diff --git a/sharding/shard.go b/sharding/shard.go
index 8a4edc710..8eca64482 100644
--- a/sharding/shard.go
+++ b/sharding/shard.go
@@ -77,22 +77,32 @@ func (s *Shard) CollationByHash(headerHash *common.Hash) (*Collation, error) {
 	return &Collation{header: header, body: body}, nil
 }
 
-// CanonicalCollationHash gets a collation header hash that has been set as canonical for
+// CanonicalHeaderHash gets a collation header hash that has been set as canonical for
 // shardID/period pair
-func (s *Shard) CanonicalCollationHash(shardID *big.Int, period *big.Int) (*common.Hash, error) {
+func (s *Shard) CanonicalHeaderHash(shardID *big.Int, period *big.Int) (*common.Hash, error) {
 	key := canonicalCollationLookupKey(shardID, period)
-	hash := common.BytesToHash(key.Bytes())
-	collationHashBytes, err := s.shardDB.Get(hash)
-	if err != nil || len(collationHashBytes) == 0 {
-		return nil, fmt.Errorf("no canonical collation set for period, shardID pair: %v", err)
+
+	// fetches the RLP encoded collation header corresponding to the key.
+	encoded, err := s.shardDB.Get(key)
+	if err != nil || len(encoded) == 0 {
+		return nil, fmt.Errorf("no canonical collation header set for period, shardID pair: %v", err)
 	}
-	collationHash := common.BytesToHash(collationHashBytes)
+
+	// RLP decodes the header, computes its hash.
+	var header CollationHeader
+
+	stream := rlp.NewStream(bytes.NewReader(encoded), uint64(len(encoded)))
+	if err := header.DecodeRLP(stream); err != nil {
+		return nil, fmt.Errorf("could not decode RLP header: %v", err)
+	}
+
+	collationHash := header.Hash()
 	return &collationHash, nil
 }
 
 // CanonicalCollation fetches the collation set as canonical in the shardDB.
 func (s *Shard) CanonicalCollation(shardID *big.Int, period *big.Int) (*Collation, error) {
-	h, err := s.CanonicalCollationHash(shardID, period)
+	h, err := s.CanonicalHeaderHash(shardID, period)
 	if err != nil {
 		return nil, fmt.Errorf("hash not found: %v", err)
 	}
@@ -203,11 +213,14 @@ func (s *Shard) SetCanonical(header *CollationHeader) error {
 	if err != nil {
 		return err
 	}
+
 	key := canonicalCollationLookupKey(dbHeader.ShardID(), dbHeader.Period())
 	encoded, err := dbHeader.EncodeRLP()
 	if err != nil {
 		return fmt.Errorf("cannot encode header: %v", err)
 	}
+	// sets the key to be the canonical collation lookup key and val as RLP encoded
+	// collation header.
 	if err := s.shardDB.Put(key, encoded); err != nil {
 		return fmt.Errorf("cannot update shardDB: %v", err)
 	}
diff --git a/sharding/shard_test.go b/sharding/shard_test.go
index 90e1f052b..8f1eae80a 100644
--- a/sharding/shard_test.go
+++ b/sharding/shard_test.go
@@ -90,3 +90,34 @@ func TestShard_CollationByHash(t *testing.T) {
 		t.Errorf("collations do not match. want=%v. got=%v", collation, dbCollation)
 	}
 }
+
+func TestShard_CanonicalHeaderHash(t *testing.T) {
+	shardID := big.NewInt(1)
+	period := big.NewInt(1)
+	proposerAddress := common.StringToAddress("")
+	proposerSignature := []byte{}
+	emptyHash := common.StringToHash("")
+	header := NewCollationHeader(shardID, &emptyHash, period, &proposerAddress, proposerSignature)
+
+	shardDB := database.MakeShardKV()
+	shard := MakeShard(shardID, shardDB)
+
+	if err := shard.SaveHeader(header); err != nil {
+		t.Fatalf("failed to save header to shardDB: %v", err)
+	}
+
+	if err := shard.SetCanonical(header); err != nil {
+		t.Fatalf("failed to set header as canonical: %v", err)
+	}
+
+	headerHash := header.Hash()
+
+	canonicalHeaderHash, err := shard.CanonicalHeaderHash(shardID, period)
+	if err != nil {
+		t.Fatalf("failed to get canonical header hash from shardDB: %v", err)
+	}
+
+	if canonicalHeaderHash.String() != headerHash.String() {
+		t.Errorf("header hashes do not match. want=%v. got=%v", headerHash.String(), canonicalHeaderHash.String())
+	}
+}