diff --git a/docs/source/en/_toctree.yml b/docs/source/en/_toctree.yml
index d2583121418e..e855ea36e8cf 100644
--- a/docs/source/en/_toctree.yml
+++ b/docs/source/en/_toctree.yml
@@ -278,6 +278,8 @@
       title: Kandinsky 2.1
     - local: api/pipelines/kandinsky_v22
       title: Kandinsky 2.2
+    - local: api/pipelines/kandinsky3
+      title: Kandinsky 3
     - local: api/pipelines/latent_consistency_models
       title: Latent Consistency Models
     - local: api/pipelines/latent_diffusion
diff --git a/docs/source/en/api/pipelines/kandinsky3.md b/docs/source/en/api/pipelines/kandinsky3.md
new file mode 100644
index 000000000000..cc4f87d47f58
--- /dev/null
+++ b/docs/source/en/api/pipelines/kandinsky3.md
@@ -0,0 +1,24 @@
+<!--Copyright 2023 The HuggingFace Team. All rights reserved.
+Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in compliance with
+the License. You may obtain a copy of the License at
+http://www.apache.org/licenses/LICENSE-2.0
+Unless required by applicable law or agreed to in writing, software distributed under the License is distributed on
+an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the License for the
+specific language governing permissions and limitations under the License.
+-->
+
+# Kandinsky 3
+
+TODO
+
+## Kandinsky3Pipeline
+
+[[autodoc]] Kandinsky3Pipeline
+	- all
+	- __call__
+
+## Kandinsky3Img2ImgPipeline
+
+[[autodoc]] Kandinsky3Img2ImgPipeline
+	- all
+	- __call__
diff --git a/scripts/convert_kandinsky3_unet.py b/scripts/convert_kandinsky3_unet.py
new file mode 100644
index 000000000000..4fe8c54eb7fc
--- /dev/null
+++ b/scripts/convert_kandinsky3_unet.py
@@ -0,0 +1,98 @@
+#!/usr/bin/env python3
+import argparse
+import fnmatch
+
+from safetensors.torch import load_file
+
+from diffusers import Kandinsky3UNet
+
+
+MAPPING = {
+    "to_time_embed.1": "time_embedding.linear_1",
+    "to_time_embed.3": "time_embedding.linear_2",
+    "in_layer": "conv_in",
+    "out_layer.0": "conv_norm_out",
+    "out_layer.2": "conv_out",
+    "down_samples": "down_blocks",
+    "up_samples": "up_blocks",
+    "projection_lin": "encoder_hid_proj.projection_linear",
+    "projection_ln": "encoder_hid_proj.projection_norm",
+    "feature_pooling": "add_time_condition",
+    "to_query": "to_q",
+    "to_key": "to_k",
+    "to_value": "to_v",
+    "output_layer": "to_out.0",
+    "self_attention_block": "attentions.0",
+}
+
+DYNAMIC_MAP = {
+    "resnet_attn_blocks.*.0": "resnets_in.*",
+    "resnet_attn_blocks.*.1": ("attentions.*", 1),
+    "resnet_attn_blocks.*.2": "resnets_out.*",
+}
+# MAPPING = {}
+
+
+def convert_state_dict(unet_state_dict):
+    """
+    Convert the state dict of a U-Net model to match the key format expected by Kandinsky3UNet model.
+    Args:
+        unet_model (torch.nn.Module): The original U-Net model.
+        unet_kandi3_model (torch.nn.Module): The Kandinsky3UNet model to match keys with.
+
+    Returns:
+        OrderedDict: The converted state dictionary.
+    """
+    # Example of renaming logic (this will vary based on your model's architecture)
+    converted_state_dict = {}
+    for key in unet_state_dict:
+        new_key = key
+        for pattern, new_pattern in MAPPING.items():
+            new_key = new_key.replace(pattern, new_pattern)
+
+        for dyn_pattern, dyn_new_pattern in DYNAMIC_MAP.items():
+            has_matched = False
+            if fnmatch.fnmatch(new_key, f"*.{dyn_pattern}.*") and not has_matched:
+                star = int(new_key.split(dyn_pattern.split(".")[0])[-1].split(".")[1])
+
+                if isinstance(dyn_new_pattern, tuple):
+                    new_star = star + dyn_new_pattern[-1]
+                    dyn_new_pattern = dyn_new_pattern[0]
+                else:
+                    new_star = star
+
+                pattern = dyn_pattern.replace("*", str(star))
+                new_pattern = dyn_new_pattern.replace("*", str(new_star))
+
+                new_key = new_key.replace(pattern, new_pattern)
+                has_matched = True
+
+        converted_state_dict[new_key] = unet_state_dict[key]
+
+    return converted_state_dict
+
+
+def main(model_path, output_path):
+    # Load your original U-Net model
+    unet_state_dict = load_file(model_path)
+
+    # Initialize your Kandinsky3UNet model
+    config = {}
+
+    # Convert the state dict
+    converted_state_dict = convert_state_dict(unet_state_dict)
+
+    unet = Kandinsky3UNet(config)
+    unet.load_state_dict(converted_state_dict)
+
+    unet.save_pretrained(output_path)
+    print(f"Converted model saved to {output_path}")
+
+
+if __name__ == "__main__":
+    parser = argparse.ArgumentParser(description="Convert U-Net PyTorch model to Kandinsky3UNet format")
+    parser.add_argument("--model_path", type=str, required=True, help="Path to the original U-Net PyTorch model")
+    parser.add_argument("--output_path", type=str, required=True, help="Path to save the converted model")
+
+    args = parser.parse_args()
+    main(args.model_path, args.output_path)
diff --git a/src/diffusers/__init__.py b/src/diffusers/__init__.py
index 21e7fbd59f24..8a0dc2b923d3 100644
--- a/src/diffusers/__init__.py
+++ b/src/diffusers/__init__.py
@@ -79,6 +79,7 @@
             "AutoencoderTiny",
             "ConsistencyDecoderVAE",
             "ControlNetModel",
+            "Kandinsky3UNet",
             "ModelMixin",
             "MotionAdapter",
             "MultiAdapter",
@@ -214,6 +215,8 @@
             "IFPipeline",
             "IFSuperResolutionPipeline",
             "ImageTextPipelineOutput",
+            "Kandinsky3Img2ImgPipeline",
+            "Kandinsky3Pipeline",
             "KandinskyCombinedPipeline",
             "KandinskyImg2ImgCombinedPipeline",
             "KandinskyImg2ImgPipeline",
@@ -446,6 +449,7 @@
             AutoencoderTiny,
             ConsistencyDecoderVAE,
             ControlNetModel,
+            Kandinsky3UNet,
             ModelMixin,
             MotionAdapter,
             MultiAdapter,
@@ -560,6 +564,8 @@
             IFPipeline,
             IFSuperResolutionPipeline,
             ImageTextPipelineOutput,
+            Kandinsky3Img2ImgPipeline,
+            Kandinsky3Pipeline,
             KandinskyCombinedPipeline,
             KandinskyImg2ImgCombinedPipeline,
             KandinskyImg2ImgPipeline,
diff --git a/src/diffusers/models/__init__.py b/src/diffusers/models/__init__.py
index d45f56d43c32..de2e2848b848 100644
--- a/src/diffusers/models/__init__.py
+++ b/src/diffusers/models/__init__.py
@@ -36,6 +36,7 @@
     _import_structure["unet_2d"] = ["UNet2DModel"]
     _import_structure["unet_2d_condition"] = ["UNet2DConditionModel"]
     _import_structure["unet_3d_condition"] = ["UNet3DConditionModel"]
+    _import_structure["unet_kandi3"] = ["Kandinsky3UNet"]
     _import_structure["unet_motion_model"] = ["MotionAdapter", "UNetMotionModel"]
     _import_structure["vq_model"] = ["VQModel"]
 
@@ -63,6 +64,7 @@
         from .unet_2d import UNet2DModel
         from .unet_2d_condition import UNet2DConditionModel
         from .unet_3d_condition import UNet3DConditionModel
+        from .unet_kandi3 import Kandinsky3UNet
         from .unet_motion_model import MotionAdapter, UNetMotionModel
         from .vq_model import VQModel
 
diff --git a/src/diffusers/models/attention_processor.py b/src/diffusers/models/attention_processor.py
index 6b86ba66db37..21eb3a32dc09 100644
--- a/src/diffusers/models/attention_processor.py
+++ b/src/diffusers/models/attention_processor.py
@@ -16,7 +16,7 @@
 
 import torch
 import torch.nn.functional as F
-from torch import nn
+from torch import einsum, nn
 
 from ..utils import USE_PEFT_BACKEND, deprecate, logging
 from ..utils.import_utils import is_xformers_available
@@ -2219,6 +2219,44 @@ def __call__(
         return hidden_states
 
 
+# TODO(Yiyi): This class should not exist, we can replace it with a normal attention processor I believe
+# this way torch.compile and co. will work as well
+class Kandi3AttnProcessor:
+    r"""
+    Default kandinsky3 proccesor for performing attention-related computations.
+    """
+
+    @staticmethod
+    def _reshape(hid_states, h):
+        b, n, f = hid_states.shape
+        d = f // h
+        return hid_states.unsqueeze(-1).reshape(b, n, h, d).permute(0, 2, 1, 3)
+
+    def __call__(
+        self,
+        attn,
+        x,
+        context,
+        context_mask=None,
+    ):
+        query = self._reshape(attn.to_q(x), h=attn.num_heads)
+        key = self._reshape(attn.to_k(context), h=attn.num_heads)
+        value = self._reshape(attn.to_v(context), h=attn.num_heads)
+
+        attention_matrix = einsum("b h i d, b h j d -> b h i j", query, key)
+
+        if context_mask is not None:
+            max_neg_value = -torch.finfo(attention_matrix.dtype).max
+            context_mask = context_mask.unsqueeze(1).unsqueeze(1)
+            attention_matrix = attention_matrix.masked_fill(~(context_mask != 0), max_neg_value)
+        attention_matrix = (attention_matrix * attn.scale).softmax(dim=-1)
+
+        out = einsum("b h i j, b h j d -> b h i d", attention_matrix, value)
+        out = out.permute(0, 2, 1, 3).reshape(out.shape[0], out.shape[2], -1)
+        out = attn.to_out[0](out)
+        return out
+
+
 LORA_ATTENTION_PROCESSORS = (
     LoRAAttnProcessor,
     LoRAAttnProcessor2_0,
@@ -2244,6 +2282,7 @@ def __call__(
     LoRAXFormersAttnProcessor,
     IPAdapterAttnProcessor,
     IPAdapterAttnProcessor2_0,
+    Kandi3AttnProcessor,
 )
 
 AttentionProcessor = Union[
diff --git a/src/diffusers/models/unet_kandi3.py b/src/diffusers/models/unet_kandi3.py
new file mode 100644
index 000000000000..42e25a942f7d
--- /dev/null
+++ b/src/diffusers/models/unet_kandi3.py
@@ -0,0 +1,589 @@
+import math
+from dataclasses import dataclass
+from typing import Dict, Tuple, Union
+
+import torch
+import torch.nn.functional as F
+import torch.utils.checkpoint
+from torch import nn
+
+from ..configuration_utils import ConfigMixin, register_to_config
+from ..utils import BaseOutput, logging
+from .attention_processor import AttentionProcessor, Kandi3AttnProcessor
+from .embeddings import TimestepEmbedding
+from .modeling_utils import ModelMixin
+
+
+logger = logging.get_logger(__name__)  # pylint: disable=invalid-name
+
+
+@dataclass
+class Kandinsky3UNetOutput(BaseOutput):
+    sample: torch.FloatTensor = None
+
+
+# TODO(Yiyi): This class needs to be removed
+def set_default_item(condition, item_1, item_2=None):
+    if condition:
+        return item_1
+    else:
+        return item_2
+
+
+# TODO(Yiyi): This class needs to be removed
+def set_default_layer(condition, layer_1, args_1=[], kwargs_1={}, layer_2=torch.nn.Identity, args_2=[], kwargs_2={}):
+    if condition:
+        return layer_1(*args_1, **kwargs_1)
+    else:
+        return layer_2(*args_2, **kwargs_2)
+
+
+# TODO(Yiyi): This class should be removed and be replaced by Timesteps
+class SinusoidalPosEmb(nn.Module):
+    def __init__(self, dim):
+        super().__init__()
+        self.dim = dim
+
+    def forward(self, x, type_tensor=None):
+        half_dim = self.dim // 2
+        emb = math.log(10000) / (half_dim - 1)
+        emb = torch.exp(torch.arange(half_dim, device=x.device) * -emb)
+        emb = x[:, None] * emb[None, :]
+        return torch.cat((emb.sin(), emb.cos()), dim=-1)
+
+
+class Kandinsky3EncoderProj(nn.Module):
+    def __init__(self, encoder_hid_dim, cross_attention_dim):
+        super().__init__()
+        self.projection_linear = nn.Linear(encoder_hid_dim, cross_attention_dim, bias=False)
+        self.projection_norm = nn.LayerNorm(cross_attention_dim)
+
+    def forward(self, x):
+        x = self.projection_linear(x)
+        x = self.projection_norm(x)
+        return x
+
+
+class Kandinsky3UNet(ModelMixin, ConfigMixin):
+    @register_to_config
+    def __init__(
+        self,
+        in_channels: int = 4,
+        time_embedding_dim: int = 1536,
+        groups: int = 32,
+        attention_head_dim: int = 64,
+        layers_per_block: Union[int, Tuple[int]] = 3,
+        block_out_channels: Tuple[int] = (384, 768, 1536, 3072),
+        cross_attention_dim: Union[int, Tuple[int]] = 4096,
+        encoder_hid_dim: int = 4096,
+    ):
+        super().__init__()
+
+        # TOOD(Yiyi): Give better name and put into config for the following 4 parameters
+        expansion_ratio = 4
+        compression_ratio = 2
+        add_cross_attention = (False, True, True, True)
+        add_self_attention = (False, True, True, True)
+
+        out_channels = in_channels
+        init_channels = block_out_channels[0] // 2
+        # TODO(Yiyi): Should be replaced with Timesteps class -> make sure that results are the same
+        # self.time_proj = Timesteps(init_channels, flip_sin_to_cos=False, downscale_freq_shift=1)
+        self.time_proj = SinusoidalPosEmb(init_channels)
+
+        self.time_embedding = TimestepEmbedding(
+            init_channels,
+            time_embedding_dim,
+        )
+
+        self.add_time_condition = Kandinsky3AttentionPooling(
+            time_embedding_dim, cross_attention_dim, attention_head_dim
+        )
+
+        self.conv_in = nn.Conv2d(in_channels, init_channels, kernel_size=3, padding=1)
+
+        self.encoder_hid_proj = Kandinsky3EncoderProj(encoder_hid_dim, cross_attention_dim)
+
+        hidden_dims = [init_channels] + list(block_out_channels)
+        in_out_dims = list(zip(hidden_dims[:-1], hidden_dims[1:]))
+        text_dims = [set_default_item(is_exist, cross_attention_dim) for is_exist in add_cross_attention]
+        num_blocks = len(block_out_channels) * [layers_per_block]
+        layer_params = [num_blocks, text_dims, add_self_attention]
+        rev_layer_params = map(reversed, layer_params)
+
+        cat_dims = []
+        self.num_levels = len(in_out_dims)
+        self.down_blocks = nn.ModuleList([])
+        for level, ((in_dim, out_dim), res_block_num, text_dim, self_attention) in enumerate(
+            zip(in_out_dims, *layer_params)
+        ):
+            down_sample = level != (self.num_levels - 1)
+            cat_dims.append(set_default_item(level != (self.num_levels - 1), out_dim, 0))
+            self.down_blocks.append(
+                Kandinsky3DownSampleBlock(
+                    in_dim,
+                    out_dim,
+                    time_embedding_dim,
+                    text_dim,
+                    res_block_num,
+                    groups,
+                    attention_head_dim,
+                    expansion_ratio,
+                    compression_ratio,
+                    down_sample,
+                    self_attention,
+                )
+            )
+
+        self.up_blocks = nn.ModuleList([])
+        for level, ((out_dim, in_dim), res_block_num, text_dim, self_attention) in enumerate(
+            zip(reversed(in_out_dims), *rev_layer_params)
+        ):
+            up_sample = level != 0
+            self.up_blocks.append(
+                Kandinsky3UpSampleBlock(
+                    in_dim,
+                    cat_dims.pop(),
+                    out_dim,
+                    time_embedding_dim,
+                    text_dim,
+                    res_block_num,
+                    groups,
+                    attention_head_dim,
+                    expansion_ratio,
+                    compression_ratio,
+                    up_sample,
+                    self_attention,
+                )
+            )
+
+        self.conv_norm_out = nn.GroupNorm(groups, init_channels)
+        self.conv_act_out = nn.SiLU()
+        self.conv_out = nn.Conv2d(init_channels, out_channels, kernel_size=3, padding=1)
+
+    @property
+    def attn_processors(self) -> Dict[str, AttentionProcessor]:
+        r"""
+        Returns:
+            `dict` of attention processors: A dictionary containing all attention processors used in the model with
+            indexed by its weight name.
+        """
+        # set recursively
+        processors = {}
+
+        def fn_recursive_add_processors(name: str, module: torch.nn.Module, processors: Dict[str, AttentionProcessor]):
+            if hasattr(module, "set_processor"):
+                processors[f"{name}.processor"] = module.processor
+
+            for sub_name, child in module.named_children():
+                fn_recursive_add_processors(f"{name}.{sub_name}", child, processors)
+
+            return processors
+
+        for name, module in self.named_children():
+            fn_recursive_add_processors(name, module, processors)
+
+        return processors
+
+    def set_attn_processor(self, processor: Union[AttentionProcessor, Dict[str, AttentionProcessor]]):
+        r"""
+        Sets the attention processor to use to compute attention.
+
+        Parameters:
+            processor (`dict` of `AttentionProcessor` or only `AttentionProcessor`):
+                The instantiated processor class or a dictionary of processor classes that will be set as the processor
+                for **all** `Attention` layers.
+
+                If `processor` is a dict, the key needs to define the path to the corresponding cross attention
+                processor. This is strongly recommended when setting trainable attention processors.
+
+        """
+        count = len(self.attn_processors.keys())
+
+        if isinstance(processor, dict) and len(processor) != count:
+            raise ValueError(
+                f"A dict of processors was passed, but the number of processors {len(processor)} does not match the"
+                f" number of attention layers: {count}. Please make sure to pass {count} processor classes."
+            )
+
+        def fn_recursive_attn_processor(name: str, module: torch.nn.Module, processor):
+            if hasattr(module, "set_processor"):
+                if not isinstance(processor, dict):
+                    module.set_processor(processor)
+                else:
+                    module.set_processor(processor.pop(f"{name}.processor"))
+
+            for sub_name, child in module.named_children():
+                fn_recursive_attn_processor(f"{name}.{sub_name}", child, processor)
+
+        for name, module in self.named_children():
+            fn_recursive_attn_processor(name, module, processor)
+
+    def set_default_attn_processor(self):
+        """
+        Disables custom attention processors and sets the default attention implementation.
+        """
+        self.set_attn_processor(Kandi3AttnProcessor())
+
+    def _set_gradient_checkpointing(self, module, value=False):
+        if hasattr(module, "gradient_checkpointing"):
+            module.gradient_checkpointing = value
+
+    def forward(self, sample, timestep, encoder_hidden_states=None, encoder_attention_mask=None, return_dict=True):
+        # TODO(Yiyi): Clean up the following variables - these names should not be used
+        # but instead only the ones that we pass to forward
+        x = sample
+        context_mask = encoder_attention_mask
+        context = encoder_hidden_states
+
+        if not torch.is_tensor(timestep):
+            dtype = torch.float32 if isinstance(timestep, float) else torch.int32
+            timestep = torch.tensor([timestep], dtype=dtype, device=sample.device)
+        elif len(timestep.shape) == 0:
+            timestep = timestep[None].to(sample.device)
+
+        # broadcast to batch dimension in a way that's compatible with ONNX/Core ML
+        timestep = timestep.expand(sample.shape[0])
+        time_embed_input = self.time_proj(timestep).to(x.dtype)
+        time_embed = self.time_embedding(time_embed_input)
+
+        context = self.encoder_hid_proj(context)
+
+        if context is not None:
+            time_embed = self.add_time_condition(time_embed, context, context_mask)
+
+        hidden_states = []
+        x = self.conv_in(x)
+        for level, down_sample in enumerate(self.down_blocks):
+            x = down_sample(x, time_embed, context, context_mask)
+            if level != self.num_levels - 1:
+                hidden_states.append(x)
+
+        for level, up_sample in enumerate(self.up_blocks):
+            if level != 0:
+                x = torch.cat([x, hidden_states.pop()], dim=1)
+            x = up_sample(x, time_embed, context, context_mask)
+
+        x = self.conv_norm_out(x)
+        x = self.conv_act_out(x)
+        x = self.conv_out(x)
+
+        if not return_dict:
+            return (x,)
+        return Kandinsky3UNetOutput(sample=x)
+
+
+class Kandinsky3UpSampleBlock(nn.Module):
+    def __init__(
+        self,
+        in_channels,
+        cat_dim,
+        out_channels,
+        time_embed_dim,
+        context_dim=None,
+        num_blocks=3,
+        groups=32,
+        head_dim=64,
+        expansion_ratio=4,
+        compression_ratio=2,
+        up_sample=True,
+        self_attention=True,
+    ):
+        super().__init__()
+        up_resolutions = [[None, set_default_item(up_sample, True), None, None]] + [[None] * 4] * (num_blocks - 1)
+        hidden_channels = (
+            [(in_channels + cat_dim, in_channels)]
+            + [(in_channels, in_channels)] * (num_blocks - 2)
+            + [(in_channels, out_channels)]
+        )
+        attentions = []
+        resnets_in = []
+        resnets_out = []
+
+        self.self_attention = self_attention
+        self.context_dim = context_dim
+
+        attentions.append(
+            set_default_layer(
+                self_attention,
+                Kandinsky3AttentionBlock,
+                (out_channels, time_embed_dim, None, groups, head_dim, expansion_ratio),
+                layer_2=nn.Identity,
+            )
+        )
+
+        for (in_channel, out_channel), up_resolution in zip(hidden_channels, up_resolutions):
+            resnets_in.append(
+                Kandinsky3ResNetBlock(in_channel, in_channel, time_embed_dim, groups, compression_ratio, up_resolution)
+            )
+            attentions.append(
+                set_default_layer(
+                    context_dim is not None,
+                    Kandinsky3AttentionBlock,
+                    (in_channel, time_embed_dim, context_dim, groups, head_dim, expansion_ratio),
+                    layer_2=nn.Identity,
+                )
+            )
+            resnets_out.append(
+                Kandinsky3ResNetBlock(in_channel, out_channel, time_embed_dim, groups, compression_ratio)
+            )
+
+        self.attentions = nn.ModuleList(attentions)
+        self.resnets_in = nn.ModuleList(resnets_in)
+        self.resnets_out = nn.ModuleList(resnets_out)
+
+    def forward(self, x, time_embed, context=None, context_mask=None, image_mask=None):
+        for attention, resnet_in, resnet_out in zip(self.attentions[1:], self.resnets_in, self.resnets_out):
+            x = resnet_in(x, time_embed)
+            if self.context_dim is not None:
+                x = attention(x, time_embed, context, context_mask, image_mask)
+            x = resnet_out(x, time_embed)
+
+        if self.self_attention:
+            x = self.attentions[0](x, time_embed, image_mask=image_mask)
+        return x
+
+
+class Kandinsky3DownSampleBlock(nn.Module):
+    def __init__(
+        self,
+        in_channels,
+        out_channels,
+        time_embed_dim,
+        context_dim=None,
+        num_blocks=3,
+        groups=32,
+        head_dim=64,
+        expansion_ratio=4,
+        compression_ratio=2,
+        down_sample=True,
+        self_attention=True,
+    ):
+        super().__init__()
+        attentions = []
+        resnets_in = []
+        resnets_out = []
+
+        self.self_attention = self_attention
+        self.context_dim = context_dim
+
+        attentions.append(
+            set_default_layer(
+                self_attention,
+                Kandinsky3AttentionBlock,
+                (in_channels, time_embed_dim, None, groups, head_dim, expansion_ratio),
+                layer_2=nn.Identity,
+            )
+        )
+
+        up_resolutions = [[None] * 4] * (num_blocks - 1) + [[None, None, set_default_item(down_sample, False), None]]
+        hidden_channels = [(in_channels, out_channels)] + [(out_channels, out_channels)] * (num_blocks - 1)
+        for (in_channel, out_channel), up_resolution in zip(hidden_channels, up_resolutions):
+            resnets_in.append(
+                Kandinsky3ResNetBlock(in_channel, out_channel, time_embed_dim, groups, compression_ratio)
+            )
+            attentions.append(
+                set_default_layer(
+                    context_dim is not None,
+                    Kandinsky3AttentionBlock,
+                    (out_channel, time_embed_dim, context_dim, groups, head_dim, expansion_ratio),
+                    layer_2=nn.Identity,
+                )
+            )
+            resnets_out.append(
+                Kandinsky3ResNetBlock(
+                    out_channel, out_channel, time_embed_dim, groups, compression_ratio, up_resolution
+                )
+            )
+
+        self.attentions = nn.ModuleList(attentions)
+        self.resnets_in = nn.ModuleList(resnets_in)
+        self.resnets_out = nn.ModuleList(resnets_out)
+
+    def forward(self, x, time_embed, context=None, context_mask=None, image_mask=None):
+        if self.self_attention:
+            x = self.attentions[0](x, time_embed, image_mask=image_mask)
+
+        for attention, resnet_in, resnet_out in zip(self.attentions[1:], self.resnets_in, self.resnets_out):
+            x = resnet_in(x, time_embed)
+            if self.context_dim is not None:
+                x = attention(x, time_embed, context, context_mask, image_mask)
+            x = resnet_out(x, time_embed)
+        return x
+
+
+class Kandinsky3ConditionalGroupNorm(nn.Module):
+    def __init__(self, groups, normalized_shape, context_dim):
+        super().__init__()
+        self.norm = nn.GroupNorm(groups, normalized_shape, affine=False)
+        self.context_mlp = nn.Sequential(nn.SiLU(), nn.Linear(context_dim, 2 * normalized_shape))
+        self.context_mlp[1].weight.data.zero_()
+        self.context_mlp[1].bias.data.zero_()
+
+    def forward(self, x, context):
+        context = self.context_mlp(context)
+
+        for _ in range(len(x.shape[2:])):
+            context = context.unsqueeze(-1)
+
+        scale, shift = context.chunk(2, dim=1)
+        x = self.norm(x) * (scale + 1.0) + shift
+        return x
+
+
+# TODO(Yiyi): This class should ideally not even exist, it slows everything needlessly down. I'm pretty
+# sure we can delete it and instead just pass an attention_mask
+class Attention(nn.Module):
+    def __init__(self, in_channels, out_channels, context_dim, head_dim=64):
+        super().__init__()
+        assert out_channels % head_dim == 0
+        self.num_heads = out_channels // head_dim
+        self.scale = head_dim**-0.5
+
+        # to_q
+        self.to_q = nn.Linear(in_channels, out_channels, bias=False)
+        # to_k
+        self.to_k = nn.Linear(context_dim, out_channels, bias=False)
+        # to_v
+        self.to_v = nn.Linear(context_dim, out_channels, bias=False)
+        processor = Kandi3AttnProcessor()
+        self.set_processor(processor)
+        # to_out
+        self.to_out = nn.ModuleList([])
+        self.to_out.append(nn.Linear(out_channels, out_channels, bias=False))
+
+    def set_processor(self, processor: "AttnProcessor"):  # noqa: F821
+        # if current processor is in `self._modules` and if passed `processor` is not, we need to
+        # pop `processor` from `self._modules`
+        if (
+            hasattr(self, "processor")
+            and isinstance(self.processor, torch.nn.Module)
+            and not isinstance(processor, torch.nn.Module)
+        ):
+            logger.info(f"You are removing possibly trained weights of {self.processor} with {processor}")
+            self._modules.pop("processor")
+
+        self.processor = processor
+
+    def forward(self, x, context, context_mask=None, image_mask=None):
+        return self.processor(
+            self,
+            x,
+            context=context,
+            context_mask=context_mask,
+        )
+
+
+class Kandinsky3Block(nn.Module):
+    def __init__(self, in_channels, out_channels, time_embed_dim, kernel_size=3, norm_groups=32, up_resolution=None):
+        super().__init__()
+        self.group_norm = Kandinsky3ConditionalGroupNorm(norm_groups, in_channels, time_embed_dim)
+        self.activation = nn.SiLU()
+        self.up_sample = set_default_layer(
+            up_resolution is not None and up_resolution,
+            nn.ConvTranspose2d,
+            (in_channels, in_channels),
+            {"kernel_size": 2, "stride": 2},
+        )
+        padding = int(kernel_size > 1)
+        self.projection = nn.Conv2d(in_channels, out_channels, kernel_size=kernel_size, padding=padding)
+        self.down_sample = set_default_layer(
+            up_resolution is not None and not up_resolution,
+            nn.Conv2d,
+            (out_channels, out_channels),
+            {"kernel_size": 2, "stride": 2},
+        )
+
+    def forward(self, x, time_embed):
+        x = self.group_norm(x, time_embed)
+        x = self.activation(x)
+        x = self.up_sample(x)
+        x = self.projection(x)
+        x = self.down_sample(x)
+        return x
+
+
+class Kandinsky3ResNetBlock(nn.Module):
+    def __init__(
+        self, in_channels, out_channels, time_embed_dim, norm_groups=32, compression_ratio=2, up_resolutions=4 * [None]
+    ):
+        super().__init__()
+        kernel_sizes = [1, 3, 3, 1]
+        hidden_channel = max(in_channels, out_channels) // compression_ratio
+        hidden_channels = (
+            [(in_channels, hidden_channel)] + [(hidden_channel, hidden_channel)] * 2 + [(hidden_channel, out_channels)]
+        )
+        self.resnet_blocks = nn.ModuleList(
+            [
+                Kandinsky3Block(in_channel, out_channel, time_embed_dim, kernel_size, norm_groups, up_resolution)
+                for (in_channel, out_channel), kernel_size, up_resolution in zip(
+                    hidden_channels, kernel_sizes, up_resolutions
+                )
+            ]
+        )
+        self.shortcut_up_sample = set_default_layer(
+            True in up_resolutions, nn.ConvTranspose2d, (in_channels, in_channels), {"kernel_size": 2, "stride": 2}
+        )
+        self.shortcut_projection = set_default_layer(
+            in_channels != out_channels, nn.Conv2d, (in_channels, out_channels), {"kernel_size": 1}
+        )
+        self.shortcut_down_sample = set_default_layer(
+            False in up_resolutions, nn.Conv2d, (out_channels, out_channels), {"kernel_size": 2, "stride": 2}
+        )
+
+    def forward(self, x, time_embed):
+        out = x
+        for resnet_block in self.resnet_blocks:
+            out = resnet_block(out, time_embed)
+
+        x = self.shortcut_up_sample(x)
+        x = self.shortcut_projection(x)
+        x = self.shortcut_down_sample(x)
+        x = x + out
+        return x
+
+
+class Kandinsky3AttentionPooling(nn.Module):
+    def __init__(self, num_channels, context_dim, head_dim=64):
+        super().__init__()
+        self.attention = Attention(context_dim, num_channels, context_dim, head_dim)
+
+    def forward(self, x, context, context_mask=None):
+        context = self.attention(context.mean(dim=1, keepdim=True), context, context_mask)
+        return x + context.squeeze(1)
+
+
+class Kandinsky3AttentionBlock(nn.Module):
+    def __init__(self, num_channels, time_embed_dim, context_dim=None, norm_groups=32, head_dim=64, expansion_ratio=4):
+        super().__init__()
+        self.in_norm = Kandinsky3ConditionalGroupNorm(norm_groups, num_channels, time_embed_dim)
+        self.attention = Attention(num_channels, num_channels, context_dim or num_channels, head_dim)
+
+        hidden_channels = expansion_ratio * num_channels
+        self.out_norm = Kandinsky3ConditionalGroupNorm(norm_groups, num_channels, time_embed_dim)
+        self.feed_forward = nn.Sequential(
+            nn.Conv2d(num_channels, hidden_channels, kernel_size=1, bias=False),
+            nn.SiLU(),
+            nn.Conv2d(hidden_channels, num_channels, kernel_size=1, bias=False),
+        )
+
+    def forward(self, x, time_embed, context=None, context_mask=None, image_mask=None):
+        height, width = x.shape[-2:]
+        out = self.in_norm(x, time_embed)
+        out = out.reshape(x.shape[0], -1, height * width).permute(0, 2, 1)
+        context = context if context is not None else out
+
+        if image_mask is not None:
+            mask_height, mask_width = image_mask.shape[-2:]
+            kernel_size = (mask_height // height, mask_width // width)
+            image_mask = F.max_pool2d(image_mask, kernel_size, kernel_size)
+            image_mask = image_mask.reshape(image_mask.shape[0], -1)
+
+        out = self.attention(out, context, context_mask, image_mask)
+        out = out.permute(0, 2, 1).unsqueeze(-1).reshape(out.shape[0], -1, height, width)
+        x = x + out
+
+        out = self.out_norm(x, time_embed)
+        out = self.feed_forward(out)
+        x = x + out
+        return x
diff --git a/src/diffusers/pipelines/__init__.py b/src/diffusers/pipelines/__init__.py
index 879bd6d98aa6..78c1b7c6285d 100644
--- a/src/diffusers/pipelines/__init__.py
+++ b/src/diffusers/pipelines/__init__.py
@@ -110,6 +110,7 @@
         "KandinskyV22PriorEmb2EmbPipeline",
         "KandinskyV22PriorPipeline",
     ]
+    _import_structure["kandinsky3"] = ["Kandinsky3Img2ImgPipeline", "Kandinsky3Pipeline"]
     _import_structure["latent_consistency_models"] = [
         "LatentConsistencyModelImg2ImgPipeline",
         "LatentConsistencyModelPipeline",
@@ -338,6 +339,10 @@
             KandinskyV22PriorEmb2EmbPipeline,
             KandinskyV22PriorPipeline,
         )
+        from .kandinsky3 import (
+            Kandinsky3Img2ImgPipeline,
+            Kandinsky3Pipeline,
+        )
         from .latent_consistency_models import LatentConsistencyModelImg2ImgPipeline, LatentConsistencyModelPipeline
         from .latent_diffusion import LDMTextToImagePipeline
         from .musicldm import MusicLDMPipeline
diff --git a/src/diffusers/pipelines/auto_pipeline.py b/src/diffusers/pipelines/auto_pipeline.py
index 6396bbbbc278..a7c6cd82c8e7 100644
--- a/src/diffusers/pipelines/auto_pipeline.py
+++ b/src/diffusers/pipelines/auto_pipeline.py
@@ -42,6 +42,7 @@
     KandinskyV22InpaintPipeline,
     KandinskyV22Pipeline,
 )
+from .kandinsky3 import Kandinsky3Img2ImgPipeline, Kandinsky3Pipeline
 from .latent_consistency_models import LatentConsistencyModelImg2ImgPipeline, LatentConsistencyModelPipeline
 from .pixart_alpha import PixArtAlphaPipeline
 from .stable_diffusion import (
@@ -64,6 +65,7 @@
         ("if", IFPipeline),
         ("kandinsky", KandinskyCombinedPipeline),
         ("kandinsky22", KandinskyV22CombinedPipeline),
+        ("kandinsky3", Kandinsky3Pipeline),
         ("stable-diffusion-controlnet", StableDiffusionControlNetPipeline),
         ("stable-diffusion-xl-controlnet", StableDiffusionXLControlNetPipeline),
         ("wuerstchen", WuerstchenCombinedPipeline),
@@ -79,6 +81,7 @@
         ("if", IFImg2ImgPipeline),
         ("kandinsky", KandinskyImg2ImgCombinedPipeline),
         ("kandinsky22", KandinskyV22Img2ImgCombinedPipeline),
+        ("kandinsky3", Kandinsky3Img2ImgPipeline),
         ("stable-diffusion-controlnet", StableDiffusionControlNetImg2ImgPipeline),
         ("stable-diffusion-xl-controlnet", StableDiffusionXLControlNetImg2ImgPipeline),
         ("lcm", LatentConsistencyModelImg2ImgPipeline),
diff --git a/src/diffusers/pipelines/kandinsky3/__init__.py b/src/diffusers/pipelines/kandinsky3/__init__.py
new file mode 100644
index 000000000000..4da3a83c0448
--- /dev/null
+++ b/src/diffusers/pipelines/kandinsky3/__init__.py
@@ -0,0 +1,49 @@
+from typing import TYPE_CHECKING
+
+from ...utils import (
+    DIFFUSERS_SLOW_IMPORT,
+    OptionalDependencyNotAvailable,
+    _LazyModule,
+    get_objects_from_module,
+    is_torch_available,
+    is_transformers_available,
+)
+
+
+_dummy_objects = {}
+_import_structure = {}
+
+try:
+    if not (is_transformers_available() and is_torch_available()):
+        raise OptionalDependencyNotAvailable()
+except OptionalDependencyNotAvailable:
+    from ...utils import dummy_torch_and_transformers_objects  # noqa F403
+
+    _dummy_objects.update(get_objects_from_module(dummy_torch_and_transformers_objects))
+else:
+    _import_structure["kandinsky3_pipeline"] = ["Kandinsky3Pipeline"]
+    _import_structure["kandinsky3img2img_pipeline"] = ["Kandinsky3Img2ImgPipeline"]
+
+
+if TYPE_CHECKING or DIFFUSERS_SLOW_IMPORT:
+    try:
+        if not (is_transformers_available() and is_torch_available()):
+            raise OptionalDependencyNotAvailable()
+
+    except OptionalDependencyNotAvailable:
+        from ...utils.dummy_torch_and_transformers_objects import *
+    else:
+        from .kandinsky3_pipeline import Kandinsky3Pipeline
+        from .kandinsky3img2img_pipeline import Kandinsky3Img2ImgPipeline
+else:
+    import sys
+
+    sys.modules[__name__] = _LazyModule(
+        __name__,
+        globals()["__file__"],
+        _import_structure,
+        module_spec=__spec__,
+    )
+
+    for name, value in _dummy_objects.items():
+        setattr(sys.modules[__name__], name, value)
diff --git a/src/diffusers/pipelines/kandinsky3/kandinsky3_pipeline.py b/src/diffusers/pipelines/kandinsky3/kandinsky3_pipeline.py
new file mode 100644
index 000000000000..8ba1a4f637be
--- /dev/null
+++ b/src/diffusers/pipelines/kandinsky3/kandinsky3_pipeline.py
@@ -0,0 +1,452 @@
+from typing import Callable, List, Optional, Union
+
+import torch
+from transformers import T5EncoderModel, T5Tokenizer
+
+from ...loaders import LoraLoaderMixin
+from ...models import Kandinsky3UNet, VQModel
+from ...schedulers import DDPMScheduler
+from ...utils import (
+    is_accelerate_available,
+    logging,
+)
+from ...utils.torch_utils import randn_tensor
+from ..pipeline_utils import DiffusionPipeline, ImagePipelineOutput
+
+
+logger = logging.get_logger(__name__)  # pylint: disable=invalid-name
+
+
+def downscale_height_and_width(height, width, scale_factor=8):
+    new_height = height // scale_factor**2
+    if height % scale_factor**2 != 0:
+        new_height += 1
+    new_width = width // scale_factor**2
+    if width % scale_factor**2 != 0:
+        new_width += 1
+    return new_height * scale_factor, new_width * scale_factor
+
+
+class Kandinsky3Pipeline(DiffusionPipeline, LoraLoaderMixin):
+    model_cpu_offload_seq = "text_encoder->unet->movq"
+
+    def __init__(
+        self,
+        tokenizer: T5Tokenizer,
+        text_encoder: T5EncoderModel,
+        unet: Kandinsky3UNet,
+        scheduler: DDPMScheduler,
+        movq: VQModel,
+    ):
+        super().__init__()
+
+        self.register_modules(
+            tokenizer=tokenizer, text_encoder=text_encoder, unet=unet, scheduler=scheduler, movq=movq
+        )
+
+    def remove_all_hooks(self):
+        if is_accelerate_available():
+            from accelerate.hooks import remove_hook_from_module
+        else:
+            raise ImportError("Please install accelerate via `pip install accelerate`")
+
+        for model in [self.text_encoder, self.unet]:
+            if model is not None:
+                remove_hook_from_module(model, recurse=True)
+
+        self.unet_offload_hook = None
+        self.text_encoder_offload_hook = None
+        self.final_offload_hook = None
+
+    def process_embeds(self, embeddings, attention_mask, cut_context):
+        if cut_context:
+            embeddings[attention_mask == 0] = torch.zeros_like(embeddings[attention_mask == 0])
+            max_seq_length = attention_mask.sum(-1).max() + 1
+            embeddings = embeddings[:, :max_seq_length]
+            attention_mask = attention_mask[:, :max_seq_length]
+        return embeddings, attention_mask
+
+    @torch.no_grad()
+    def encode_prompt(
+        self,
+        prompt,
+        do_classifier_free_guidance=True,
+        num_images_per_prompt=1,
+        device=None,
+        negative_prompt=None,
+        prompt_embeds: Optional[torch.FloatTensor] = None,
+        negative_prompt_embeds: Optional[torch.FloatTensor] = None,
+        _cut_context=False,
+    ):
+        r"""
+        Encodes the prompt into text encoder hidden states.
+
+        Args:
+             prompt (`str` or `List[str]`, *optional*):
+                prompt to be encoded
+            device: (`torch.device`, *optional*):
+                torch device to place the resulting embeddings on
+            num_images_per_prompt (`int`, *optional*, defaults to 1):
+                number of images that should be generated per prompt
+            do_classifier_free_guidance (`bool`, *optional*, defaults to `True`):
+                whether to use classifier free guidance or not
+            negative_prompt (`str` or `List[str]`, *optional*):
+                The prompt or prompts not to guide the image generation. If not defined, one has to pass
+                `negative_prompt_embeds`. instead. If not defined, one has to pass `negative_prompt_embeds`. instead.
+                Ignored when not using guidance (i.e., ignored if `guidance_scale` is less than `1`).
+            prompt_embeds (`torch.FloatTensor`, *optional*):
+                Pre-generated text embeddings. Can be used to easily tweak text inputs, *e.g.* prompt weighting. If not
+                provided, text embeddings will be generated from `prompt` input argument.
+            negative_prompt_embeds (`torch.FloatTensor`, *optional*):
+                Pre-generated negative text embeddings. Can be used to easily tweak text inputs, *e.g.* prompt
+                weighting. If not provided, negative_prompt_embeds will be generated from `negative_prompt` input
+                argument.
+        """
+        if prompt is not None and negative_prompt is not None:
+            if type(prompt) is not type(negative_prompt):
+                raise TypeError(
+                    f"`negative_prompt` should be the same type to `prompt`, but got {type(negative_prompt)} !="
+                    f" {type(prompt)}."
+                )
+
+        if device is None:
+            device = self._execution_device
+
+        if prompt is not None and isinstance(prompt, str):
+            batch_size = 1
+        elif prompt is not None and isinstance(prompt, list):
+            batch_size = len(prompt)
+        else:
+            batch_size = prompt_embeds.shape[0]
+
+        max_length = 128
+
+        if prompt_embeds is None:
+            text_inputs = self.tokenizer(
+                prompt,
+                padding="max_length",
+                max_length=max_length,
+                truncation=True,
+                return_tensors="pt",
+            )
+            text_input_ids = text_inputs.input_ids.to(device)
+            attention_mask = text_inputs.attention_mask.to(device)
+            prompt_embeds = self.text_encoder(
+                text_input_ids,
+                attention_mask=attention_mask,
+            )
+            prompt_embeds = prompt_embeds[0]
+            prompt_embeds, attention_mask = self.process_embeds(prompt_embeds, attention_mask, _cut_context)
+            prompt_embeds = prompt_embeds * attention_mask.unsqueeze(2)
+
+        if self.text_encoder is not None:
+            dtype = self.text_encoder.dtype
+        else:
+            dtype = None
+
+        prompt_embeds = prompt_embeds.to(dtype=dtype, device=device)
+
+        bs_embed, seq_len, _ = prompt_embeds.shape
+        # duplicate text embeddings for each generation per prompt, using mps friendly method
+        prompt_embeds = prompt_embeds.repeat(1, num_images_per_prompt, 1)
+        prompt_embeds = prompt_embeds.view(bs_embed * num_images_per_prompt, seq_len, -1)
+        attention_mask = attention_mask.repeat(num_images_per_prompt, 1)
+        # get unconditional embeddings for classifier free guidance
+        if do_classifier_free_guidance and negative_prompt_embeds is None:
+            uncond_tokens: List[str]
+
+            if negative_prompt is None:
+                uncond_tokens = [""] * batch_size
+            elif isinstance(negative_prompt, str):
+                uncond_tokens = [negative_prompt]
+            elif batch_size != len(negative_prompt):
+                raise ValueError(
+                    f"`negative_prompt`: {negative_prompt} has batch size {len(negative_prompt)}, but `prompt`:"
+                    f" {prompt} has batch size {batch_size}. Please make sure that passed `negative_prompt` matches"
+                    " the batch size of `prompt`."
+                )
+            else:
+                uncond_tokens = negative_prompt
+            if negative_prompt is not None:
+                uncond_input = self.tokenizer(
+                    uncond_tokens,
+                    padding="max_length",
+                    max_length=128,
+                    truncation=True,
+                    return_attention_mask=True,
+                    return_tensors="pt",
+                )
+                text_input_ids = uncond_input.input_ids.to(device)
+                negative_attention_mask = uncond_input.attention_mask.to(device)
+
+                negative_prompt_embeds = self.text_encoder(
+                    text_input_ids,
+                    attention_mask=negative_attention_mask,
+                )
+                negative_prompt_embeds = negative_prompt_embeds[0]
+                negative_prompt_embeds = negative_prompt_embeds[:, : prompt_embeds.shape[1]]
+                negative_attention_mask = negative_attention_mask[:, : prompt_embeds.shape[1]]
+                negative_prompt_embeds = negative_prompt_embeds * negative_attention_mask.unsqueeze(2)
+
+            else:
+                negative_prompt_embeds = torch.zeros_like(prompt_embeds)
+                negative_attention_mask = torch.zeros_like(attention_mask)
+
+        if do_classifier_free_guidance:
+            # duplicate unconditional embeddings for each generation per prompt, using mps friendly method
+            seq_len = negative_prompt_embeds.shape[1]
+
+            negative_prompt_embeds = negative_prompt_embeds.to(dtype=dtype, device=device)
+            if negative_prompt_embeds.shape != prompt_embeds.shape:
+                negative_prompt_embeds = negative_prompt_embeds.repeat(1, num_images_per_prompt, 1)
+                negative_prompt_embeds = negative_prompt_embeds.view(batch_size * num_images_per_prompt, seq_len, -1)
+                negative_attention_mask = negative_attention_mask.repeat(num_images_per_prompt, 1)
+
+            # For classifier free guidance, we need to do two forward passes.
+            # Here we concatenate the unconditional and text embeddings into a single batch
+            # to avoid doing two forward passes
+        else:
+            negative_prompt_embeds = None
+            negative_attention_mask = None
+        return prompt_embeds, negative_prompt_embeds, attention_mask, negative_attention_mask
+
+    def prepare_latents(self, shape, dtype, device, generator, latents, scheduler):
+        if latents is None:
+            latents = randn_tensor(shape, generator=generator, device=device, dtype=dtype)
+        else:
+            if latents.shape != shape:
+                raise ValueError(f"Unexpected latents shape, got {latents.shape}, expected {shape}")
+            latents = latents.to(device)
+
+        latents = latents * scheduler.init_noise_sigma
+        return latents
+
+    def check_inputs(
+        self,
+        prompt,
+        callback_steps,
+        negative_prompt=None,
+        prompt_embeds=None,
+        negative_prompt_embeds=None,
+    ):
+        if (callback_steps is None) or (
+            callback_steps is not None and (not isinstance(callback_steps, int) or callback_steps <= 0)
+        ):
+            raise ValueError(
+                f"`callback_steps` has to be a positive integer but is {callback_steps} of type"
+                f" {type(callback_steps)}."
+            )
+
+        if prompt is not None and prompt_embeds is not None:
+            raise ValueError(
+                f"Cannot forward both `prompt`: {prompt} and `prompt_embeds`: {prompt_embeds}. Please make sure to"
+                " only forward one of the two."
+            )
+        elif prompt is None and prompt_embeds is None:
+            raise ValueError(
+                "Provide either `prompt` or `prompt_embeds`. Cannot leave both `prompt` and `prompt_embeds` undefined."
+            )
+        elif prompt is not None and (not isinstance(prompt, str) and not isinstance(prompt, list)):
+            raise ValueError(f"`prompt` has to be of type `str` or `list` but is {type(prompt)}")
+
+        if negative_prompt is not None and negative_prompt_embeds is not None:
+            raise ValueError(
+                f"Cannot forward both `negative_prompt`: {negative_prompt} and `negative_prompt_embeds`:"
+                f" {negative_prompt_embeds}. Please make sure to only forward one of the two."
+            )
+
+        if prompt_embeds is not None and negative_prompt_embeds is not None:
+            if prompt_embeds.shape != negative_prompt_embeds.shape:
+                raise ValueError(
+                    "`prompt_embeds` and `negative_prompt_embeds` must have the same shape when passed directly, but"
+                    f" got: `prompt_embeds` {prompt_embeds.shape} != `negative_prompt_embeds`"
+                    f" {negative_prompt_embeds.shape}."
+                )
+
+    @torch.no_grad()
+    def __call__(
+        self,
+        prompt: Union[str, List[str]] = None,
+        num_inference_steps: int = 100,
+        guidance_scale: float = 3.0,
+        negative_prompt: Optional[Union[str, List[str]]] = None,
+        num_images_per_prompt: Optional[int] = 1,
+        height: Optional[int] = 1024,
+        width: Optional[int] = 1024,
+        generator: Optional[Union[torch.Generator, List[torch.Generator]]] = None,
+        prompt_embeds: Optional[torch.FloatTensor] = None,
+        negative_prompt_embeds: Optional[torch.FloatTensor] = None,
+        output_type: Optional[str] = "pil",
+        return_dict: bool = True,
+        callback: Optional[Callable[[int, int, torch.FloatTensor], None]] = None,
+        callback_steps: int = 1,
+        latents=None,
+    ):
+        """
+        Function invoked when calling the pipeline for generation.
+
+        Args:
+            prompt (`str` or `List[str]`, *optional*):
+                The prompt or prompts to guide the image generation. If not defined, one has to pass `prompt_embeds`.
+                instead.
+            num_inference_steps (`int`, *optional*, defaults to 50):
+                The number of denoising steps. More denoising steps usually lead to a higher quality image at the
+                expense of slower inference.
+            timesteps (`List[int]`, *optional*):
+                Custom timesteps to use for the denoising process. If not defined, equal spaced `num_inference_steps`
+                timesteps are used. Must be in descending order.
+            guidance_scale (`float`, *optional*, defaults to 3.0):
+                Guidance scale as defined in [Classifier-Free Diffusion Guidance](https://arxiv.org/abs/2207.12598).
+                `guidance_scale` is defined as `w` of equation 2. of [Imagen
+                Paper](https://arxiv.org/pdf/2205.11487.pdf). Guidance scale is enabled by setting `guidance_scale >
+                1`. Higher guidance scale encourages to generate images that are closely linked to the text `prompt`,
+                usually at the expense of lower image quality.
+            negative_prompt (`str` or `List[str]`, *optional*):
+                The prompt or prompts not to guide the image generation. If not defined, one has to pass
+                `negative_prompt_embeds` instead. Ignored when not using guidance (i.e., ignored if `guidance_scale` is
+                less than `1`).
+            num_images_per_prompt (`int`, *optional*, defaults to 1):
+                The number of images to generate per prompt.
+            height (`int`, *optional*, defaults to self.unet.config.sample_size):
+                The height in pixels of the generated image.
+            width (`int`, *optional*, defaults to self.unet.config.sample_size):
+                The width in pixels of the generated image.
+            eta (`float`, *optional*, defaults to 0.0):
+                Corresponds to parameter eta (η) in the DDIM paper: https://arxiv.org/abs/2010.02502. Only applies to
+                [`schedulers.DDIMScheduler`], will be ignored for others.
+            generator (`torch.Generator` or `List[torch.Generator]`, *optional*):
+                One or a list of [torch generator(s)](https://pytorch.org/docs/stable/generated/torch.Generator.html)
+                to make generation deterministic.
+            prompt_embeds (`torch.FloatTensor`, *optional*):
+                Pre-generated text embeddings. Can be used to easily tweak text inputs, *e.g.* prompt weighting. If not
+                provided, text embeddings will be generated from `prompt` input argument.
+            negative_prompt_embeds (`torch.FloatTensor`, *optional*):
+                Pre-generated negative text embeddings. Can be used to easily tweak text inputs, *e.g.* prompt
+                weighting. If not provided, negative_prompt_embeds will be generated from `negative_prompt` input
+                argument.
+            output_type (`str`, *optional*, defaults to `"pil"`):
+                The output format of the generate image. Choose between
+                [PIL](https://pillow.readthedocs.io/en/stable/): `PIL.Image.Image` or `np.array`.
+            return_dict (`bool`, *optional*, defaults to `True`):
+                Whether or not to return a [`~pipelines.stable_diffusion.IFPipelineOutput`] instead of a plain tuple.
+            callback (`Callable`, *optional*):
+                A function that will be called every `callback_steps` steps during inference. The function will be
+                called with the following arguments: `callback(step: int, timestep: int, latents: torch.FloatTensor)`.
+            callback_steps (`int`, *optional*, defaults to 1):
+                The frequency at which the `callback` function will be called. If not specified, the callback will be
+                called at every step.
+            clean_caption (`bool`, *optional*, defaults to `True`):
+                Whether or not to clean the caption before creating embeddings. Requires `beautifulsoup4` and `ftfy` to
+                be installed. If the dependencies are not installed, the embeddings will be created from the raw
+                prompt.
+            cross_attention_kwargs (`dict`, *optional*):
+                A kwargs dictionary that if specified is passed along to the `AttentionProcessor` as defined under
+                `self.processor` in
+                [diffusers.models.attention_processor](https://github.com/huggingface/diffusers/blob/main/src/diffusers/models/attention_processor.py).
+        """
+        cut_context = True
+        device = self._execution_device
+
+        # 1. Check inputs. Raise error if not correct
+        self.check_inputs(prompt, callback_steps, negative_prompt, prompt_embeds, negative_prompt_embeds)
+
+        if prompt is not None and isinstance(prompt, str):
+            batch_size = 1
+        elif prompt is not None and isinstance(prompt, list):
+            batch_size = len(prompt)
+        else:
+            batch_size = prompt_embeds.shape[0]
+
+        # here `guidance_scale` is defined analog to the guidance weight `w` of equation (2)
+        # of the Imagen paper: https://arxiv.org/pdf/2205.11487.pdf . `guidance_scale = 1`
+        # corresponds to doing no classifier free guidance.
+        do_classifier_free_guidance = guidance_scale > 1.0
+
+        # 3. Encode input prompt
+        prompt_embeds, negative_prompt_embeds, attention_mask, negative_attention_mask = self.encode_prompt(
+            prompt,
+            do_classifier_free_guidance,
+            num_images_per_prompt=num_images_per_prompt,
+            device=device,
+            negative_prompt=negative_prompt,
+            prompt_embeds=prompt_embeds,
+            negative_prompt_embeds=negative_prompt_embeds,
+            _cut_context=cut_context,
+        )
+
+        if do_classifier_free_guidance:
+            prompt_embeds = torch.cat([negative_prompt_embeds, prompt_embeds])
+            attention_mask = torch.cat([negative_attention_mask, attention_mask]).bool()
+        # 4. Prepare timesteps
+        self.scheduler.set_timesteps(num_inference_steps, device=device)
+        timesteps = self.scheduler.timesteps
+
+        # 5. Prepare latents
+        height, width = downscale_height_and_width(height, width, 8)
+
+        latents = self.prepare_latents(
+            (batch_size * num_images_per_prompt, 4, height, width),
+            prompt_embeds.dtype,
+            device,
+            generator,
+            latents,
+            self.scheduler,
+        )
+
+        if hasattr(self, "text_encoder_offload_hook") and self.text_encoder_offload_hook is not None:
+            self.text_encoder_offload_hook.offload()
+
+        # 7. Denoising loop
+        # TODO(Yiyi): Correct the following line and use correctly
+        # num_warmup_steps = len(timesteps) - num_inference_steps * self.scheduler.order
+        with self.progress_bar(total=num_inference_steps) as progress_bar:
+            for i, t in enumerate(timesteps):
+                latent_model_input = torch.cat([latents] * 2) if do_classifier_free_guidance else latents
+
+                # predict the noise residual
+                noise_pred = self.unet(
+                    latent_model_input,
+                    t,
+                    encoder_hidden_states=prompt_embeds,
+                    encoder_attention_mask=attention_mask,
+                    return_dict=False,
+                )[0]
+
+                if do_classifier_free_guidance:
+                    noise_pred_uncond, noise_pred_text = noise_pred.chunk(2)
+
+                    noise_pred = (guidance_scale + 1.0) * noise_pred_text - guidance_scale * noise_pred_uncond
+                    # noise_pred = noise_pred_uncond + guidance_scale * (noise_pred_text - noise_pred_uncond)
+
+                # compute the previous noisy sample x_t -> x_t-1
+                latents = self.scheduler.step(
+                    noise_pred,
+                    t,
+                    latents,
+                    generator=generator,
+                ).prev_sample
+                progress_bar.update()
+                if callback is not None and i % callback_steps == 0:
+                    step_idx = i // getattr(self.scheduler, "order", 1)
+                    callback(step_idx, t, latents)
+
+            # post-processing
+            image = self.movq.decode(latents, force_not_quantize=True)["sample"]
+
+            if output_type not in ["pt", "np", "pil"]:
+                raise ValueError(
+                    f"Only the output types `pt`, `pil` and `np` are supported not output_type={output_type}"
+                )
+
+            if output_type in ["np", "pil"]:
+                image = image * 0.5 + 0.5
+                image = image.clamp(0, 1)
+                image = image.cpu().permute(0, 2, 3, 1).float().numpy()
+
+            if output_type == "pil":
+                image = self.numpy_to_pil(image)
+
+            if not return_dict:
+                return (image,)
+
+            return ImagePipelineOutput(images=image)
diff --git a/src/diffusers/pipelines/kandinsky3/kandinsky3img2img_pipeline.py b/src/diffusers/pipelines/kandinsky3/kandinsky3img2img_pipeline.py
new file mode 100644
index 000000000000..b043110cf1d7
--- /dev/null
+++ b/src/diffusers/pipelines/kandinsky3/kandinsky3img2img_pipeline.py
@@ -0,0 +1,460 @@
+import inspect
+from typing import Callable, List, Optional, Union
+
+import numpy as np
+import PIL
+import PIL.Image
+import torch
+from transformers import T5EncoderModel, T5Tokenizer
+
+from ...loaders import LoraLoaderMixin
+from ...models import Kandinsky3UNet, VQModel
+from ...schedulers import DDPMScheduler
+from ...utils import (
+    is_accelerate_available,
+    logging,
+)
+from ...utils.torch_utils import randn_tensor
+from ..pipeline_utils import DiffusionPipeline, ImagePipelineOutput
+
+
+logger = logging.get_logger(__name__)  # pylint: disable=invalid-name
+
+
+def downscale_height_and_width(height, width, scale_factor=8):
+    new_height = height // scale_factor**2
+    if height % scale_factor**2 != 0:
+        new_height += 1
+    new_width = width // scale_factor**2
+    if width % scale_factor**2 != 0:
+        new_width += 1
+    return new_height * scale_factor, new_width * scale_factor
+
+
+def prepare_image(pil_image):
+    arr = np.array(pil_image.convert("RGB"))
+    arr = arr.astype(np.float32) / 127.5 - 1
+    arr = np.transpose(arr, [2, 0, 1])
+    image = torch.from_numpy(arr).unsqueeze(0)
+    return image
+
+
+class Kandinsky3Img2ImgPipeline(DiffusionPipeline, LoraLoaderMixin):
+    model_cpu_offload_seq = "text_encoder->unet->movq"
+
+    def __init__(
+        self,
+        tokenizer: T5Tokenizer,
+        text_encoder: T5EncoderModel,
+        unet: Kandinsky3UNet,
+        scheduler: DDPMScheduler,
+        movq: VQModel,
+    ):
+        super().__init__()
+
+        self.register_modules(
+            tokenizer=tokenizer, text_encoder=text_encoder, unet=unet, scheduler=scheduler, movq=movq
+        )
+
+    def get_timesteps(self, num_inference_steps, strength, device):
+        # get the original timestep using init_timestep
+        init_timestep = min(int(num_inference_steps * strength), num_inference_steps)
+
+        t_start = max(num_inference_steps - init_timestep, 0)
+        timesteps = self.scheduler.timesteps[t_start:]
+
+        return timesteps, num_inference_steps - t_start
+
+    def remove_all_hooks(self):
+        if is_accelerate_available():
+            from accelerate.hooks import remove_hook_from_module
+        else:
+            raise ImportError("Please install accelerate via `pip install accelerate`")
+
+        for model in [self.text_encoder, self.unet]:
+            if model is not None:
+                remove_hook_from_module(model, recurse=True)
+
+        self.unet_offload_hook = None
+        self.text_encoder_offload_hook = None
+        self.final_offload_hook = None
+
+    def _process_embeds(self, embeddings, attention_mask, cut_context):
+        # return embeddings, attention_mask
+        if cut_context:
+            embeddings[attention_mask == 0] = torch.zeros_like(embeddings[attention_mask == 0])
+            max_seq_length = attention_mask.sum(-1).max() + 1
+            embeddings = embeddings[:, :max_seq_length]
+            attention_mask = attention_mask[:, :max_seq_length]
+        return embeddings, attention_mask
+
+    @torch.no_grad()
+    def encode_prompt(
+        self,
+        prompt,
+        do_classifier_free_guidance=True,
+        num_images_per_prompt=1,
+        device=None,
+        negative_prompt=None,
+        prompt_embeds: Optional[torch.FloatTensor] = None,
+        negative_prompt_embeds: Optional[torch.FloatTensor] = None,
+        _cut_context=False,
+    ):
+        r"""
+        Encodes the prompt into text encoder hidden states.
+
+        Args:
+             prompt (`str` or `List[str]`, *optional*):
+                prompt to be encoded
+            device: (`torch.device`, *optional*):
+                torch device to place the resulting embeddings on
+            num_images_per_prompt (`int`, *optional*, defaults to 1):
+                number of images that should be generated per prompt
+            do_classifier_free_guidance (`bool`, *optional*, defaults to `True`):
+                whether to use classifier free guidance or not
+            negative_prompt (`str` or `List[str]`, *optional*):
+                The prompt or prompts not to guide the image generation. If not defined, one has to pass
+                `negative_prompt_embeds`. instead. If not defined, one has to pass `negative_prompt_embeds`. instead.
+                Ignored when not using guidance (i.e., ignored if `guidance_scale` is less than `1`).
+            prompt_embeds (`torch.FloatTensor`, *optional*):
+                Pre-generated text embeddings. Can be used to easily tweak text inputs, *e.g.* prompt weighting. If not
+                provided, text embeddings will be generated from `prompt` input argument.
+            negative_prompt_embeds (`torch.FloatTensor`, *optional*):
+                Pre-generated negative text embeddings. Can be used to easily tweak text inputs, *e.g.* prompt
+                weighting. If not provided, negative_prompt_embeds will be generated from `negative_prompt` input
+                argument.
+        """
+        if prompt is not None and negative_prompt is not None:
+            if type(prompt) is not type(negative_prompt):
+                raise TypeError(
+                    f"`negative_prompt` should be the same type to `prompt`, but got {type(negative_prompt)} !="
+                    f" {type(prompt)}."
+                )
+
+        if device is None:
+            device = self._execution_device
+
+        if prompt is not None and isinstance(prompt, str):
+            batch_size = 1
+        elif prompt is not None and isinstance(prompt, list):
+            batch_size = len(prompt)
+        else:
+            batch_size = prompt_embeds.shape[0]
+
+        max_length = 128
+
+        if prompt_embeds is None:
+            text_inputs = self.tokenizer(
+                prompt,
+                padding="max_length",
+                max_length=max_length,
+                truncation=True,
+                return_tensors="pt",
+            )
+            text_input_ids = text_inputs.input_ids.to(device)
+            attention_mask = text_inputs.attention_mask.to(device)
+            prompt_embeds = self.text_encoder(
+                text_input_ids,
+                attention_mask=attention_mask,
+            )
+            prompt_embeds = prompt_embeds[0]
+            prompt_embeds, attention_mask = self._process_embeds(prompt_embeds, attention_mask, _cut_context)
+            prompt_embeds = prompt_embeds * attention_mask.unsqueeze(2)
+
+        if self.text_encoder is not None:
+            dtype = self.text_encoder.dtype
+        else:
+            dtype = None
+
+        prompt_embeds = prompt_embeds.to(dtype=dtype, device=device)
+
+        bs_embed, seq_len, _ = prompt_embeds.shape
+        # duplicate text embeddings for each generation per prompt, using mps friendly method
+        prompt_embeds = prompt_embeds.repeat(1, num_images_per_prompt, 1)
+        prompt_embeds = prompt_embeds.view(bs_embed * num_images_per_prompt, seq_len, -1)
+        attention_mask = attention_mask.repeat(num_images_per_prompt, 1)
+        # get unconditional embeddings for classifier free guidance
+        if do_classifier_free_guidance and negative_prompt_embeds is None:
+            uncond_tokens: List[str]
+
+            if negative_prompt is None:
+                uncond_tokens = [""] * batch_size
+            elif isinstance(negative_prompt, str):
+                uncond_tokens = [negative_prompt]
+            elif batch_size != len(negative_prompt):
+                raise ValueError(
+                    f"`negative_prompt`: {negative_prompt} has batch size {len(negative_prompt)}, but `prompt`:"
+                    f" {prompt} has batch size {batch_size}. Please make sure that passed `negative_prompt` matches"
+                    " the batch size of `prompt`."
+                )
+            else:
+                uncond_tokens = negative_prompt
+            if negative_prompt is not None:
+                uncond_input = self.tokenizer(
+                    uncond_tokens,
+                    padding="max_length",
+                    max_length=128,
+                    truncation=True,
+                    return_attention_mask=True,
+                    return_tensors="pt",
+                )
+                text_input_ids = uncond_input.input_ids.to(device)
+                negative_attention_mask = uncond_input.attention_mask.to(device)
+
+                negative_prompt_embeds = self.text_encoder(
+                    text_input_ids,
+                    attention_mask=negative_attention_mask,
+                )
+                negative_prompt_embeds = negative_prompt_embeds[0]
+                negative_prompt_embeds = negative_prompt_embeds[:, : prompt_embeds.shape[1]]
+                negative_attention_mask = negative_attention_mask[:, : prompt_embeds.shape[1]]
+                negative_prompt_embeds = negative_prompt_embeds * negative_attention_mask.unsqueeze(2)
+
+            else:
+                negative_prompt_embeds = torch.zeros_like(prompt_embeds)
+                negative_attention_mask = torch.zeros_like(attention_mask)
+
+        if do_classifier_free_guidance:
+            # duplicate unconditional embeddings for each generation per prompt, using mps friendly method
+            seq_len = negative_prompt_embeds.shape[1]
+
+            negative_prompt_embeds = negative_prompt_embeds.to(dtype=dtype, device=device)
+            if negative_prompt_embeds.shape != prompt_embeds.shape:
+                negative_prompt_embeds = negative_prompt_embeds.repeat(1, num_images_per_prompt, 1)
+                negative_prompt_embeds = negative_prompt_embeds.view(batch_size * num_images_per_prompt, seq_len, -1)
+                negative_attention_mask = negative_attention_mask.repeat(num_images_per_prompt, 1)
+
+            # For classifier free guidance, we need to do two forward passes.
+            # Here we concatenate the unconditional and text embeddings into a single batch
+            # to avoid doing two forward passes
+        else:
+            negative_prompt_embeds = None
+            negative_attention_mask = None
+        return prompt_embeds, negative_prompt_embeds, attention_mask, negative_attention_mask
+
+    def prepare_latents(self, image, timestep, batch_size, num_images_per_prompt, dtype, device, generator=None):
+        if not isinstance(image, (torch.Tensor, PIL.Image.Image, list)):
+            raise ValueError(
+                f"`image` has to be of type `torch.Tensor`, `PIL.Image.Image` or list but is {type(image)}"
+            )
+
+        image = image.to(device=device, dtype=dtype)
+
+        batch_size = batch_size * num_images_per_prompt
+
+        if image.shape[1] == 4:
+            init_latents = image
+
+        else:
+            if isinstance(generator, list) and len(generator) != batch_size:
+                raise ValueError(
+                    f"You have passed a list of generators of length {len(generator)}, but requested an effective batch"
+                    f" size of {batch_size}. Make sure the batch size matches the length of the generators."
+                )
+
+            elif isinstance(generator, list):
+                init_latents = [
+                    self.movq.encode(image[i : i + 1]).latent_dist.sample(generator[i]) for i in range(batch_size)
+                ]
+                init_latents = torch.cat(init_latents, dim=0)
+            else:
+                init_latents = self.movq.encode(image).latent_dist.sample(generator)
+
+            init_latents = self.movq.config.scaling_factor * init_latents
+
+        init_latents = torch.cat([init_latents], dim=0)
+
+        shape = init_latents.shape
+        noise = randn_tensor(shape, generator=generator, device=device, dtype=dtype)
+
+        # get latents
+        init_latents = self.scheduler.add_noise(init_latents, noise, timestep)
+
+        latents = init_latents
+
+        return latents
+
+    # Copied from diffusers.pipelines.stable_diffusion.pipeline_stable_diffusion.StableDiffusionPipeline.prepare_extra_step_kwargs
+    def prepare_extra_step_kwargs(self, generator, eta):
+        # prepare extra kwargs for the scheduler step, since not all schedulers have the same signature
+        # eta (η) is only used with the DDIMScheduler, it will be ignored for other schedulers.
+        # eta corresponds to η in DDIM paper: https://arxiv.org/abs/2010.02502
+        # and should be between [0, 1]
+
+        accepts_eta = "eta" in set(inspect.signature(self.scheduler.step).parameters.keys())
+        extra_step_kwargs = {}
+        if accepts_eta:
+            extra_step_kwargs["eta"] = eta
+
+        # check if the scheduler accepts generator
+        accepts_generator = "generator" in set(inspect.signature(self.scheduler.step).parameters.keys())
+        if accepts_generator:
+            extra_step_kwargs["generator"] = generator
+        return extra_step_kwargs
+
+    def check_inputs(
+        self,
+        prompt,
+        callback_steps,
+        negative_prompt=None,
+        prompt_embeds=None,
+        negative_prompt_embeds=None,
+    ):
+        if (callback_steps is None) or (
+            callback_steps is not None and (not isinstance(callback_steps, int) or callback_steps <= 0)
+        ):
+            raise ValueError(
+                f"`callback_steps` has to be a positive integer but is {callback_steps} of type"
+                f" {type(callback_steps)}."
+            )
+
+        if prompt is not None and prompt_embeds is not None:
+            raise ValueError(
+                f"Cannot forward both `prompt`: {prompt} and `prompt_embeds`: {prompt_embeds}. Please make sure to"
+                " only forward one of the two."
+            )
+        elif prompt is None and prompt_embeds is None:
+            raise ValueError(
+                "Provide either `prompt` or `prompt_embeds`. Cannot leave both `prompt` and `prompt_embeds` undefined."
+            )
+        elif prompt is not None and (not isinstance(prompt, str) and not isinstance(prompt, list)):
+            raise ValueError(f"`prompt` has to be of type `str` or `list` but is {type(prompt)}")
+
+        if negative_prompt is not None and negative_prompt_embeds is not None:
+            raise ValueError(
+                f"Cannot forward both `negative_prompt`: {negative_prompt} and `negative_prompt_embeds`:"
+                f" {negative_prompt_embeds}. Please make sure to only forward one of the two."
+            )
+
+        if prompt_embeds is not None and negative_prompt_embeds is not None:
+            if prompt_embeds.shape != negative_prompt_embeds.shape:
+                raise ValueError(
+                    "`prompt_embeds` and `negative_prompt_embeds` must have the same shape when passed directly, but"
+                    f" got: `prompt_embeds` {prompt_embeds.shape} != `negative_prompt_embeds`"
+                    f" {negative_prompt_embeds.shape}."
+                )
+
+    @torch.no_grad()
+    def __call__(
+        self,
+        prompt: Union[str, List[str]] = None,
+        image: Union[torch.FloatTensor, PIL.Image.Image, List[torch.FloatTensor], List[PIL.Image.Image]] = None,
+        strength: float = 0.3,
+        num_inference_steps: int = 25,
+        guidance_scale: float = 3.0,
+        negative_prompt: Optional[Union[str, List[str]]] = None,
+        num_images_per_prompt: Optional[int] = 1,
+        generator: Optional[Union[torch.Generator, List[torch.Generator]]] = None,
+        prompt_embeds: Optional[torch.FloatTensor] = None,
+        negative_prompt_embeds: Optional[torch.FloatTensor] = None,
+        output_type: Optional[str] = "pil",
+        return_dict: bool = True,
+        callback: Optional[Callable[[int, int, torch.FloatTensor], None]] = None,
+        callback_steps: int = 1,
+        latents=None,
+    ):
+        cut_context = True
+        # 1. Check inputs. Raise error if not correct
+        self.check_inputs(prompt, callback_steps, negative_prompt, prompt_embeds, negative_prompt_embeds)
+
+        if prompt is not None and isinstance(prompt, str):
+            batch_size = 1
+        elif prompt is not None and isinstance(prompt, list):
+            batch_size = len(prompt)
+        else:
+            batch_size = prompt_embeds.shape[0]
+
+        device = self._execution_device
+
+        # here `guidance_scale` is defined analog to the guidance weight `w` of equation (2)
+        # of the Imagen paper: https://arxiv.org/pdf/2205.11487.pdf . `guidance_scale = 1`
+        # corresponds to doing no classifier free guidance.
+        do_classifier_free_guidance = guidance_scale > 1.0
+
+        # 3. Encode input prompt
+        prompt_embeds, negative_prompt_embeds, attention_mask, negative_attention_mask = self.encode_prompt(
+            prompt,
+            do_classifier_free_guidance,
+            num_images_per_prompt=num_images_per_prompt,
+            device=device,
+            negative_prompt=negative_prompt,
+            prompt_embeds=prompt_embeds,
+            negative_prompt_embeds=negative_prompt_embeds,
+            _cut_context=cut_context,
+        )
+
+        if do_classifier_free_guidance:
+            prompt_embeds = torch.cat([negative_prompt_embeds, prompt_embeds])
+            attention_mask = torch.cat([negative_attention_mask, attention_mask]).bool()
+        if not isinstance(image, list):
+            image = [image]
+        if not all(isinstance(i, (PIL.Image.Image, torch.Tensor)) for i in image):
+            raise ValueError(
+                f"Input is in incorrect format: {[type(i) for i in image]}. Currently, we only support  PIL image and pytorch tensor"
+            )
+
+        image = torch.cat([prepare_image(i) for i in image], dim=0)
+        image = image.to(dtype=prompt_embeds.dtype, device=device)
+        # 4. Prepare timesteps
+        self.scheduler.set_timesteps(num_inference_steps, device=device)
+        timesteps, num_inference_steps = self.get_timesteps(num_inference_steps, strength, device)
+        # 5. Prepare latents
+        latents = self.movq.encode(image)["latents"]
+        latents = latents.repeat_interleave(num_images_per_prompt, dim=0)
+        latent_timestep = timesteps[:1].repeat(batch_size * num_images_per_prompt)
+        latents = self.prepare_latents(
+            latents, latent_timestep, batch_size, num_images_per_prompt, prompt_embeds.dtype, device, generator
+        )
+        if hasattr(self, "text_encoder_offload_hook") and self.text_encoder_offload_hook is not None:
+            self.text_encoder_offload_hook.offload()
+
+        # 7. Denoising loop
+        # TODO(Yiyi): Correct the following line and use correctly
+        # num_warmup_steps = len(timesteps) - num_inference_steps * self.scheduler.order
+        with self.progress_bar(total=num_inference_steps) as progress_bar:
+            for i, t in enumerate(timesteps):
+                latent_model_input = torch.cat([latents] * 2) if do_classifier_free_guidance else latents
+
+                # predict the noise residual
+                noise_pred = self.unet(
+                    latent_model_input,
+                    t,
+                    encoder_hidden_states=prompt_embeds,
+                    encoder_attention_mask=attention_mask,
+                )[0]
+                if do_classifier_free_guidance:
+                    noise_pred_uncond, noise_pred_text = noise_pred.chunk(2)
+
+                    noise_pred = (guidance_scale + 1.0) * noise_pred_text - guidance_scale * noise_pred_uncond
+
+                # compute the previous noisy sample x_t -> x_t-1
+                latents = self.scheduler.step(
+                    noise_pred,
+                    t,
+                    latents,
+                    generator=generator,
+                ).prev_sample
+                progress_bar.update()
+                if callback is not None and i % callback_steps == 0:
+                    step_idx = i // getattr(self.scheduler, "order", 1)
+                    callback(step_idx, t, latents)
+            # post-processing
+            image = self.movq.decode(latents, force_not_quantize=True)["sample"]
+
+            if output_type not in ["pt", "np", "pil"]:
+                raise ValueError(
+                    f"Only the output types `pt`, `pil` and `np` are supported not output_type={output_type}"
+                )
+
+            if output_type in ["np", "pil"]:
+                image = image * 0.5 + 0.5
+                image = image.clamp(0, 1)
+                image = image.cpu().permute(0, 2, 3, 1).float().numpy()
+
+            if output_type == "pil":
+                image = self.numpy_to_pil(image)
+
+            if not return_dict:
+                return (image,)
+
+            return ImagePipelineOutput(images=image)
diff --git a/src/diffusers/utils/dummy_pt_objects.py b/src/diffusers/utils/dummy_pt_objects.py
index 090b1081fdaf..360727ab2fc5 100644
--- a/src/diffusers/utils/dummy_pt_objects.py
+++ b/src/diffusers/utils/dummy_pt_objects.py
@@ -77,6 +77,21 @@ def from_pretrained(cls, *args, **kwargs):
         requires_backends(cls, ["torch"])
 
 
+class Kandinsky3UNet(metaclass=DummyObject):
+    _backends = ["torch"]
+
+    def __init__(self, *args, **kwargs):
+        requires_backends(self, ["torch"])
+
+    @classmethod
+    def from_config(cls, *args, **kwargs):
+        requires_backends(cls, ["torch"])
+
+    @classmethod
+    def from_pretrained(cls, *args, **kwargs):
+        requires_backends(cls, ["torch"])
+
+
 class ModelMixin(metaclass=DummyObject):
     _backends = ["torch"]
 
diff --git a/src/diffusers/utils/dummy_torch_and_transformers_objects.py b/src/diffusers/utils/dummy_torch_and_transformers_objects.py
index d6200bcaf122..3386a95eb7d4 100644
--- a/src/diffusers/utils/dummy_torch_and_transformers_objects.py
+++ b/src/diffusers/utils/dummy_torch_and_transformers_objects.py
@@ -242,6 +242,36 @@ def from_pretrained(cls, *args, **kwargs):
         requires_backends(cls, ["torch", "transformers"])
 
 
+class Kandinsky3Img2ImgPipeline(metaclass=DummyObject):
+    _backends = ["torch", "transformers"]
+
+    def __init__(self, *args, **kwargs):
+        requires_backends(self, ["torch", "transformers"])
+
+    @classmethod
+    def from_config(cls, *args, **kwargs):
+        requires_backends(cls, ["torch", "transformers"])
+
+    @classmethod
+    def from_pretrained(cls, *args, **kwargs):
+        requires_backends(cls, ["torch", "transformers"])
+
+
+class Kandinsky3Pipeline(metaclass=DummyObject):
+    _backends = ["torch", "transformers"]
+
+    def __init__(self, *args, **kwargs):
+        requires_backends(self, ["torch", "transformers"])
+
+    @classmethod
+    def from_config(cls, *args, **kwargs):
+        requires_backends(cls, ["torch", "transformers"])
+
+    @classmethod
+    def from_pretrained(cls, *args, **kwargs):
+        requires_backends(cls, ["torch", "transformers"])
+
+
 class KandinskyCombinedPipeline(metaclass=DummyObject):
     _backends = ["torch", "transformers"]
 
diff --git a/tests/convert_kandinsky3_unet.py b/tests/convert_kandinsky3_unet.py
new file mode 100755
index 000000000000..4fe8c54eb7fc
--- /dev/null
+++ b/tests/convert_kandinsky3_unet.py
@@ -0,0 +1,98 @@
+#!/usr/bin/env python3
+import argparse
+import fnmatch
+
+from safetensors.torch import load_file
+
+from diffusers import Kandinsky3UNet
+
+
+MAPPING = {
+    "to_time_embed.1": "time_embedding.linear_1",
+    "to_time_embed.3": "time_embedding.linear_2",
+    "in_layer": "conv_in",
+    "out_layer.0": "conv_norm_out",
+    "out_layer.2": "conv_out",
+    "down_samples": "down_blocks",
+    "up_samples": "up_blocks",
+    "projection_lin": "encoder_hid_proj.projection_linear",
+    "projection_ln": "encoder_hid_proj.projection_norm",
+    "feature_pooling": "add_time_condition",
+    "to_query": "to_q",
+    "to_key": "to_k",
+    "to_value": "to_v",
+    "output_layer": "to_out.0",
+    "self_attention_block": "attentions.0",
+}
+
+DYNAMIC_MAP = {
+    "resnet_attn_blocks.*.0": "resnets_in.*",
+    "resnet_attn_blocks.*.1": ("attentions.*", 1),
+    "resnet_attn_blocks.*.2": "resnets_out.*",
+}
+# MAPPING = {}
+
+
+def convert_state_dict(unet_state_dict):
+    """
+    Convert the state dict of a U-Net model to match the key format expected by Kandinsky3UNet model.
+    Args:
+        unet_model (torch.nn.Module): The original U-Net model.
+        unet_kandi3_model (torch.nn.Module): The Kandinsky3UNet model to match keys with.
+
+    Returns:
+        OrderedDict: The converted state dictionary.
+    """
+    # Example of renaming logic (this will vary based on your model's architecture)
+    converted_state_dict = {}
+    for key in unet_state_dict:
+        new_key = key
+        for pattern, new_pattern in MAPPING.items():
+            new_key = new_key.replace(pattern, new_pattern)
+
+        for dyn_pattern, dyn_new_pattern in DYNAMIC_MAP.items():
+            has_matched = False
+            if fnmatch.fnmatch(new_key, f"*.{dyn_pattern}.*") and not has_matched:
+                star = int(new_key.split(dyn_pattern.split(".")[0])[-1].split(".")[1])
+
+                if isinstance(dyn_new_pattern, tuple):
+                    new_star = star + dyn_new_pattern[-1]
+                    dyn_new_pattern = dyn_new_pattern[0]
+                else:
+                    new_star = star
+
+                pattern = dyn_pattern.replace("*", str(star))
+                new_pattern = dyn_new_pattern.replace("*", str(new_star))
+
+                new_key = new_key.replace(pattern, new_pattern)
+                has_matched = True
+
+        converted_state_dict[new_key] = unet_state_dict[key]
+
+    return converted_state_dict
+
+
+def main(model_path, output_path):
+    # Load your original U-Net model
+    unet_state_dict = load_file(model_path)
+
+    # Initialize your Kandinsky3UNet model
+    config = {}
+
+    # Convert the state dict
+    converted_state_dict = convert_state_dict(unet_state_dict)
+
+    unet = Kandinsky3UNet(config)
+    unet.load_state_dict(converted_state_dict)
+
+    unet.save_pretrained(output_path)
+    print(f"Converted model saved to {output_path}")
+
+
+if __name__ == "__main__":
+    parser = argparse.ArgumentParser(description="Convert U-Net PyTorch model to Kandinsky3UNet format")
+    parser.add_argument("--model_path", type=str, required=True, help="Path to the original U-Net PyTorch model")
+    parser.add_argument("--output_path", type=str, required=True, help="Path to save the converted model")
+
+    args = parser.parse_args()
+    main(args.model_path, args.output_path)
diff --git a/tests/pipelines/kandinsky3/__init__.py b/tests/pipelines/kandinsky3/__init__.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/tests/pipelines/kandinsky3/test_kandinsky3.py b/tests/pipelines/kandinsky3/test_kandinsky3.py
new file mode 100644
index 000000000000..65297a36b157
--- /dev/null
+++ b/tests/pipelines/kandinsky3/test_kandinsky3.py
@@ -0,0 +1,237 @@
+# coding=utf-8
+# Copyright 2023 HuggingFace Inc.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+import gc
+import unittest
+
+import numpy as np
+import torch
+from PIL import Image
+from transformers import AutoTokenizer, T5EncoderModel
+
+from diffusers import (
+    AutoPipelineForImage2Image,
+    AutoPipelineForText2Image,
+    Kandinsky3Pipeline,
+    Kandinsky3UNet,
+    VQModel,
+)
+from diffusers.image_processor import VaeImageProcessor
+from diffusers.schedulers.scheduling_ddpm import DDPMScheduler
+from diffusers.utils.testing_utils import (
+    enable_full_determinism,
+    load_image,
+    require_torch_gpu,
+    slow,
+)
+
+from ..pipeline_params import (
+    TEXT_TO_IMAGE_BATCH_PARAMS,
+    TEXT_TO_IMAGE_CALLBACK_CFG_PARAMS,
+    TEXT_TO_IMAGE_IMAGE_PARAMS,
+    TEXT_TO_IMAGE_PARAMS,
+)
+from ..test_pipelines_common import PipelineTesterMixin
+
+
+enable_full_determinism()
+
+
+class Kandinsky3PipelineFastTests(PipelineTesterMixin, unittest.TestCase):
+    pipeline_class = Kandinsky3Pipeline
+    params = TEXT_TO_IMAGE_PARAMS - {"cross_attention_kwargs"}
+    batch_params = TEXT_TO_IMAGE_BATCH_PARAMS
+    image_params = TEXT_TO_IMAGE_IMAGE_PARAMS
+    image_latents_params = TEXT_TO_IMAGE_IMAGE_PARAMS
+    callback_cfg_params = TEXT_TO_IMAGE_CALLBACK_CFG_PARAMS
+    test_xformers_attention = False
+
+    @property
+    def dummy_movq_kwargs(self):
+        return {
+            "block_out_channels": [32, 64],
+            "down_block_types": ["DownEncoderBlock2D", "AttnDownEncoderBlock2D"],
+            "in_channels": 3,
+            "latent_channels": 4,
+            "layers_per_block": 1,
+            "norm_num_groups": 8,
+            "norm_type": "spatial",
+            "num_vq_embeddings": 12,
+            "out_channels": 3,
+            "up_block_types": [
+                "AttnUpDecoderBlock2D",
+                "UpDecoderBlock2D",
+            ],
+            "vq_embed_dim": 4,
+        }
+
+    @property
+    def dummy_movq(self):
+        torch.manual_seed(0)
+        model = VQModel(**self.dummy_movq_kwargs)
+        return model
+
+    def get_dummy_components(self, time_cond_proj_dim=None):
+        torch.manual_seed(0)
+        unet = Kandinsky3UNet(
+            in_channels=4,
+            time_embedding_dim=4,
+            groups=2,
+            attention_head_dim=4,
+            layers_per_block=3,
+            block_out_channels=(32, 64),
+            cross_attention_dim=4,
+            encoder_hid_dim=32,
+        )
+        scheduler = DDPMScheduler(
+            beta_start=0.00085,
+            beta_end=0.012,
+            steps_offset=1,
+            beta_schedule="squaredcos_cap_v2",
+            clip_sample=True,
+            thresholding=False,
+        )
+        torch.manual_seed(0)
+        movq = self.dummy_movq
+        torch.manual_seed(0)
+        text_encoder = T5EncoderModel.from_pretrained("hf-internal-testing/tiny-random-t5")
+
+        torch.manual_seed(0)
+        tokenizer = AutoTokenizer.from_pretrained("hf-internal-testing/tiny-random-t5")
+
+        components = {
+            "unet": unet,
+            "scheduler": scheduler,
+            "movq": movq,
+            "text_encoder": text_encoder,
+            "tokenizer": tokenizer,
+        }
+        return components
+
+    def get_dummy_inputs(self, device, seed=0):
+        if str(device).startswith("mps"):
+            generator = torch.manual_seed(seed)
+        else:
+            generator = torch.Generator(device=device).manual_seed(seed)
+        inputs = {
+            "prompt": "A painting of a squirrel eating a burger",
+            "generator": generator,
+            "num_inference_steps": 2,
+            "guidance_scale": 6.0,
+            "output_type": "np",
+            "width": 16,
+            "height": 16,
+        }
+        return inputs
+
+    def test_kandinsky3(self):
+        device = "cpu"
+
+        components = self.get_dummy_components()
+
+        pipe = self.pipeline_class(**components)
+        pipe = pipe.to(device)
+
+        pipe.set_progress_bar_config(disable=None)
+
+        output = pipe(**self.get_dummy_inputs(device))
+        image = output.images
+
+        image_slice = image[0, -3:, -3:, -1]
+
+        assert image.shape == (1, 16, 16, 3)
+
+        expected_slice = np.array([0.3768, 0.4373, 0.4865, 0.4890, 0.4299, 0.5122, 0.4921, 0.4924, 0.5599])
+
+        assert (
+            np.abs(image_slice.flatten() - expected_slice).max() < 1e-2
+        ), f" expected_slice {expected_slice}, but got {image_slice.flatten()}"
+
+    def test_float16_inference(self):
+        super().test_float16_inference(expected_max_diff=1e-1)
+
+    def test_inference_batch_single_identical(self):
+        super().test_inference_batch_single_identical(expected_max_diff=1e-2)
+
+    def test_model_cpu_offload_forward_pass(self):
+        # TODO(Yiyi) - this test should work, skipped for time reasons for now
+        pass
+
+
+@slow
+@require_torch_gpu
+class Kandinsky3PipelineIntegrationTests(unittest.TestCase):
+    def tearDown(self):
+        # clean up the VRAM after each test
+        super().tearDown()
+        gc.collect()
+        torch.cuda.empty_cache()
+
+    def test_kandinskyV3(self):
+        pipe = AutoPipelineForText2Image.from_pretrained(
+            "kandinsky-community/kandinsky-3", variant="fp16", torch_dtype=torch.float16
+        )
+        pipe.enable_model_cpu_offload()
+        pipe.set_progress_bar_config(disable=None)
+
+        prompt = "A photograph of the inside of a subway train. There are raccoons sitting on the seats. One of them is reading a newspaper. The window shows the city in the background."
+
+        generator = torch.Generator(device="cpu").manual_seed(0)
+
+        image = pipe(prompt, num_inference_steps=25, generator=generator).images[0]
+
+        assert image.size == (1024, 1024)
+
+        expected_image = load_image(
+            "https://huggingface.co/datasets/hf-internal-testing/diffusers-images/resolve/main/kandinsky3/t2i.png"
+        )
+
+        image_processor = VaeImageProcessor()
+
+        image_np = image_processor.pil_to_numpy(image)
+        expected_image_np = image_processor.pil_to_numpy(expected_image)
+
+        self.assertTrue(np.allclose(image_np, expected_image_np, atol=5e-2))
+
+    def test_kandinskyV3_img2img(self):
+        pipe = AutoPipelineForImage2Image.from_pretrained(
+            "kandinsky-community/kandinsky-3", variant="fp16", torch_dtype=torch.float16
+        )
+        pipe.enable_model_cpu_offload()
+        pipe.set_progress_bar_config(disable=None)
+
+        generator = torch.Generator(device="cpu").manual_seed(0)
+
+        image = load_image(
+            "https://huggingface.co/datasets/hf-internal-testing/diffusers-images/resolve/main/kandinsky3/t2i.png"
+        )
+        w, h = 512, 512
+        image = image.resize((w, h), resample=Image.BICUBIC, reducing_gap=1)
+        prompt = "A painting of the inside of a subway train with tiny raccoons."
+
+        image = pipe(prompt, image=image, strength=0.75, num_inference_steps=25, generator=generator).images[0]
+
+        assert image.size == (512, 512)
+
+        expected_image = load_image(
+            "https://huggingface.co/datasets/hf-internal-testing/diffusers-images/resolve/main/kandinsky3/i2i.png"
+        )
+
+        image_processor = VaeImageProcessor()
+
+        image_np = image_processor.pil_to_numpy(image)
+        expected_image_np = image_processor.pil_to_numpy(expected_image)
+
+        self.assertTrue(np.allclose(image_np, expected_image_np, atol=5e-2))