@ -19,7 +19,7 @@ repos:
     hooks:
       - id: isort
 -   repo: https://github.com/PyCQA/flake8
-    rev: 6.0.0
+    rev: 6.1.0
     hooks:
     - id: flake8
 -   repo: https://github.com/PyCQA/pylint
diff --git a/docs/config.qmd b/docs/config.qmd
index f253decbe..ecb571040 100644
--- a/docs/config.qmd
+++ b/docs/config.qmd
@@ -187,6 +187,12 @@ rl:
 # whether to perform weighting if doing DPO training. Boolean.
 dpo_use_weighting:
 
+# reward modelling: `True` or `False`
+reward_model:
+
+# process reward modelling: `True` or `False`
+process_reward_model:
+
 # The name of the chat template to use for training, following values are supported:
 # - tokenizer_default: Uses the chat template that is available in the tokenizer_config.json. If the chat template is not available in the tokenizer, it will raise an error. This is the default value.
 # - alpaca/inst/chatml/gemma/cohere/llama3/phi_3/deepseek_v2/jamba: These chat templates are available in the axolotl codebase at src/axolotl/utils/chat_templates.py
diff --git a/docs/dataset-formats/stepwise_supervised.qmd b/docs/dataset-formats/stepwise_supervised.qmd
new file mode 100644
index 000000000..17f0c9141
--- /dev/null
+++ b/docs/dataset-formats/stepwise_supervised.qmd
@@ -0,0 +1,18 @@
+---
+title: Stepwise Supervised Format
+description: Format for datasets with stepwise completions and labels
+order: 3
+---
+
+## Stepwise Supervised
+
+The stepwise supervised format is designed for chain-of-thought (COT) reasoning datasets where each example contains multiple completion steps and a preference label for each step.
+### ExampleHere's a simple example of a stepwise supervised dataset entry:```json
+{
+  "prompt": "Which number is larger, 9.8 or 9.11?",
+  "completions": [
+    "The fractional part of 9.8 is 0.8, while the fractional part of 9.11 is 0.11.",
+    "Since 0.11 is greater than 0.8, the number 9.11 is larger than 9.8."
+  ],
+  "labels": [true, false]
+}
diff --git a/docs/reward_modelling.qmd b/docs/reward_modelling.qmd
new file mode 100644
index 000000000..8baa93424
--- /dev/null
+++ b/docs/reward_modelling.qmd
@@ -0,0 +1,47 @@
+---
+title: "Reward Modelling"
+description: "Reward models are used to guide models towards behaviors which is preferred by humans, by training over large datasets annotated with human preferences. "
+---
+
+### Overview
+
+Reward modelling is a technique used to train models to predict the reward or value of a given input. This is particularly useful in reinforcement learning scenarios where the model needs to evaluate the quality of its actions or predictions.
+We support the reward modelling techniques supported by `trl`.
+
+### (Outcome) Reward Models
+
+Outcome reward models are trained using data which contains preference annotations for an entire interaction between the user and model (e.g. rather than per-turn or per-step).
+
+```yaml
+base_model: google/gemma-2-2b
+model_type: AutoModelForSequenceClassification
+num_labels: 1
+tokenizer_type: AutoTokenizer
+
+reward_model: true
+chat_template: gemma
+datasets:
+  - path: argilla/distilabel-intel-orca-dpo-pairs
+    type: bradley_terry.chat_template
+
+val_set_size: 0.1
+eval_steps: 100
+```
+
+### Process Reward Models (PRM)
+
+Process reward models are trained using data which contains preference annotations for each step in a series of interactions. Typically, PRMs are trained to provide reward signals over each step of a reasoning trace and are used for downstream reinforcement learning.
+```yaml
+base_model: Qwen/Qwen2.5-3B
+model_type: AutoModelForTokenClassification
+num_labels: 2
+
+process_reward_model: true
+datasets:
+  - path: trl-lib/math_shepherd
+    type: stepwise_supervised
+    split: train
+
+val_set_size: 0.1
+eval_steps: 100
+```
diff --git a/examples/gemma2/reward-model.yaml b/examples/gemma2/reward-model.yaml
index b492c6f93..ada42ec28 100644
--- a/examples/gemma2/reward-model.yaml
+++ b/examples/gemma2/reward-model.yaml
@@ -1,6 +1,7 @@
 base_model: google/gemma-2-2b
 # optionally might have model_type or tokenizer_type
 model_type: AutoModelForSequenceClassification
+num_labels: 1
 tokenizer_type: AutoTokenizer
 # Automatically upload checkpoint and final model to HF
 # hub_model_id: username/custom_model_name
diff --git a/examples/qwen2/prm.yaml b/examples/qwen2/prm.yaml
new file mode 100644
index 000000000..071e2d0f3
--- /dev/null
+++ b/examples/qwen2/prm.yaml
@@ -0,0 +1,72 @@
+base_model: Qwen/Qwen2.5-3B
+# optionally might have model_type or tokenizer_type
+model_type: AutoModelForTokenClassification
+num_labels: 2
+tokenizer_type: AutoTokenizer
+# Automatically upload checkpoint and final model to HF
+# hub_model_id: username/custom_model_name
+
+load_in_8bit: false
+load_in_4bit: false
+strict: false
+
+process_reward_model: true
+chat_template:
+datasets:
+  - path: trl-lib/math_shepherd
+    type: stepwise_supervised
+    step_separator: "\n"
+    max_completion_length:
+    train_on_last_step_only: false
+
+val_set_size: 0.2
+output_dir: ./outputs/out
+remove_unused_columns: false
+
+sequence_len: 2048
+sample_packing: false
+eval_sample_packing: false
+pad_to_sequence_len: true
+
+wandb_project:
+wandb_entity:
+wandb_watch:
+wandb_name:
+wandb_log_model:
+
+
+gradient_accumulation_steps: 1
+micro_batch_size: 8
+eval_batch_size: 8
+num_epochs: 1
+optimizer: adamw_torch
+lr_scheduler: cosine
+learning_rate: 0.0002
+
+train_on_inputs: false
+group_by_length: false
+bf16: true
+fp16:
+tf32:
+gradient_checkpointing: true
+gradient_checkpointing_kwargs:
+  use_reentrant: false
+early_stopping_patience:
+resume_from_checkpoint:
+local_rank:
+logging_steps: 1
+xformers_attention:
+flash_attention: true
+
+warmup_ratio: 0.1
+evals_per_epoch:
+eval_table_size:
+eval_max_new_tokens: 128
+eval_steps: 100
+saves_per_epoch: 1
+debug:
+deepspeed:
+weight_decay: 0.0
+fsdp:
+fsdp_config:
+special_tokens:
diff --git a/examples/qwen2/reward-model.yaml b/examples/qwen2/reward-model.yaml
new file mode 100644
index 000000000..bbd6e66ce
--- /dev/null
+++ b/examples/qwen2/reward-model.yaml
@@ -0,0 +1,67 @@
+base_model:  Qwen/Qwen2.5-0.5B
+# optionally might have model_type or tokenizer_type
+model_type: AutoModelForSequenceClassification
+num_labels: 1
+tokenizer_type: AutoTokenizer
+# Automatically upload checkpoint and final model to HF
+# hub_model_id: username/custom_model_name
+
+load_in_8bit: false
+load_in_4bit: false
+strict: false
+
+reward_model: true
+chat_template: qwen_25
+datasets:
+  - path: argilla/distilabel-intel-orca-dpo-pairs
+    type: bradley_terry.chat_template
+val_set_size: 0.0
+output_dir: ./outputs/out
+remove_unused_columns: false
+
+sequence_len: 2048
+sample_packing: false
+eval_sample_packing: false
+pad_to_sequence_len: true
+
+wandb_project:
+wandb_entity:
+wandb_watch:
+wandb_name:
+wandb_log_model:
+
+
+gradient_accumulation_steps: 4
+micro_batch_size: 2
+num_epochs: 4
+optimizer: adamw_bnb_8bit
+lr_scheduler: cosine
+learning_rate: 0.0002
+
+train_on_inputs: false
+group_by_length: false
+bf16: true
+fp16:
+tf32: true
+
+gradient_checkpointing: true
+gradient_checkpointing_kwargs:
+  use_reentrant: false
+early_stopping_patience:
+resume_from_checkpoint:
+local_rank:
+logging_steps: 1
+xformers_attention:
+flash_attention: true
+
+warmup_ratio: 0.1
+evals_per_epoch:
+eval_table_size:
+eval_max_new_tokens: 128
+saves_per_epoch: 1
+debug:
+deepspeed:
+weight_decay: 0.0
+fsdp:
+fsdp_config:
+special_tokens:
diff --git a/src/axolotl/core/trainer_builder.py b/src/axolotl/core/trainer_builder.py
index d63a10e74..6bf03d78c 100755
--- a/src/axolotl/core/trainer_builder.py
+++ b/src/axolotl/core/trainer_builder.py
@@ -44,6 +44,8 @@ from trl import (
     KTOTrainer,
     ORPOConfig,
     ORPOTrainer,
+    PRMConfig,
+    PRMTrainer,
     RewardConfig,
     RewardTrainer,
 )
@@ -342,6 +344,13 @@ class AxolotlRewardConfig(AxolotlTrainingMixins, RewardConfig):
     """
 
 
+@dataclass
+class AxolotlPRMConfig(AxolotlTrainingMixins, PRMConfig):
+    """
+    PRM config for PRM training
+    """
+
+
 class SchedulerMixin(Trainer):
     """
     Mixin class for scheduler setup in CausalTrainer.
@@ -1244,6 +1253,14 @@ class AxolotlRewardTrainer(SchedulerMixin, RewardTrainer):
     tag_names = ["axolotl", "reward"]
 
 
+class AxolotlPRMTrainer(SchedulerMixin, PRMTrainer):
+    """
+    Extend the base trl.PRMTrainer for axolotl helpers
+    """
+
+    tag_names = ["axolotl", "prm"]
+
+
 class TrainerBuilderBase(abc.ABC):
     """
     Base class for trainer builder
@@ -1377,7 +1394,8 @@ class TrainerBuilderBase(abc.ABC):
 
 class HFCausalTrainerBuilder(TrainerBuilderBase):
     """
-    Build the HuggingFace training args/trainer for Causal models
+    Build the HuggingFace training args/trainer for causal models
+    and reward modelling using TRL.
     """
 
     def get_callbacks(self):
@@ -1452,6 +1470,8 @@ class HFCausalTrainerBuilder(TrainerBuilderBase):
             return AxolotlMambaTrainer
         if self.cfg.reward_model:
             return AxolotlRewardTrainer
+        if self.cfg.process_reward_model:
+            return AxolotlPRMTrainer
         return AxolotlTrainer
 
     def build(self, total_num_steps):
@@ -1842,11 +1862,13 @@ class HFCausalTrainerBuilder(TrainerBuilderBase):
                 "accelerator_config"
             ] = self.cfg.accelerator_config
 
-        training_args_cls = (
-            AxolotlTrainingArguments
-            if not self.cfg.reward_model
-            else AxolotlRewardConfig
-        )
+        if self.cfg.reward_model:
+            training_args_cls = AxolotlRewardConfig
+        elif self.cfg.process_reward_model:
+            training_args_cls = AxolotlPRMConfig
+        else:
+            training_args_cls = AxolotlTrainingArguments
+
         training_args = training_args_cls(  # pylint: disable=unexpected-keyword-arg
             **training_arguments_kwargs,
         )
@@ -1880,9 +1902,9 @@ class HFCausalTrainerBuilder(TrainerBuilderBase):
         if eval_data_collator := self.build_collator(
             training_args, is_eval=True, **data_collator_kwargs
         ):
-            if not self.cfg.reward_model:
+            if not (self.cfg.reward_model or self.cfg.process_reward_model):
                 trainer_kwargs["eval_data_collator"] = eval_data_collator
-        if not self.cfg.reward_model:
+        if not (self.cfg.reward_model or self.cfg.process_reward_model):
             trainer_kwargs["bench_data_collator"] = transformers.DataCollatorForSeq2Seq(
                 self.tokenizer,
                 return_tensors="pt",
@@ -1893,8 +1915,10 @@ class HFCausalTrainerBuilder(TrainerBuilderBase):
             trainer_kwargs["processing_class"] = self.tokenizer
         else:
             trainer_kwargs["tokenizer"] = self.tokenizer
-
-        if (trainer_cls is not AxolotlRewardTrainer) and self.cfg.datasets is not None:
+        if (
+            not (trainer_cls in [AxolotlRewardTrainer, AxolotlPRMTrainer])
+            and self.cfg.datasets is not None
+        ):
             trainer_kwargs["dataset_tags"] = [
                 d["path"] for d in self.cfg.datasets if not Path(d["path"]).is_dir()
             ]
@@ -1984,7 +2008,7 @@ class HFCausalTrainerBuilder(TrainerBuilderBase):
 
 class HFRLTrainerBuilder(TrainerBuilderBase):
     """
-    Trainer factory class for DPO Trainer
+    Trainer factory class for TRL-based RLHF trainers (e.g. DPO)
     """
 
     def get_callbacks(self):
diff --git a/src/axolotl/datasets.py b/src/axolotl/datasets.py
index b5638a614..e4531930f 100644
--- a/src/axolotl/datasets.py
+++ b/src/axolotl/datasets.py
@@ -52,6 +52,7 @@ class TokenizedPromptDataset(Dataset):
         if self.prompt_tokenizer.supports_batched:
             map_kwargs["batched"] = True
             map_kwargs["batch_size"] = 100
+
         return dataset.map(
             self.prompt_tokenizer.tokenize_prompt,
             num_proc=num_proc,
diff --git a/src/axolotl/prompt_strategies/stepwise_supervised.py b/src/axolotl/prompt_strategies/stepwise_supervised.py
new file mode 100644
index 000000000..8be7c35e3
--- /dev/null
+++ b/src/axolotl/prompt_strategies/stepwise_supervised.py
@@ -0,0 +1,116 @@
+"""
+Module for stepwise datasets, typically including a prompt and reasoning traces,
+and (optionally) per-step, or per-prompt-trace labels for reward modelling.
+"""
+
+from itertools import chain
+from typing import Dict, List, Optional, Union
+
+from transformers import BatchEncoding, PreTrainedTokenizer
+
+from axolotl.prompt_tokenizers import IGNORE_INDEX
+from axolotl.utils.dict import DictDefault
+
+
+class StepwiseSupervisedPromptTokenizingStrategy:
+    """
+    Tokenizing strategy for supervised stepwise datasets, typically used for COT-reasoning.
+    These datasets should include the following columns:
+    - prompt: the prompt text
+    - completions: a list of `n` completion steps
+    - labels: a list of `n` labels indicating the "correctness" of each step
+    """
+
+    def __init__(
+        self,
+        tokenizer,
+        sequence_len: int = 2048,
+        step_separator: str = "\n",
+        max_completion_length: Optional[int] = None,
+        train_on_last_step_only: bool = False,
+    ):
+        self.tokenizer = tokenizer
+        self.sequence_len = sequence_len
+        self.step_separator = step_separator
+        self.max_completion_length = max_completion_length
+        self.train_on_last_step_only = train_on_last_step_only
+
+    def tokenize_prompt(
+        self, prompt: Dict[str, Union[str, List[str]]]
+    ) -> BatchEncoding:
+        # Inspired by TRL's PRMTRainer
+        # https://github.com/huggingface/trl/blob/ed7de87dc766478c024b68f12530d1b0e7c3ff23/trl/trainer/prm_trainer.py#L206
+        prompt_ids = self.tokenizer(prompt["prompt"], add_special_tokens=False)[
+            "input_ids"
+        ]
+
+        completions_ids = [
+            self.tokenizer(completion, add_special_tokens=False)["input_ids"]
+            for completion in prompt["completions"]
+        ]
+
+        # Handle labels
+        if self.train_on_last_step_only:
+            labels = [IGNORE_INDEX] * (len(prompt["labels"]) - 1) + [
+                int(prompt["labels"][-1])
+            ]
+        else:
+            labels = [int(label) for label in prompt["labels"]]
+
+        # Add step separators
+        separator_ids = self.tokenizer.encode(
+            self.step_separator, add_special_tokens=False
+        )
+        completions_ids = [completion + separator_ids for completion in completions_ids]
+
+        # Create step-wise labels
+        labels = [
+            [IGNORE_INDEX] * (len(completion) - 1) + [label]  # type: ignore
+            for completion, label in zip(completions_ids, labels)
+        ]
+
+        # Join all steps
+        completion_ids = list(chain(*completions_ids))
+        labels = list(chain(*labels))  # type: ignore
+
+        # Handle max lengths
+        if self.max_completion_length:
+            completion_ids = completion_ids[: self.max_completion_length]
+            labels = labels[: self.max_completion_length]
+
+        # Add BOS token if model has one
+        if self.tokenizer.bos_token_id is not None:
+            prompt_ids = [self.tokenizer.bos_token_id] + prompt_ids
+
+        # Combine prompt and completion
+        input_ids = prompt_ids + completion_ids
+
+        full_labels = [IGNORE_INDEX] * len(prompt_ids) + labels
+        # Apply max sequence length
+        if self.sequence_len:
+            input_ids = input_ids[: self.sequence_len]
+            full_labels = full_labels[: self.sequence_len]
+
+        return {
+            "input_ids": input_ids,
+            "labels": full_labels,
+            "attention_mask": [1] * len(input_ids),
+        }
+
+    @property
+    def supports_batched(self):
+        return False
+
+
+def load(
+    tokenizer: PreTrainedTokenizer,
+    cfg: DictDefault,
+    ds_cfg: DictDefault,
+) -> StepwiseSupervisedPromptTokenizingStrategy:
+    return StepwiseSupervisedPromptTokenizingStrategy(
+        tokenizer,
+        cfg.sequence_len,
+        step_separator=ds_cfg.get("step_separator", "\n"),
+        max_completion_length=ds_cfg.max_completion_length,
+        train_on_last_step_only=ds_cfg.get("train_on_last_step_only", False),
+    )
diff --git a/src/axolotl/train.py b/src/axolotl/train.py
index b901c2a97..0bd400f6b 100644
--- a/src/axolotl/train.py
+++ b/src/axolotl/train.py
@@ -259,7 +259,7 @@ def train(
                 .decode("utf-8")
             }
             if cfg.datasets is not None:
-                if cfg.rl is not None or cfg.reward_model:
+                if cfg.rl is not None or cfg.reward_model or cfg.process_reward_model:
                     dataset_tags = [
                         d["path"] for d in cfg.datasets if not Path(d["path"]).is_dir()
                     ]
diff --git a/src/axolotl/utils/config/models/input/v0_4_1/__init__.py b/src/axolotl/utils/config/models/input/v0_4_1/__init__.py
index e5edf8e7b..4f0fa4c29 100644
--- a/src/axolotl/utils/config/models/input/v0_4_1/__init__.py
+++ b/src/axolotl/utils/config/models/input/v0_4_1/__init__.py
@@ -236,6 +236,18 @@ class DPODataset(BaseModel):
     revision: Optional[str] = None
 
 
+class StepwiseSupervisedDataset(BaseModel):
+    """Stepwise supervised dataset configuration subset"""
+
+    path: Optional[str] = None
+    split: Optional[str] = None
+    data_files: Optional[List[str]] = None
+    revision: Optional[str] = None
+    step_separator: Optional[str] = None
+    max_completion_length: Optional[int] = None
+    train_on_last_step_only: Optional[bool] = None
+
+
 class UserDefinedKTOType(BaseModel):
     """User defined typing for KTO"""
 
@@ -626,12 +638,14 @@ class AxolotlInputConfig(
 
     rl: Optional[RLType] = None
     reward_model: Optional[bool] = None
+    process_reward_model: Optional[bool] = None
+    num_labels: Optional[int] = None
     dpo_use_weighting: Optional[
         bool
     ] = None  # whether to use weighting in DPO trainer. If none, default is false in the trainer.
 
-    datasets: Optional[conlist(Union[SFTDataset, DPODataset, KTODataset], min_length=1)] = None  # type: ignore
-    test_datasets: Optional[conlist(Union[SFTDataset, DPODataset, KTODataset], min_length=1)] = None  # type: ignore
+    datasets: Optional[conlist(Union[SFTDataset, DPODataset, KTODataset, StepwiseSupervisedDataset], min_length=1)] = None  # type: ignore
+    test_datasets: Optional[conlist(Union[SFTDataset, DPODataset, KTODataset, StepwiseSupervisedDataset], min_length=1)] = None  # type: ignore
     shuffle_merged_datasets: Optional[bool] = True
     dataset_prepared_path: Optional[str] = None
     dataset_shard_num: Optional[int] = None
diff --git a/src/axolotl/utils/data/sft.py b/src/axolotl/utils/data/sft.py
index de373c06e..ba5d0c54d 100644
--- a/src/axolotl/utils/data/sft.py
+++ b/src/axolotl/utils/data/sft.py
@@ -8,6 +8,8 @@ from typing import List, Tuple, Union
 from datasets import (
     Dataset,
     DatasetDict,
+    Sequence,
+    Value,
     concatenate_datasets,
     load_dataset,
     load_from_disk,
@@ -467,6 +469,17 @@ def get_dataset_wrapper(
             dataset,
             **ds_kwargs,
         )
+    elif config_dataset.type.startswith("stepwise_supervised"):
+        dataset_prompter = UnsupportedPrompter()
+        ds_strategy = load(config_dataset.type, tokenizer, cfg, config_dataset)
+        # we need to explicitly cast boolean labels to int
+        # for compatibility with how trl's PRMTrainer works
+        dataset = dataset.cast_column("labels", Sequence(Value("int64")))
+        dataset_wrapper = TokenizedPromptDataset(
+            ds_strategy,
+            dataset,
+            **ds_kwargs,
+        )
     elif ds_strategy := load(
         config_dataset.type, tokenizer, cfg, config_dataset, processor=processor
     ):
diff --git a/src/axolotl/utils/models.py b/src/axolotl/utils/models.py
index c4b8f05b9..d46564f42 100644
--- a/src/axolotl/utils/models.py
+++ b/src/axolotl/utils/models.py
@@ -138,7 +138,9 @@ def load_model_config(cfg):
     config_kwargs = {}
     if cfg.revision_of_model:
         config_kwargs["revision"] = cfg.revision_of_model
-
+    if cfg.num_labels:
+        # num_labels is used to initialize classifier models
+        config_kwargs["num_labels"] = cfg.num_labels
     try:
         model_config = AutoConfig.from_pretrained(
             model_config_name,
diff --git a/tests/e2e/test_process_reward_model_smollm2.py b/tests/e2e/test_process_reward_model_smollm2.py
new file mode 100644
index 000000000..16bf2cdc8
--- /dev/null
+++ b/tests/e2e/test_process_reward_model_smollm2.py
@@ -0,0 +1,69 @@
+"""
+E2E tests for process reward model w/ lora llama
+"""
+
+import logging
+import os
+import unittest
+
+from axolotl.cli.args import TrainerCliArgs
+from axolotl.common.datasets import load_datasets
+from axolotl.train import train
+from axolotl.utils.config import normalize_config
+from axolotl.utils.dict import DictDefault
+
+from .utils import check_model_output_exists, check_tensorboard, with_temp_dir
+
+LOG = logging.getLogger("axolotl.tests.e2e")
+os.environ["WANDB_DISABLED"] = "true"
+
+
+class TestProcessRewardSmolLM2(unittest.TestCase):
+    """
+    Test case for Llama process reward models using LoRA
+    """
+
+    @with_temp_dir
+    def test_prm(self, temp_dir):
+        # pylint: disable=duplicate-code
+        cfg = DictDefault(
+            {
+                "base_model": "HuggingFaceTB/SmolLM2-135M",
+                "model_type": "AutoModelForTokenClassification",
+                "num_labels": 2,
+                "process_reward_model": True,
+                "sequence_len": 512,
+                "val_set_size": 0.0,
+                "datasets": [
+                    {
+                        "path": "trl-lib/math_shepherd",
+                        "type": "stepwise_supervised",
+                        "step_separator": "\n",
+                        "split": "train[:10%]",
+                    },
+                ],
+                "max_steps": 100,
+                "num_epochs": 1,
+                "micro_batch_size": 4,
+                "gradient_accumulation_steps": 1,
+                "output_dir": temp_dir,
+                "learning_rate": 0.0005,
+                "optimizer": "adamw_torch",
+                "lr_scheduler": "cosine",
+                "gradient_checkpointing": True,
+                "warmup_ratio": 0.1,
+                "use_tensorboard": True,
+                "special_tokens": {"pad_token": "<|endoftext|>"},
+                "seed": 42,
+            }
+        )
+        normalize_config(cfg)
+        cli_args = TrainerCliArgs()
+        dataset_meta = load_datasets(cfg=cfg, cli_args=cli_args)
+
+        train(cfg=cfg, dataset_meta=dataset_meta)
+        check_tensorboard(
+            temp_dir + "/runs", "train/train_loss", 2.5, "Train Loss is too high"
+        )
+
+        check_model_output_exists(temp_dir, cfg)
diff --git a/tests/e2e/test_reward_model_llama.py b/tests/e2e/test_reward_model_smollm2.py
similarity index 75%
rename from tests/e2e/test_reward_model_llama.py
rename to tests/e2e/test_reward_model_smollm2.py
index 4cd8602f3..7360a99dc 100644
--- a/tests/e2e/test_reward_model_llama.py
+++ b/tests/e2e/test_reward_model_smollm2.py
@@ -12,25 +12,25 @@ from axolotl.train import train
 from axolotl.utils.config import normalize_config
 from axolotl.utils.dict import DictDefault
 
-from .utils import check_model_output_exists, with_temp_dir
+from .utils import check_model_output_exists, check_tensorboard, with_temp_dir
 
 LOG = logging.getLogger("axolotl.tests.e2e")
 os.environ["WANDB_DISABLED"] = "true"
 
 
-class TestRewardModelLoraLlama(unittest.TestCase):
+class TestRewardModelLoraSmolLM2(unittest.TestCase):
     """
     Test case for Llama reward models using LoRA
     """
 
     @with_temp_dir
-    def test_rm_fft(self, temp_dir):
+    def test_rm_lora(self, temp_dir):
         # pylint: disable=duplicate-code
         cfg = DictDefault(
             {
-                "base_model": "JackFram/llama-68m",
+                "base_model": "HuggingFaceTB/SmolLM2-135M",
                 "model_type": "AutoModelForSequenceClassification",
-                "tokenizer_type": "LlamaTokenizer",
+                "num_labels": 1,
                 "chat_template": "alpaca",
                 "reward_model": True,
                 "sequence_len": 1024,
@@ -42,16 +42,16 @@ class TestRewardModelLoraLlama(unittest.TestCase):
                 "lora_target_linear": True,
                 "val_set_size": 0.0,
                 "special_tokens": {
-                    "unk_token": "<unk>",
-                    "bos_token": "<s>",
-                    "eos_token": "</s>",
+                    "pad_token": "<|endoftext|>",
                 },
                 "datasets": [
                     {
                         "path": "argilla/distilabel-intel-orca-dpo-pairs",
                         "type": "bradley_terry.chat_template",
+                        "split": "train[:10%]",
                     },
                 ],
+                "lora_modules_to_save": ["embed_tokens", "lm_head"],
                 "remove_unused_columns": False,
                 "max_steps": 10,
                 "num_epochs": 1,
@@ -59,10 +59,11 @@ class TestRewardModelLoraLlama(unittest.TestCase):
                 "gradient_accumulation_steps": 1,
                 "output_dir": temp_dir,
                 "learning_rate": 0.00001,
-                "optimizer": "adamw_bnb_8bit",
+                "optimizer": "adamw_torch",
                 "lr_scheduler": "cosine",
                 "gradient_checkpointing": True,
                 "warmup_ratio": 0.1,
+                "use_tensorboard": True,
             }
         )
         normalize_config(cfg)
@@ -70,4 +71,7 @@ class TestRewardModelLoraLlama(unittest.TestCase):
         dataset_meta = load_datasets(cfg=cfg, cli_args=cli_args)
 
         train(cfg=cfg, dataset_meta=dataset_meta)
+        check_tensorboard(
+            temp_dir + "/runs", "train/train_loss", 2.5, "Train Loss is too high"
+        )
         check_model_output_exists(temp_dir, cfg)
diff --git a/tests/prompt_strategies/test_stepwise.py b/tests/prompt_strategies/test_stepwise.py
new file mode 100644
index 000000000..2abe4ae18
--- /dev/null
+++ b/tests/prompt_strategies/test_stepwise.py
@@ -0,0 +1,63 @@
+"""
+tests for chat_template prompt strategy
+"""
+
+import datasets
+import pytest
+from datasets import Dataset
+from transformers import AutoTokenizer
+
+from axolotl.datasets import TokenizedPromptDataset
+from axolotl.prompt_strategies.stepwise_supervised import (
+    StepwiseSupervisedPromptTokenizingStrategy,
+)
+
+
+class TestStepWiseSupervisedPromptTokenizingStrategy:
+    """
+    Test class for stepwise supervised prompt strategy
+    """
+
+    @pytest.fixture()
+    def stepwise_supervised_dataset(self):
+        # pylint: disable=duplicate-code
+        return Dataset.from_list(
+            [
+                {
+                    "prompt": "Which number is larger, 9.8 or 9.11?",
+                    "completions": [
+                        "The fractional part of 9.8 is 0.8, while the fractional part of 9.11 is 0.11.",
+                        "Since 0.11 is greater than 0.8, the number 9.11 is larger than 9.8.",
+                        "Actually, this is incorrect. In decimal numbers, 0.8 is equal to 0.80, which is larger than 0.11. Therefore, 9.8 is larger than 9.11.",
+                    ],
+                    "labels": [True, False, False],
+                }
+            ]
+        )
+
+    @pytest.fixture()
+    def tokenizer(self):
+        return AutoTokenizer.from_pretrained("Qwen/Qwen2.5-0.5B")
+
+    def test_stepwise_supervised_dataset(self, tokenizer, stepwise_supervised_dataset):
+        strategy = StepwiseSupervisedPromptTokenizingStrategy(
+            tokenizer,
+            sequence_len=2048,
+            step_separator="\n",
+        )
+        stepwise_supervised_dataset = stepwise_supervised_dataset.cast_column(
+            "labels", datasets.Sequence(datasets.Value("int64"))
+        )
+        dataset_wrapper = TokenizedPromptDataset(
+            strategy,
+            stepwise_supervised_dataset,
+            process_count=1,
+        )
+        labels = dataset_wrapper[0]["labels"]
+        # expected labels is:
+        # the prompt + first step are ignored, followed by the label for step 1 (True)
+        # the second step, and its label (False)
+        # the third step, and its label (False)
+        expected = [-100] * 47 + [1] + [-100] * 29 + [0] + [-100] * 48 + [0]
+
+        assert labels == expected