diff --git a/daemon/pay.c b/daemon/pay.c
index 6b8791d87..b9d4c2dd3 100644
--- a/daemon/pay.c
+++ b/daemon/pay.c
@@ -16,7 +16,7 @@ struct pay_command {
 	struct list_node list;
 	struct sha256 rhash;
 	u64 msatoshis;
-	struct pubkey id;
+	struct pubkey *ids;
 	/* Set if this is in progress. */
 	struct htlc *htlc;
 	/* Preimage if this succeeded. */
@@ -35,9 +35,9 @@ static void json_pay_success(struct command *cmd, const struct rval *rval)
 	command_success(cmd, response);
 }
 
-static void handle_json(struct command *cmd, const struct htlc *htlc)
+static void handle_json(struct command *cmd, const struct htlc *htlc,
+			const FailInfo *f)
 {
-	FailInfo *f;
 	struct pubkey id;
 	const char *idstr = "INVALID";
 
@@ -46,7 +46,6 @@ static void handle_json(struct command *cmd, const struct htlc *htlc)
 		return;
 	}
 
-	f = failinfo_unwrap(cmd, htlc->fail, tal_count(htlc->fail));
 	if (!f) {
 		command_fail(cmd, "failed (bad message)");
 		return;
@@ -60,6 +59,40 @@ static void handle_json(struct command *cmd, const struct htlc *htlc)
 		     f->error_code, idstr, f->reason ? f->reason : "unknown");
 }
 
+static void check_routing_failure(struct lightningd_state *dstate,
+				  const struct pay_command *pc,
+				  const FailInfo *f)
+{
+	size_t i;
+	struct pubkey id;
+
+	if (!f)
+		return;
+
+	/* FIXME: We remove route on *any* failure. */
+	log_debug(dstate->base_log, "Seeking route for fail code %u",
+		  f->error_code);
+	if (!proto_to_pubkey(dstate->secpctx, f->id, &id)) {
+		log_add(dstate->base_log, " - bad node");
+		return;
+	}
+
+	log_add_struct(dstate->base_log, " node %s", struct pubkey, &id);
+
+	/* Don't remove route if it's last node (obviously) */
+	for (i = 0; i+1 < tal_count(pc->ids); i++) {
+		if (structeq(&pc->ids[i], &id)) {
+			remove_connection(dstate, &pc->ids[i], &pc->ids[i+1]);
+			return;
+		}
+	}
+
+	if (structeq(&pc->ids[i], &id))
+		log_debug(dstate->base_log, "Final node: ignoring");
+	else
+		log_debug(dstate->base_log, "Node not on route: ignoring");
+}
+
 void complete_pay_command(struct lightningd_state *dstate,
 			  const struct htlc *htlc)
 {
@@ -67,13 +100,21 @@ void complete_pay_command(struct lightningd_state *dstate,
 
 	list_for_each(&dstate->pay_commands, i, list) {
 		if (i->htlc == htlc) {
+			FailInfo *f = NULL;
 			if (htlc->r)
 				i->rval = tal_dup(i, struct rval, htlc->r);
+			else {
+				f = failinfo_unwrap(i->cmd, htlc->fail,
+						    tal_count(htlc->fail));
+				check_routing_failure(dstate, i, f);
+			}
+
+			/* No longer connected to live HTLC. */
 			i->htlc = NULL;
 
 			/* Can be NULL if JSON RPC goes away. */
 			if (i->cmd)
-				handle_json(i->cmd, htlc);
+				handle_json(i->cmd, htlc, f);
 			return;
 		}
 	}
@@ -305,6 +346,7 @@ static void json_sendpay(struct command *cmd,
 			return;
 		}
 		if (pc->rval) {
+			size_t old_nhops = tal_count(pc->ids);
 			log_add(cmd->dstate->base_log, "... succeeded");
 			/* Must match successful payment parameters. */
 			if (pc->msatoshis != amounts[n_hops-1]) {
@@ -313,11 +355,11 @@ static void json_sendpay(struct command *cmd,
 					     PRIu64, pc->msatoshis);
 				return;
 			}
-			if (!structeq(&pc->id, &ids[n_hops-1])) {
+			if (!structeq(&pc->ids[old_nhops-1], &ids[n_hops-1])) {
 				char *previd;
 				previd = pubkey_to_hexstr(cmd,
 							  cmd->dstate->secpctx,
-							  &pc->id);
+							  &pc->ids[old_nhops-1]);
 				command_fail(cmd,
 					     "already succeeded to %s",
 					     previd);
@@ -339,12 +381,14 @@ static void json_sendpay(struct command *cmd,
 	onion = onion_create(cmd, cmd->dstate->secpctx, ids+1, amounts+1,
 			     n_hops-1);
 
-	if (!pc)
+	if (pc)
+		pc->ids = tal_free(pc->ids);
+	else
 		pc = tal(cmd->dstate, struct pay_command);
 	pc->cmd = cmd;
 	pc->rhash = rhash;
 	pc->rval = NULL;
-	pc->id = ids[n_hops-1];
+	pc->ids = tal_steal(pc, ids);
 	pc->msatoshis = amounts[n_hops-1];
 
 	/* Expiry for HTLCs is absolute.  And add one to give some margin. */
diff --git a/daemon/routing.c b/daemon/routing.c
index ca946b136..1c7a37582 100644
--- a/daemon/routing.c
+++ b/daemon/routing.c
@@ -154,6 +154,39 @@ struct node_connection *add_connection(struct lightningd_state *dstate,
 	return c;
 }
 
+void remove_connection(struct lightningd_state *dstate,
+		       const struct pubkey *src, const struct pubkey *dst)
+{
+	struct node *from, *to;
+	size_t i, num_edges;
+
+	log_debug_struct(dstate->base_log, "Removing route from %s",
+			 struct pubkey, src);
+	log_add_struct(dstate->base_log, " to %s", struct pubkey, dst);
+
+	from = get_node(dstate, src);
+	to = get_node(dstate, dst);
+	if (!from || !to) {
+		log_debug(dstate->base_log, "Not found: src=%p dst=%p",
+			  from, to);
+		return;
+	}
+
+	num_edges = tal_count(from->out);
+
+	for (i = 0; i < num_edges; i++) {
+		if (from->out[i]->dst != to)
+			continue;
+
+		log_add(dstate->base_log, " Matched route %zu of %zu",
+			i, num_edges);
+		/* Destructor makes it delete itself */
+		tal_free(from->out[i]);
+		return;
+	}
+	log_add(dstate->base_log, " None of %zu routes matched", num_edges);
+}
+
 /* Too big to reach, but don't overflow if added. */
 #define INFINITE 0x3FFFFFFFFFFFFFFFULL
 
diff --git a/daemon/routing.h b/daemon/routing.h
index 8d0b615a3..8aac6acb7 100644
--- a/daemon/routing.h
+++ b/daemon/routing.h
@@ -51,6 +51,9 @@ struct node_connection *add_connection(struct lightningd_state *dstate,
 				       u32 base_fee, s32 proportional_fee,
 				       u32 delay, u32 min_blocks);
 
+void remove_connection(struct lightningd_state *dstate,
+		       const struct pubkey *src, const struct pubkey *dst);
+
 struct peer *find_route(struct lightningd_state *dstate,
 			const struct pubkey *to,
 			u64 msatoshi, s64 *fee,
diff --git a/daemon/test/test.sh b/daemon/test/test.sh
index 9d6995d23..aa6228144 100755
--- a/daemon/test/test.sh
+++ b/daemon/test/test.sh
@@ -1048,6 +1048,20 @@ if [ ! -n "$MANUALCOMMIT" ]; then
     lcli1 sendpay "$SHORTROUTE" $RHASH5 | $FGREP "already succeeded to $ID3"
     lcli1 sendpay "$UNDERPAY" $RHASH5 | $FGREP "already succeeded with amount $HTLC_AMOUNT"
 
+    # Now node2 should fail to route.
+    if lcli1 sendpay "$ROUTE" $RHASH4 | $FGREP "failed: error code 404 node $ID2 reason Unknown peer"; then : ;
+    else
+	echo "Pay to node3 didn't give 404" >&2
+	exit 1
+    fi
+
+    # Now node1 should fail to route (route deleted)
+    if lcli1 getroute $ID3 $HTLC_AMOUNT | $FGREP "no route found"; then : ;
+    else
+	echo "Pay to node3 didn't fail instantly second time" >&2
+	exit 1
+    fi
+
     DO_RECONNECT=$RECONNECT
 fi