diff --git a/CHANGELOG.md b/CHANGELOG.md
index 4abe6a0ea..a3bce3ee1 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -54,7 +54,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 - (community) [#1729] Consolidate community funds from `x/distribution` and `x/kavadist` to `x/community`
 - (community) [#1752] Set `x/distribution` CommunityTax to zero on inflation disable upgrade
 - (community) [#1755] Keep funds in `x/community` in `CommunityPoolLendWithdrawProposal` handler
-
+- (staking) [#1761] Set validator minimum commission to 5% for all validators under 5%
 
 ## [v0.24.1](https://github.com/Kava-Labs/kava/releases/tag/v0.24.1)
 
@@ -303,6 +303,7 @@ the [changelog](https://github.com/cosmos/cosmos-sdk/blob/v0.38.4/CHANGELOG.md).
   large-scale simulations remotely using aws-batch
 
 [#1755]: https://github.com/Kava-Labs/kava/pull/1755
+[#1761]: https://github.com/Kava-Labs/kava/pull/1761
 [#1752]: https://github.com/Kava-Labs/kava/pull/1752
 [#1751]: https://github.com/Kava-Labs/kava/pull/1751
 [#1745]: https://github.com/Kava-Labs/kava/pull/1745
diff --git a/app/upgrades.go b/app/upgrades.go
index bd2f6cc14..3c5b4f5b4 100644
--- a/app/upgrades.go
+++ b/app/upgrades.go
@@ -8,6 +8,7 @@ import (
 	storetypes "github.com/cosmos/cosmos-sdk/store/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/cosmos/cosmos-sdk/types/module"
+	stakingtypes "github.com/cosmos/cosmos-sdk/x/staking/types"
 	upgradetypes "github.com/cosmos/cosmos-sdk/x/upgrade/types"
 
 	communitytypes "github.com/kava-labs/kava/x/community/types"
@@ -52,6 +53,9 @@ var (
 		sdkmath.LegacyNewDec(0),              // stakingRewardsPerSecond
 		sdkmath.LegacyNewDec(1000),           // upgradeTimeSetstakingRewardsPerSecond
 	)
+
+	// ValidatorMinimumCommission is the new 5% minimum commission rate for validators
+	ValidatorMinimumCommission = sdk.NewDecWithPrec(5, 2)
 )
 
 // RegisterUpgradeHandlers registers the upgrade handlers for the app.
@@ -109,6 +113,8 @@ func upgradeHandler(
 			return toVM, err
 		}
 
+		UpdateValidatorMinimumCommission(ctx, app)
+
 		app.communityKeeper.SetParams(ctx, communityParams)
 		app.Logger().Info(
 			"initialized x/community params",
@@ -120,3 +126,71 @@ func upgradeHandler(
 		return toVM, nil
 	}
 }
+
+// UpdateValidatorMinimumCommission updates the commission rate for all
+// validators to be at least the new min commission rate, and sets the minimum
+// commission rate in the staking params.
+func UpdateValidatorMinimumCommission(
+	ctx sdk.Context,
+	app App,
+) {
+	resultCount := make(map[stakingtypes.BondStatus]int)
+
+	// Iterate over *all* validators including inactive
+	app.stakingKeeper.IterateValidators(
+		ctx,
+		func(index int64, validator stakingtypes.ValidatorI) (stop bool) {
+			// Skip if validator commission is already >= 5%
+			if validator.GetCommission().GTE(ValidatorMinimumCommission) {
+				return false
+			}
+
+			val, ok := validator.(stakingtypes.Validator)
+			if !ok {
+				panic("expected stakingtypes.Validator")
+			}
+
+			// Set minimum commission rate to 5%, when commission is < 5%
+			val.Commission.Rate = ValidatorMinimumCommission
+			val.Commission.UpdateTime = ctx.BlockTime()
+
+			// Update MaxRate if necessary
+			if val.Commission.MaxRate.LT(ValidatorMinimumCommission) {
+				val.Commission.MaxRate = ValidatorMinimumCommission
+			}
+
+			if err := app.stakingKeeper.BeforeValidatorModified(ctx, val.GetOperator()); err != nil {
+				panic(fmt.Sprintf("failed to call BeforeValidatorModified: %s", err))
+			}
+			app.stakingKeeper.SetValidator(ctx, val)
+
+			// Keep track of counts just for logging purposes
+			switch val.GetStatus() {
+			case stakingtypes.Bonded:
+				resultCount[stakingtypes.Bonded]++
+			case stakingtypes.Unbonded:
+				resultCount[stakingtypes.Unbonded]++
+			case stakingtypes.Unbonding:
+				resultCount[stakingtypes.Unbonding]++
+			}
+
+			return false
+		},
+	)
+
+	app.Logger().Info(
+		"updated validator minimum commission rate for all existing validators",
+		stakingtypes.BondStatusBonded, resultCount[stakingtypes.Bonded],
+		stakingtypes.BondStatusUnbonded, resultCount[stakingtypes.Unbonded],
+		stakingtypes.BondStatusUnbonding, resultCount[stakingtypes.Unbonding],
+	)
+
+	stakingParams := app.stakingKeeper.GetParams(ctx)
+	stakingParams.MinCommissionRate = ValidatorMinimumCommission
+	app.stakingKeeper.SetParams(ctx, stakingParams)
+
+	app.Logger().Info(
+		"updated x/staking params minimum commission rate",
+		"MinCommissionRate", stakingParams.MinCommissionRate,
+	)
+}
diff --git a/app/upgrades_test.go b/app/upgrades_test.go
index 804fe6e47..e66b530d4 100644
--- a/app/upgrades_test.go
+++ b/app/upgrades_test.go
@@ -2,10 +2,16 @@ package app_test
 
 import (
 	"testing"
+	"time"
 
 	sdkmath "cosmossdk.io/math"
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	stakingtypes "github.com/cosmos/cosmos-sdk/x/staking/types"
+	"github.com/evmos/ethermint/crypto/ethsecp256k1"
 	"github.com/kava-labs/kava/app"
 	"github.com/stretchr/testify/require"
+	tmproto "github.com/tendermint/tendermint/proto/tendermint/types"
+	tmtime "github.com/tendermint/tendermint/types/time"
 )
 
 func TestUpgradeCommunityParams_Mainnet(t *testing.T) {
@@ -39,3 +45,138 @@ func TestUpgradeCommunityParams_Testnet(t *testing.T) {
 		"testnet kava per second should be correct",
 	)
 }
+
+func TestUpdateValidatorMinimumCommission(t *testing.T) {
+	tApp := app.NewTestApp()
+	tApp.InitializeFromGenesisStates()
+	ctx := tApp.NewContext(true, tmproto.Header{Height: 1, Time: tmtime.Now()})
+
+	sk := tApp.GetStakingKeeper()
+	stakingParams := sk.GetParams(ctx)
+	stakingParams.MinCommissionRate = sdk.ZeroDec()
+	sk.SetParams(ctx, stakingParams)
+
+	// Set some validators with varying commission rates
+
+	vals := []struct {
+		name              string
+		operatorAddr      sdk.ValAddress
+		consPriv          *ethsecp256k1.PrivKey
+		commissionRateMin sdk.Dec
+		commissionRateMax sdk.Dec
+		shouldBeUpdated   bool
+	}{
+		{
+			name:              "zero commission rate",
+			operatorAddr:      sdk.ValAddress("val0"),
+			consPriv:          generateConsKey(t),
+			commissionRateMin: sdk.ZeroDec(),
+			commissionRateMax: sdk.ZeroDec(),
+			shouldBeUpdated:   true,
+		},
+		{
+			name:              "0.01 commission rate",
+			operatorAddr:      sdk.ValAddress("val1"),
+			consPriv:          generateConsKey(t),
+			commissionRateMin: sdk.MustNewDecFromStr("0.01"),
+			commissionRateMax: sdk.MustNewDecFromStr("0.01"),
+			shouldBeUpdated:   true,
+		},
+		{
+			name:              "0.05 commission rate",
+			operatorAddr:      sdk.ValAddress("val2"),
+			consPriv:          generateConsKey(t),
+			commissionRateMin: sdk.MustNewDecFromStr("0.05"),
+			commissionRateMax: sdk.MustNewDecFromStr("0.05"),
+			shouldBeUpdated:   false,
+		},
+		{
+			name:              "0.06 commission rate",
+			operatorAddr:      sdk.ValAddress("val3"),
+			consPriv:          generateConsKey(t),
+			commissionRateMin: sdk.MustNewDecFromStr("0.06"),
+			commissionRateMax: sdk.MustNewDecFromStr("0.06"),
+			shouldBeUpdated:   false,
+		},
+		{
+			name:              "0.5 commission rate",
+			operatorAddr:      sdk.ValAddress("val4"),
+			consPriv:          generateConsKey(t),
+			commissionRateMin: sdk.MustNewDecFromStr("0.5"),
+			commissionRateMax: sdk.MustNewDecFromStr("0.5"),
+			shouldBeUpdated:   false,
+		},
+	}
+
+	for _, v := range vals {
+		val, err := stakingtypes.NewValidator(
+			v.operatorAddr,
+			v.consPriv.PubKey(),
+			stakingtypes.Description{},
+		)
+		require.NoError(t, err)
+		val.Commission.Rate = v.commissionRateMin
+		val.Commission.MaxRate = v.commissionRateMax
+
+		err = sk.SetValidatorByConsAddr(ctx, val)
+		require.NoError(t, err)
+		sk.SetValidator(ctx, val)
+	}
+
+	require.NotPanics(
+		t, func() {
+			app.UpdateValidatorMinimumCommission(ctx, tApp.App)
+		},
+	)
+
+	stakingParamsAfter := sk.GetParams(ctx)
+	require.Equal(t, stakingParamsAfter.MinCommissionRate, app.ValidatorMinimumCommission)
+
+	// Check that all validators have a commission rate >= 5%
+	for _, val := range vals {
+		t.Run(val.name, func(t *testing.T) {
+			validator, found := sk.GetValidator(ctx, val.operatorAddr)
+			require.True(t, found, "validator should be found")
+
+			require.True(
+				t,
+				validator.GetCommission().GTE(app.ValidatorMinimumCommission),
+				"commission rate should be >= 5%",
+			)
+
+			require.True(
+				t,
+				validator.Commission.MaxRate.GTE(app.ValidatorMinimumCommission),
+				"commission rate max should be >= 5%, got %s",
+				validator.Commission.MaxRate,
+			)
+
+			if val.shouldBeUpdated {
+				require.Equal(
+					t,
+					ctx.BlockTime(),
+					validator.Commission.UpdateTime,
+					"commission update time should be set to block time",
+				)
+			} else {
+				require.Equal(
+					t,
+					time.Unix(0, 0).UTC(),
+					validator.Commission.UpdateTime,
+					"commission update time should not be changed -- default value is 0",
+				)
+			}
+		})
+	}
+}
+
+func generateConsKey(
+	t *testing.T,
+) *ethsecp256k1.PrivKey {
+	t.Helper()
+
+	key, err := ethsecp256k1.GenerateKey()
+	require.NoError(t, err)
+
+	return key
+}
diff --git a/tests/e2e/e2e_upgrade_min_commission_test.go b/tests/e2e/e2e_upgrade_min_commission_test.go
new file mode 100644
index 000000000..38455a951
--- /dev/null
+++ b/tests/e2e/e2e_upgrade_min_commission_test.go
@@ -0,0 +1,103 @@
+package e2e_test
+
+import (
+	"context"
+
+	sdkmath "cosmossdk.io/math"
+	"github.com/cosmos/cosmos-sdk/client/grpc/tmservice"
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	"github.com/cosmos/cosmos-sdk/x/staking/types"
+
+	"github.com/kava-labs/kava/tests/util"
+)
+
+func (suite *IntegrationTestSuite) TestValMinCommission() {
+	suite.SkipIfUpgradeDisabled()
+
+	beforeUpgradeCtx := util.CtxAtHeight(suite.UpgradeHeight - 1)
+	afterUpgradeCtx := util.CtxAtHeight(suite.UpgradeHeight)
+
+	suite.Run("before upgrade", func() {
+		// Before params
+		beforeParams, err := suite.Kava.Staking.Params(beforeUpgradeCtx, &types.QueryParamsRequest{})
+		suite.Require().NoError(err)
+
+		suite.Require().Equal(
+			sdkmath.LegacyZeroDec().String(),
+			beforeParams.Params.MinCommissionRate.String(),
+			"min commission rate should be 0%% before upgrade",
+		)
+
+		// Before validators
+		beforeValidators, err := suite.Kava.Staking.Validators(beforeUpgradeCtx, &types.QueryValidatorsRequest{})
+		suite.Require().NoError(err)
+
+		for _, val := range beforeValidators.Validators {
+			// In kvtool gentx, the commission rate is set to 0, with max of 0.01
+			expectedRate := sdkmath.LegacyZeroDec()
+			expectedRateMax := sdkmath.LegacyMustNewDecFromStr("0.01")
+
+			suite.Require().Equalf(
+				expectedRate.String(),
+				val.Commission.CommissionRates.Rate.String(),
+				"validator %s should have commission rate of %s before upgrade",
+				val.OperatorAddress,
+				expectedRate,
+			)
+
+			suite.Require().Equalf(
+				expectedRateMax.String(),
+				val.Commission.CommissionRates.MaxRate.String(),
+				"validator %s should have max commission rate of %s before upgrade",
+				val.OperatorAddress,
+				expectedRateMax,
+			)
+		}
+	})
+
+	suite.Run("after upgrade", func() {
+		block, err := suite.Kava.Tm.GetBlockByHeight(context.Background(), &tmservice.GetBlockByHeightRequest{
+			Height: suite.UpgradeHeight,
+		})
+		suite.Require().NoError(err)
+
+		// After params
+		afterParams, err := suite.Kava.Staking.Params(afterUpgradeCtx, &types.QueryParamsRequest{})
+		suite.Require().NoError(err)
+
+		expectedMinRate := sdk.MustNewDecFromStr("0.05")
+
+		suite.Require().Equal(
+			expectedMinRate.String(),
+			afterParams.Params.MinCommissionRate.String(),
+			"min commission rate should be 5%% after upgrade",
+		)
+
+		// After validators
+		afterValidators, err := suite.Kava.Staking.Validators(afterUpgradeCtx, &types.QueryValidatorsRequest{})
+		suite.Require().NoError(err)
+
+		for _, val := range afterValidators.Validators {
+
+			suite.Require().Truef(
+				val.Commission.CommissionRates.Rate.GTE(expectedMinRate),
+				"validator %s should have commission rate of at least 5%%",
+				val.OperatorAddress,
+			)
+
+			suite.Require().Truef(
+				val.Commission.CommissionRates.MaxRate.GTE(expectedMinRate),
+				"validator %s should have max commission rate of at least 5%%",
+				val.OperatorAddress,
+			)
+
+			suite.Require().Truef(
+				val.Commission.UpdateTime.Equal(block.SdkBlock.Header.Time),
+				"validator %s should have commission update time set to block time, expected %s, got %s",
+				val.OperatorAddress,
+				block.SdkBlock.Header.Time,
+				val.Commission.UpdateTime,
+			)
+		}
+	})
+}
diff --git a/tests/e2e/kvtool b/tests/e2e/kvtool
index bec8a8d82..b7948a9ac 160000
--- a/tests/e2e/kvtool
+++ b/tests/e2e/kvtool
@@ -1 +1 @@
-Subproject commit bec8a8d82d1b0a2336724c428dbb472a6dd0411e
+Subproject commit b7948a9acf002b41b9b730b23bd625f30a9a0902