diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -2826,7 +2826,9 @@
     RPCHelpMan{
         "settxfee",
         "Set the transaction fee per kB for this wallet. Overrides the "
-        "global -paytxfee command line parameter.\n",
+        "global -paytxfee command line parameter.\n"
+        "Can be deactivated by passing 0 as the fee. In that case automatic "
+        "fee selection will be used by default.\n",
         {
             {"amount", RPCArg::Type::AMOUNT, RPCArg::Optional::NO,
              "The transaction fee in " + CURRENCY_UNIT + "/kB"},
@@ -2841,6 +2843,7 @@
 
     Amount nAmount = AmountFromValue(request.params[0]);
     CFeeRate tx_fee_rate(nAmount, 1000);
+    CFeeRate max_tx_fee_rate(pwallet->m_default_max_tx_fee, 1000);
     if (tx_fee_rate == CFeeRate()) {
         // automatic selection
     } else if (tx_fee_rate < pwallet->chain().relayMinFee()) {
@@ -2853,6 +2856,11 @@
             RPC_INVALID_PARAMETER,
             strprintf("txfee cannot be less than wallet min fee (%s)",
                       pwallet->m_min_fee.ToString()));
+    } else if (tx_fee_rate > max_tx_fee_rate) {
+        throw JSONRPCError(
+            RPC_INVALID_PARAMETER,
+            strprintf("txfee cannot be more than wallet max tx fee (%s)",
+                      max_tx_fee_rate.ToString()));
     }
 
     pwallet->m_pay_tx_fee = tx_fee_rate;
diff --git a/test/functional/rpc_estimatefee.py b/test/functional/rpc_estimatefee.py
--- a/test/functional/rpc_estimatefee.py
+++ b/test/functional/rpc_estimatefee.py
@@ -13,7 +13,11 @@
     def set_test_params(self):
         self.setup_clean_chain = True
         self.num_nodes = 3
-        self.extra_args = [[], ["-minrelaytxfee=0.001"], ["-mintxfee=0.00002"]]
+        self.extra_args = [
+            [],
+            ["-minrelaytxfee=0.001"],
+            ["-mintxfee=0.00002", "-maxtxfee=0.000025"],
+        ]
 
     def skip_test_if_missing_module(self):
         self.skip_if_no_wallet()
@@ -37,6 +41,8 @@
                                     diff_tx_fee_node.settxfee, Decimal('0.000005'))
             assert_raises_rpc_error(-8, "txfee cannot be less than wallet min fee",
                                     diff_tx_fee_node.settxfee, Decimal('0.000015'))
+            assert_raises_rpc_error(-8, "txfee cannot be more than wallet max tx fee",
+                                    diff_tx_fee_node.settxfee, Decimal('0.00003'))
 
 
 if __name__ == '__main__':
diff --git a/test/functional/wallet_multiwallet.py b/test/functional/wallet_multiwallet.py
--- a/test/functional/wallet_multiwallet.py
+++ b/test/functional/wallet_multiwallet.py
@@ -6,6 +6,7 @@
 
 Verify that a bitcoind node can load multiple wallet files
 """
+from decimal import Decimal
 import os
 import shutil
 import time
@@ -229,9 +230,9 @@
         self.log.info('Check for per-wallet settxfee call')
         assert_equal(w1.getwalletinfo()['paytxfee'], 0)
         assert_equal(w2.getwalletinfo()['paytxfee'], 0)
-        w2.settxfee(4.0)
+        w2.settxfee(0.001)
         assert_equal(w1.getwalletinfo()['paytxfee'], 0)
-        assert_equal(w2.getwalletinfo()['paytxfee'], 4.0)
+        assert_equal(w2.getwalletinfo()['paytxfee'], Decimal('0.00100000'))
 
         self.log.info("Test dynamic wallet loading")