diff --git a/qa/rpc-tests/bip68-sequence.py b/qa/rpc-tests/bip68-sequence.py
new file mode 100755
index 0000000000..45b4f22c0b
--- /dev/null
+++ b/qa/rpc-tests/bip68-sequence.py
@@ -0,0 +1,388 @@
+#!/usr/bin/env python2
+# Copyright (c) 2014-2015 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 BIP68 implementation (mempool only)
+#
+
+from test_framework.test_framework import BitcoinTestFramework
+from test_framework.util import *
+from test_framework.script import *
+from test_framework.mininode import *
+from test_framework.blocktools import *
+
+COIN = 100000000
+SEQUENCE_LOCKTIME_DISABLE_FLAG = (1<<31)
+SEQUENCE_LOCKTIME_TYPE_FLAG = (1<<22) # this means use time (0 means height)
+SEQUENCE_LOCKTIME_GRANULARITY = 9 # this is a bit-shift
+SEQUENCE_LOCKTIME_MASK = 0x0000ffff
+
+# RPC error for non-BIP68 final transactions
+NOT_FINAL_ERROR = "64: non-BIP68-final"
+
+class BIP68Test(BitcoinTestFramework):
+
+    def setup_network(self):
+        self.nodes = []
+        self.nodes.append(start_node(0, self.options.tmpdir, ["-debug", "-blockprioritysize=0"]))
+        self.is_network_split = False
+        self.relayfee = self.nodes[0].getnetworkinfo()["relayfee"]
+
+    def run_test(self):
+        # Generate some coins
+        self.nodes[0].generate(110)
+
+        print "Running test disable flag"
+        self.test_disable_flag()
+
+        print "Running test sequence-lock-confirmed-inputs"
+        self.test_sequence_lock_confirmed_inputs()
+
+        print "Running test sequence-lock-unconfirmed-inputs"
+        self.test_sequence_lock_unconfirmed_inputs()
+
+        # This test needs to change when BIP68 becomes consensus
+        print "Running test BIP68 not consensus"
+        self.test_bip68_not_consensus()
+
+        print "Passed\n"
+
+    # Test that BIP68 is not in effect if tx version is 1, or if
+    # the first sequence bit is set.
+    def test_disable_flag(self):
+        # Create some unconfirmed inputs
+        new_addr = self.nodes[0].getnewaddress()
+        self.nodes[0].sendtoaddress(new_addr, 2) # send 2 BTC
+
+        utxos = self.nodes[0].listunspent(0, 0)
+        assert(len(utxos) > 0)
+
+        utxo = utxos[0]
+
+        tx1 = CTransaction()
+        value = satoshi_round(utxo["amount"] - self.relayfee)*COIN
+
+        # Check that the disable flag disables relative locktime.
+        # If sequence locks were used, this would require 1 block for the
+        # input to mature.
+        sequence_value = SEQUENCE_LOCKTIME_DISABLE_FLAG | 1
+        tx1.vin = [CTxIn(COutPoint(int(utxo["txid"], 16), utxo["vout"]), nSequence=sequence_value)] 
+        tx1.vout = [CTxOut(value, CScript([b'a']))]
+
+        tx1_signed = self.nodes[0].signrawtransaction(ToHex(tx1))["hex"]
+        tx1_id = self.nodes[0].sendrawtransaction(tx1_signed)
+        tx1_id = int(tx1_id, 16)
+
+        # This transaction will enable sequence-locks, so this transaction should
+        # fail
+        tx2 = CTransaction()
+        tx2.nVersion = 2
+        sequence_value = sequence_value & 0x7fffffff
+        tx2.vin = [CTxIn(COutPoint(tx1_id, 0), nSequence=sequence_value)]
+        tx2.vout = [CTxOut(int(value-self.relayfee*COIN), CScript([b'a']))]
+        tx2.rehash()
+
+        try:
+            self.nodes[0].sendrawtransaction(ToHex(tx2))
+        except JSONRPCException as exp:
+            assert_equal(exp.error["message"], NOT_FINAL_ERROR)
+        else:
+            assert(False)
+
+        # Setting the version back down to 1 should disable the sequence lock,
+        # so this should be accepted.
+        tx2.nVersion = 1
+
+        self.nodes[0].sendrawtransaction(ToHex(tx2))
+
+    # Calculate the median time past of a prior block ("confirmations" before
+    # the current tip).
+    def get_median_time_past(self, confirmations):
+        block_hash = self.nodes[0].getblockhash(self.nodes[0].getblockcount()-confirmations)
+        return self.nodes[0].getblockheader(block_hash)["mediantime"]
+
+    # Test that sequence locks are respected for transactions spending confirmed inputs.
+    def test_sequence_lock_confirmed_inputs(self):
+        # Create lots of confirmed utxos, and use them to generate lots of random
+        # transactions.
+        max_outputs = 50
+        addresses = []
+        while len(addresses) < max_outputs:
+            addresses.append(self.nodes[0].getnewaddress())
+        while len(self.nodes[0].listunspent()) < 200:
+            import random
+            random.shuffle(addresses)
+            num_outputs = random.randint(1, max_outputs)
+            outputs = {}
+            for i in xrange(num_outputs):
+                outputs[addresses[i]] = random.randint(1, 20)*0.01
+            self.nodes[0].sendmany("", outputs)
+            self.nodes[0].generate(1)
+
+        utxos = self.nodes[0].listunspent()
+
+        # Try creating a lot of random transactions.
+        # Each time, choose a random number of inputs, and randomly set
+        # some of those inputs to be sequence locked (and randomly choose
+        # between height/time locking). Small random chance of making the locks
+        # all pass.
+        for i in xrange(400):
+            # Randomly choose up to 10 inputs
+            num_inputs = random.randint(1, 10)
+            random.shuffle(utxos)
+
+            # Track whether any sequence locks used should fail
+            should_pass = True
+            
+            # Track whether this transaction was built with sequence locks
+            using_sequence_locks = False
+
+            tx = CTransaction()
+            tx.nVersion = 2
+            value = 0
+            for j in xrange(num_inputs):
+                sequence_value = 0xfffffffe # this disables sequence locks
+
+                # 50% chance we enable sequence locks
+                if random.randint(0,1):
+                    using_sequence_locks = True
+
+                    # 10% of the time, make the input sequence value pass
+                    input_will_pass = (random.randint(1,10) == 1)
+                    sequence_value = utxos[j]["confirmations"]
+                    if not input_will_pass:
+                        sequence_value += 1
+                        should_pass = False
+
+                    # Figure out what the median-time-past was for the confirmed input
+                    # Note that if an input has N confirmations, we're going back N blocks
+                    # from the tip so that we're looking up MTP of the block
+                    # PRIOR to the one the input appears in, as per the BIP68 spec.
+                    orig_time = self.get_median_time_past(utxos[j]["confirmations"])
+                    cur_time = self.get_median_time_past(0) # MTP of the tip
+
+                    # can only timelock this input if it's not too old -- otherwise use height
+                    can_time_lock = True
+                    if ((cur_time - orig_time) >> SEQUENCE_LOCKTIME_GRANULARITY) >= SEQUENCE_LOCKTIME_MASK:
+                        can_time_lock = False
+
+                    # if time-lockable, then 50% chance we make this a time lock
+                    if random.randint(0,1) and can_time_lock:
+                        # Find first time-lock value that fails, or latest one that succeeds
+                        time_delta = sequence_value << SEQUENCE_LOCKTIME_GRANULARITY
+                        if input_will_pass and time_delta > cur_time - orig_time:
+                            sequence_value = ((cur_time - orig_time) >> SEQUENCE_LOCKTIME_GRANULARITY)
+                        elif (not input_will_pass and time_delta <= cur_time - orig_time):
+                            sequence_value = ((cur_time - orig_time) >> SEQUENCE_LOCKTIME_GRANULARITY)+1
+                        sequence_value |= SEQUENCE_LOCKTIME_TYPE_FLAG
+                tx.vin.append(CTxIn(COutPoint(int(utxos[j]["txid"], 16), utxos[j]["vout"]), nSequence=sequence_value))
+                value += utxos[j]["amount"]*COIN
+            # Overestimate the size of the tx - signatures should be less than 120 bytes, and leave 50 for the output
+            tx_size = len(ToHex(tx))/2 + 120*num_inputs + 50
+            tx.vout.append(CTxOut(value-self.relayfee*tx_size*COIN/1000, CScript([b'a'])))
+            rawtx = self.nodes[0].signrawtransaction(ToHex(tx))["hex"]
+
+            try:
+                self.nodes[0].sendrawtransaction(rawtx)
+            except JSONRPCException as exp:
+                assert(not should_pass and using_sequence_locks)
+                assert_equal(exp.error["message"], NOT_FINAL_ERROR)
+            else:
+                assert(should_pass or not using_sequence_locks)
+                # Recalculate utxos if we successfully sent the transaction
+                utxos = self.nodes[0].listunspent()
+
+    # Test that sequence locks on unconfirmed inputs must have nSequence
+    # height or time of 0 to be accepted.
+    # Then test that BIP68-invalid transactions are removed from the mempool
+    # after a reorg.
+    def test_sequence_lock_unconfirmed_inputs(self):
+        # Store height so we can easily reset the chain at the end of the test
+        cur_height = self.nodes[0].getblockcount()
+
+        utxos = self.nodes[0].listunspent()
+
+        # Create a mempool tx.
+        txid = self.nodes[0].sendtoaddress(self.nodes[0].getnewaddress(), 2)
+        tx1 = FromHex(CTransaction(), self.nodes[0].getrawtransaction(txid))
+        tx1.rehash()
+
+        # Anyone-can-spend mempool tx.
+        # Sequence lock of 0 should pass.
+        tx2 = CTransaction()
+        tx2.nVersion = 2
+        tx2.vin = [CTxIn(COutPoint(tx1.sha256, 0), nSequence=0)]
+        tx2.vout = [CTxOut(int(tx1.vout[0].nValue - self.relayfee*COIN), CScript([b'a']))]
+        tx2_raw = self.nodes[0].signrawtransaction(ToHex(tx2))["hex"]
+        tx2 = FromHex(tx2, tx2_raw)
+        tx2.rehash()
+
+        self.nodes[0].sendrawtransaction(tx2_raw)
+
+        # Create a spend of the 0th output of orig_tx with a sequence lock
+        # of 1, and test what happens when submitting.
+        # orig_tx.vout[0] must be an anyone-can-spend output
+        def test_nonzero_locks(orig_tx, node, relayfee, use_height_lock):
+            sequence_value = 1
+            if not use_height_lock:
+                sequence_value |= SEQUENCE_LOCKTIME_TYPE_FLAG
+
+            tx = CTransaction()
+            tx.nVersion = 2
+            tx.vin = [CTxIn(COutPoint(orig_tx.sha256, 0), nSequence=sequence_value)]
+            tx.vout = [CTxOut(int(orig_tx.vout[0].nValue - relayfee*COIN), CScript([b'a']))]
+            tx.rehash()
+
+            try:
+                node.sendrawtransaction(ToHex(tx))
+            except JSONRPCException as exp:
+                assert_equal(exp.error["message"], NOT_FINAL_ERROR)
+                assert(orig_tx.hash in node.getrawmempool())
+            else:
+                # orig_tx must not be in mempool
+                assert(orig_tx.hash not in node.getrawmempool())
+            return tx
+
+        test_nonzero_locks(tx2, self.nodes[0], self.relayfee, use_height_lock=True)
+        test_nonzero_locks(tx2, self.nodes[0], self.relayfee, use_height_lock=False)
+
+        # Now mine some blocks, but make sure tx2 doesn't get mined.
+        # Use prioritisetransaction to lower the effective feerate to 0
+        self.nodes[0].prioritisetransaction(tx2.hash, -1e15, int(-self.relayfee*COIN))
+        cur_time = int(time.time())
+        for i in xrange(10):
+            self.nodes[0].setmocktime(cur_time + 600)
+            self.nodes[0].generate(1)
+            cur_time += 600
+
+        assert(tx2.hash in self.nodes[0].getrawmempool())
+
+        test_nonzero_locks(tx2, self.nodes[0], self.relayfee, use_height_lock=True)
+        test_nonzero_locks(tx2, self.nodes[0], self.relayfee, use_height_lock=False)
+
+        # Mine tx2, and then try again
+        self.nodes[0].prioritisetransaction(tx2.hash, 1e15, int(self.relayfee*COIN))
+
+        # Advance the time on the node so that we can test timelocks
+        self.nodes[0].setmocktime(cur_time+600)
+        self.nodes[0].generate(1)
+        assert(tx2.hash not in self.nodes[0].getrawmempool())
+
+        # Now that tx2 is not in the mempool, a sequence locked spend should
+        # succeed
+        tx3 = test_nonzero_locks(tx2, self.nodes[0], self.relayfee, use_height_lock=False)
+        assert(tx3.hash in self.nodes[0].getrawmempool())
+
+        self.nodes[0].generate(1)
+        assert(tx3.hash not in self.nodes[0].getrawmempool())
+
+        # One more test, this time using height locks
+        tx4 = test_nonzero_locks(tx3, self.nodes[0], self.relayfee, use_height_lock=True)
+        assert(tx4.hash in self.nodes[0].getrawmempool())
+
+        # Now try combining confirmed and unconfirmed inputs
+        tx5 = test_nonzero_locks(tx4, self.nodes[0], self.relayfee, use_height_lock=True)
+        assert(tx5.hash not in self.nodes[0].getrawmempool())
+
+        tx5.vin.append(CTxIn(COutPoint(int(utxos[0]["txid"], 16), utxos[0]["vout"]), nSequence=1))
+        tx5.vout[0].nValue += int(utxos[0]["amount"]*COIN)
+        raw_tx5 = self.nodes[0].signrawtransaction(ToHex(tx5))["hex"]
+
+        try:
+            self.nodes[0].sendrawtransaction(raw_tx5)
+        except JSONRPCException as exp:
+            assert_equal(exp.error["message"], NOT_FINAL_ERROR)
+        else:
+            assert(False)
+
+        # Test mempool-BIP68 consistency after reorg
+        #
+        # State of the transactions in the last blocks:
+        # ... -> [ tx2 ] ->  [ tx3 ]
+        #         tip-1        tip
+        # And currently tx4 is in the mempool.
+        #
+        # If we invalidate the tip, tx3 should get added to the mempool, causing
+        # tx4 to be removed (fails sequence-lock).
+        self.nodes[0].invalidateblock(self.nodes[0].getbestblockhash())
+        assert(tx4.hash not in self.nodes[0].getrawmempool())
+        assert(tx3.hash in self.nodes[0].getrawmempool())
+
+        # Now mine 2 empty blocks to reorg out the current tip (labeled tip-1 in
+        # diagram above).
+        # This would cause tx2 to be added back to the mempool, which in turn causes
+        # tx3 to be removed.
+        tip = int(self.nodes[0].getblockhash(self.nodes[0].getblockcount()-1), 16)
+        height = self.nodes[0].getblockcount()
+        for i in xrange(2):
+            block = create_block(tip, create_coinbase(height), cur_time)
+            block.nVersion = 3
+            block.rehash()
+            block.solve()
+            tip = block.sha256
+            height += 1
+            self.nodes[0].submitblock(ToHex(block))
+            cur_time += 1
+
+        mempool = self.nodes[0].getrawmempool()
+        assert(tx3.hash not in mempool)
+        assert(tx2.hash in mempool)
+
+        # Reset the chain and get rid of the mocktimed-blocks
+        self.nodes[0].setmocktime(0)
+        self.nodes[0].invalidateblock(self.nodes[0].getblockhash(cur_height+1))
+        self.nodes[0].generate(10)
+
+    # Make sure that BIP68 isn't being used to validate blocks.
+    def test_bip68_not_consensus(self):
+        txid = self.nodes[0].sendtoaddress(self.nodes[0].getnewaddress(), 2)
+
+        tx1 = FromHex(CTransaction(), self.nodes[0].getrawtransaction(txid))
+        tx1.rehash()
+
+        # Make an anyone-can-spend transaction
+        tx2 = CTransaction()
+        tx2.nVersion = 1
+        tx2.vin = [CTxIn(COutPoint(tx1.sha256, 0), nSequence=0)]
+        tx2.vout = [CTxOut(int(tx1.vout[0].nValue - self.relayfee*COIN), CScript([b'a']))]
+
+        # sign tx2
+        tx2_raw = self.nodes[0].signrawtransaction(ToHex(tx2))["hex"]
+        tx2 = FromHex(tx2, tx2_raw)
+        tx2.rehash()
+
+        self.nodes[0].sendrawtransaction(ToHex(tx2))
+        
+        # Now make an invalid spend of tx2 according to BIP68
+        sequence_value = 100 # 100 block relative locktime
+
+        tx3 = CTransaction()
+        tx3.nVersion = 2
+        tx3.vin = [CTxIn(COutPoint(tx2.sha256, 0), nSequence=sequence_value)]
+        tx3.vout = [CTxOut(int(tx2.vout[0].nValue - self.relayfee*COIN), CScript([b'a']))]
+        tx3.rehash()
+
+        try:
+            self.nodes[0].sendrawtransaction(ToHex(tx3))
+        except JSONRPCException as exp:
+            assert_equal(exp.error["message"], NOT_FINAL_ERROR)
+        else:
+            assert(False)
+
+        # make a block that violates bip68; ensure that the tip updates
+        tip = int(self.nodes[0].getbestblockhash(), 16)
+        block = create_block(tip, create_coinbase(self.nodes[0].getblockcount()+1))
+        block.nVersion = 3
+        block.vtx.extend([tx1, tx2, tx3])
+        block.hashMerkleRoot = block.calc_merkle_root()
+        block.rehash()
+        block.solve()
+
+        self.nodes[0].submitblock(ToHex(block))
+        assert_equal(self.nodes[0].getbestblockhash(), block.hash)
+
+
+if __name__ == '__main__':
+    BIP68Test().main()
diff --git a/qa/rpc-tests/test_framework/mininode.py b/qa/rpc-tests/test_framework/mininode.py
index 9d0fb713a1..259dba71c3 100755
--- a/qa/rpc-tests/test_framework/mininode.py
+++ b/qa/rpc-tests/test_framework/mininode.py
@@ -230,6 +230,14 @@ def ser_int_vector(l):
         r += struct.pack("<i", i)
     return r
 
+# Deserialize from a hex string representation (eg from RPC)
+def FromHex(obj, hex_string):
+    obj.deserialize(cStringIO.StringIO(binascii.unhexlify(hex_string)))
+    return obj
+
+# Convert a binary-serializable object to hex (eg for submission via RPC)
+def ToHex(obj):
+    return binascii.hexlify(obj.serialize()).decode('utf-8')
 
 # Objects that map to bitcoind objects, which can be serialized/deserialized