diff --git a/src/rpc/rawtransaction.cpp b/src/rpc/rawtransaction.cpp
--- a/src/rpc/rawtransaction.cpp
+++ b/src/rpc/rawtransaction.cpp
@@ -180,15 +180,13 @@
 
     if (!request.params[2].isNull()) {
         uint256 blockhash = ParseHashV(request.params[2], "parameter 3");
-        if (!blockhash.IsNull()) {
-            BlockMap::iterator it = mapBlockIndex.find(blockhash);
-            if (it == mapBlockIndex.end()) {
-                throw JSONRPCError(RPC_INVALID_ADDRESS_OR_KEY,
-                                   "Block hash not found");
-            }
-            blockindex = it->second;
-            in_active_chain = chainActive.Contains(blockindex);
+        BlockMap::iterator it = mapBlockIndex.find(blockhash);
+        if (it == mapBlockIndex.end()) {
+            throw JSONRPCError(RPC_INVALID_ADDRESS_OR_KEY,
+                               "Block hash not found");
         }
+        blockindex = it->second;
+        in_active_chain = chainActive.Contains(blockindex);
     }
 
     CTransactionRef tx;
diff --git a/test/functional/rpc_rawtransaction.py b/test/functional/rpc_rawtransaction.py
--- a/test/functional/rpc_rawtransaction.py
+++ b/test/functional/rpc_rawtransaction.py
@@ -89,7 +89,14 @@
         assert_raises_rpc_error(-8, "parameter 3 must be of length 64",
                                 self.nodes[0].getrawtransaction, tx, True, "abcd1234")
         assert_raises_rpc_error(-5, "Block hash not found", self.nodes[0].getrawtransaction,
-                                tx, True, "aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa")
+                                tx, True, "0000000000000000000000000000000000000000000000000000000000000000")
+        # Undo the blocks and check in_active_chain
+        self.nodes[0].invalidateblock(block1)
+        gottx = self.nodes[0].getrawtransaction(
+            txid=tx, verbose=True, blockhash=block1)
+        assert_equal(gottx['in_active_chain'], False)
+        self.nodes[0].reconsiderblock(block1)
+        assert_equal(self.nodes[0].getbestblockhash(), block2)
 
         #
         # RAW TX MULTISIG TESTS #