diff --git a/apps/pce/app/src/main/java/org/onosproject/pce/pceservice/PceccSrTeBeHandler.java b/apps/pce/app/src/main/java/org/onosproject/pce/pceservice/PceccSrTeBeHandler.java
new file mode 100644
index 0000000..2a10dcf
--- /dev/null
+++ b/apps/pce/app/src/main/java/org/onosproject/pce/pceservice/PceccSrTeBeHandler.java
@@ -0,0 +1,389 @@
+/*
+ * Copyright 2016-present Open Networking Laboratory
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package org.onosproject.pce.pceservice;
+
+import static com.google.common.base.Preconditions.checkNotNull;
+
+import java.util.Collection;
+import java.util.Iterator;
+import java.util.HashSet;
+import java.util.List;
+import java.util.LinkedList;
+import java.util.Map;
+import java.util.Set;
+
+import org.onosproject.incubator.net.resource.label.DefaultLabelResource;
+import org.onosproject.incubator.net.resource.label.LabelResource;
+import org.onosproject.incubator.net.resource.label.LabelResourceId;
+import org.onosproject.incubator.net.resource.label.LabelResourceAdminService;
+import org.onosproject.incubator.net.resource.label.LabelResourceService;
+import org.onosproject.incubator.net.tunnel.DefaultLabelStack;
+import org.onosproject.incubator.net.tunnel.LabelStack;
+import org.onosproject.net.DeviceId;
+import org.onosproject.pce.pcestore.api.PceStore;
+import org.onosproject.net.Link;
+import org.onosproject.net.Path;
+
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+
+import com.google.common.collect.ArrayListMultimap;
+import com.google.common.collect.Multimap;
+
+/**
+ * PCE SR-BE and SR-TE functionality.
+ * SR-BE: Each node (PCC) is allocated a node-SID (label) by the PCECC. The PCECC sends PCLabelUpd to
+ * update the label map of each node to all the nodes in the domain.
+ * SR-TE: apart from node-SID, Adj-SID is used where each adjacency is allocated an Adj-SID (label) by the PCECC.
+ * The PCECC sends PCLabelUpd to update the label map of each Adj to the corresponding nodes in the domain.
+ */
+public final class PceccSrTeBeHandler {
+    private static final Logger log = LoggerFactory.getLogger(PceccSrTeBeHandler.class);
+
+    private static final String LABEL_RESOURCE_ADMIN_SERVICE_NULL = "Label Resource Admin Service cannot be null";
+    private static final String LABEL_RESOURCE_SERVICE_NULL = "Label Resource Service cannot be null";
+    private static final String PCE_STORE_NULL = "PCE Store cannot be null";
+    private static final String DEVICE_SERVICE_NULL = "Device Service cannot be null";
+    private static final String DEVICE_ID_NULL = "Device-Id cannot be null";
+    private static final String LSR_ID_NULL = "LSR-Id cannot be null";
+    private static final String DEVICE_ID_LSR_ID_MAP_NULL = "Device-Id and LSR-Id map cannot be null";
+    private static final String LINK_NULL = "Link cannot be null";
+    private static final String PATH_NULL = "Path cannot be null";
+    private static final String LSR_ID = "lsrId";
+    private static final int PREFIX_LENGTH = 32;
+    private static PceccSrTeBeHandler srTeHandlerInstance = null;
+    private LabelResourceAdminService labelRsrcAdminService;
+    private LabelResourceService labelRsrcService;
+    private PceStore pceStore;
+
+    /**
+     * Initializes default values.
+     */
+    private PceccSrTeBeHandler() {
+    }
+
+    /**
+     * Returns single instance of this class.
+     *
+     * @return this class single instance
+     */
+    public static PceccSrTeBeHandler getInstance() {
+        if (srTeHandlerInstance == null) {
+            srTeHandlerInstance = new PceccSrTeBeHandler();
+        }
+        return srTeHandlerInstance;
+    }
+
+    /**
+     * Initialization of label manager interfaces and pce store.
+     *
+     * @param labelRsrcAdminService label resource admin service
+     * @param labelRsrcService label resource service
+     * @param pceStore PCE label store
+     */
+    public void initialize(LabelResourceAdminService labelRsrcAdminService,
+                           LabelResourceService labelRsrcService, PceStore pceStore) {
+        this.labelRsrcAdminService = labelRsrcAdminService;
+        this.labelRsrcService = labelRsrcService;
+        this.pceStore = pceStore;
+    }
+
+    /**
+     * Reserves the global label pool.
+     *
+     * @param beginLabel minimum value of global label space
+     * @param endLabel maximum value of global label space
+     * @return success or failure
+     */
+    public boolean reserveGlobalPool(long beginLabel, long endLabel) {
+        checkNotNull(labelRsrcAdminService, LABEL_RESOURCE_ADMIN_SERVICE_NULL);
+        return labelRsrcAdminService.createGlobalPool(LabelResourceId.labelResourceId(beginLabel),
+                                                      LabelResourceId.labelResourceId(endLabel));
+    }
+
+    /**
+     * Allocates node label from global node label pool to specific device.
+     * Configure this device with labels and lsrid mapping of all other devices and vice versa.
+     *
+     * @param specificDeviceId node label needs to be allocated to specific device
+     * @param specificLsrId lsrid of specific device
+     * @param deviceIdLsrIdMap deviceid and lsrid mapping
+     * @return success or failure
+     */
+    public boolean allocateNodeLabel(DeviceId specificDeviceId, String specificLsrId,
+                                     Map<DeviceId, String> deviceIdLsrIdMap) {
+        long applyNum = 1; // For each node only one node label
+        LabelResourceId specificLabelId = null;
+
+        checkNotNull(specificDeviceId, DEVICE_ID_NULL);
+        checkNotNull(specificLsrId, LSR_ID_NULL);
+        checkNotNull(deviceIdLsrIdMap, DEVICE_ID_LSR_ID_MAP_NULL);
+        checkNotNull(labelRsrcService, LABEL_RESOURCE_SERVICE_NULL);
+        checkNotNull(pceStore, PCE_STORE_NULL);
+
+        // The specificDeviceId is the new device and is not there in the deviceIdLsrIdMap.
+        // So, first generate its label and configure label and its lsr-id to it.
+        Collection<LabelResource> result = labelRsrcService.applyFromGlobalPool(applyNum);
+        if (result.size() > 0) {
+           // Only one element (label-id) to retrieve
+           Iterator<LabelResource> iterator = result.iterator();
+           DefaultLabelResource defaultLabelResource = (DefaultLabelResource) iterator.next();
+           specificLabelId = defaultLabelResource.labelResourceId();
+           if (specificLabelId == null) {
+              log.error("Unable to retrieve global node label for a device id {}.", specificDeviceId.toString());
+              return false;
+           }
+        } else {
+           log.error("Unable to allocate global node label for a device id {}.", specificDeviceId.toString());
+           return false;
+        }
+
+        pceStore.addGlobalNodeLabel(specificDeviceId, specificLabelId);
+        //TODO: uncomment below line once advertiseNodeLabelRule() is ready
+        // Push its label information into specificDeviceId
+        //advertiseNodeLabelRule(specificDeviceId, specificLabelId,
+        //                       IpPrefix.valueOf(IpAddress.valueOf(specificLsrId), PREFIX_LENGTH),
+
+        // Configure (node-label, lsr-id) mapping of each devices in list to specific device and vice versa.
+        for (Map.Entry element:deviceIdLsrIdMap.entrySet()) {
+           DeviceId otherDevId = (DeviceId) element.getKey();
+           String otherLsrId = (String) element.getValue();
+           if (otherLsrId == null) {
+               log.error("The lsr-id of device id {} is null.", otherDevId.toString());
+               releaseNodeLabel(specificDeviceId, specificLsrId, deviceIdLsrIdMap);
+               return false;
+           }
+
+           // Label for other device in list should be already allocated.
+           LabelResourceId otherLabelId = pceStore.getGlobalNodeLabel(otherDevId);
+           if (otherLabelId == null) {
+              log.error("Unable to find global node label in store for a device id {}.", otherDevId.toString());
+              releaseNodeLabel(specificDeviceId, specificLsrId, deviceIdLsrIdMap);
+              return false;
+           }
+
+           // Push to device
+           // TODO: uncomment below line once advertiseNodeLabelRule() is ready
+           // Push label information of specificDeviceId to otherDevId in list and vice versa.
+           //advertiseNodeLabelRule(otherDevId, specificLabelId, IpPrefix.valueOf(IpAddress.valueOf(specificLsrId),
+           //                       PREFIX_LENGTH), Objective.Operation.ADD);
+           //advertiseNodeLabelRule(specificDeviceId, otherLabelId, IpPrefix.valueOf(IpAddress.valueOf(otherLsrId),
+           //                       PREFIX_LENGTH), Objective.Operation.ADD);
+        }
+
+        return true;
+    }
+
+    /**
+     * Releases assigned node label of specific device from global node label pool and pce store.
+     * and remove configured this node label from all other devices.
+     *
+     * @param specificDeviceId node label needs to be released for specific device
+     * @param specificLsrId lsrid of specific device
+     * @param deviceIdLsrIdMap deviceid and lsrid mapping
+     * @return success or failure
+     */
+    public boolean releaseNodeLabel(DeviceId specificDeviceId, String specificLsrId,
+                                    Map<DeviceId, String> deviceIdLsrIdMap) {
+        checkNotNull(specificDeviceId, DEVICE_ID_NULL);
+        checkNotNull(specificLsrId, LSR_ID_NULL);
+        checkNotNull(deviceIdLsrIdMap, DEVICE_ID_LSR_ID_MAP_NULL);
+        checkNotNull(labelRsrcService, LABEL_RESOURCE_SERVICE_NULL);
+        checkNotNull(pceStore, PCE_STORE_NULL);
+        boolean retValue = true;
+
+        // Release node label entry of this specific device from all other devices
+        // Retrieve node label of this specific device from store
+        LabelResourceId labelId = pceStore.getGlobalNodeLabel(specificDeviceId);
+        if (labelId == null) {
+           log.error("Unable to retrieve label of a device id {} from store.", specificDeviceId.toString());
+           return false;
+        }
+
+        // Go through all devices in the map and remove label entry
+        for (Map.Entry element:deviceIdLsrIdMap.entrySet()) {
+           DeviceId otherDevId = (DeviceId) element.getKey();
+
+           // Remove this specific device label information from all other nodes except
+           // this specific node where connection already lost.
+           if (!specificDeviceId.equals(otherDevId)) {
+              //TODO: uncomment below lines once advertiseNodeLabelRule() is ready
+              //advertiseNodeLabelRule(otherDevId, labelId, IpPrefix.valueOf(IpAddress.valueOf(specificLsrId),
+              //                       PREFIX_LENGTH), Objective.Operation.REMOVE);
+           }
+        }
+
+        // Release from label manager
+        Set<LabelResourceId> release = new HashSet<>();
+        release.add(labelId);
+        if (!labelRsrcService.releaseToGlobalPool(release)) {
+            log.error("Unable to release label id {} from label manager.", labelId.toString());
+            retValue = false;
+        }
+
+        // Remove from store
+        if (!pceStore.removeGlobalNodeLabel(specificDeviceId)) {
+            log.error("Unable to remove global node label id {} from store.", labelId.toString());
+            retValue = false;
+        }
+
+        return retValue;
+    }
+
+    /**
+     * Allocates adjacency label to a link from local resource pool by a specific device id.
+     *
+     * @param link between devices
+     * @return success or failure
+     */
+    public boolean allocateAdjacencyLabel(Link link) {
+        long applyNum = 1; // Single label to each link.
+        DeviceId srcDeviceId = link.src().deviceId();
+        Collection<LabelResource> labelList;
+
+        checkNotNull(link, LINK_NULL);
+        checkNotNull(labelRsrcService, LABEL_RESOURCE_SERVICE_NULL);
+        checkNotNull(pceStore, PCE_STORE_NULL);
+
+        // Allocate adjacency label to a link from label manager.
+        // Take label from source device pool to allocate.
+        labelList = labelRsrcService.applyFromDevicePool(srcDeviceId, applyNum);
+        if (labelList.size() <= 0) {
+           log.error("Unable to allocate label to a device id {}.", srcDeviceId.toString());
+           return false;
+        }
+
+        // Currently only one label to a device. So, no need to iterate through list
+        Iterator<LabelResource> iterator = labelList.iterator();
+        DefaultLabelResource defaultLabelResource = (DefaultLabelResource) iterator.next();
+        LabelResourceId labelId = defaultLabelResource.labelResourceId();
+        if (labelId == null) {
+           log.error("Unable to allocate label to a device id {}.", srcDeviceId.toString());
+           return false;
+        }
+        log.debug("Allocated adjacency label {} to a link {}.", labelId.toString(),
+                  link.toString());
+
+        // Push adjacency label to device
+        //TODO: uncomment below line once installAdjLabelRule() method is ready
+        //installAdjLabelRule(srcDeviceId, labelId, link.src().port(), link.dst().port(), Objective.Operation.ADD);
+
+        // Save in store
+        pceStore.addAdjLabel(link, labelId);
+        return true;
+    }
+
+   /**
+     * Releases unused adjacency labels from device pools.
+     *
+     * @param link between devices
+     * @return success or failure
+     */
+    public boolean releaseAdjacencyLabel(Link link) {
+       checkNotNull(link, LINK_NULL);
+       checkNotNull(labelRsrcService, LABEL_RESOURCE_SERVICE_NULL);
+       checkNotNull(pceStore, PCE_STORE_NULL);
+       boolean retValue = true;
+
+       // Retrieve link label from store
+       LabelResourceId labelId = pceStore.getAdjLabel(link);
+       if (labelId == null) {
+          log.error("Unabel to retrieve label for a link {} from store.", link.toString());
+          return false;
+       }
+
+       // Device
+       DeviceId srcDeviceId = link.src().deviceId();
+
+       // Release adjacency label from device
+       //TODO: uncomment below line once installAdjLabelRule() method is ready
+       //installAdjLabelRule(srcDeviceId, labelId, link.src().port(), link.dst().port(), Objective.Operation.REMOVE);
+
+       // Release link label from label manager
+       Multimap<DeviceId, LabelResource> release = ArrayListMultimap.create();
+       DefaultLabelResource defaultLabelResource = new DefaultLabelResource(srcDeviceId, labelId);
+       release.put(srcDeviceId, defaultLabelResource);
+       if (!labelRsrcService.releaseToDevicePool(release)) {
+          log.error("Unable to release label id {} from label manager.", labelId.toString());
+          retValue = false;
+       }
+
+       // Remove adjacency label from store
+       if (!pceStore.removeAdjLabel(link)) {
+          log.error("Unable to remove adjacency label id {} from store.", labelId.toString());
+          retValue = false;
+       }
+       return retValue;
+    }
+
+    /**
+     * Computes label stack for a path.
+     *
+     * @param path lsp path
+     * @return label stack
+     */
+    public LabelStack computeLabelStack(Path path) {
+        checkNotNull(path, PATH_NULL);
+        // Label stack is linked list to make labels in order.
+        List<LabelResourceId> labelStack = new LinkedList<>();
+        List<Link> linkList = path.links();
+        if ((linkList != null) && (linkList.size() > 0)) {
+            // Path: [x] ---- [y] ---- [z]
+            // For other than last link, add only source[x] device label.
+            // For the last link, add both source[y] and destination[z] device labels.
+            // For all links add adjacency label
+            Link link = null;
+            LabelResourceId nodeLabelId = null;
+            LabelResourceId adjLabelId = null;
+            DeviceId deviceId = null;
+            for (Iterator<Link> iterator = linkList.iterator(); iterator.hasNext();) {
+                link = (Link) iterator.next();
+                // Add source device label now
+                deviceId = link.src().deviceId();
+                nodeLabelId = pceStore.getGlobalNodeLabel(deviceId);
+                if (nodeLabelId == null) {
+                   log.error("Unable to find node label for a device id {} in store.", deviceId.toString());
+                   return null;
+                }
+                labelStack.add(nodeLabelId);
+
+                // Add adjacency label for this link
+                adjLabelId = pceStore.getAdjLabel(link);
+                if (adjLabelId == null) {
+                   log.error("Adjacency label id is null for a link {}.", link.toString());
+                   return null;
+                }
+                labelStack.add(adjLabelId);
+            }
+
+            // This is the last link in path
+            // Add destination device label now.
+            if (link != null) {
+               deviceId = link.dst().deviceId();
+               nodeLabelId = pceStore.getGlobalNodeLabel(deviceId);
+               if (nodeLabelId == null) {
+                  log.error("Unable to find node label for a device id {} in store.", deviceId.toString());
+                  return null;
+               }
+               labelStack.add(nodeLabelId);
+            }
+        } else {
+            log.debug("Empty link in path.");
+            return null;
+        }
+        return new DefaultLabelStack(labelStack);
+    }
+}