diff --git a/tests/test_lightningd.py b/tests/test_lightningd.py
index 57b83490b..35522dbc2 100644
--- a/tests/test_lightningd.py
+++ b/tests/test_lightningd.py
@@ -2521,6 +2521,32 @@ class LightningDTests(BaseLightningDTests):
         l2.daemon.wait_for_logs(['sendrawtx exit 0', ' to CLOSINGD_COMPLETE'])
         assert l1.bitcoin.rpc.getmempoolinfo()['size'] == 1
 
+    def test_bech32_funding(self):
+        # Don't get any funds from previous runs.
+        l1 = self.node_factory.get_node(random_hsm=True)
+        l2 = self.node_factory.get_node(random_hsm=True)
+
+        # connect
+        l1.rpc.connect(l2.info['id'], 'localhost', l2.info['port'])
+
+        # fund a bech32 address and then open a channel with it
+        res = l1.openchannel(l2, 20000, addrtype='bech32')
+        address = res['address']
+        assert address[0:4] == "bcrt"
+
+        # probably overly paranoid checking
+        wallettxid = res['wallettxid']
+
+        wallettx = l1.bitcoin.rpc.getrawtransaction(wallettxid, True)
+        fundingtx = l1.bitcoin.rpc.decoderawtransaction(res['fundingtx']['tx'])
+
+        def is_p2wpkh(output):
+            return output['type'] == 'witness_v0_keyhash' and \
+                   address == output['addresses'][0]
+
+        assert any(is_p2wpkh(output['scriptPubKey']) for output in wallettx['vout'])
+        assert fundingtx['vin'][0]['txid'] == res['wallettxid']
+
     def test_withdraw(self):
         amount = 1000000
         # Don't get any funds from previous runs.
diff --git a/tests/utils.py b/tests/utils.py
index 7b9c437c0..f8b7db817 100644
--- a/tests/utils.py
+++ b/tests/utils.py
@@ -327,15 +327,20 @@ class LightningNode(object):
         else:
             return wait_connected()
 
-    def openchannel(self, remote_node, capacity):
-        addr = self.rpc.newaddr()['address']
-        txid = self.bitcoin.rpc.sendtoaddress(addr, capacity / 10**6)
-        self.bitcoin.generate_block(1)
-        self.daemon.wait_for_log('Owning output .* txid {}'.format(txid))
-        self.rpc.fundchannel(remote_node.info['id'], capacity)
+    def openchannel(self, remote_node, capacity, addrtype="p2sh-segwit"):
+        addr, wallettxid = self.fundwallet(capacity, addrtype)
+        fundingtx = self.rpc.fundchannel(remote_node.info['id'], capacity)
         self.daemon.wait_for_log('sendrawtx exit 0, gave')
         self.bitcoin.generate_block(6)
         self.daemon.wait_for_log('to CHANNELD_NORMAL|STATE_NORMAL')
+        return {'address': addr, 'wallettxid': wallettxid, 'fundingtx': fundingtx}
+
+    def fundwallet(self, sats, addrtype="p2sh-segwit"):
+        addr = self.rpc.newaddr(addrtype)['address']
+        txid = self.bitcoin.rpc.sendtoaddress(addr, sats / 10**6)
+        self.bitcoin.generate_block(1)
+        self.daemon.wait_for_log('Owning output .* txid {}'.format(txid))
+        return addr, txid
 
     def getactivechannels(self):
         return [c for c in self.rpc.listchannels()['channels'] if c['active']]