diff --git a/api/app/controllers/spree/api/checkouts_controller.rb b/api/app/controllers/spree/api/checkouts_controller.rb
index af51911573b..40c5c431732 100644
--- a/api/app/controllers/spree/api/checkouts_controller.rb
+++ b/api/app/controllers/spree/api/checkouts_controller.rb
@@ -19,7 +19,7 @@ def next
         authorize! :update, @order, order_token
         @order.next!
         respond_with(@order, default_template: 'spree/api/orders/show', status: 200)
-      rescue StateMachine::InvalidTransition
+      rescue StateMachines::InvalidTransition
         respond_with(@order, default_template: 'spree/api/orders/could_not_transition', status: 422)
       end
 
diff --git a/api/spec/spec_helper.rb b/api/spec/spec_helper.rb
index 3d58449c9bb..7801b7bcb5f 100644
--- a/api/spec/spec_helper.rb
+++ b/api/spec/spec_helper.rb
@@ -20,21 +20,6 @@
   puts "Could not load dummy application. Please ensure you have run `bundle exec rake test_app`"
   exit
 end
-#
-# STATE MACHINE GEM HACK
-# Rails 4.1.0.rc1 and StateMachine don't play nice
-# https://github.com/pluginaweek/state_machine/issues/295
-require 'state_machine'
-require 'state_machine/version'
-
-unless StateMachine::VERSION == '1.2.0'
-  # If you see this message, please test removing this file
-  # If it's still required, please bump up the version above
-  puts  "StateMachine Hack says: Please remove me, StateMachine version has changed #{__FILE__} #{__LINE__} "
-end
-module StateMachine::Integrations::ActiveModel
-  public :around_validation
-end
 
 
 
diff --git a/core/app/models/spree/inventory_unit.rb b/core/app/models/spree/inventory_unit.rb
index ef962ac004b..c036b18e030 100644
--- a/core/app/models/spree/inventory_unit.rb
+++ b/core/app/models/spree/inventory_unit.rb
@@ -17,6 +17,7 @@ class InventoryUnit < ActiveRecord::Base
     end
 
     # state machine (see http://github.com/pluginaweek/state_machine/tree/master for details)
+    # comment updated 08/2017: see https://github.com/state-machines/state_machines
     state_machine initial: :on_hand do
       event :fill_backorder do
         transition to: :on_hand, from: :backordered
diff --git a/core/app/models/spree/order/checkout.rb b/core/app/models/spree/order/checkout.rb
index 22e535240d2..366243e71eb 100644
--- a/core/app/models/spree/order/checkout.rb
+++ b/core/app/models/spree/order/checkout.rb
@@ -34,7 +34,7 @@ def self.define_state_machine!
             klass = self
 
             # To avoid a ton of warnings when the state machine is re-defined
-            StateMachine::Machine.ignore_method_conflicts = true
+            StateMachines::Machine.ignore_method_conflicts = true
             # To avoid multiple occurrences of the same transition being defined
             # On first definition, state_machines will not be defined
             state_machines.clear if respond_to?(:state_machines)
diff --git a/core/app/models/spree/payment.rb b/core/app/models/spree/payment.rb
index b317737b747..78b5d7bd81a 100644
--- a/core/app/models/spree/payment.rb
+++ b/core/app/models/spree/payment.rb
@@ -48,6 +48,7 @@ def persist_invalid
     end
 
     # order state machine (see http://github.com/pluginaweek/state_machine/tree/master for details)
+    # comment updated 08/2017: see https://github.com/state-machines/state_machines
     state_machine initial: :checkout do
       # With card payments, happens before purchase or authorization happens
       event :started_processing do
diff --git a/core/app/models/spree/shipment.rb b/core/app/models/spree/shipment.rb
index 3455c47ee23..ea8a20af1ba 100644
--- a/core/app/models/spree/shipment.rb
+++ b/core/app/models/spree/shipment.rb
@@ -30,6 +30,7 @@ class Shipment < ActiveRecord::Base
     scope :trackable, -> { where("tracking IS NOT NULL AND tracking != ''") }
 
     # shipment state machine (see http://github.com/pluginaweek/state_machine/tree/master for details)
+    # comment updated 08/2017: see https://github.com/state-machines/state_machines
     state_machine initial: :pending, use_transactions: false do
       event :ready do
         transition from: :pending, to: :ready, if: lambda { |shipment|
@@ -153,7 +154,7 @@ def discounted_cost
     alias discounted_amount discounted_cost
 
     # Only one of either included_tax_total or additional_tax_total is set
-    # This method returns the total of the two. Saves having to check if 
+    # This method returns the total of the two. Saves having to check if
     # tax is included or additional.
     def tax_total
       included_tax_total + additional_tax_total
diff --git a/core/lib/spree/core.rb b/core/lib/spree/core.rb
index ae50f99a95a..2467422b7a2 100644
--- a/core/lib/spree/core.rb
+++ b/core/lib/spree/core.rb
@@ -9,7 +9,7 @@
 require 'paperclip'
 require 'paranoia'
 require 'ransack'
-require 'state_machine'
+require 'state_machines-activerecord'
 require 'friendly_id'
 require 'font-awesome-rails'
 require 'responders'
diff --git a/core/spec/models/spree/order/checkout_spec.rb b/core/spec/models/spree/order/checkout_spec.rb
index 1aafee0e680..07780111920 100644
--- a/core/spec/models/spree/order/checkout_spec.rb
+++ b/core/spec/models/spree/order/checkout_spec.rb
@@ -99,7 +99,7 @@ def assert_state_changed(order, from, to)
 
     it "cannot transition to address without any line items" do
       order.line_items.should be_blank
-      lambda { order.next! }.should raise_error(StateMachine::InvalidTransition, /#{Spree.t(:there_are_no_items_for_this_order)}/)
+      lambda { order.next! }.should raise_error(StateMachines::InvalidTransition, /#{Spree.t(:there_are_no_items_for_this_order)}/)
     end
 
     context "from address" do
@@ -137,7 +137,7 @@ def assert_state_changed(order, from, to)
         context "if there are no shipping rates for any shipment" do
           specify do
             transition = lambda { order.next! }
-            transition.should raise_error(StateMachine::InvalidTransition, /#{Spree.t(:items_cannot_be_shipped)}/)
+            transition.should raise_error(StateMachines::InvalidTransition, /#{Spree.t(:items_cannot_be_shipped)}/)
           end
         end
       end
diff --git a/core/spec/spec_helper.rb b/core/spec/spec_helper.rb
index 3ebd2f5a7e4..12b2f2e1856 100644
--- a/core/spec/spec_helper.rb
+++ b/core/spec/spec_helper.rb
@@ -15,24 +15,9 @@
 # from the project root directory.
 ENV["RAILS_ENV"] ||= 'test'
 
-# STATE MACHINE GEM HACK
-# Rails 4.1.0.rc1 and StateMachine don't play nice
-# https://github.com/pluginaweek/state_machine/issues/295
-require 'state_machine'
-require 'state_machine/version'
-
-unless StateMachine::VERSION == '1.2.0'
-  # If you see this message, please test removing this file
-  # If it's still required, please bump up the version above
-  puts  "StateMachine Hack says: Please remove me, StateMachine version has changed #{__FILE__} #{__LINE__} "
-end
 
 require 'byebug'
 
-module StateMachine::Integrations::ActiveModel
-  public :around_validation
-end
-
 begin
   require File.expand_path("../dummy/config/environment", __FILE__)
 rescue LoadError
diff --git a/core/spree_core.gemspec b/core/spree_core.gemspec
index 198e3c2f32f..1f8e56588a4 100644
--- a/core/spree_core.gemspec
+++ b/core/spree_core.gemspec
@@ -37,7 +37,7 @@ Gem::Specification.new do |s|
   s.add_dependency 'rails', '~> 4.2.9'
   s.add_dependency 'ransack', '~> 1.4.1'
   s.add_dependency 'responders', '~> 2.3.0'
-  s.add_dependency 'state_machine', '1.2.0'
+  s.add_dependency 'state_machines-activerecord', '~> 0.5.0'
   s.add_dependency 'stringex', '~> 1.5.1'
   s.add_dependency 'truncate_html', '0.9.2'
   s.add_development_dependency 'byebug'