diff --git a/Cargo.lock b/Cargo.lock
index 2dc8d59207..3ebbca750d 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -8030,6 +8030,7 @@ dependencies = [
  "alloy-sol-types",
  "alloy-transport 0.3.6 (registry+https://github.com/rust-lang/crates.io-index)",
  "anyhow",
+ "arbitrary",
  "assert_matches",
  "async-trait",
  "derive_more 0.99.18",
@@ -8048,6 +8049,7 @@ dependencies = [
  "metrics",
  "num-traits 0.2.19",
  "parking_lot 0.12.3",
+ "rand 0.8.5",
  "reqwest 0.11.27",
  "serde",
  "serde_json",
diff --git a/crates/katana/core/Cargo.toml b/crates/katana/core/Cargo.toml
index 0322de40dc..d33d32cb7b 100644
--- a/crates/katana/core/Cargo.toml
+++ b/crates/katana/core/Cargo.toml
@@ -46,8 +46,10 @@ alloy-rpc-types-eth = { workspace = true, default-features = false }
 alloy-transport = { workspace = true, default-features = false }
 
 [dev-dependencies]
+arbitrary.workspace = true
 assert_matches.workspace = true
 hex.workspace = true
+rand.workspace = true
 tempfile.workspace = true
 
 [features]
diff --git a/crates/katana/core/src/backend/mod.rs b/crates/katana/core/src/backend/mod.rs
index b429e875c8..afcb726789 100644
--- a/crates/katana/core/src/backend/mod.rs
+++ b/crates/katana/core/src/backend/mod.rs
@@ -34,7 +34,7 @@ use crate::utils::get_current_timestamp;
 pub(crate) const LOG_TARGET: &str = "katana::core::backend";
 
 #[derive(Debug)]
-pub struct Backend<EF: ExecutorFactory> {
+pub struct Backend<EF> {
     pub chain_spec: Arc<ChainSpec>,
     /// stores all block related data in memory
     pub blockchain: Blockchain,
@@ -46,6 +46,23 @@ pub struct Backend<EF: ExecutorFactory> {
     pub gas_oracle: GasOracle,
 }
 
+impl<EF> Backend<EF> {
+    pub fn new(
+        chain_spec: Arc<ChainSpec>,
+        blockchain: Blockchain,
+        gas_oracle: GasOracle,
+        executor_factory: EF,
+    ) -> Self {
+        Self {
+            blockchain,
+            chain_spec,
+            gas_oracle,
+            executor_factory: Arc::new(executor_factory),
+            block_context_generator: RwLock::new(BlockContextGenerator::default()),
+        }
+    }
+}
+
 impl<EF: ExecutorFactory> Backend<EF> {
     // TODO: add test for this function
     pub fn do_mine_block(
diff --git a/crates/katana/core/src/service/block_producer.rs b/crates/katana/core/src/service/block_producer.rs
index 80dd670d63..81af6d1887 100644
--- a/crates/katana/core/src/service/block_producer.rs
+++ b/crates/katana/core/src/service/block_producer.rs
@@ -28,6 +28,10 @@ use tracing::{error, info, trace, warn};
 
 use crate::backend::Backend;
 
+#[cfg(test)]
+#[path = "block_producer_tests.rs"]
+mod tests;
+
 pub(crate) const LOG_TARGET: &str = "miner";
 
 #[derive(Debug, thiserror::Error)]
@@ -181,8 +185,12 @@ impl PendingExecutor {
 
 #[allow(missing_debug_implementations)]
 pub struct IntervalBlockProducer<EF: ExecutorFactory> {
-    /// The interval at which new blocks are mined.
-    interval: Option<Interval>,
+    /// How long until the block is closed.
+    ///
+    /// In this mining mode, a new block is only opened upon receiving a new transaction. The block
+    /// is closed after the interval is over. The interval is reset after every block.
+    block_time: Option<u64>,
+
     backend: Arc<Backend<EF>>,
     /// Single active future that mines a new block
     ongoing_mining: Option<BlockProductionFuture>,
@@ -194,23 +202,21 @@ pub struct IntervalBlockProducer<EF: ExecutorFactory> {
     /// Listeners notified when a new executed tx is added.
     tx_execution_listeners: RwLock<Vec<Sender<Vec<TxWithOutcome>>>>,
 
+    // Usage with `validator`
     permit: Arc<Mutex<()>>,
-
     /// validator used in the tx pool
     // the validator needs to always be built against the state of the block producer, so
     // im putting here for now until we find a better way to handle this.
     validator: TxValidator,
+
+    /// The timer should only be `Some` if:
+    /// - `block_time` is `Some`,
+    /// - and, at least one transaction has been executed and thus a new block is opened.
+    timer: Option<Interval>,
 }
 
 impl<EF: ExecutorFactory> IntervalBlockProducer<EF> {
-    pub fn new(backend: Arc<Backend<EF>>, interval: Option<u64>) -> Self {
-        let interval = interval.map(|time| {
-            let duration = Duration::from_millis(time);
-            let mut interval = interval_at(Instant::now() + duration, duration);
-            interval.set_missed_tick_behavior(tokio::time::MissedTickBehavior::Delay);
-            interval
-        });
-
+    pub fn new(backend: Arc<Backend<EF>>, block_time: Option<u64>) -> Self {
         let provider = backend.blockchain.provider();
 
         let latest_num = provider.latest_number().unwrap();
@@ -233,7 +239,8 @@ impl<EF: ExecutorFactory> IntervalBlockProducer<EF> {
             validator,
             permit,
             backend,
-            interval,
+            block_time,
+            timer: None,
             ongoing_mining: None,
             ongoing_execution: None,
             queued: VecDeque::default(),
@@ -384,9 +391,9 @@ impl<EF: ExecutorFactory> Stream for IntervalBlockProducer<EF> {
     fn poll_next(self: Pin<&mut Self>, cx: &mut Context<'_>) -> Poll<Option<Self::Item>> {
         let pin = self.get_mut();
 
-        if let Some(interval) = &mut pin.interval {
-            // mine block if the interval is over
-            if interval.poll_tick(cx).is_ready() && pin.ongoing_mining.is_none() {
+        if let Some(mut timer) = pin.timer.take() {
+            // Mine block if the interval is over
+            if timer.poll_tick(cx).is_ready() && pin.ongoing_mining.is_none() {
                 pin.ongoing_mining = Some(Box::pin({
                     let executor = pin.executor.clone();
                     let backend = pin.backend.clone();
@@ -394,6 +401,9 @@ impl<EF: ExecutorFactory> Stream for IntervalBlockProducer<EF> {
 
                     pin.blocking_task_spawner.spawn(|| Self::do_mine(permit, executor, backend))
                 }));
+            } else {
+                // Unable to close the block due to ongoing mining.
+                pin.timer = Some(timer);
             }
         }
 
@@ -412,6 +422,16 @@ impl<EF: ExecutorFactory> Stream for IntervalBlockProducer<EF> {
                     .spawn(|| Self::execute_transactions(executor, transactions));
 
                 pin.ongoing_execution = Some(Box::pin(fut));
+
+                if pin.timer.is_none() {
+                    // Start the interval timer if it's not already started
+                    pin.timer = pin.block_time.map(|time| {
+                        let duration = Duration::from_millis(time);
+                        let mut interval = interval_at(Instant::now() + duration, duration);
+                        interval.set_missed_tick_behavior(tokio::time::MissedTickBehavior::Delay);
+                        interval
+                    });
+                }
             }
 
             // poll the ongoing execution if any
diff --git a/crates/katana/core/src/service/block_producer_tests.rs b/crates/katana/core/src/service/block_producer_tests.rs
new file mode 100644
index 0000000000..21cccaa16f
--- /dev/null
+++ b/crates/katana/core/src/service/block_producer_tests.rs
@@ -0,0 +1,81 @@
+use arbitrary::{Arbitrary, Unstructured};
+use futures::pin_mut;
+use katana_chain_spec::DEV;
+use katana_executor::implementation::noop::NoopExecutorFactory;
+use katana_primitives::transaction::{ExecutableTx, InvokeTx};
+use katana_primitives::Felt;
+use katana_provider::providers::db::DbProvider;
+use tokio::time;
+
+use super::*;
+use crate::backend::gas_oracle::GasOracle;
+use crate::backend::storage::Blockchain;
+
+fn test_backend() -> Arc<Backend<NoopExecutorFactory>> {
+    let chain_spec = Arc::new(DEV.clone());
+    let provider = DbProvider::new_ephemeral();
+    let executor_factory = NoopExecutorFactory::new();
+    let blockchain = Blockchain::new_with_chain(provider, chain_spec.as_ref()).unwrap();
+    let gas_oracle = GasOracle::fixed(Default::default(), Default::default());
+    Arc::new(Backend::new(chain_spec, blockchain, gas_oracle, executor_factory))
+}
+
+#[tokio::test]
+async fn interval_initial_state() {
+    let backend = test_backend();
+    let producer = IntervalBlockProducer::new(backend, Some(1000));
+
+    assert!(producer.timer.is_none());
+    assert!(producer.queued.is_empty());
+    assert!(producer.ongoing_mining.is_none());
+    assert!(producer.ongoing_execution.is_none());
+}
+
+#[tokio::test]
+async fn interval_force_mine_without_transactions() {
+    let backend = test_backend();
+
+    let mut producer = IntervalBlockProducer::new(backend.clone(), None);
+    producer.force_mine();
+
+    let latest_num = backend.blockchain.provider().latest_number().unwrap();
+    assert_eq!(latest_num, 1);
+}
+
+#[tokio::test]
+async fn interval_mine_after_timer() {
+    let backend = test_backend();
+    let mut producer = IntervalBlockProducer::new(backend.clone(), Some(1000));
+    // Initial state
+    assert!(producer.timer.is_none());
+
+    producer.queued.push_back(vec![dummy_transaction()]);
+
+    let stream = producer;
+    pin_mut!(stream);
+
+    // Process the transaction, the timer should be automatically started
+    let _ = stream.next().await;
+    assert!(stream.timer.is_some());
+
+    // Advance time to trigger mining
+    time::sleep(Duration::from_secs(1)).await;
+    let result = stream.next().await.expect("should mine block").unwrap();
+
+    assert_eq!(result.block_number, 1);
+    assert_eq!(backend.blockchain.provider().latest_number().unwrap(), 1);
+
+    // Final state
+    assert!(stream.timer.is_none());
+}
+
+// Helper functions to create test transactions
+fn dummy_transaction() -> ExecutableTxWithHash {
+    fn tx() -> ExecutableTx {
+        let data = (0..InvokeTx::size_hint(0).0).map(|_| rand::random::<u8>()).collect::<Vec<u8>>();
+        let mut unstructured = Unstructured::new(&data);
+        ExecutableTx::Invoke(InvokeTx::arbitrary(&mut unstructured).unwrap())
+    }
+
+    ExecutableTxWithHash { hash: Felt::ONE, transaction: tx() }
+}