diff --git a/doc/release-notes.md b/doc/release-notes.md
--- a/doc/release-notes.md
+++ b/doc/release-notes.md
@@ -9,6 +9,12 @@
 `createwallet` now returns a warning if an empty string is used as an encryption password, and does not encrypt the wallet, instead of raising an error.
 This makes it easier to disable encryption but also specify other options when using the `bitcoin-cli` tool.
 
+RPCs which have an `include_watchonly` argument or `includeWatching`
+option now default to `true` for watch-only wallets. Affected RPCs
+are: `getbalance`, `listreceivedbyaddress`, `listreceivedbylabel`,
+`listtransactions`, `listsinceblock`, `gettransaction`,
+`walletcreatefundedpsbt`, and `fundrawtransaction`.
+
 Low-level changes
 =================
 
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
@@ -98,6 +98,7 @@
     "wallet_txn_clone.py": [["--mineblock"]],
     "wallet_createwallet.py": [["--usecli"]],
     "wallet_multiwallet.py": [["--usecli"]],
+    "wallet_watchonly.py": [["--usecli"]],
 }
 
 # Used to limit the number of tests, when list of tests is not provided on command line
diff --git a/test/functional/wallet_watchonly.py b/test/functional/wallet_watchonly.py
new file mode 100644
--- /dev/null
+++ b/test/functional/wallet_watchonly.py
@@ -0,0 +1,120 @@
+#!/usr/bin/env python3
+# Copyright (c) 2018-2019 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 createwallet arguments.
+"""
+
+from test_framework.test_framework import BitcoinTestFramework
+from test_framework.util import (
+    assert_equal,
+    assert_raises_rpc_error
+)
+
+
+class CreateWalletWatchonlyTest(BitcoinTestFramework):
+    def set_test_params(self):
+        self.setup_clean_chain = False
+        self.num_nodes = 1
+        self.supports_cli = True
+
+    def skip_test_if_missing_module(self):
+        self.skip_if_no_wallet()
+
+    def run_test(self):
+        node = self.nodes[0]
+
+        self.nodes[0].createwallet(wallet_name='default')
+        def_wallet = node.get_wallet_rpc('default')
+
+        a1 = def_wallet.getnewaddress()
+        wo_change = def_wallet.getnewaddress()
+        wo_addr = def_wallet.getnewaddress()
+
+        self.nodes[0].createwallet(wallet_name='wo', disable_private_keys=True)
+        wo_wallet = node.get_wallet_rpc('wo')
+
+        wo_wallet.importpubkey(
+            pubkey=def_wallet.getaddressinfo(wo_addr)['pubkey'])
+        wo_wallet.importpubkey(
+            pubkey=def_wallet.getaddressinfo(wo_change)['pubkey'])
+
+        # generate some btc for testing
+        node.generatetoaddress(101, a1)
+
+        # send 1 btc to our watch-only address
+        txid = def_wallet.sendtoaddress(wo_addr, 1)
+        self.nodes[0].generate(1)
+
+        # getbalance
+        self.log.info(
+            'include_watchonly should default to true for watch-only wallets')
+        self.log.info('Testing getbalance watch-only defaults')
+        assert_equal(wo_wallet.getbalance(), 1)
+        assert_equal(len(wo_wallet.listtransactions()), 1)
+        assert_equal(wo_wallet.getbalance(include_watchonly=False), 0)
+
+        self.log.info('Testing listreceivedbyaddress watch-only defaults')
+        result = wo_wallet.listreceivedbyaddress()
+        assert_equal(len(result), 1)
+        assert_equal(result[0]["involvesWatchonly"], True)
+        result = wo_wallet.listreceivedbyaddress(include_watchonly=False)
+        assert_equal(len(result), 0)
+
+        self.log.info('Testing listreceivedbylabel watch-only defaults')
+        result = wo_wallet.listreceivedbylabel()
+        assert_equal(len(result), 1)
+        assert_equal(result[0]["involvesWatchonly"], True)
+        result = wo_wallet.listreceivedbylabel(include_watchonly=False)
+        assert_equal(len(result), 0)
+
+        self.log.info('Testing listtransactions watch-only defaults')
+        result = wo_wallet.listtransactions()
+        assert_equal(len(result), 1)
+        assert_equal(result[0]["involvesWatchonly"], True)
+        result = wo_wallet.listtransactions(include_watchonly=False)
+        assert_equal(len(result), 0)
+
+        self.log.info('Testing listsinceblock watch-only defaults')
+        result = wo_wallet.listsinceblock()
+        assert_equal(len(result["transactions"]), 1)
+        assert_equal(result["transactions"][0]["involvesWatchonly"], True)
+        result = wo_wallet.listsinceblock(include_watchonly=False)
+        assert_equal(len(result["transactions"]), 0)
+
+        self.log.info('Testing gettransaction watch-only defaults')
+        result = wo_wallet.gettransaction(txid)
+        assert_equal(result["details"][0]["involvesWatchonly"], True)
+        result = wo_wallet.gettransaction(txid=txid, include_watchonly=False)
+        assert_equal(len(result["details"]), 0)
+
+        self.log.info('Testing walletcreatefundedpsbt watch-only defaults')
+        inputs = []
+        outputs = [{a1: 0.5}]
+        options = {'changeAddress': wo_change}
+        no_wo_options = {'changeAddress': wo_change, 'includeWatching': False}
+
+        result = wo_wallet.walletcreatefundedpsbt(
+            inputs=inputs, outputs=outputs, options=options)
+        assert_equal("psbt" in result, True)
+        assert_raises_rpc_error(-4,
+                                "Insufficient funds",
+                                wo_wallet.walletcreatefundedpsbt,
+                                inputs,
+                                outputs,
+                                0,
+                                no_wo_options)
+
+        self.log.info('Testing fundrawtransaction watch-only defaults')
+        rawtx = wo_wallet.createrawtransaction(inputs=inputs, outputs=outputs)
+        result = wo_wallet.fundrawtransaction(hexstring=rawtx, options=options)
+        assert_equal("hex" in result, True)
+        assert_raises_rpc_error(-4,
+                                "Insufficient funds",
+                                wo_wallet.fundrawtransaction,
+                                rawtx,
+                                no_wo_options)
+
+
+if __name__ == '__main__':
+    CreateWalletWatchonlyTest().main()