diff --git a/test/functional/mempool_persist.py b/test/functional/mempool_persist.py
new file mode 100755
index 00000000000..c22b7ff0200
--- /dev/null
+++ b/test/functional/mempool_persist.py
@@ -0,0 +1,91 @@
+#!/usr/bin/env python3
+# Copyright (c) 2014-2017 The Bitcoin Core developers
+# Distributed under the MIT software license, see the accompanying
+# file COPYING or http://www.opensource.org/licenses/mit-license.php.
+"""Test mempool persistence.
+
+By default, bitcoind will dump mempool on shutdown and
+then reload it on startup. This can be overridden with
+the -persistmempool=false command line option.
+
+Test is as follows:
+
+  - start node0, node1 and node2. node1 has -persistmempool=false
+  - create 5 transactions on node2 to its own address. Note that these
+    are not sent to node0 or node1 addresses because we don't want
+    them to be saved in the wallet.
+  - check that node0 and node1 have 5 transactions in their mempools
+  - shutdown all nodes.
+  - startup node0. Verify that it still has 5 transactions
+    in its mempool. Shutdown node0. This tests that by default the
+    mempool is persistent.
+  - startup node1. Verify that its mempool is empty. Shutdown node1.
+    This tests that with -persistmempool=false, the mempool is not
+    dumped to disk when the node is shut down.
+  - Restart node0 with -persistmempool=false. Verify that its mempool is
+    empty. Shutdown node0. This tests that with -persistmempool=false,
+    the mempool is not loaded from disk on start up.
+  - Restart node0 with -persistmempool=true. Verify that it has 5
+    transactions in its mempool. This tests that -persistmempool=false
+    does not overwrite a previously valid mempool stored on disk.
+
+"""
+
+from test_framework.test_framework import BitcoinTestFramework
+from test_framework.util import *
+
+class MempoolPersistTest(BitcoinTestFramework):
+
+    def __init__(self):
+        super().__init__()
+        self.num_nodes = 3
+        self.setup_clean_chain = False
+
+    def setup_network(self):
+        # We need 3 nodes for this test. Node1 does not have a persistent mempool.
+        self.nodes = []
+        self.nodes.append(start_node(0, self.options.tmpdir))
+        self.nodes.append(start_node(1, self.options.tmpdir, ["-persistmempool=false"]))
+        self.nodes.append(start_node(2, self.options.tmpdir))
+        connect_nodes_bi(self.nodes, 0, 2)
+        connect_nodes_bi(self.nodes, 1, 2)
+        self.is_network_split = False
+
+    def run_test(self):
+        chain_height = self.nodes[0].getblockcount()
+        assert_equal(chain_height, 200)
+
+        self.log.debug("Mine a single block to get out of IBD")
+        self.nodes[0].generate(1)
+
+        self.log.debug("Send 5 transactions from node2 (to its own address)")
+        for i in range(5):
+            self.nodes[2].sendtoaddress(self.nodes[2].getnewaddress(), Decimal("10"))
+        self.sync_all()
+
+        self.log.debug("Verify that node0 and node1 have 5 transactions in their mempools")
+        assert_equal(len(self.nodes[0].getrawmempool()), 5)
+        assert_equal(len(self.nodes[1].getrawmempool()), 5)
+
+        self.log.debug("Stop-start node0 and node1. Verify that node0 has the transactions in its mempool and node1 does not.")
+        stop_nodes(self.nodes)
+        self.nodes = []
+        self.nodes.append(start_node(0, self.options.tmpdir))
+        self.nodes.append(start_node(1, self.options.tmpdir))
+        assert_equal(len(self.nodes[0].getrawmempool()), 5)
+        assert_equal(len(self.nodes[1].getrawmempool()), 0)
+
+        self.log.debug("Stop-start node0 with -persistmempool=false. Verify that it doesn't load its mempool.dat file.")
+        stop_nodes(self.nodes)
+        self.nodes = []
+        self.nodes.append(start_node(0, self.options.tmpdir, ["-persistmempool=false"]))
+        assert_equal(len(self.nodes[0].getrawmempool()), 0)
+
+        self.log.debug("Stop-start node0. Verify that it has the transactions in its mempool.")
+        stop_nodes(self.nodes)
+        self.nodes = []
+        self.nodes.append(start_node(0, self.options.tmpdir))
+        assert_equal(len(self.nodes[0].getrawmempool()), 5)
+
+if __name__ == '__main__':
+    MempoolPersistTest().main()
diff --git a/test/functional/test_runner.py b/test/functional/test_runner.py
index 12eb92028f6..7ec9d552a12 100755
--- a/test/functional/test_runner.py
+++ b/test/functional/test_runner.py
@@ -59,6 +59,7 @@ BASE_SCRIPTS= [
     'rest.py',
     'mempool_spendcoinbase.py',
     'mempool_reorg.py',
+    'mempool_persist.py',
     'httpbasics.py',
     'multi_rpc.py',
     'proxy_test.py',