diff --git a/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/common/ContractCallContext.java b/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/common/ContractCallContext.java
index 64a3d2c784..bb85e28c0f 100644
--- a/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/common/ContractCallContext.java
+++ b/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/common/ContractCallContext.java
@@ -16,6 +16,9 @@
 
 package com.hedera.mirror.web3.common;
 
+import com.hedera.hapi.node.contract.ContractCreateTransactionBody;
+import com.hedera.hapi.node.file.FileCreateTransactionBody;
+import com.hedera.hapi.node.state.file.File;
 import com.hedera.mirror.common.domain.contract.ContractAction;
 import com.hedera.mirror.common.domain.transaction.RecordFile;
 import com.hedera.mirror.web3.evm.contracts.execution.traceability.Opcode;
@@ -23,6 +26,7 @@
 import com.hedera.mirror.web3.evm.contracts.execution.traceability.OpcodeTracerOptions;
 import com.hedera.mirror.web3.evm.store.CachingStateFrame;
 import com.hedera.mirror.web3.evm.store.StackedStateFrames;
+import com.hedera.mirror.web3.state.FileReadableKVState;
 import java.util.ArrayList;
 import java.util.EmptyStackException;
 import java.util.List;
@@ -73,6 +77,24 @@ public class ContractCallContext {
     @Setter
     private Optional<Long> timestamp = Optional.empty();
 
+    /**
+     * The TransactionExecutor from the modularized services integration deploys contracts in 2 steps:
+     *
+     * 1. The initcode is uploaded and saved as a file using a {@link FileCreateTransactionBody}.
+     * 2. The returned file id from step 1 is then passed to a {@link ContractCreateTransactionBody}.
+     * Each step performs a separate transaction.
+     * For step 2 even if we pass the correct file id, since the mirror node data is readonly,
+     * the {@link FileReadableKVState} is not able to populate the contract's bytecode from the DB
+     * since it was never explicitly persisted in the DB.
+     *
+     * This is the function of the field "file" to hold temporary the bytecode and the fileId
+     * during contract deploy.
+     */
+    @Setter
+    private Optional<File> file = Optional.empty();
+
+    ;
+
     private ContractCallContext() {}
 
     public static ContractCallContext get() {
@@ -86,6 +108,7 @@ public static <T> T run(Function<ContractCallContext, T> function) {
     public void reset() {
         recordFile = null;
         stack = stackBase;
+        file = Optional.empty();
     }
 
     public int getStackHeight() {
diff --git a/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/state/FileReadableKVState.java b/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/state/FileReadableKVState.java
index d8ca1935ba..119b430d34 100644
--- a/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/state/FileReadableKVState.java
+++ b/hedera-mirror-web3/src/main/java/com/hedera/mirror/web3/state/FileReadableKVState.java
@@ -58,7 +58,15 @@ public FileReadableKVState(final FileDataRepository fileDataRepository, final En
     @Override
     protected File readFromDataSource(@Nonnull FileID key) {
         final var timestamp = ContractCallContext.get().getTimestamp();
-        final var fileId = toEntityId(key).getId();
+        final var fileEntityId = toEntityId(key);
+        final var fileId = fileEntityId.getId();
+
+        final var contextFile = ContractCallContext.get().getFile();
+        // If we are in a contract create case, the fileID and the init bytecode are in the ContractCallContext.
+        if (contextFile.isPresent() && contextFile.get().fileId().equals(key)) {
+            return contextFile.get();
+        }
+
         return timestamp
                 .map(t -> fileDataRepository.getFileAtTimestamp(fileId, t))
                 .orElseGet(() -> fileDataRepository.getFileAtTimestamp(fileId, getCurrentTimestamp()))
diff --git a/hedera-mirror-web3/src/test/java/com/hedera/mirror/web3/state/FileReadableKVStateTest.java b/hedera-mirror-web3/src/test/java/com/hedera/mirror/web3/state/FileReadableKVStateTest.java
index 100cf4aa93..68afe39d05 100644
--- a/hedera-mirror-web3/src/test/java/com/hedera/mirror/web3/state/FileReadableKVStateTest.java
+++ b/hedera-mirror-web3/src/test/java/com/hedera/mirror/web3/state/FileReadableKVStateTest.java
@@ -21,6 +21,8 @@
 import static org.assertj.core.api.AssertionsForClassTypes.assertThat;
 import static org.mockito.ArgumentMatchers.anyLong;
 import static org.mockito.Mockito.mockStatic;
+import static org.mockito.Mockito.times;
+import static org.mockito.Mockito.verify;
 import static org.mockito.Mockito.when;
 
 import com.hedera.hapi.node.base.FileID;
@@ -52,6 +54,7 @@ class FileReadableKVStateTest {
     private static final long REALM = 1L;
     private static final long FILE_NUM = 123L;
     private static final FileID FILE_ID = toFileId(SHARD, REALM, FILE_NUM);
+    private static final File FILE = File.newBuilder().fileId(FILE_ID).build();
     private static final long FILE_ID_LONG = toEntityId(FILE_ID).getId();
     private static final long EXPIRATION_TIMESTAMP = 2_000_000_000L;
     private static final Optional<Long> TIMESTAMP = Optional.of(1234L);
@@ -68,6 +71,9 @@ class FileReadableKVStateTest {
     @Mock
     private EntityRepository entityRepository;
 
+    @Mock
+    private Bytes initBytecode;
+
     @Spy
     private ContractCallContext contractCallContext;
 
@@ -173,6 +179,19 @@ void readFromDataSourceFileNotFound() {
         assertThat(result).isNull();
     }
 
+    @Test
+    void readFromDataSourceWhenThereIsContext() {
+        when(ContractCallContext.get().getFile()).thenReturn(Optional.of(FILE));
+
+        File result = fileReadableKVState.readFromDataSource(FILE_ID);
+
+        assertThat(result)
+                .isEqualTo(
+                        File.newBuilder().fileId(FILE_ID).contents(initBytecode).build());
+        verify(fileDataRepository, times(0)).findById(anyLong());
+        verify(fileDataRepository, times(0)).getFileAtTimestamp(anyLong(), anyLong());
+    }
+
     @Test
     void sizeIsAlwaysZero() {
         assertThat(fileReadableKVState.size()).isZero();