diff --git a/bin/dx-unpack b/bin/dx-unpack
index 9a3f986819..676fc7ad89 100755
--- a/bin/dx-unpack
+++ b/bin/dx-unpack
@@ -60,4 +60,5 @@ if [[ $output != "" ]]; then
     rmdir "$tempdir"
 else
     unpack "$@"
+    rm -f "$@"
 fi
diff --git a/src/python/test/test_dxclient.py b/src/python/test/test_dxclient.py
index 4a023d5ce3..8fe3e42dd4 100755
--- a/src/python/test/test_dxclient.py
+++ b/src/python/test/test_dxclient.py
@@ -2918,19 +2918,6 @@ def test_bundledDepends_name_with_whitespaces(self):
         applet_job.wait_on_done()
         self.assertEqual(applet_job.describe()['state'], 'done')
 
-    def test_bundledDepends_name_with_special_chars_locally(self):
-        # dx-unpack will fail for tarball names containing '$' at the begining of a word,
-        # example: "test '$bundle' \"with\" \"@#^&%()[]{}\" spaces.tar.gz"
-        bundle_name = "test 'bundle' \"with\" \"@#^&%()[]{}\" spaces.tar.gz"
-        bundle_tmp_dir = tempfile.mkdtemp()
-        os.mkdir(os.path.join(bundle_tmp_dir, "a"))
-        with open(os.path.join(bundle_tmp_dir, 'a', 'foo.txt'), 'w') as file_in_bundle:
-            file_in_bundle.write('foo\n')
-        subprocess.check_call(['tar', '-czf', os.path.join(bundle_tmp_dir, bundle_name),
-                               '-C', os.path.join(bundle_tmp_dir, 'a'), '.'])
-        subprocess.check_call(["dx-unpack", os.path.join(bundle_tmp_dir, bundle_name)])
-        os.remove(os.path.join(os.getcwd(), 'foo.txt'))
-
 
 class TestDXClientWorkflow(DXTestCase):
     default_inst_type = "mem2_hdd2_x2"
diff --git a/src/python/test/test_dxunpack.py b/src/python/test/test_dxunpack.py
new file mode 100755
index 0000000000..a4107b1e5b
--- /dev/null
+++ b/src/python/test/test_dxunpack.py
@@ -0,0 +1,62 @@
+#!/usr/bin/env python
+# -*- coding: utf-8 -*-
+#
+# Copyright (C) 2016 DNAnexus, Inc.
+#
+# This file is part of dx-toolkit (DNAnexus platform client libraries).
+#
+#   Licensed under the Apache License, Version 2.0 (the "License"); you may not
+#   use this file except in compliance with the License. You may obtain a copy
+#   of the License at
+#
+#       http://www.apache.org/licenses/LICENSE-2.0
+#
+#   Unless required by applicable law or agreed to in writing, software
+#   distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#   WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#   License for the specific language governing permissions and limitations
+#   under the License.
+
+from __future__ import print_function, unicode_literals, division, absolute_import
+
+import os
+import unittest
+import tempfile
+import shutil
+import subprocess
+from dxpy_testutil import (DXTestCase)
+
+
+class TestDXUnpack(DXTestCase):
+    def test_file_name_with_special_chars_locally(self):
+        # create a tar.gz file with spaces, quotes and escape chars in its name
+        bundle_name = "test 'bundle' \"with\" \"@#^&%()[]{}\" spaces.tar.gz"
+        bundle_tmp_dir = tempfile.mkdtemp()
+        os.mkdir(os.path.join(bundle_tmp_dir, "a"))
+        with open(os.path.join(bundle_tmp_dir, 'a', 'foo.txt'), 'w') as file_in_bundle:
+            file_in_bundle.write('foo\n')
+        subprocess.check_call(['tar', '-czf', os.path.join(bundle_tmp_dir, bundle_name),
+                               '-C', os.path.join(bundle_tmp_dir, 'a'), '.'])
+        extract_tmp_dir = tempfile.mkdtemp()
+        os.chdir(extract_tmp_dir)
+        subprocess.check_call(["dx-unpack", os.path.join(bundle_tmp_dir, bundle_name)])
+        self.assertTrue(os.path.exists(os.path.join(extract_tmp_dir, 'foo.txt')))
+
+    def test_remove_file_after_unpack(self):
+        # dx-unpack removes the file after unpacking
+        bundle_name = "tarball.tar.gz"
+        bundle_tmp_dir = tempfile.mkdtemp()
+        os.mkdir(os.path.join(bundle_tmp_dir, "a"))
+        with open(os.path.join(bundle_tmp_dir, 'a', 'foo.txt'), 'w') as file_in_bundle:
+            file_in_bundle.write('foo\n')
+        subprocess.check_call(['tar', '-czf', os.path.join(bundle_tmp_dir, bundle_name),
+                               '-C', os.path.join(bundle_tmp_dir, 'a'), '.'])
+        extract_tmp_dir = tempfile.mkdtemp()
+        os.chdir(extract_tmp_dir)
+        subprocess.check_call(["dx-unpack", os.path.join(bundle_tmp_dir, bundle_name)])
+        self.assertTrue(os.path.exists(os.path.join(extract_tmp_dir, 'foo.txt')))
+        shutil.rmtree(os.path.join(bundle_tmp_dir, "a"))
+        self.assertFalse(os.path.exists(os.path.join(bundle_tmp_dir, bundle_name)))
+
+if __name__ == '__main__':
+    unittest.main()