diff --git a/src/Makefile.test.include b/src/Makefile.test.include
--- a/src/Makefile.test.include
+++ b/src/Makefile.test.include
@@ -37,6 +37,7 @@
   test/base58_tests.cpp \
   test/base64_tests.cpp \
   test/bip32_tests.cpp \
+  test/blockchain_tests.cpp \
   test/blockcheck_tests.cpp \
   test/blockencodings_tests.cpp \
   test/blockfilter_tests.cpp \
diff --git a/src/rpc/blockchain.h b/src/rpc/blockchain.h
--- a/src/rpc/blockchain.h
+++ b/src/rpc/blockchain.h
@@ -15,8 +15,7 @@
 UniValue getblockchaininfo(const Config &config, const JSONRPCRequest &request);
 
 /**
- * Get the difficulty of the net wrt the given block index, or the chain tip
- * if not provided.
+ * Get the required difficulty of the next block w/r/t the given block index.
  *
  * @return A floating point number that is a multiple of the main net minimum
  * difficulty (4295032833 hashes).
diff --git a/src/rpc/blockchain.cpp b/src/rpc/blockchain.cpp
--- a/src/rpc/blockchain.cpp
+++ b/src/rpc/blockchain.cpp
@@ -42,15 +42,19 @@
 static std::condition_variable cond_blockchange;
 static CUpdatedBlock latestblock;
 
-static double GetDifficultyFromBits(uint32_t nBits) {
-    int nShift = (nBits >> 24) & 0xff;
-    double dDiff = 0x0000ffff / double(nBits & 0x00ffffff);
+/**
+ * Calculate the difficulty for a given block index.
+ */
+double GetDifficulty(const CBlockIndex *blockindex) {
+    assert(blockindex);
+
+    int nShift = (blockindex->nBits >> 24) & 0xff;
+    double dDiff = double(0x0000ffff) / double(blockindex->nBits & 0x00ffffff);
 
     while (nShift < 29) {
         dDiff *= 256.0;
         nShift++;
     }
-
     while (nShift > 29) {
         dDiff /= 256.0;
         nShift--;
@@ -59,12 +63,6 @@
     return dDiff;
 }
 
-double GetDifficulty(const CBlockIndex *blockindex) {
-    assert(blockindex);
-
-    return GetDifficultyFromBits(blockindex->nBits);
-}
-
 static int ComputeNextBlockAndDepth(const CBlockIndex *tip,
                                     const CBlockIndex *blockindex,
                                     const CBlockIndex *&next) {
diff --git a/src/test/CMakeLists.txt b/src/test/CMakeLists.txt
--- a/src/test/CMakeLists.txt
+++ b/src/test/CMakeLists.txt
@@ -55,6 +55,7 @@
 	base58_tests.cpp
 	base64_tests.cpp
 	bip32_tests.cpp
+	blockchain_tests.cpp
 	blockcheck_tests.cpp
 	blockencodings_tests.cpp
 	blockfilter_tests.cpp
diff --git a/src/test/blockchain_tests.cpp b/src/test/blockchain_tests.cpp
new file mode 100644
--- /dev/null
+++ b/src/test/blockchain_tests.cpp
@@ -0,0 +1,69 @@
+#include <rpc/blockchain.h>
+
+#include <chain.h>
+
+#include <test/test_bitcoin.h>
+
+#include <boost/test/unit_test.hpp>
+
+#include <cstdlib>
+
+/**
+ * Equality between doubles is imprecise. Comparison should be done
+ * with a small threshold of tolerance, rather than exact equality.
+ */
+static bool DoubleEquals(double a, double b, double epsilon) {
+    return std::abs(a - b) < epsilon;
+}
+
+static CBlockIndex *CreateBlockIndexWithNbits(uint32_t nbits) {
+    CBlockIndex *block_index = new CBlockIndex();
+    block_index->nHeight = 46367;
+    block_index->nTime = 1269211443;
+    block_index->nBits = nbits;
+    return block_index;
+}
+
+static void RejectDifficultyMismatch(double difficulty,
+                                     double expected_difficulty) {
+    BOOST_CHECK_MESSAGE(DoubleEquals(difficulty, expected_difficulty, 0.00001),
+                        "Difficulty was " + std::to_string(difficulty) +
+                            " but was expected to be " +
+                            std::to_string(expected_difficulty));
+}
+
+/**
+ * Given a BlockIndex with the provided nbits,
+ * verify that the expected difficulty results.
+ */
+static void TestDifficulty(uint32_t nbits, double expected_difficulty) {
+    CBlockIndex *block_index = CreateBlockIndexWithNbits(nbits);
+    double difficulty = GetDifficulty(block_index);
+    delete block_index;
+
+    RejectDifficultyMismatch(difficulty, expected_difficulty);
+}
+
+BOOST_FIXTURE_TEST_SUITE(blockchain_tests, BasicTestingSetup)
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_very_low_target) {
+    TestDifficulty(0x1f111111, 0.000001);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_low_target) {
+    TestDifficulty(0x1ef88f6f, 0.000016);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_mid_target) {
+    TestDifficulty(0x1df88f6f, 0.004023);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_high_target) {
+    TestDifficulty(0x1cf88f6f, 1.029916);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_very_high_target) {
+    TestDifficulty(0x12345678, 5913134931067755359633408.0);
+}
+
+BOOST_AUTO_TEST_SUITE_END()