diff --git a/doc/functional-tests.md b/doc/functional-tests.md
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+++ b/doc/functional-tests.md
@@ -334,6 +334,16 @@
 - Can be used to write tests where specific P2P protocol behavior is tested.
 Examples tests are `p2p-acceptblock.py`, `p2p-compactblocks.py`.
 
+#### Prototyping tests
+
+The [`TestShell`](test-shell.md) class exposes the BitcoinTestFramework
+functionality to interactive Python3 environments and can be used to prototype
+tests. This may be especially useful in a REPL environment with session logging
+utilities, such as
+[IPython](https://ipython.readthedocs.io/en/stable/interactive/reference.html#session-logging-and-restoring).
+The logs of such interactive sessions can later be adapted into permanent test
+cases.
+
 ### test-framework modules
 
 #### [test_framework/authproxy.py](/test/functional/test_framework/authproxy.py)
diff --git a/doc/test-shell.md b/doc/test-shell.md
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+++ b/doc/test-shell.md
@@ -0,0 +1,188 @@
+Test Shell for Interactive Environments
+=========================================
+
+This document describes how to use the `TestShell` submodule in the functional
+test suite.
+
+The `TestShell` submodule extends the `BitcoinTestFramework` functionality to
+external interactive environments for prototyping and educational purposes. Just
+like `BitcoinTestFramework`, the `TestShell` allows the user to:
+
+* Manage regtest bitcoind subprocesses.
+* Access RPC interfaces of the underlying bitcoind instances.
+* Log events to the functional test logging utility.
+
+The `TestShell` can be useful in interactive environments where it is necessary
+to extend the object lifetime of the underlying `BitcoinTestFramework` between
+user inputs. Such environments include the Python3 command line interpreter or
+[Jupyter](https://jupyter.org/) notebooks running a Python3 kernel.
+
+## 1. Requirements
+
+* Python3
+* `bitcoind` built in the same repository as the `TestShell`.
+
+## 2. Importing `TestShell` from the Bitcoin ABC repository
+
+We can import the `TestShell` by adding the path of the Bitcoin ABC
+`test_framework` module to the beginning of the PATH variable, and then
+importing the `TestShell` class from the `test_shell` sub-package.
+
+```
+>>> import sys
+>>> sys.path.insert(0, "/path/to/bitcoin-abc/test/functional")
+>>> from test_framework.test_shell import TestShell
+```
+
+The following `TestShell` methods manage the lifetime of the underlying bitcoind
+processes and logging utilities.
+
+* `TestShell.setup()`
+* `TestShell.shutdown()`
+
+The `TestShell` inherits all `BitcoinTestFramework` members and methods, such
+as:
+* `TestShell.nodes[index].rpc_method()`
+* `TestShell.log.info("Custom log message")`
+
+The following sections demonstrate how to initialize, run, and shut down a
+`TestShell` object.
+
+## 3. Initializing a `TestShell` object
+
+```
+>>> test = TestShell()
+>>> test.setup(num_nodes=2, setup_clean_chain=True, configfile="/path/to/bitcoin-abc/build/test/config.ini")
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Initializing test directory /path/to/bitcoin_func_test_XXXXXXX
+```
+The `TestShell` forwards all functional test parameters of the parent
+`BitcoinTestFramework` object. The full set of argument keywords which can be
+used to initialize the `TestShell` can be found in
+[section#6](#custom-testshell-parameters) of this document.
+
+**Note: Running multiple instances of `TestShell` is not allowed.** Running a
+single process also ensures that logging remains consolidated in the same
+temporary folder. If you need more bitcoind nodes than set by default (1),
+simply increase the `num_nodes` parameter during setup.
+
+```
+>>> test2 = TestShell()
+>>> test2.setup()
+TestShell is already running!
+```
+
+## 4. Interacting with the `TestShell`
+
+Unlike the `BitcoinTestFramework` class, the `TestShell` keeps the underlying
+Bitcoind subprocesses (nodes) and logging utilities running until the user
+explicitly shuts down the `TestShell` object.
+
+During the time between the `setup` and `shutdown` calls, all `bitcoind` node
+processes and `BitcoinTestFramework` convenience methods can be accessed
+interactively.
+
+**Example: Mining a regtest chain**
+
+By default, the `TestShell` nodes are initialized with 200 blocks. This means
+that each node of the `TestShell` is initialized with a block height of 200.
+
+```
+>>> test.nodes[0].getblockchaininfo()["blocks"]
+200
+```
+
+We now let the first node generate 101 regtest blocks, and direct the coinbase
+rewards to a wallet address owned by the mining node.
+
+```
+>>> address = test.nodes[0].getnewaddress()
+>>> test.nodes[0].generatetoaddress(101, address)
+['2b98dd0044aae6f1cca7f88a0acf366a4bfe053c7f7b00da3c0d115f03d67efb', ...
+```
+Since the two nodes are both initialized by default to establish an outbound
+connection to each other during `setup`, the second node's chain will include
+the mined blocks as soon as they propagate.
+
+```
+>>> test.nodes[1].getblockchaininfo()["blocks"]
+301
+```
+The block rewards from the first block are now spendable by the wallet of the
+first node.
+
+```
+>>> test.nodes[0].getbalance()
+Decimal('50.00000000')
+```
+
+We can also log custom events to the logger.
+
+```
+>>> test.nodes[0].log.info("Successfully mined regtest chain!")
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework.node0 (INFO): Successfully mined regtest chain!
+```
+
+**Note: Please also consider the functional test
+[documentation](functional-tests.md), which provides an overview of the
+test-framework**. Modules such as
+[key.py](../test/functional/test_framework/key.py),
+[script.py](../test/functional/test_framework/script.py) and
+[messages.py](../test/functional/test_framework/messages.py) are particularly
+useful in constructing objects which can be passed to the bitcoind nodes managed
+by a running `TestShell` object.
+
+## 5. Shutting the `TestShell` down
+
+Shutting down the `TestShell` will safely tear down all running bitcoind
+instances and remove all temporary data and logging directories.
+
+```
+>>> test.shutdown()
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Stopping nodes
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Cleaning up /path/to/bitcoin_func_test_XXXXXXX on exit
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Tests successful
+```
+To prevent the logs from being removed after a shutdown, simply set the
+`TestShell.options.nocleanup` member to `True`.
+```
+>>> test.options.nocleanup = True
+>>> test.shutdown()
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Stopping nodes
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Not cleaning up dir /path/to/bitcoin_func_test_XXXXXXX on exit
+20XX-XX-XXTXX:XX:XX.XXXXXXX TestFramework (INFO): Tests successful
+```
+
+The following utility consolidates logs from the bitcoind nodes and the
+underlying `BitcoinTestFramework`:
+
+* `/path/to/bitcoin-abc/test/functional/combine_logs.py
+  '/path/to/bitcoin_func_test_XXXXXXX'`
+
+## 6. Custom `TestShell` parameters
+
+The `TestShell` object initializes with the default settings inherited from the
+`BitcoinTestFramework` class. The user can override these in
+`TestShell.setup(key=value)`.
+
+**Note:** `TestShell.reset()` will reset test parameters to default values and
+can be called after the TestShell is shut down.
+
+| Test parameter key | Default Value | Description |
+|---|---|---|
+| `bind_to_localhost_only` | `True` | Binds bitcoind RPC services to `127.0.0.1` if set to `True`.|
+| `cachedir` | `"/path/to/test/cache"` | Sets the bitcoind datadir directory. |
+| `chain`  | `"regtest"` | Sets the chain-type for the underlying test bitcoind processes. |
+| `configfile` | `"/path/to/test/config.ini"` | Sets the location of the test framework config file. |
+| `coveragedir` | `None` | Records bitcoind RPC test coverage into this directory if set. |
+| `loglevel` | `INFO` | Logs events at this level and higher. Can be set to `DEBUG`, `INFO`, `WARNING`, `ERROR` or `CRITICAL`. |
+| `nocleanup` | `False` | Cleans up temporary test directory if set to `True` during `shutdown`. |
+| `noshutdown` | `False` | Does not stop bitcoind instances after `shutdown` if set to `True`. |
+| `num_nodes` | `1` | Sets the number of initialized bitcoind processes. |
+| `perf` | False | Profiles running nodes with `perf` for the duration of the test if set to `True`. |
+| `rpc_timeout` | `60` | Sets the RPC server timeout for the underlying bitcoind processes. |
+| `setup_clean_chain` | `False` | Initializes a 200-block-long chain by default. If set to `True`, initialize an empty chain. |
+| `randomseed` | Random Integer | `TestShell.options.randomseed` is a member of `TestShell` which can be accessed during a test to seed a random generator. User can override default with a constant value for reproducible test runs. |
+| `supports_cli` | `False` | Whether the bitcoin-cli utility is compiled and available for the test. |
+| `tmpdir` | `"/var/folders/.../"` | Sets directory for test logs. Will be deleted upon a successful test run unless `nocleanup` is set to `True` |
+| `trace_rpc` | `False` | Logs all RPC calls if set to `True`. |
+| `usecli` | `False` | Uses the bitcoin-cli interface for all bitcoind commands instead of directly calling the RPC server. Requires `supports_cli`. |