diff --git a/roomserver/internal/input_events.go b/roomserver/internal/input_events.go
index f4d3bb8f..f5c678ca 100644
--- a/roomserver/internal/input_events.go
+++ b/roomserver/internal/input_events.go
@@ -52,13 +52,15 @@ func processRoomEvent(
 	headered := input.Event
 	event := headered.Unwrap()
 
-	// Check that the event passes authentication checks and work out the numeric IDs for the auth events.
+	// Check that the event passes authentication checks and work out
+	// the numeric IDs for the auth events.
 	authEventNIDs, err := checkAuthEvents(ctx, db, headered, input.AuthEventIDs)
 	if err != nil {
 		logrus.WithError(err).WithField("event_id", event.EventID()).WithField("auth_event_ids", input.AuthEventIDs).Error("processRoomEvent.checkAuthEvents failed for event")
 		return
 	}
 
+	// If we don't have a transaction ID then get one.
 	if input.TransactionID != nil {
 		tdID := input.TransactionID
 		eventID, err = db.GetTransactionEventID(
@@ -70,17 +72,21 @@ func processRoomEvent(
 		}
 	}
 
-	// Store the event
+	// Store the event.
 	roomNID, stateAtEvent, err := db.StoreEvent(ctx, event, input.TransactionID, authEventNIDs)
 	if err != nil {
 		return
 	}
 
+	// For outliers we can stop after we've stored the event itself as it
+	// doesn't have any associated state to store and we don't need to
+	// notify anyone about it.
 	if input.Kind == api.KindOutlier {
-		// For outliers we can stop after we've stored the event itself as it
-		// doesn't have any associated state to store and we don't need to
-		// notify anyone about it.
-		logrus.WithField("event_id", event.EventID()).WithField("type", event.Type()).WithField("room", event.RoomID()).Info("Stored outlier")
+		logrus.WithFields(logrus.Fields{
+			"event_id": event.EventID(),
+			"type":     event.Type(),
+			"room":     event.RoomID(),
+		}).Info("Stored outlier")
 		return event.EventID(), nil
 	}
 
@@ -93,10 +99,21 @@ func processRoomEvent(
 		}
 	}
 
+	if err = updateLatestEvents(
+		ctx,                 // context
+		db,                  // roomserver database
+		ow,                  // output event writer
+		roomNID,             // room NID to update
+		stateAtEvent,        // state at event (below)
+		event,               // event
+		input.SendAsServer,  // send as server
+		input.TransactionID, // transaction ID
+	); err != nil {
+		return
+	}
+
 	// Update the extremities of the event graph for the room
-	return event.EventID(), updateLatestEvents(
-		ctx, db, ow, roomNID, stateAtEvent, event, input.SendAsServer, input.TransactionID,
-	)
+	return event.EventID(), nil
 }
 
 func calculateAndSetState(
@@ -111,6 +128,9 @@ func calculateAndSetState(
 	roomState := state.NewStateResolution(db)
 
 	if input.HasState {
+		// TODO: Check here if we think we're in the room already.
+		stateAtEvent.Overwrite = true
+
 		// We've been told what the state at the event is so we don't need to calculate it.
 		// Check that those state events are in the database and store the state.
 		var entries []types.StateEntry
@@ -122,6 +142,8 @@ func calculateAndSetState(
 			return err
 		}
 	} else {
+		stateAtEvent.Overwrite = false
+
 		// We haven't been told what the state at the event is so we need to calculate it from the prev_events
 		if stateAtEvent.BeforeStateSnapshotNID, err = roomState.CalculateAndStoreStateBeforeEvent(ctx, event, roomNID); err != nil {
 			return err
diff --git a/roomserver/internal/input_latest_events.go b/roomserver/internal/input_latest_events.go
index 42be0f40..6eeeedab 100644
--- a/roomserver/internal/input_latest_events.go
+++ b/roomserver/internal/input_latest_events.go
@@ -69,10 +69,17 @@ func updateLatestEvents(
 	}()
 
 	u := latestEventsUpdater{
-		ctx: ctx, db: db, updater: updater, ow: ow, roomNID: roomNID,
-		stateAtEvent: stateAtEvent, event: event, sendAsServer: sendAsServer,
+		ctx:           ctx,
+		db:            db,
+		updater:       updater,
+		ow:            ow,
+		roomNID:       roomNID,
+		stateAtEvent:  stateAtEvent,
+		event:         event,
+		sendAsServer:  sendAsServer,
 		transactionID: transactionID,
 	}
+
 	if err = u.doUpdateLatestEvents(); err != nil {
 		return err
 	}
@@ -115,38 +122,65 @@ type latestEventsUpdater struct {
 
 func (u *latestEventsUpdater) doUpdateLatestEvents() error {
 	prevEvents := u.event.PrevEvents()
-	oldLatest := u.updater.LatestEvents()
 	u.lastEventIDSent = u.updater.LastEventIDSent()
 	u.oldStateNID = u.updater.CurrentStateSnapshotNID()
 
+	// If we are doing a regular event update then we will get the
+	// previous latest events to use as a part of the calculation. If
+	// we are overwriting the latest events because we have a complete
+	// state snapshot from somewhere else, e.g. a federated room join,
+	// then start with an empty set - none of the forward extremities
+	// that we knew about before matter anymore.
+	oldLatest := []types.StateAtEventAndReference{}
+	if !u.stateAtEvent.Overwrite {
+		oldLatest = u.updater.LatestEvents()
+	}
+
+	// If the event has already been written to the output log then we
+	// don't need to do anything, as we've handled it already.
 	hasBeenSent, err := u.updater.HasEventBeenSent(u.stateAtEvent.EventNID)
 	if err != nil {
 		return err
 	} else if hasBeenSent {
-		// Already sent this event so we can stop processing
 		return nil
 	}
 
+	// Update the roomserver_previous_events table with references. This
+	// is effectively tracking the structure of the DAG.
 	if err = u.updater.StorePreviousEvents(u.stateAtEvent.EventNID, prevEvents); err != nil {
 		return err
 	}
 
+	// Get the event reference for our new event. This will be used when
+	// determining if the event is referenced by an existing event.
 	eventReference := u.event.EventReference()
-	// Check if this event is already referenced by another event in the room.
+
+	// Check if our new event is already referenced by an existing event
+	// in the room. If it is then it isn't a latest event.
 	alreadyReferenced, err := u.updater.IsReferenced(eventReference)
 	if err != nil {
 		return err
 	}
 
-	u.latest = calculateLatest(oldLatest, alreadyReferenced, prevEvents, types.StateAtEventAndReference{
-		EventReference: eventReference,
-		StateAtEvent:   u.stateAtEvent,
-	})
+	// Work out what the latest events are.
+	u.latest = calculateLatest(
+		oldLatest,
+		alreadyReferenced,
+		prevEvents,
+		types.StateAtEventAndReference{
+			EventReference: eventReference,
+			StateAtEvent:   u.stateAtEvent,
+		},
+	)
 
+	// Now that we know what the latest events are, it's time to get the
+	// latest state.
 	if err = u.latestState(); err != nil {
 		return err
 	}
 
+	// If we need to generate any output events then here's where we do it.
+	// TODO: Move this!
 	updates, err := updateMemberships(u.ctx, u.db, u.updater, u.removed, u.added)
 	if err != nil {
 		return err
@@ -181,10 +215,15 @@ func (u *latestEventsUpdater) latestState() error {
 	var err error
 	roomState := state.NewStateResolution(u.db)
 
+	// Get a list of the current latest events.
 	latestStateAtEvents := make([]types.StateAtEvent, len(u.latest))
 	for i := range u.latest {
 		latestStateAtEvents[i] = u.latest[i].StateAtEvent
 	}
+
+	// Takes the NIDs of the latest events and creates a state snapshot
+	// of the state after the events. The snapshot state will be resolved
+	// using the correct state resolution algorithm for the room.
 	u.newStateNID, err = roomState.CalculateAndStoreStateAfterEvents(
 		u.ctx, u.roomNID, latestStateAtEvents,
 	)
@@ -192,6 +231,18 @@ func (u *latestEventsUpdater) latestState() error {
 		return err
 	}
 
+	// If we are overwriting the state then we should make sure that we
+	// don't send anything out over federation again, it will very likely
+	// be a repeat.
+	if u.stateAtEvent.Overwrite {
+		u.sendAsServer = ""
+	}
+
+	// Now that we have a new state snapshot based on the latest events,
+	// we can compare that new snapshot to the previous one and see what
+	// has changed. This gives us one list of removed state events and
+	// another list of added ones. Replacing a value for a state-key tuple
+	// will result one removed (the old event) and one added (the new event).
 	u.removed, u.added, err = roomState.DifferenceBetweeenStateSnapshots(
 		u.ctx, u.oldStateNID, u.newStateNID,
 	)
@@ -199,6 +250,8 @@ func (u *latestEventsUpdater) latestState() error {
 		return err
 	}
 
+	// Also work out the state before the event removes and the event
+	// adds.
 	u.stateBeforeEventRemoves, u.stateBeforeEventAdds, err = roomState.DifferenceBetweeenStateSnapshots(
 		u.ctx, u.newStateNID, u.stateAtEvent.BeforeStateSnapshotNID,
 	)
diff --git a/roomserver/internal/input_membership.go b/roomserver/internal/input_membership.go
index a0029a28..666e7ebc 100644
--- a/roomserver/internal/input_membership.go
+++ b/roomserver/internal/input_membership.go
@@ -16,7 +16,6 @@ package internal
 
 import (
 	"context"
-	"errors"
 	"fmt"
 
 	"github.com/matrix-org/dendrite/roomserver/api"
@@ -108,10 +107,10 @@ func updateMembership(
 	}
 
 	if add == nil {
-		// This shouldn't happen. Returning an error here is better than panicking
-		// in the membership updater functions later on.
-		// TODO: Why does this happen to begin with?
-		return updates, errors.New("add should not be nil")
+		// This can happen when we have rejoined a room and suddenly we have a
+		// divergence between the former state and the new one. We don't want to
+		// act on removals and apparently there are no adds, so stop here.
+		return updates, nil
 	}
 
 	mu, err := updater.MembershipUpdater(targetUserNID)
diff --git a/roomserver/types/types.go b/roomserver/types/types.go
index dfc112cf..da83f614 100644
--- a/roomserver/types/types.go
+++ b/roomserver/types/types.go
@@ -75,6 +75,10 @@ func (a StateEntry) LessThan(b StateEntry) bool {
 
 // StateAtEvent is the state before and after a matrix event.
 type StateAtEvent struct {
+	// Should this state overwrite the latest events and memberships of the room?
+	// This might be necessary when rejoining a federated room after a period of
+	// absence, as our state and latest events will be out of date.
+	Overwrite bool
 	// The state before the event.
 	BeforeStateSnapshotNID StateSnapshotNID
 	// The state entry for the event itself, allows us to calculate the state after the event.