diff --git a/htlcswitch/htlcnotifier.go b/htlcswitch/htlcnotifier.go
index dd71f3da5..25953e656 100644
--- a/htlcswitch/htlcnotifier.go
+++ b/htlcswitch/htlcnotifier.go
@@ -371,3 +371,59 @@ func (h *HtlcNotifier) NotifySettleEvent(key HtlcKey, eventType HtlcEventType) {
 		log.Warnf("Unable to send settle event: %v", err)
 	}
 }
+
+// newHtlc key returns a htlc key for the packet provided. If the packet
+// has a zero incoming channel ID, the packet is for one of our own sends,
+// which has the payment id stashed in the incoming htlc id. If this is the
+// case, we replace the incoming htlc id with zero so that the notifier
+// consistently reports zero circuit keys for events that terminate or
+// originate at our node.
+func newHtlcKey(pkt *htlcPacket) HtlcKey {
+	htlcKey := HtlcKey{
+		IncomingCircuit: channeldb.CircuitKey{
+			ChanID: pkt.incomingChanID,
+			HtlcID: pkt.incomingHTLCID,
+		},
+		OutgoingCircuit: CircuitKey{
+			ChanID: pkt.outgoingChanID,
+			HtlcID: pkt.outgoingHTLCID,
+		},
+	}
+
+	// If the packet has a zero incoming channel ID, it is a send that was
+	// initiated at our node. If this is the case, our internal pid is in
+	// the incoming htlc ID, so we overwrite it with 0 for notification
+	// purposes.
+	if pkt.incomingChanID == hop.Source {
+		htlcKey.IncomingCircuit.HtlcID = 0
+	}
+
+	return htlcKey
+}
+
+// newHtlcInfo returns HtlcInfo for the packet provided.
+func newHtlcInfo(pkt *htlcPacket) HtlcInfo {
+	return HtlcInfo{
+		IncomingTimeLock: pkt.incomingTimeout,
+		OutgoingTimeLock: pkt.outgoingTimeout,
+		IncomingAmt:      pkt.incomingAmount,
+		OutgoingAmt:      pkt.amount,
+	}
+}
+
+// getEventType returns the htlc type based on the fields set in the htlc
+// packet. Sends that originate at our node have the source (zero) incoming
+// channel ID. Receives to our node have the exit (zero) outgoing channel ID
+// and forwards have both fields set.
+func getEventType(pkt *htlcPacket) HtlcEventType {
+	switch {
+	case pkt.incomingChanID == hop.Source:
+		return HtlcEventTypeSend
+
+	case pkt.outgoingChanID == hop.Exit:
+		return HtlcEventTypeReceive
+
+	default:
+		return HtlcEventTypeForward
+	}
+}
diff --git a/htlcswitch/link.go b/htlcswitch/link.go
index d8da0f13a..c386ad345 100644
--- a/htlcswitch/link.go
+++ b/htlcswitch/link.go
@@ -1418,6 +1418,18 @@ func (l *channelLink) handleDownStreamPkt(pkt *htlcPacket, isReProcess bool) {
 
 		l.cfg.Peer.SendMessage(false, htlc)
 
+		// Send a forward event notification to htlcNotifier.
+		l.cfg.HtlcNotifier.NotifyForwardingEvent(
+			newHtlcKey(pkt),
+			HtlcInfo{
+				IncomingTimeLock: pkt.incomingTimeout,
+				IncomingAmt:      pkt.incomingAmount,
+				OutgoingTimeLock: htlc.Expiry,
+				OutgoingAmt:      htlc.Amount,
+			},
+			getEventType(pkt),
+		)
+
 	case *lnwire.UpdateFulfillHTLC:
 		// If hodl.SettleOutgoing mode is active, we exit early to
 		// simulate arbitrary delays between the switch adding the
@@ -1476,6 +1488,12 @@ func (l *channelLink) handleDownStreamPkt(pkt *htlcPacket, isReProcess bool) {
 		l.cfg.Peer.SendMessage(false, htlc)
 		isSettle = true
 
+		// Send a settle event notification to htlcNotifier.
+		l.cfg.HtlcNotifier.NotifySettleEvent(
+			newHtlcKey(pkt),
+			getEventType(pkt),
+		)
+
 	case *lnwire.UpdateFailHTLC:
 		// If hodl.FailOutgoing mode is active, we exit early to
 		// simulate arbitrary delays between the switch adding a FAIL to
@@ -1529,10 +1547,28 @@ func (l *channelLink) handleDownStreamPkt(pkt *htlcPacket, isReProcess bool) {
 		htlc.ChanID = l.ChanID()
 		htlc.ID = pkt.incomingHTLCID
 
-		// Finally, we send the HTLC message to the peer which
-		// initially created the HTLC.
+		// We send the HTLC message to the peer which initially created
+		// the HTLC.
 		l.cfg.Peer.SendMessage(false, htlc)
 		isSettle = true
+
+		// If the packet does not have a link failure set, it failed
+		// further down the route so we notify a forwarding failure.
+		// Otherwise, we notify a link failure because it failed at our
+		// node.
+		if pkt.linkFailure != nil {
+			l.cfg.HtlcNotifier.NotifyLinkFailEvent(
+				newHtlcKey(pkt),
+				newHtlcInfo(pkt),
+				getEventType(pkt),
+				pkt.linkFailure,
+				false,
+			)
+		} else {
+			l.cfg.HtlcNotifier.NotifyForwardingFailEvent(
+				newHtlcKey(pkt), getEventType(pkt),
+			)
+		}
 	}
 
 	// If this newly added update exceeds the min batch size for adds, or