diff --git a/src/rpc/rawtransaction.cpp b/src/rpc/rawtransaction.cpp
index 1a201b1cdb103..d204880a74fad 100644
--- a/src/rpc/rawtransaction.cpp
+++ b/src/rpc/rawtransaction.cpp
@@ -203,14 +203,12 @@ UniValue getrawtransaction(const JSONRPCRequest& request)
 
     if (!request.params[2].isNull()) {
         uint256 blockhash = ParseHashV(request.params[2], "parameter 3");
-        if (!blockhash.IsNull()) {
-            BlockMap::iterator it = mapBlockIndex.find(blockhash);
-            if (it == mapBlockIndex.end()) {
-                throw JSONRPCError(RPC_INVALID_ADDRESS_OR_KEY, "Block hash not found");
-            }
-            blockindex = it->second;
-            in_active_chain = chainActive.Contains(blockindex);
+        BlockMap::iterator it = mapBlockIndex.find(blockhash);
+        if (it == mapBlockIndex.end()) {
+            throw JSONRPCError(RPC_INVALID_ADDRESS_OR_KEY, "Block hash not found");
         }
+        blockindex = it->second;
+        in_active_chain = chainActive.Contains(blockindex);
     }
 
     CTransactionRef tx;
diff --git a/test/functional/rawtransactions.py b/test/functional/rawtransactions.py
index 086feccab64d5..02bb97492b40b 100755
--- a/test/functional/rawtransactions.py
+++ b/test/functional/rawtransactions.py
@@ -127,7 +127,13 @@ def run_test(self):
         assert_raises_rpc_error(-8, "parameter 3 must be hexadecimal", self.nodes[0].getrawtransaction, tx, True, True)
         assert_raises_rpc_error(-8, "parameter 3 must be hexadecimal", self.nodes[0].getrawtransaction, tx, True, "foobar")
         assert_raises_rpc_error(-8, "parameter 3 must be of length 64", self.nodes[0].getrawtransaction, tx, True, "abcd1234")
-        assert_raises_rpc_error(-5, "Block hash not found", self.nodes[0].getrawtransaction, tx, True, "aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa")
+        assert_raises_rpc_error(-5, "Block hash not found", self.nodes[0].getrawtransaction, tx, True, "0000000000000000000000000000000000000000000000000000000000000000")
+        # Undo the blocks and check in_active_chain
+        self.nodes[0].invalidateblock(block1)
+        gottx = self.nodes[0].getrawtransaction(txid=tx, verbose=True, blockhash=block1)
+        assert_equal(gottx['in_active_chain'], False)
+        self.nodes[0].reconsiderblock(block1)
+        assert_equal(self.nodes[0].getbestblockhash(), block2)
 
         #########################
         # RAW TX MULTISIG TESTS #
@@ -267,13 +273,13 @@ def run_test(self):
         assert_equal(self.nodes[0].getrawtransaction(txHash, True)["hex"], rawTxSigned['hex'])
 
         # 6. invalid parameters - supply txid and string "Flase"
-        assert_raises_rpc_error(-1,"not a boolean", self.nodes[0].getrawtransaction, txHash, "Flase")
+        assert_raises_rpc_error(-1, "not a boolean", self.nodes[0].getrawtransaction, txHash, "Flase")
 
         # 7. invalid parameters - supply txid and empty array
-        assert_raises_rpc_error(-1,"not a boolean", self.nodes[0].getrawtransaction, txHash, [])
+        assert_raises_rpc_error(-1, "not a boolean", self.nodes[0].getrawtransaction, txHash, [])
 
         # 8. invalid parameters - supply txid and empty dict
-        assert_raises_rpc_error(-1,"not a boolean", self.nodes[0].getrawtransaction, txHash, {})
+        assert_raises_rpc_error(-1, "not a boolean", self.nodes[0].getrawtransaction, txHash, {})
 
         inputs  = [ {'txid' : "1d1d4e24ed99057e84c3f80fd8fbec79ed9e1acee37da269356ecea000000000", 'vout' : 1, 'sequence' : 1000}]
         outputs = { self.nodes[0].getnewaddress() : 1 }