diff --git a/test/functional/test_runner.py b/test/functional/test_runner.py
--- a/test/functional/test_runner.py
+++ b/test/functional/test_runner.py
@@ -114,6 +114,7 @@
     'abc-p2p-fullblocktest.py',
     'abc-rpc.py',
     'mempool-accept-txn.py',
+    'wallet-encryption.py',
 ]
 
 EXTENDED_SCRIPTS = [
diff --git a/test/functional/wallet-encryption.py b/test/functional/wallet-encryption.py
new file mode 100755
--- /dev/null
+++ b/test/functional/wallet-encryption.py
@@ -0,0 +1,71 @@
+#!/usr/bin/env python3
+# Copyright (c) 2016 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 Wallet encryption"""
+
+import time
+
+from test_framework.test_framework import BitcoinTestFramework, BITCOIND_PROC_WAIT_TIMEOUT
+from test_framework.util import (
+    assert_equal,
+    assert_raises_jsonrpc,
+)
+
+
+class WalletEncryptionTest(BitcoinTestFramework):
+
+    def __init__(self):
+        super().__init__()
+        self.setup_clean_chain = True
+        self.num_nodes = 1
+
+    def run_test(self):
+        passphrase = "WalletPassphrase"
+        passphrase2 = "SecondWalletPassphrase"
+
+        # Make sure the wallet isn't encrypted first
+        address = self.nodes[0].getnewaddress()
+        privkey = self.nodes[0].dumpprivkey(address)
+        assert_equal(privkey[:1], "c")
+        assert_equal(len(privkey), 52)
+
+        # Encrypt the wallet
+        self.nodes[0].encryptwallet(passphrase)
+        self.bitcoind_processes[0].wait(timeout=BITCOIND_PROC_WAIT_TIMEOUT)
+        self.nodes[0] = self.start_node(0, self.options.tmpdir)
+
+        # Test that the wallet is encrypted
+        assert_raises_jsonrpc(-13, "Please enter the wallet passphrase with walletpassphrase first",
+                              self.nodes[0].dumpprivkey, address)
+
+        # Check that walletpassphrase works
+        self.nodes[0].walletpassphrase(passphrase, 2)
+        assert_equal(privkey, self.nodes[0].dumpprivkey(address))
+
+        # Check that the timeout is right
+        time.sleep(2)
+        assert_raises_jsonrpc(-13, "Please enter the wallet passphrase with walletpassphrase first",
+                              self.nodes[0].dumpprivkey, address)
+
+        # Test wrong passphrase
+        assert_raises_jsonrpc(-14, "wallet passphrase entered was incorrect",
+                              self.nodes[0].walletpassphrase, passphrase + "wrong", 10)
+
+        # Test walletlock
+        self.nodes[0].walletpassphrase(passphrase, 84600)
+        assert_equal(privkey, self.nodes[0].dumpprivkey(address))
+        self.nodes[0].walletlock()
+        assert_raises_jsonrpc(-13, "Please enter the wallet passphrase with walletpassphrase first",
+                              self.nodes[0].dumpprivkey, address)
+
+        # Test passphrase changes
+        self.nodes[0].walletpassphrasechange(passphrase, passphrase2)
+        assert_raises_jsonrpc(-14, "wallet passphrase entered was incorrect",
+                              self.nodes[0].walletpassphrase, passphrase, 10)
+        self.nodes[0].walletpassphrase(passphrase2, 10)
+        assert_equal(privkey, self.nodes[0].dumpprivkey(address))
+
+
+if __name__ == '__main__':
+    WalletEncryptionTest().main()