diff --git a/cdap-common/src/main/resources/cdap-default.xml b/cdap-common/src/main/resources/cdap-default.xml
index ca06f7488aa6..dc184e459a4b 100644
--- a/cdap-common/src/main/resources/cdap-default.xml
+++ b/cdap-common/src/main/resources/cdap-default.xml
@@ -409,7 +409,8 @@
         <name>data.tx.snapshot.codecs</name>
         <value>
           co.cask.cdap.data2.transaction.snapshot.SnapshotCodecV1,
-          co.cask.cdap.data2.transaction.snapshot.SnapshotCodecV2
+          co.cask.cdap.data2.transaction.snapshot.SnapshotCodecV2,
+          co.cask.tephra.snapshot.SnapshotCodecV3
         </value>
         <description>Specifies the class names of all supported transaction state codecs</description>
     </property>
diff --git a/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/coprocessor/DefaultTransactionStateCache.java b/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/coprocessor/DefaultTransactionStateCache.java
index 1a975f18f1a4..321941e9f4c8 100644
--- a/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/coprocessor/DefaultTransactionStateCache.java
+++ b/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/coprocessor/DefaultTransactionStateCache.java
@@ -22,6 +22,7 @@
 import co.cask.cdap.data2.transaction.snapshot.SnapshotCodecV2;
 import co.cask.cdap.data2.util.hbase.ConfigurationTable;
 import co.cask.tephra.coprocessor.TransactionStateCache;
+import co.cask.tephra.snapshot.SnapshotCodecV3;
 import org.apache.hadoop.conf.Configuration;
 import org.apache.hadoop.hbase.HBaseConfiguration;
 
@@ -38,6 +39,7 @@ public class DefaultTransactionStateCache extends TransactionStateCache {
   // DO NOT REMOVE
   private static final SnapshotCodecV1 codecV1 = null;
   private static final SnapshotCodecV2 codecV2 = null;
+  private static final SnapshotCodecV3 codecV3 = null;
 
   private String sysConfigTablePrefix;
   private ConfigurationTable configTable;
diff --git a/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV1.java b/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV1.java
index cbdedd2223b5..29791780f326 100644
--- a/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV1.java
+++ b/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV1.java
@@ -28,7 +28,9 @@
 /**
  * Handles serialization/deserialization of a {@link co.cask.tephra.persist.TransactionSnapshot} and
  * its elements to {@code byte[]}.
+ * @deprecated Replaced by use of {@code co.cask.tephra.snapshot.SnapshotCodecV3}.
  */
+@Deprecated
 public class SnapshotCodecV1 extends AbstractSnapshotCodec {
   public static final int VERSION = 1;
 
diff --git a/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV2.java b/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV2.java
index 0620e408b104..c7362b0ef80b 100644
--- a/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV2.java
+++ b/cdap-data-fabric/src/main/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecV2.java
@@ -28,7 +28,10 @@
 /**
  * Handles serialization/deserialization of a {@link co.cask.tephra.persist.TransactionSnapshot}
  * and its elements to {@code byte[]}.
+ *
+ * @deprecated Replaced by use of {@code co.cask.tephra.snapshot.SnapshotCodecV3}.
  */
+@Deprecated
 public class SnapshotCodecV2 extends AbstractSnapshotCodec {
   public static final int VERSION = 2;
 
diff --git a/cdap-data-fabric/src/test/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecCompatibilityTest.java b/cdap-data-fabric/src/test/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecCompatibilityTest.java
index e36c4761a834..5f3b0c4ea4be 100644
--- a/cdap-data-fabric/src/test/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecCompatibilityTest.java
+++ b/cdap-data-fabric/src/test/java/co/cask/cdap/data2/transaction/snapshot/SnapshotCodecCompatibilityTest.java
@@ -17,31 +17,50 @@
 package co.cask.cdap.data2.transaction.snapshot;
 
 import co.cask.cdap.api.common.Bytes;
+import co.cask.cdap.common.conf.CConfiguration;
+import co.cask.cdap.common.conf.CConfigurationUtil;
 import co.cask.tephra.ChangeId;
 import co.cask.tephra.TransactionManager;
+import co.cask.tephra.TransactionType;
 import co.cask.tephra.TxConstants;
 import co.cask.tephra.persist.TransactionSnapshot;
+import co.cask.tephra.persist.TransactionStateStorage;
+import co.cask.tephra.runtime.ConfigModule;
+import co.cask.tephra.runtime.DiscoveryModules;
+import co.cask.tephra.runtime.TransactionModules;
 import co.cask.tephra.snapshot.SnapshotCodecProvider;
 import com.google.common.collect.ImmutableMap;
 import com.google.common.collect.ImmutableSortedMap;
 import com.google.common.collect.Lists;
 import com.google.common.collect.Maps;
 import com.google.common.collect.Sets;
+import com.google.inject.Guice;
+import com.google.inject.Injector;
 import org.apache.hadoop.conf.Configuration;
 import org.apache.hadoop.hbase.HBaseConfiguration;
+import org.junit.ClassRule;
 import org.junit.Test;
+import org.junit.rules.TemporaryFolder;
 
 import java.io.ByteArrayInputStream;
 import java.io.ByteArrayOutputStream;
+import java.io.File;
+import java.util.Map;
 import java.util.Set;
 import java.util.TreeMap;
 
 import static org.junit.Assert.assertEquals;
+import static org.junit.Assert.assertNotEquals;
+import static org.junit.Assert.assertNotNull;
+import static org.junit.Assert.assertNull;
+
 
 /**
  * Tests snapshot codecs.
  */
 public class SnapshotCodecCompatibilityTest {
+  @ClassRule
+  public static TemporaryFolder tmpDir = new TemporaryFolder();
 
   @Test
   public void testV1CodecV2Compat() throws Exception {
@@ -87,4 +106,130 @@ public void testV1CodecV2Compat() throws Exception {
 
     assertEquals(snapshot, decoded);
   }
+
+  /**
+   * In-progress LONG transactions written with DefaultSnapshotCodec will not have the type serialized as part of
+   * the data.  Since these transactions also contain a non-negative expiration, we need to ensure we reset the type
+   * correctly when the snapshot is loaded.
+   */
+  @Test
+  public void testV2ToTephraV3Compatibility() throws Exception {
+    long now = System.currentTimeMillis();
+    long nowWritePointer = now * TxConstants.MAX_TX_PER_MS;
+    /*
+     * Snapshot consisting of transactions at:
+     */
+    long tInvalid = nowWritePointer - 5;    // t1 - invalid
+    long readPtr = nowWritePointer - 4;     // t2 - here and earlier committed
+    long tLong = nowWritePointer - 3;       // t3 - in-progress LONG
+    long tCommitted = nowWritePointer - 2;  // t4 - committed, changeset (r1, r2)
+    long tShort = nowWritePointer - 1;      // t5 - in-progress SHORT, canCommit called, changeset (r3, r4)
+
+    TreeMap<Long, TransactionManager.InProgressTx> inProgress = Maps.newTreeMap(ImmutableSortedMap.of(
+        tLong, new TransactionManager.InProgressTx(readPtr,
+            TransactionManager.getTxExpirationFromWritePointer(tLong, TxConstants.Manager.DEFAULT_TX_LONG_TIMEOUT),
+            TransactionType.LONG),
+        tShort, new TransactionManager.InProgressTx(readPtr, now + 1000, TransactionType.SHORT)));
+
+    TransactionSnapshot snapshot = new TransactionSnapshot(now, readPtr, nowWritePointer,
+        Lists.newArrayList(tInvalid), // invalid
+        inProgress,
+        ImmutableMap.<Long, Set<ChangeId>>of(
+            tShort, Sets.newHashSet(new ChangeId(new byte[]{'r', '3'}), new ChangeId(new byte[]{'r', '4'}))),
+        ImmutableMap.<Long, Set<ChangeId>>of(
+            tCommitted, Sets.newHashSet(new ChangeId(new byte[]{'r', '1'}), new ChangeId(new byte[]{'r', '2'}))));
+
+    Configuration conf1 = new Configuration();
+    conf1.set(TxConstants.Persist.CFG_TX_SNAPHOT_CODEC_CLASSES, SnapshotCodecV2.class.getName());
+    SnapshotCodecProvider provider1 = new SnapshotCodecProvider(conf1);
+
+    ByteArrayOutputStream out = new ByteArrayOutputStream();
+    try {
+      provider1.encode(out, snapshot);
+    } finally {
+      out.close();
+    }
+
+    TransactionSnapshot snapshot2 = provider1.decode(new ByteArrayInputStream(out.toByteArray()));
+    assertEquals(snapshot.getReadPointer(), snapshot2.getReadPointer());
+    assertEquals(snapshot.getWritePointer(), snapshot2.getWritePointer());
+    assertEquals(snapshot.getInvalid(), snapshot2.getInvalid());
+    // in-progress transactions will have missing types
+    assertNotEquals(snapshot.getInProgress(), snapshot2.getInProgress());
+    assertEquals(snapshot.getCommittingChangeSets(), snapshot2.getCommittingChangeSets());
+    assertEquals(snapshot.getCommittedChangeSets(), snapshot2.getCommittedChangeSets());
+
+    // after fixing in-progress, full snapshot should match
+    Map<Long, TransactionManager.InProgressTx> fixedInProgress = TransactionManager.txnBackwardsCompatCheck(
+        TxConstants.Manager.DEFAULT_TX_LONG_TIMEOUT, 10000L, snapshot2.getInProgress());
+    assertEquals(snapshot.getInProgress(), fixedInProgress);
+    assertEquals(snapshot, snapshot2);
+  }
+
+  /**
+   * Test full stack serialization for a TransactionManager migrating from DefaultSnapshotCodec to SnapshotCodecV3.
+   */
+  @Test
+  public void testV2ToTephraV3Migration() throws Exception {
+    File testDir = tmpDir.newFolder("testV2ToTephraV3Migration");
+    Configuration conf = new Configuration();
+    conf.setStrings(TxConstants.Persist.CFG_TX_SNAPHOT_CODEC_CLASSES,
+        SnapshotCodecV1.class.getName(), SnapshotCodecV2.class.getName());
+    conf.set(TxConstants.Manager.CFG_TX_SNAPSHOT_LOCAL_DIR, testDir.getAbsolutePath());
+
+    Injector injector = Guice.createInjector(new ConfigModule(conf),
+        new DiscoveryModules().getSingleNodeModules(), new TransactionModules().getSingleNodeModules());
+
+    TransactionManager txManager = injector.getInstance(TransactionManager.class);
+    txManager.startAndWait();
+
+    txManager.startLong();
+
+    // shutdown to force a snapshot
+    txManager.stopAndWait();
+
+    TransactionStateStorage txStorage = injector.getInstance(TransactionStateStorage.class);
+    txStorage.startAndWait();
+
+    // confirm that the in-progress entry is missing a type
+    TransactionSnapshot snapshot = txStorage.getLatestSnapshot();
+    assertNotNull(snapshot);
+    assertEquals(1, snapshot.getInProgress().size());
+    Map.Entry<Long, TransactionManager.InProgressTx> entry =
+        snapshot.getInProgress().entrySet().iterator().next();
+    assertNull(entry.getValue().getType());
+
+
+    // start a new Tx manager to test fixup
+    Configuration conf2 = new Configuration();
+    // make sure we work with the default CDAP conf for snapshot codecs
+    CConfiguration cconf = CConfiguration.create();
+    CConfigurationUtil.copyTxProperties(cconf, conf2);
+    // override snapshot dir
+    conf2.set(TxConstants.Manager.CFG_TX_SNAPSHOT_LOCAL_DIR, testDir.getAbsolutePath());
+
+    Injector injector2 = Guice.createInjector(new ConfigModule(conf2),
+        new DiscoveryModules().getSingleNodeModules(), new TransactionModules().getSingleNodeModules());
+
+    TransactionManager txManager2 = injector2.getInstance(TransactionManager.class);
+    txManager2.startAndWait();
+
+    // state should be recovered
+    TransactionSnapshot snapshot2 = txManager2.getCurrentState();
+    assertEquals(1, snapshot2.getInProgress().size());
+    Map.Entry<Long, TransactionManager.InProgressTx> inProgressTx =
+        snapshot2.getInProgress().entrySet().iterator().next();
+    assertEquals(TransactionType.LONG, inProgressTx.getValue().getType());
+
+    // save a new snapshot
+    txManager2.stopAndWait();
+
+    TransactionStateStorage txStorage2 = injector2.getInstance(TransactionStateStorage.class);
+    txStorage2.startAndWait();
+
+    TransactionSnapshot snapshot3 = txStorage2.getLatestSnapshot();
+    // full snapshot should have deserialized correctly without any fixups
+    assertEquals(snapshot2.getInProgress(), snapshot3.getInProgress());
+    assertEquals(snapshot2, snapshot3);
+  }
 }
diff --git a/pom.xml b/pom.xml
index a258bdacc9e5..67422e6d3e8a 100644
--- a/pom.xml
+++ b/pom.xml
@@ -126,7 +126,7 @@
     <servlet.api.version>3.0.1</servlet.api.version>
     <shiro.version>1.2.1</shiro.version>
     <slf4j.version>1.7.5</slf4j.version>
-    <tephra.version>0.4.1</tephra.version>
+    <tephra.version>0.4.2</tephra.version>
     <thrift.version>0.9.0</thrift.version>
     <twill.version>0.5.0-incubating</twill.version>
     <unboundid.version>2.3.6</unboundid.version>