diff --git a/src/protocols/bdx/BdxTransferSession.cpp b/src/protocols/bdx/BdxTransferSession.cpp
index f6c54985ab5cd1..99588f0770a72e 100644
--- a/src/protocols/bdx/BdxTransferSession.cpp
+++ b/src/protocols/bdx/BdxTransferSession.cpp
@@ -261,6 +261,17 @@ CHIP_ERROR TransferSession::AcceptTransfer(const TransferAcceptData & acceptData
     return CHIP_NO_ERROR;
 }
 
+CHIP_ERROR TransferSession::RejectTransfer(StatusCode reason)
+{
+    VerifyOrReturnError(mState == TransferState::kNegotiateTransferParams, CHIP_ERROR_INCORRECT_STATE);
+    VerifyOrReturnError(mPendingOutput == OutputEventType::kNone, CHIP_ERROR_INCORRECT_STATE);
+
+    PrepareStatusReport(reason);
+    mState = TransferState::kTransferDone;
+
+    return CHIP_NO_ERROR;
+}
+
 CHIP_ERROR TransferSession::PrepareBlockQuery()
 {
     const MessageType msgType = MessageType::BlockQuery;
diff --git a/src/protocols/bdx/tests/TestBdxTransferSession.cpp b/src/protocols/bdx/tests/TestBdxTransferSession.cpp
index 8fcc4fab312f26..9a383752551064 100644
--- a/src/protocols/bdx/tests/TestBdxTransferSession.cpp
+++ b/src/protocols/bdx/tests/TestBdxTransferSession.cpp
@@ -124,6 +124,13 @@ void VerifyNoMoreOutput(TransferSession & transferSession)
     EXPECT_EQ(event.EventType, TransferSession::OutputEventType::kNone);
 }
 
+void VerifyInternalError(TransferSession & transferSession)
+{
+    TransferSession::OutputEvent event;
+    transferSession.PollOutput(event, kNoAdvanceTime);
+    EXPECT_EQ(event.EventType, TransferSession::OutputEventType::kInternalError);
+}
+
 // Helper method for initializing two TransferSession objects, generating a TransferInit message, and passing it to a responding
 // TransferSession.
 void SendAndVerifyTransferInit(TransferSession::OutputEvent & outEvent, System::Clock::Timeout timeout, TransferSession & initiator,
@@ -235,6 +242,30 @@ void SendAndVerifyAcceptMsg(TransferSession::OutputEvent & outEvent, TransferSes
     EXPECT_LE(acceptReceiver.GetTransferBlockSize(), initData.MaxBlockSize);
 }
 
+void SendAndVerifyRejectMsg(TransferSession::OutputEvent & outEvent, TransferSession & rejectSender, StatusCode reason,
+                            TransferSession & rejectReceiver)
+{
+    CHIP_ERROR err = rejectSender.RejectTransfer(reason);
+    EXPECT_EQ(err, CHIP_NO_ERROR);
+
+    // Verify Sender emits status message for sending
+    rejectSender.PollOutput(outEvent, kNoAdvanceTime);
+    VerifyNoMoreOutput(rejectSender);
+    EXPECT_EQ(outEvent.EventType, TransferSession::OutputEventType::kMsgToSend);
+    System::PacketBufferHandle statusReportMsg = outEvent.MsgData.Retain();
+    VerifyStatusReport(std::move(outEvent.MsgData), reason);
+
+    // Pass status message to rejectReceiver
+    err = AttachHeaderAndSend(outEvent.msgTypeData, std::move(outEvent.MsgData), rejectReceiver);
+    EXPECT_EQ(err, CHIP_NO_ERROR);
+
+    // Verify received status message.
+    rejectReceiver.PollOutput(outEvent, kNoAdvanceTime);
+    VerifyInternalError(rejectReceiver);
+    EXPECT_EQ(outEvent.EventType, TransferSession::OutputEventType::kStatusReceived);
+    EXPECT_EQ(outEvent.statusData.statusCode, reason);
+}
+
 // Helper method for preparing a sending a BlockQuery message between two TransferSession objects.
 void SendAndVerifyQuery(TransferSession & queryReceiver, TransferSession & querySender, TransferSession::OutputEvent & outEvent)
 {
@@ -698,3 +729,33 @@ TEST_F(TestBdxTransferSession, TestDuplicateBlockError)
         EXPECT_EQ(outEvent.statusData.statusCode, StatusCode::kBadBlockCounter);
     }
 }
+
+TEST_F(TestBdxTransferSession, TestRejectTransfer)
+{
+    TransferSession::OutputEvent outEvent;
+    TransferSession initiatingReceiver;
+    TransferSession respondingSender;
+
+    // Chosen arbitrarily for this test
+    uint16_t proposedBlockSize     = 128;
+    System::Clock::Timeout timeout = System::Clock::Seconds16(24);
+    TransferControlFlags driveMode = TransferControlFlags::kReceiverDrive;
+
+    // ReceiveInit parameters
+    TransferSession::TransferInitData initOptions;
+    initOptions.TransferCtlFlags = driveMode;
+    initOptions.MaxBlockSize     = proposedBlockSize;
+    char testFileDes[9]          = { "test.txt" };
+    initOptions.FileDesLength    = static_cast<uint16_t>(strlen(testFileDes));
+    initOptions.FileDesignator   = reinterpret_cast<uint8_t *>(testFileDes);
+
+    // Initialize respondingSender and pass ReceiveInit message
+    BitFlags<TransferControlFlags> senderOpts;
+    senderOpts.Set(driveMode);
+
+    SendAndVerifyTransferInit(outEvent, timeout, initiatingReceiver, TransferRole::kReceiver, initOptions, respondingSender,
+                              senderOpts, proposedBlockSize);
+
+    // Reject the transfer with a status
+    SendAndVerifyRejectMsg(outEvent, respondingSender, StatusCode::kResponderBusy, initiatingReceiver);
+}