diff --git a/src/Makefile.test.include b/src/Makefile.test.include
index d3e7b5da12597..fb94821b03aca 100644
--- a/src/Makefile.test.include
+++ b/src/Makefile.test.include
@@ -33,6 +33,7 @@ BITCOIN_TESTS =\
   test/base64_tests.cpp \
   test/bech32_tests.cpp \
   test/bip32_tests.cpp \
+  test/blockchain_tests.cpp \
   test/blockencodings_tests.cpp \
   test/bloom_tests.cpp \
   test/bswap_tests.cpp \
diff --git a/src/rpc/blockchain.cpp b/src/rpc/blockchain.cpp
index 8fff937d82902..9c5ea723806e9 100644
--- a/src/rpc/blockchain.cpp
+++ b/src/rpc/blockchain.cpp
@@ -47,18 +47,20 @@ static CUpdatedBlock latestblock;
 
 extern void TxToJSON(const CTransaction& tx, const uint256 hashBlock, UniValue& entry);
 
-double GetDifficulty(const CBlockIndex* blockindex)
+/* Calculate the difficulty for a given block index,
+ * or the block index of the given chain.
+ */
+double GetDifficulty(const CChain& chain, const CBlockIndex* blockindex)
 {
     if (blockindex == nullptr)
     {
-        if (chainActive.Tip() == nullptr)
+        if (chain.Tip() == nullptr)
             return 1.0;
         else
-            blockindex = chainActive.Tip();
+            blockindex = chain.Tip();
     }
 
     int nShift = (blockindex->nBits >> 24) & 0xff;
-
     double dDiff =
         (double)0x0000ffff / (double)(blockindex->nBits & 0x00ffffff);
 
@@ -76,6 +78,11 @@ double GetDifficulty(const CBlockIndex* blockindex)
     return dDiff;
 }
 
+double GetDifficulty(const CBlockIndex* blockindex)
+{
+    return GetDifficulty(chainActive, blockindex);
+}
+
 UniValue blockheaderToJSON(const CBlockIndex* blockindex)
 {
     AssertLockHeld(cs_main);
diff --git a/src/test/blockchain_tests.cpp b/src/test/blockchain_tests.cpp
new file mode 100644
index 0000000000000..55fdd2c07192e
--- /dev/null
+++ b/src/test/blockchain_tests.cpp
@@ -0,0 +1,126 @@
+#include <boost/test/unit_test.hpp>
+
+#include "stdlib.h"
+
+#include "rpc/blockchain.cpp"
+#include "test/test_bitcoin.h"
+
+/* Equality between doubles is imprecise. Comparison should be done
+ * with a small threshold of tolerance, rather than exact equality.
+ */
+bool DoubleEquals(double a, double b, double epsilon)
+{
+    return std::abs(a - b) < epsilon;
+}
+
+CBlockIndex* CreateBlockIndexWithNbits(uint32_t nbits)
+{
+    CBlockIndex* block_index = new CBlockIndex();
+    block_index->nHeight = 46367;
+    block_index->nTime = 1269211443;
+    block_index->nBits = nbits;
+    return block_index;
+}
+
+CChain CreateChainWithNbits(uint32_t nbits)
+{
+    CBlockIndex* block_index = CreateBlockIndexWithNbits(nbits);
+    CChain chain;
+    chain.SetTip(block_index);
+    return chain;
+}
+
+void RejectDifficultyMismatch(double difficulty, double expected_difficulty) {
+     BOOST_CHECK_MESSAGE(
+        DoubleEquals(difficulty, expected_difficulty, 0.00001),
+        "Difficulty was " + std::to_string(difficulty)
+            + " but was expected to be " + std::to_string(expected_difficulty));
+}
+
+/* Given a BlockIndex with the provided nbits,
+ * verify that the expected difficulty results.
+ */
+void TestDifficulty(uint32_t nbits, double expected_difficulty)
+{
+    CBlockIndex* block_index = CreateBlockIndexWithNbits(nbits);
+    /* Since we are passing in block index explicitly,
+     * there is no need to set up anything within the chain itself.
+     */
+    CChain chain;
+
+    double difficulty = GetDifficulty(chain, block_index);
+    delete block_index;
+
+    RejectDifficultyMismatch(difficulty, expected_difficulty);
+}
+
+BOOST_FIXTURE_TEST_SUITE(blockchain_difficulty_tests, BasicTestingSetup)
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_very_low_target)
+{
+    TestDifficulty(0x1f111111, 0.000001);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_low_target)
+{
+    TestDifficulty(0x1ef88f6f, 0.000016);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_mid_target)
+{
+    TestDifficulty(0x1df88f6f, 0.004023);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_high_target)
+{
+    TestDifficulty(0x1cf88f6f, 1.029916);
+}
+
+BOOST_AUTO_TEST_CASE(get_difficulty_for_very_high_target)
+{
+    TestDifficulty(0x12345678, 5913134931067755359633408.0);
+}
+
+// Verify that difficulty is 1.0 for an empty chain.
+BOOST_AUTO_TEST_CASE(get_difficulty_for_null_tip)
+{
+    CChain chain;
+    double difficulty = GetDifficulty(chain, nullptr);
+    RejectDifficultyMismatch(difficulty, 1.0);
+}
+
+/* Verify that if difficulty is based upon the block index
+ * in the chain, if no block index is explicitly specified.
+ */
+BOOST_AUTO_TEST_CASE(get_difficulty_for_null_block_index)
+{
+    CChain chain = CreateChainWithNbits(0x1df88f6f);
+
+    double difficulty = GetDifficulty(chain, nullptr);
+    delete chain.Tip();
+
+    double expected_difficulty = 0.004023;
+
+    RejectDifficultyMismatch(difficulty, expected_difficulty);
+}
+
+/* Verify that difficulty is based upon the explicitly specified
+ * block index rather than being taken from the provided chain,
+ * when both are present.
+ */
+BOOST_AUTO_TEST_CASE(get_difficulty_for_block_index_overrides_tip)
+{
+    CChain chain = CreateChainWithNbits(0x1df88f6f);
+    /* This block index's nbits should be used
+     * instead of the chain's when calculating difficulty.
+     */
+    CBlockIndex* override_block_index = CreateBlockIndexWithNbits(0x12345678);
+
+    double difficulty = GetDifficulty(chain, override_block_index);
+    delete chain.Tip();
+    delete override_block_index;
+
+    RejectDifficultyMismatch(difficulty, 5913134931067755359633408.0);
+}
+
+BOOST_AUTO_TEST_SUITE_END()