diff --git a/tests/libqos/rtas.c b/tests/libqos/rtas.c
index fdeab448f7..ade572a84f 100644
--- a/tests/libqos/rtas.c
+++ b/tests/libqos/rtas.c
@@ -151,3 +151,36 @@ int qrtas_check_exception(QGuestAllocator *alloc, uint32_t mask,
 
     return ret[0];
 }
+
+/*
+ * set_indicator as defined by PAPR 2.7+, 7.3.5.4
+ *
+ * nargs = 3
+ * nrets = 1
+ *
+ * arg[0] = the type of the indicator
+ * arg[1] = index of the specific indicator
+ * arg[2] = desired new state
+ *
+ * Depending on the input, set_indicator will call set_isolation_state,
+ * set_allocation_state or set_dr_indicator in hw/ppc/spapr_drc.c.
+ * These functions allows the guest to control the state of hotplugged
+ * and hot unplugged devices.
+ */
+int qrtas_set_indicator(QGuestAllocator *alloc, uint32_t type, uint32_t idx,
+                        uint32_t new_state)
+{
+    uint32_t args[3], ret[1];
+    int res;
+
+    args[0] = type;
+    args[1] = idx;
+    args[2] = new_state;
+
+    res = qrtas_call(alloc, "set-indicator", 3, args, 1, ret);
+    if (res != 0) {
+        return -1;
+    }
+
+    return ret[0];
+}
diff --git a/tests/libqos/rtas.h b/tests/libqos/rtas.h
index 330ecfd397..9dfa18f32b 100644
--- a/tests/libqos/rtas.h
+++ b/tests/libqos/rtas.h
@@ -14,4 +14,6 @@ int qrtas_ibm_write_pci_config(QGuestAllocator *alloc, uint64_t buid,
                                uint32_t addr, uint32_t size, uint32_t val);
 int qrtas_check_exception(QGuestAllocator *alloc, uint32_t mask,
                           uint32_t buf_addr, uint32_t buf_len);
+int qrtas_set_indicator(QGuestAllocator *alloc, uint32_t type, uint32_t idx,
+                        uint32_t new_state);
 #endif /* LIBQOS_RTAS_H */
diff --git a/tests/rtas-test.c b/tests/rtas-test.c
index c5a6080043..2c34b6e83c 100644
--- a/tests/rtas-test.c
+++ b/tests/rtas-test.c
@@ -8,6 +8,13 @@
 #define EVENT_MASK_EPOW (1 << 30)
 #define EVENT_LOG_LEN 2048
 
+#define RTAS_SENSOR_TYPE_ISOLATION_STATE 9001
+#define RTAS_SENSOR_TYPE_ALLOCATION_STATE 9003
+#define SPAPR_DR_ISOLATION_STATE_ISOLATED 0
+#define SPAPR_DR_ALLOCATION_STATE_UNUSABLE 0
+#define SPAPR_DR_ALLOCATION_STATE_USABLE  1
+#define SPAPR_DR_ISOLATION_STATE_UNISOLATED 1
+
 static void test_rtas_get_time_of_day(void)
 {
     QOSState *qs;
@@ -97,6 +104,71 @@ static void test_rtas_check_exception_hotplug_event(void)
     qtest_shutdown(qs);
 }
 
+/*
+ * To test the 'set-indicator' RTAS call we will hotplug a device
+ * (in this case a CPU) and then make its DRC state go from
+ * the starting state UNUSABLE(1) to UNISOLATE(3). These DRC
+ * states transitions are described in further detail in
+ * PAPR 2.7+ 13.4.
+ */
+static void test_rtas_set_indicator(void)
+{
+    QOSState *qs;
+    uint64_t ret;
+    uintptr_t guest_buf_addr;
+    uint32_t drc_index;
+    uint8_t *buf = g_malloc0(EVENT_LOG_LEN);
+
+    qs = qtest_spapr_boot("-machine pseries -cpu POWER8_v2.0 "
+                          "-smp 1,sockets=4,cores=1,threads=1,maxcpus=4");
+
+    guest_buf_addr = guest_alloc(qs->alloc, EVENT_LOG_LEN * sizeof(uint8_t));
+    qtest_qmp_device_add("power8_v2.0-spapr-cpu-core", "id-1",
+                         "'core-id':'1'");
+
+    ret = qrtas_check_exception(qs->alloc, EVENT_MASK_EPOW,
+                                guest_buf_addr, EVENT_LOG_LEN);
+
+    memread(guest_buf_addr, buf, EVENT_LOG_LEN);
+    guest_free(qs->alloc, guest_buf_addr);
+
+    g_assert_cmpint(ret, ==, 0);
+
+    /*
+     * This time we can't ignore the event log written in the
+     * check_exception call - we need the DRC index of the
+     * recently added CPU to make the state changes using set_indicator.
+     *
+     * A bit of magic to go straight to the DRC index by checking the
+     * error log format in hw/ppc/spapr_events.c:
+     *
+     * - rtas_error_log size = 8 bytes
+     * - all other structures until the hotplug event log = 88 bytes
+     * - inside the hotplug event log, skip 8 + 4 bytes to get to
+     *   the drc_id union.
+     *
+     * This gives us a 108 bytes skip to get the drc info, which is
+     * written in be32.
+     */
+    drc_index = be32toh(*((uint32_t *)(buf + 108)));
+    g_free(buf);
+
+    /*
+     * According to the DRC state diagram, the guest first sets a device
+     * to USABLE (2), then UNISOLATED (3). Both should return
+     * RTAS_OUT_SUCCESS(0).
+     */
+    ret = qrtas_set_indicator(qs->alloc, RTAS_SENSOR_TYPE_ALLOCATION_STATE,
+                              drc_index, SPAPR_DR_ALLOCATION_STATE_USABLE);
+    g_assert_cmpint(ret, ==, 0);
+
+    ret = qrtas_set_indicator(qs->alloc, RTAS_SENSOR_TYPE_ISOLATION_STATE,
+                              drc_index, SPAPR_DR_ISOLATION_STATE_UNISOLATED);
+    g_assert_cmpint(ret, ==, 0);
+
+    qtest_shutdown(qs);
+}
+
 int main(int argc, char *argv[])
 {
     const char *arch = qtest_get_arch();
@@ -112,6 +184,7 @@ int main(int argc, char *argv[])
                    test_rtas_check_exception_no_events);
     qtest_add_func("rtas/rtas-check-exception-hotplug-event",
                    test_rtas_check_exception_hotplug_event);
+    qtest_add_func("rtas/test_rtas_set_indicator", test_rtas_set_indicator);
 
     return g_test_run();
 }
