diff --git a/app/controllers/tournaments_controller.rb b/app/controllers/tournaments_controller.rb
index 1f1ddb6..e994448 100644
--- a/app/controllers/tournaments_controller.rb
+++ b/app/controllers/tournaments_controller.rb
@@ -31,25 +31,47 @@ class TournamentsController < ApplicationController
   def create
     params = tournament_params
     params.require(:teams)
-    # convert teams parameter into Team objects
-    teams = params.delete('teams').map do |team|
-      if team[:id]
-        Team.find team[:id]
-      elsif team[:name]
-        Team.create name: team[:name]
-      end
-    end
+    group_stage = params.delete(:group_stage)
+    teams = params.delete('teams')
     # create tournament
     tournament = current_user.tournaments.new params
-    # associate provided teams with tournament
-    tournament.teams = teams
+    if group_stage
+      groups = {}
+      teams.each do |team|
+        team_id = team[:id]
+        team_name = team[:name]
+        group = team[:group]
+        unless team_id.nil?
+          team = Team.find team_id
+          put_team_into_groups_hash(groups, team, group)
+        end
+
+        unless team_name.nil?
+          team = Team.create name: team_name
+          put_team_into_groups_hash(groups, team, group)
+        end
+      end
+      # add groups to tournament
+      result = AddGroupStageToTournamentAndSaveTournamentToDatabase.call(tournament: tournament, groups: groups.values)
+    else
+      # convert teams parameter into Team objects
+      teams = teams.map do |team|
+        if team[:id]
+          Team.find team[:id]
+        elsif team[:name]
+          Team.create name: team[:name]
+        end
+      end
+      # associate provided teams with tournament
+      tournament.teams = teams
+      # add playoff stage to tournament
+      result = AddPlayoffsToTournamentAndSaveTournamentToDatabase.call(tournament: tournament)
+    end
     # validate tournament
     unless tournament.valid?
       render json: tournament.errors, status: :unprocessable_entity
       return
     end
-    # add playoff stage to tournament
-    result = AddPlayoffsToTournamentAndSaveTournamentToDatabase.call(tournament: tournament)
     # return appropriate result
     if result.success?
       render json: result.tournament, status: :created, location: result.tournament
@@ -74,6 +96,14 @@ class TournamentsController < ApplicationController
 
   private
 
+  def put_team_into_groups_hash(groups, team, group)
+    if groups[group].is_a?(Array)
+      groups[group] << team
+    else
+      groups[group] = [team]
+    end
+  end
+
   def set_tournament
     @tournament = Tournament.find(params[:id])
   end
diff --git a/spec/controllers/tournaments_controller_spec.rb b/spec/controllers/tournaments_controller_spec.rb
index 84d60f6..37588de 100644
--- a/spec/controllers/tournaments_controller_spec.rb
+++ b/spec/controllers/tournaments_controller_spec.rb
@@ -9,6 +9,8 @@ RSpec.describe TournamentsController, type: :controller do
     @another_user = create(:user)
     @private_tournament = create(:tournament, user: @another_user, public: false)
     @teams = create_list(:detached_team, 4)
+    @teams16 = create_list(:detached_team, 16)
+    @groups = create_list(:group, 4)
   end
 
   describe 'GET #index' do
@@ -112,6 +114,17 @@ RSpec.describe TournamentsController, type: :controller do
       }
     end
 
+    let(:create_group_tournament_data) do
+      teams_with_groups = @teams16.each_with_index.map { |team, i| { id: team.id, group: (i / 4).floor } }
+      {
+        name: Faker::TvShows::FamilyGuy.character,
+        description: Faker::Movies::HarryPotter.quote,
+        public: false,
+        group_stage: true,
+        teams: teams_with_groups
+      }
+    end
+
     context 'without authentication headers' do
       it 'renders an unauthorized error response' do
         put :create, params: create_playoff_tournament_data
@@ -159,6 +172,24 @@ RSpec.describe TournamentsController, type: :controller do
           expect(included_teams).to match_array(@teams)
         end
 
+        context 'generates a group stage tournament' do
+          before(:each) do
+            post :create, params: create_group_tournament_data
+            body = deserialize_response response
+            @group_stage_tournament = Tournament.find(body[:id])
+          end
+
+          it 'with all given teams in their respective groups' do
+            included_teams = @group_stage_tournament.stages.find_by(level: -1).teams
+            expect(included_teams).to match_array(@teams16)
+          end
+
+          it 'with stage level -1 for the group stage' do
+            group_stage = @group_stage_tournament.stages.find_by(level: -1)
+            expect(group_stage).to be_a(Stage)
+          end
+        end
+
         it 'renders a JSON response with the new tournament' do
           post :create, params: create_playoff_tournament_data
           expect(response).to have_http_status(:created)
@@ -176,6 +207,15 @@ RSpec.describe TournamentsController, type: :controller do
         end
       end
 
+      context 'with unequal group sizes' do
+        it 'returns an error response' do
+          data = create_group_tournament_data
+          data[:teams].pop
+          post :create, params: data
+          expect(response).to have_http_status(:unprocessable_entity)
+        end
+      end
+
       context 'with team names' do
         it 'creates teams for given names' do
           data = create_playoff_tournament_data