diff --git a/test/functional/interface_bitcoin_cli.py b/test/functional/interface_bitcoin_cli.py
--- a/test/functional/interface_bitcoin_cli.py
+++ b/test/functional/interface_bitcoin_cli.py
@@ -19,7 +19,6 @@
 
 
 class TestBitcoinCli(BitcoinTestFramework):
-
     def set_test_params(self):
         self.setup_clean_chain = True
         self.num_nodes = 1
@@ -40,16 +39,35 @@
         user, password = get_auth_cookie(self.nodes[0].datadir, self.chain)
 
         self.log.info("Test -stdinrpcpass option")
-        assert_equal(BLOCKS, self.nodes[0].cli(
-            '-rpcuser={}'.format(user), '-stdinrpcpass', input=password).getblockcount())
-        assert_raises_process_error(1, "Incorrect rpcuser or rpcpassword", self.nodes[0].cli(
-            '-rpcuser={}'.format(user), '-stdinrpcpass', input="foo").echo)
+        assert_equal(
+            BLOCKS,
+            self.nodes[0].cli(
+                '-rpcuser={}'.format(user),
+                '-stdinrpcpass',
+                input=password).getblockcount())
+        assert_raises_process_error(
+            1,
+            'Incorrect rpcuser or rpcpassword',
+            self.nodes[0].cli(
+                '-rpcuser={}'.format(user),
+                '-stdinrpcpass',
+                input='foo').echo)
 
         self.log.info("Test -stdin and -stdinrpcpass")
-        assert_equal(["foo", "bar"], self.nodes[0].cli('-rpcuser={}'.format(user),
-                                                       '-stdin', '-stdinrpcpass', input=password + "\nfoo\nbar").echo())
-        assert_raises_process_error(1, "Incorrect rpcuser or rpcpassword", self.nodes[0].cli(
-            '-rpcuser={}'.format(user), '-stdin', '-stdinrpcpass', input="foo").echo)
+        assert_equal(['foo',
+                      'bar'],
+                     self.nodes[0].cli('-rpcuser={}'.format(user),
+                                       '-stdin',
+                                       '-stdinrpcpass',
+                                       input=password + '\nfoo\nbar').echo())
+        assert_raises_process_error(
+            1,
+            'Incorrect rpcuser or rpcpassword',
+            self.nodes[0].cli(
+                '-rpcuser={}'.format(user),
+                '-stdin',
+                '-stdinrpcpass',
+                input='foo').echo)
 
         self.log.info("Test connecting to a non-existing server")
         assert_raises_process_error(
@@ -67,7 +85,7 @@
             "Test -getinfo returns expected network and blockchain info")
         if self.is_wallet_compiled():
             self.nodes[0].encryptwallet(password)
-        cli_get_info = self.nodes[0].cli('-getinfo').send_cli()
+        cli_get_info = self.nodes[0].cli().send_cli('-getinfo')
         network_info = self.nodes[0].getnetworkinfo()
         blockchain_info = self.nodes[0].getblockchaininfo()
         assert_equal(cli_get_info['version'], network_info['version'])
@@ -153,28 +171,20 @@
             # maintain block parity with the wallet_compiled conditional branch
             self.nodes[0].generate(1)
 
-        self.stop_node(0)
-
         self.log.info("Test -version with node stopped")
-        cli_response = self.nodes[0].cli("-version").send_cli()
+        self.stop_node(0)
+        cli_response = self.nodes[0].cli().send_cli('-version')
         assert "{} RPC client version".format(
             self.config['environment']['PACKAGE_NAME']) in cli_response
 
         self.log.info(
-            "Test -rpcwait option waits for RPC connection instead of failing")
-        # Start node without RPC connection.
-        self.nodes[0].start()
-        # Verify failure without -rpcwait.
-        assert_raises_process_error(1,
-                                    "Could not connect to the server",
-                                    self.nodes[0].cli('getblockcount').echo)
-        # Verify success using -rpcwait.
-        assert_equal(
-            BLOCKS + 1,
-            self.nodes[0].cli(
-                '-rpcwait',
-                'getblockcount').send_cli())
+            "Test -rpcwait option successfully waits for RPC connection")
+        self.nodes[0].start()  # start node without RPC connection
+        # ensure cookie file is available to avoid race condition
+        self.nodes[0].wait_for_cookie_credentials()
+        blocks = self.nodes[0].cli('-rpcwait').send_cli('getblockcount')
         self.nodes[0].wait_for_rpc_connection()
+        assert_equal(blocks, BLOCKS + 1)
 
 
 if __name__ == '__main__':
diff --git a/test/functional/test_framework/test_node.py b/test/functional/test_framework/test_node.py
--- a/test/functional/test_framework/test_node.py
+++ b/test/functional/test_framework/test_node.py
@@ -28,6 +28,7 @@
     MAX_NODES,
     append_config,
     delete_cookie_file,
+    get_auth_cookie,
     get_rpc_proxy,
     p2p_port,
     rpc_url,
@@ -344,12 +345,29 @@
             except OSError as e:
                 if e.errno != errno.ECONNREFUSED:  # Port not yet open?
                     raise  # unknown OS error
-            except ValueError as e:  # cookie file not found and no rpcuser or rpcassword. bitcoind still starting
+            except ValueError as e:  # cookie file not found and no rpcuser or rpcpassword; bitcoind is still starting
                 if "No RPC credentials" not in str(e):
                     raise
             time.sleep(1.0 / poll_per_s)
         self._raise_assertion_error("Unable to connect to bitcoind")
 
+    def wait_for_cookie_credentials(self):
+        """Ensures auth cookie credentials can be read, e.g. for testing CLI with -rpcwait before RPC connection is up."""
+        self.log.debug("Waiting for cookie credentials")
+        # Poll at a rate of four times per second.
+        poll_per_s = 4
+        for _ in range(poll_per_s * self.rpc_timeout):
+            try:
+                get_auth_cookie(self.datadir, self.chain)
+                self.log.debug("Cookie credentials successfully retrieved")
+                return
+            except ValueError:  # cookie file not found and no rpcuser or rpcpassword; bitcoind is still starting
+                pass            # so we continue polling until RPC credentials are retrieved
+            time.sleep(1.0 / poll_per_s)
+        self._raise_assertion_error(
+            "Unable to retrieve cookie credentials after {}s".format(
+                self.rpc_timeout))
+
     def generate(self, nblocks, maxtries=1000000):
         self.log.debug(
             "TestNode.generate() dispatches `generate` call to `generatetoaddress`")