diff --git a/.circleci/config.yml b/.circleci/config.yml
index 7186c51936..fa9753e063 100644
--- a/.circleci/config.yml
+++ b/.circleci/config.yml
@@ -91,7 +91,7 @@ jobs:
     docker:
       - image: circleci/python:3.7
     environment:
-      - XLA_VER: 1.7
+      - XLA_VER: 1.8
       - MAX_CHECKS: 240
       - CHECK_SPEEP: 5
     steps:
diff --git a/CHANGELOG.md b/CHANGELOG.md
index dbb1c5798a..54c9647a57 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -118,6 +118,9 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
 - Add torchelastic check when sanitizing GPUs ([#8095](https://github.com/PyTorchLightning/pytorch-lightning/pull/8095))
 
 
+- Added XLA Profiler ([#8014](https://github.com/PyTorchLightning/pytorch-lightning/pull/8014))
+
+
 ### Changed
 
 
diff --git a/dockers/tpu-tests/tpu_test_cases.jsonnet b/dockers/tpu-tests/tpu_test_cases.jsonnet
index 13f70deed4..e4b3db9cac 100644
--- a/dockers/tpu-tests/tpu_test_cases.jsonnet
+++ b/dockers/tpu-tests/tpu_test_cases.jsonnet
@@ -22,6 +22,7 @@ local tputests = base.BaseTest {
     |||
       cd pytorch-lightning
       coverage run --source=pytorch_lightning -m pytest -v --capture=no \
+          tests/profiler/test_xla_profiler.py \
           pytorch_lightning/utilities/xla_device.py \
           tests/accelerators/test_tpu_backend.py \
           tests/models/test_tpu.py
diff --git a/pytorch_lightning/profiler/__init__.py b/pytorch_lightning/profiler/__init__.py
index 90fe55e0c1..a21b3f173c 100644
--- a/pytorch_lightning/profiler/__init__.py
+++ b/pytorch_lightning/profiler/__init__.py
@@ -198,6 +198,7 @@ from pytorch_lightning.profiler.advanced import AdvancedProfiler
 from pytorch_lightning.profiler.base import AbstractProfiler, BaseProfiler, PassThroughProfiler
 from pytorch_lightning.profiler.pytorch import PyTorchProfiler
 from pytorch_lightning.profiler.simple import SimpleProfiler
+from pytorch_lightning.profiler.xla import XLAProfiler
 
 __all__ = [
     'AbstractProfiler',
@@ -206,4 +207,5 @@ __all__ = [
     'PassThroughProfiler',
     'PyTorchProfiler',
     'SimpleProfiler',
+    'XLAProfiler',
 ]
diff --git a/pytorch_lightning/profiler/profilers.py b/pytorch_lightning/profiler/profilers.py
index 3f534ce0bb..fb29ec5289 100644
--- a/pytorch_lightning/profiler/profilers.py
+++ b/pytorch_lightning/profiler/profilers.py
@@ -9,6 +9,7 @@ from pytorch_lightning.profiler.advanced import AdvancedProfiler  # noqa E402
 from pytorch_lightning.profiler.base import AbstractProfiler, BaseProfiler, PassThroughProfiler  # noqa E402
 from pytorch_lightning.profiler.pytorch import PyTorchProfiler  # noqa E402
 from pytorch_lightning.profiler.simple import SimpleProfiler  # noqa E402
+from pytorch_lightning.profiler.xla import XLAProfiler  # noqa E402
 
 __all__ = [
     'AbstractProfiler',
@@ -17,4 +18,5 @@ __all__ = [
     'PassThroughProfiler',
     'PyTorchProfiler',
     'SimpleProfiler',
+    'XLAProfiler',
 ]
diff --git a/pytorch_lightning/profiler/xla.py b/pytorch_lightning/profiler/xla.py
new file mode 100644
index 0000000000..35b8e7f264
--- /dev/null
+++ b/pytorch_lightning/profiler/xla.py
@@ -0,0 +1,110 @@
+# Copyright The PyTorch Lightning team.
+#
+# 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.
+"""
+XLA Profiler will help you debug and optimize training workload performance
+for your models using Cloud TPU performance tools.
+
+Manual capture via TensorBoard
+
+The following instructions are for capturing trace from a running program
+
+0. This [guide](https://cloud.google.com/tpu/docs/pytorch-xla-performance-profiling-tpu-vm#tpu-vm) will
+help you with the Cloud TPU setup with the required installations
+
+1. Start a TensorBoard Server
+
+>> tensorboard --logdir ./tensorboard --port 9001
+
+You could view the TensorBoard output at http://localhost:9001 on your local machine, and then open the
+``PROFILE`` plugn from the top right dropdown or open http://localhost:9001/#profile
+
+2. Once the code you'd like to profile is running, click on ``CAPTURE PROFILE`` button. You could enter
+``localhost:9012`` (default port for XLA Profiler) as the Profile Service URL. Then, you could enter
+the number of milliseconds for the profiling duration, and click ``CAPTURE``
+
+3. Make sure the code is running, while you are trying to capture the traces. Also, it would lead to better
+performance insights if the profiling duration is longer than the step time
+
+4. Once the capture is finished, the page will refresh and you could browse through the insights using the
+``Tools`` dropdown at the top left
+
+"""
+import logging
+from typing import Dict
+
+from pytorch_lightning.profiler.base import BaseProfiler
+from pytorch_lightning.utilities import _TPU_AVAILABLE
+
+if _TPU_AVAILABLE:
+    import torch_xla.debug.profiler as xp
+
+log = logging.getLogger(__name__)
+
+
+class XLAProfiler(BaseProfiler):
+
+    STEP_FUNCTIONS = {
+        "training_step_and_backward",
+        "validation_step",
+        "test_step",
+        "predict_step",
+    }
+    RECORD_FUNCTIONS = {
+        "training_step_and_backward",
+        "training_step",
+        "backward",
+        "validation_step",
+        "test_step",
+        "predict_step",
+    }
+
+    def __init__(self, port: int = 9012) -> None:
+        """
+        This Profiler will help you debug and optimize training workload performance
+        for your models using Cloud TPU performance tools.
+        """
+        super().__init__(dirpath=None, filename=None, output_filename=None)
+        self.port = port
+        self._recording_map: Dict = {}
+        self._step_recoding_map: Dict = {}
+        self._start_trace: bool = False
+
+    def start(self, action_name: str) -> None:
+        if action_name in self.RECORD_FUNCTIONS:
+            if not self._start_trace:
+                self.server = xp.start_server(self.port)
+                self._start_trace = True
+
+            if action_name in self.STEP_FUNCTIONS:
+                step = self._get_step_num(action_name)
+                recording = xp.StepTrace(action_name, step_num=step)
+            else:
+                recording = xp.Trace(action_name)
+            recording.__enter__()
+            self._recording_map[action_name] = recording
+
+    def stop(self, action_name: str) -> None:
+        if action_name in self._recording_map:
+            self._recording_map[action_name].__exit__(None, None, None)
+            del self._recording_map[action_name]
+
+    def _get_step_num(self, action_name: str) -> int:
+        if action_name not in self._step_recoding_map:
+            self._step_recoding_map[action_name] = 1
+        else:
+            self._step_recoding_map[action_name] += 1
+        return self._step_recoding_map[action_name]
+
+    def summary(self) -> str:
+        return ""
diff --git a/pytorch_lightning/trainer/trainer.py b/pytorch_lightning/trainer/trainer.py
index 258f4dc1c1..e854688a04 100644
--- a/pytorch_lightning/trainer/trainer.py
+++ b/pytorch_lightning/trainer/trainer.py
@@ -39,6 +39,7 @@ from pytorch_lightning.profiler import (
     PassThroughProfiler,
     PyTorchProfiler,
     SimpleProfiler,
+    XLAProfiler,
 )
 from pytorch_lightning.trainer.callback_hook import TrainerCallbackHookMixin
 from pytorch_lightning.trainer.configuration_validator import ConfigValidator
@@ -1183,6 +1184,7 @@ class Trainer(
                 "simple": SimpleProfiler,
                 "advanced": AdvancedProfiler,
                 "pytorch": PyTorchProfiler,
+                "xla": XLAProfiler,
             }
             profiler = profiler.lower()
             if profiler not in PROFILERS:
diff --git a/tests/profiler/__init__.py b/tests/profiler/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/test_profiler.py b/tests/profiler/test_profiler.py
similarity index 100%
rename from tests/test_profiler.py
rename to tests/profiler/test_profiler.py
diff --git a/tests/profiler/test_xla_profiler.py b/tests/profiler/test_xla_profiler.py
new file mode 100644
index 0000000000..35279ddee8
--- /dev/null
+++ b/tests/profiler/test_xla_profiler.py
@@ -0,0 +1,72 @@
+# Copyright The PyTorch Lightning team.
+#
+# 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 os
+from multiprocessing import Event, Process
+
+import pytest
+
+from pytorch_lightning import Trainer
+from pytorch_lightning.profiler import XLAProfiler
+from pytorch_lightning.utilities import _TPU_AVAILABLE
+from tests.helpers import BoringModel
+from tests.helpers.runif import RunIf
+
+if _TPU_AVAILABLE:
+    import torch_xla.debug.profiler as xp
+    import torch_xla.utils.utils as xu
+
+
+@RunIf(tpu=True)
+def test_xla_profiler_instance(tmpdir):
+
+    model = BoringModel()
+    trainer = Trainer(
+        default_root_dir=tmpdir,
+        fast_dev_run=True,
+        profiler="xla",
+        tpu_cores=8,
+    )
+
+    assert isinstance(trainer.profiler, XLAProfiler)
+    trainer.fit(model)
+    assert trainer.state.finished, f"Training failed with {trainer.state}"
+
+
+@pytest.mark.skipif(True, reason="XLA Profiler doesn't support Prog. capture yet")
+def test_xla_profiler_prog_capture(tmpdir):
+
+    port = xu.get_free_tcp_ports()[0]
+    training_started = Event()
+
+    def train_worker():
+        model = BoringModel()
+        trainer = Trainer(
+            default_root_dir=tmpdir,
+            max_epochs=4,
+            profiler="xla",
+            tpu_cores=8,
+        )
+
+        trainer.fit(model)
+
+    p = Process(target=train_worker, daemon=True)
+    p.start()
+    training_started.wait(120)
+
+    logdir = str(tmpdir)
+    xp.trace(f'localhost:{port}', logdir, duration_ms=2000, num_tracing_attempts=5, delay_ms=1000)
+
+    p.terminate()
+
+    assert os.isfile(os.path.join(logdir, 'plugins', 'profile', '*', '*.xplane.pb'))
diff --git a/tests/special_tests.sh b/tests/special_tests.sh
index f76ac419ea..95311fb2df 100755
--- a/tests/special_tests.sh
+++ b/tests/special_tests.sh
@@ -69,7 +69,7 @@ for i in "${!files_arr[@]}"; do
 done
 
 if nvcc --version; then
-    nvprof --profile-from-start off -o trace_name.prof -- python ${defaults} tests/test_profiler.py::test_pytorch_profiler_nested_emit_nvtx
+    nvprof --profile-from-start off -o trace_name.prof -- python ${defaults} tests/profiler/test_profiler.py::test_pytorch_profiler_nested_emit_nvtx
 fi
 
 # needs to run outside of `pytest`