diff --git a/pkg/operator/controllers/clusteroperatoraro/clusteroperatoraro_controller_test.go b/pkg/operator/controllers/clusteroperatoraro/clusteroperatoraro_controller_test.go
new file mode 100644
index 00000000000..b5102004f3f
--- /dev/null
+++ b/pkg/operator/controllers/clusteroperatoraro/clusteroperatoraro_controller_test.go
@@ -0,0 +1,274 @@
+package clusteroperatoraro
+
+// Copyright (c) Microsoft Corporation.
+// Licensed under the Apache License 2.0.
+
+import (
+	"context"
+	"testing"
+	"time"
+
+	"github.com/google/go-cmp/cmp/cmpopts"
+	configv1 "github.com/openshift/api/config/v1"
+	operatorv1 "github.com/openshift/api/operator/v1"
+	"github.com/sirupsen/logrus"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
+	"k8s.io/utils/pointer"
+	ctrl "sigs.k8s.io/controller-runtime"
+	ctrlfake "sigs.k8s.io/controller-runtime/pkg/client/fake"
+
+	arov1alpha1 "github.com/Azure/ARO-RP/pkg/operator/apis/aro.openshift.io/v1alpha1"
+	"github.com/Azure/ARO-RP/pkg/util/cmp"
+	_ "github.com/Azure/ARO-RP/pkg/util/scheme"
+	"github.com/Azure/ARO-RP/pkg/util/version"
+	utilconditions "github.com/Azure/ARO-RP/test/util/conditions"
+	utilerror "github.com/Azure/ARO-RP/test/util/error"
+)
+
+func TestConditions(t *testing.T) {
+	tests := []struct {
+		name                 string
+		controllerConditions []operatorv1.OperatorCondition
+		wantConditions       []configv1.ClusterOperatorStatusCondition
+		wantErr              string
+	}{
+		{
+			name:                 "no conditions sets defaults",
+			controllerConditions: []operatorv1.OperatorCondition{},
+			wantConditions: []configv1.ClusterOperatorStatusCondition{
+				{
+					Type:               configv1.OperatorAvailable,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorProgressing,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorDegraded,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+				},
+			},
+		},
+		{
+			name: "All controllers available sets Available=True",
+			controllerConditions: []operatorv1.OperatorCondition{
+				utilconditions.ControllerDefaultAvailable("ControllerA"),
+				utilconditions.ControllerDefaultAvailable("ControllerB"),
+				utilconditions.ControllerDefaultAvailable("ControllerC"),
+			},
+			wantConditions: []configv1.ClusterOperatorStatusCondition{
+				{
+					Type:               configv1.OperatorAvailable,
+					Status:             configv1.ConditionTrue,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+					Message:            "All is well",
+				},
+				{
+					Type:               configv1.OperatorProgressing,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorDegraded,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+				},
+			},
+		},
+		{
+			name: "Controller not available sets Available=False",
+			controllerConditions: []operatorv1.OperatorCondition{
+				utilconditions.ControllerDefaultAvailable("ControllerA"),
+				{
+					Type:               "ControllerBAvailable",
+					Status:             operatorv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "SomeError",
+					Message:            "An error occurred",
+				},
+				utilconditions.ControllerDefaultAvailable("ControllerC"),
+			},
+			wantConditions: []configv1.ClusterOperatorStatusCondition{
+				{
+					Type:               configv1.OperatorAvailable,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "ControllerB_SomeError",
+					Message:            "ControllerBAvailable: An error occurred",
+				},
+				{
+					Type:               configv1.OperatorProgressing,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorDegraded,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+				},
+			},
+		},
+		{
+			name: "All controllers not progressing sets Progressing=False",
+			controllerConditions: []operatorv1.OperatorCondition{
+				utilconditions.ControllerDefaultProgressing("ControllerA"),
+				utilconditions.ControllerDefaultProgressing("ControllerB"),
+				utilconditions.ControllerDefaultProgressing("ControllerC"),
+			},
+			wantConditions: []configv1.ClusterOperatorStatusCondition{
+				{
+					Type:               configv1.OperatorAvailable,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorProgressing,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+					Message:            "All is well",
+				},
+				{
+					Type:               configv1.OperatorDegraded,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+				},
+			},
+		},
+		{
+			name: "Controller progressing sets Progressing=True",
+			controllerConditions: []operatorv1.OperatorCondition{
+				utilconditions.ControllerDefaultProgressing("ControllerA"),
+				{
+					Type:               "ControllerBProgressing",
+					Status:             operatorv1.ConditionTrue,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "SomeProcess",
+					Message:            "Something is happening",
+				},
+				utilconditions.ControllerDefaultProgressing("ControllerC"),
+			},
+			wantConditions: []configv1.ClusterOperatorStatusCondition{
+				{
+					Type:               configv1.OperatorAvailable,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorProgressing,
+					Status:             configv1.ConditionTrue,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "ControllerB_SomeProcess",
+					Message:            "ControllerBProgressing: Something is happening",
+				},
+				{
+					Type:               configv1.OperatorDegraded,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+				},
+			},
+		},
+		{
+			name: "Controller degraded does NOT set Degraded=True",
+			controllerConditions: []operatorv1.OperatorCondition{
+				utilconditions.ControllerDefaultDegraded("ControllerA"),
+				{
+					Type:               "ControllerBDegraded",
+					Status:             operatorv1.ConditionTrue,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "SomeProcess",
+					Message:            "Something bad is happening",
+				},
+				utilconditions.ControllerDefaultDegraded("ControllerC"),
+			},
+			wantConditions: []configv1.ClusterOperatorStatusCondition{
+				{
+					Type:               configv1.OperatorAvailable,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorProgressing,
+					Status:             configv1.ConditionUnknown,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "NoData",
+				},
+				{
+					Type:               configv1.OperatorDegraded,
+					Status:             configv1.ConditionFalse,
+					LastTransitionTime: metav1.NewTime(time.Now()),
+					Reason:             "AsExpected",
+				},
+			},
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			cluster := &arov1alpha1.Cluster{
+				ObjectMeta: metav1.ObjectMeta{Name: arov1alpha1.SingletonClusterName},
+				Status: arov1alpha1.ClusterStatus{
+					Conditions: tt.controllerConditions,
+				},
+			}
+			clientFake := ctrlfake.NewClientBuilder().
+				WithObjects(cluster).
+				Build()
+
+			r := NewReconciler(logrus.NewEntry(logrus.StandardLogger()), clientFake)
+
+			request := ctrl.Request{}
+			ctx := context.Background()
+
+			_, err := r.Reconcile(ctx, request)
+
+			utilerror.AssertErrorMessage(t, err, tt.wantErr)
+
+			operator := &configv1.ClusterOperator{}
+			if err := clientFake.Get(ctx, types.NamespacedName{Name: clusterOperatorName}, operator); err != nil {
+				t.Error(err)
+			}
+			if diff := cmp.Diff(tt.wantConditions, operator.Status.Conditions, cmpopts.EquateApproxTime(time.Second)); diff != "" {
+				t.Error(diff)
+			}
+
+			// static checks - these should always be set on the operator resource after every reconcile
+			wantVersion := []configv1.OperandVersion{{
+				Name:    "operator",
+				Version: version.GitCommit,
+			}}
+			if diff := cmp.Diff(wantVersion, operator.Status.Versions); diff != "" {
+				t.Error(diff)
+			}
+
+			wantOwnerReference := []metav1.OwnerReference{{
+				APIVersion:         arov1alpha1.GroupVersion.Identifier(),
+				Kind:               "Cluster",
+				Name:               arov1alpha1.SingletonClusterName,
+				Controller:         pointer.BoolPtr(true),
+				BlockOwnerDeletion: pointer.BoolPtr(true),
+			}}
+			if diff := cmp.Diff(wantOwnerReference, operator.ObjectMeta.OwnerReferences); diff != "" {
+				t.Error(diff)
+			}
+		})
+	}
+}