diff --git a/tests/framework/test_auto_unit.py b/tests/framework/test_auto_unit.py
index 92b9bffca0..593db6eecb 100644
--- a/tests/framework/test_auto_unit.py
+++ b/tests/framework/test_auto_unit.py
@@ -10,6 +10,7 @@
 from unittest.mock import MagicMock, patch
 
 import torch
+from torch.distributed.fsdp.sharded_grad_scaler import ShardedGradScaler
 
 from torchtnt.utils.version import is_torch_version_geq_1_13
 
@@ -79,6 +80,35 @@ def test_app_state_mixin(self) -> None:
         for key in ("module", "optimizer", "lr_scheduler", "grad_scaler"):
             self.assertIn(key, auto_unit.app_state())
 
+    @unittest.skipUnless(
+        condition=distributed_available, reason="Torch distributed is needed to run"
+    )
+    @unittest.skipUnless(
+        condition=cuda_available, reason="This test needs a GPU host to run."
+    )
+    def test_fsdp_fp16(self) -> None:
+        """
+        Test that FSDP + FP16 uses ShardedGradScaler
+        """
+        spawn_multi_process(
+            2,
+            "nccl",
+            self._test_fsdp_fp16,
+        )
+
+    @staticmethod
+    def _test_fsdp_fp16() -> None:
+        device = init_from_env()
+        my_module = torch.nn.Linear(2, 2)
+        auto_unit_fsdp = DummyAutoUnit(
+            module=my_module,
+            device=device,
+            strategy=FSDPStrategy(),
+            precision="fp16",
+        )
+        tc = unittest.TestCase()
+        tc.assertTrue(isinstance(auto_unit_fsdp.grad_scaler, ShardedGradScaler))
+
     def test_lr_scheduler_step(self) -> None:
         """
         Test that the lr scheduler is stepped every optimizer step when step_lr_interval="step"
diff --git a/torchtnt/framework/auto_unit.py b/torchtnt/framework/auto_unit.py
index 9d9a85a164..8e4dd4c6d5 100644
--- a/torchtnt/framework/auto_unit.py
+++ b/torchtnt/framework/auto_unit.py
@@ -476,7 +476,7 @@ def __init__(
         if self.precision:
             self.grad_scaler = _get_grad_scaler_from_precision(
                 self.precision,
-                module,
+                self.module,
             )
 
         self.step_lr_interval = step_lr_interval