diff --git a/qa/rpc-tests/p2p-compactblocks.py b/qa/rpc-tests/p2p-compactblocks.py
index ac4655a841..d91e10d77c 100755
--- a/qa/rpc-tests/p2p-compactblocks.py
+++ b/qa/rpc-tests/p2p-compactblocks.py
@@ -12,14 +12,16 @@ from test_framework.script import CScript, OP_TRUE
 
 '''
 CompactBlocksTest -- test compact blocks (BIP 152)
-'''
 
+Version 1 compact blocks are pre-segwit (txids)
+Version 2 compact blocks are post-segwit (wtxids)
+'''
 
 # TestNode: A peer we use to send messages to bitcoind, and store responses.
 class TestNode(SingleNodeConnCB):
     def __init__(self):
         SingleNodeConnCB.__init__(self)
-        self.last_sendcmpct = None
+        self.last_sendcmpct = []
         self.last_headers = None
         self.last_inv = None
         self.last_cmpctblock = None
@@ -30,7 +32,7 @@ class TestNode(SingleNodeConnCB):
         self.last_blocktxn = None
 
     def on_sendcmpct(self, conn, message):
-        self.last_sendcmpct = message
+        self.last_sendcmpct.append(message)
 
     def on_block(self, conn, message):
         self.last_block = message
@@ -90,29 +92,31 @@ class CompactBlocksTest(BitcoinTestFramework):
     def __init__(self):
         super().__init__()
         self.setup_clean_chain = True
-        self.num_nodes = 1
+        # Node0 = pre-segwit, node1 = segwit-aware
+        self.num_nodes = 2
         self.utxos = []
 
     def setup_network(self):
         self.nodes = []
 
-        # Turn off segwit in this test, as compact blocks don't currently work
-        # with segwit.  (After BIP 152 is updated to support segwit, we can
-        # test behavior with and without segwit enabled by adding a second node
-        # to the test.)
-        self.nodes = start_nodes(self.num_nodes, self.options.tmpdir, [["-debug", "-logtimemicros=1", "-bip9params=segwit:0:0"]])
+        # Start up node0 to be a version 1, pre-segwit node.
+        self.nodes = start_nodes(self.num_nodes, self.options.tmpdir, 
+                [["-debug", "-logtimemicros=1", "-bip9params=segwit:0:0"], 
+                 ["-debug", "-logtimemicros", "-txindex"]])
+        connect_nodes(self.nodes[0], 1)
 
-    def build_block_on_tip(self):
-        height = self.nodes[0].getblockcount()
-        tip = self.nodes[0].getbestblockhash()
-        mtp = self.nodes[0].getblockheader(tip)['mediantime']
+    def build_block_on_tip(self, node):
+        height = node.getblockcount()
+        tip = node.getbestblockhash()
+        mtp = node.getblockheader(tip)['mediantime']
         block = create_block(int(tip, 16), create_coinbase(height + 1), mtp + 1)
         block.solve()
         return block
 
     # Create 10 more anyone-can-spend utxo's for testing.
     def make_utxos(self):
-        block = self.build_block_on_tip()
+        # Doesn't matter which node we use, just use node0.
+        block = self.build_block_on_tip(self.nodes[0])
         self.test_node.send_and_ping(msg_block(block))
         assert(int(self.nodes[0].getbestblockhash(), 16) == block.sha256)
         self.nodes[0].generate(100)
@@ -125,7 +129,7 @@ class CompactBlocksTest(BitcoinTestFramework):
             tx.vout.append(CTxOut(out_value, CScript([OP_TRUE])))
         tx.rehash()
 
-        block2 = self.build_block_on_tip()
+        block2 = self.build_block_on_tip(self.nodes[0])
         block2.vtx.append(tx)
         block2.hashMerkleRoot = block2.calc_merkle_root()
         block2.solve()
@@ -134,26 +138,30 @@ class CompactBlocksTest(BitcoinTestFramework):
         self.utxos.extend([[tx.sha256, i, out_value] for i in range(10)])
         return
 
-    # Test "sendcmpct":
-    # - No compact block announcements or getdata(MSG_CMPCT_BLOCK) unless
-    #   sendcmpct is sent.
-    # - If sendcmpct is sent with version > 1, the message is ignored.
+    # Test "sendcmpct" (between peers preferring the same version):
+    # - No compact block announcements unless sendcmpct is sent.
+    # - If sendcmpct is sent with version > preferred_version, the message is ignored.
     # - If sendcmpct is sent with boolean 0, then block announcements are not
     #   made with compact blocks.
     # - If sendcmpct is then sent with boolean 1, then new block announcements
     #   are made with compact blocks.
-    def test_sendcmpct(self):
-        print("Testing SENDCMPCT p2p message... ")
-
-        # Make sure we get a version 0 SENDCMPCT message from our peer
+    # If old_node is passed in, request compact blocks with version=preferred-1
+    # and verify that it receives block announcements via compact block.
+    def test_sendcmpct(self, node, test_node, preferred_version, old_node=None):
+        # Make sure we get a SENDCMPCT message from our peer
         def received_sendcmpct():
-            return (self.test_node.last_sendcmpct is not None)
+            return (len(test_node.last_sendcmpct) > 0)
         got_message = wait_until(received_sendcmpct, timeout=30)
         assert(received_sendcmpct())
         assert(got_message)
-        assert_equal(self.test_node.last_sendcmpct.version, 1)
+        with mininode_lock:
+            # Check that the first version received is the preferred one
+            assert_equal(test_node.last_sendcmpct[0].version, preferred_version)
+            # And that we receive versions down to 1.
+            assert_equal(test_node.last_sendcmpct[-1].version, 1)
+            test_node.last_sendcmpct = []
 
-        tip = int(self.nodes[0].getbestblockhash(), 16)
+        tip = int(node.getbestblockhash(), 16)
 
         def check_announcement_of_new_block(node, peer, predicate):
             peer.clear_block_announcement()
@@ -165,56 +173,75 @@ class CompactBlocksTest(BitcoinTestFramework):
                 assert(predicate(peer))
 
         # We shouldn't get any block announcements via cmpctblock yet.
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is None)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is None)
 
         # Try one more time, this time after requesting headers.
-        self.test_node.request_headers_and_sync(locator=[tip])
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is None and p.last_inv is not None)
+        test_node.request_headers_and_sync(locator=[tip])
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is None and p.last_inv is not None)
 
         # Test a few ways of using sendcmpct that should NOT
         # result in compact block announcements.
         # Before each test, sync the headers chain.
-        self.test_node.request_headers_and_sync(locator=[tip])
+        test_node.request_headers_and_sync(locator=[tip])
 
         # Now try a SENDCMPCT message with too-high version
         sendcmpct = msg_sendcmpct()
-        sendcmpct.version = 2
-        self.test_node.send_and_ping(sendcmpct)
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is None)
+        sendcmpct.version = preferred_version+1
+        sendcmpct.announce = True
+        test_node.send_and_ping(sendcmpct)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is None)
 
         # Headers sync before next test.
-        self.test_node.request_headers_and_sync(locator=[tip])
+        test_node.request_headers_and_sync(locator=[tip])
 
         # Now try a SENDCMPCT message with valid version, but announce=False
-        self.test_node.send_and_ping(msg_sendcmpct())
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is None)
+        sendcmpct.version = preferred_version
+        sendcmpct.announce = False
+        test_node.send_and_ping(sendcmpct)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is None)
 
         # Headers sync before next test.
-        self.test_node.request_headers_and_sync(locator=[tip])
+        test_node.request_headers_and_sync(locator=[tip])
 
         # Finally, try a SENDCMPCT message with announce=True
-        sendcmpct.version = 1
+        sendcmpct.version = preferred_version
         sendcmpct.announce = True
-        self.test_node.send_and_ping(sendcmpct)
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is not None)
+        test_node.send_and_ping(sendcmpct)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is not None)
 
         # Try one more time (no headers sync should be needed!)
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is not None)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is not None)
 
         # Try one more time, after turning on sendheaders
-        self.test_node.send_and_ping(msg_sendheaders())
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is not None)
+        test_node.send_and_ping(msg_sendheaders())
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is not None)
+
+        # Try one more time, after sending a version-1, announce=false message.
+        sendcmpct.version = preferred_version-1
+        sendcmpct.announce = False
+        test_node.send_and_ping(sendcmpct)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is not None)
 
         # Now turn off announcements
+        sendcmpct.version = preferred_version
         sendcmpct.announce = False
-        self.test_node.send_and_ping(sendcmpct)
-        check_announcement_of_new_block(self.nodes[0], self.test_node, lambda p: p.last_cmpctblock is None and p.last_headers is not None)
+        test_node.send_and_ping(sendcmpct)
+        check_announcement_of_new_block(node, test_node, lambda p: p.last_cmpctblock is None and p.last_headers is not None)
+
+        if old_node is not None:
+            # Verify that a peer using an older protocol version can receive
+            # announcements from this node.
+            sendcmpct.version = preferred_version-1
+            sendcmpct.announce = True
+            old_node.send_and_ping(sendcmpct)
+            # Header sync
+            old_node.request_headers_and_sync(locator=[tip])
+            check_announcement_of_new_block(node, old_node, lambda p: p.last_cmpctblock is not None)
 
     # This test actually causes bitcoind to (reasonably!) disconnect us, so do this last.
     def test_invalid_cmpctblock_message(self):
-        print("Testing invalid index in cmpctblock message...")
         self.nodes[0].generate(101)
-        block = self.build_block_on_tip()
+        block = self.build_block_on_tip(self.nodes[0])
 
         cmpct_block = P2PHeaderAndShortIDs()
         cmpct_block.header = CBlockHeader(block)
@@ -227,45 +254,61 @@ class CompactBlocksTest(BitcoinTestFramework):
 
     # Compare the generated shortids to what we expect based on BIP 152, given
     # bitcoind's choice of nonce.
-    def test_compactblock_construction(self):
-        print("Testing compactblock headers and shortIDs are correct...")
-
+    def test_compactblock_construction(self, node, test_node, version, use_witness_address):
         # Generate a bunch of transactions.
-        self.nodes[0].generate(101)
+        node.generate(101)
         num_transactions = 25
-        address = self.nodes[0].getnewaddress()
+        address = node.getnewaddress()
+        if use_witness_address:
+            # Want at least one segwit spend, so move all funds to
+            # a witness address.
+            address = node.addwitnessaddress(address)
+            value_to_send = node.getbalance()
+            node.sendtoaddress(address, satoshi_round(value_to_send-Decimal(0.1)))
+            node.generate(1)
+
+        segwit_tx_generated = False
         for i in range(num_transactions):
-            self.nodes[0].sendtoaddress(address, 0.1)
+            txid = node.sendtoaddress(address, 0.1)
+            hex_tx = node.gettransaction(txid)["hex"]
+            tx = FromHex(CTransaction(), hex_tx)
+            if not tx.wit.is_null():
+                segwit_tx_generated = True
+
+        if use_witness_address:
+            assert(segwit_tx_generated) # check that our test is not broken
 
         self.test_node.sync_with_ping()
 
         # Now mine a block, and look at the resulting compact block.
-        self.test_node.clear_block_announcement()
-        block_hash = int(self.nodes[0].generate(1)[0], 16)
+        test_node.clear_block_announcement()
+        block_hash = int(node.generate(1)[0], 16)
 
         # Store the raw block in our internal format.
-        block = FromHex(CBlock(), self.nodes[0].getblock("%02x" % block_hash, False))
+        block = FromHex(CBlock(), node.getblock("%02x" % block_hash, False))
         [tx.calc_sha256() for tx in block.vtx]
         block.rehash()
 
         # Don't care which type of announcement came back for this test; just
         # request the compact block if we didn't get one yet.
-        wait_until(self.test_node.received_block_announcement, timeout=30)
+        wait_until(test_node.received_block_announcement, timeout=30)
+        assert(test_node.received_block_announcement())
 
         with mininode_lock:
-            if self.test_node.last_cmpctblock is None:
-                self.test_node.clear_block_announcement()
+            if test_node.last_cmpctblock is None:
+                test_node.clear_block_announcement()
                 inv = CInv(4, block_hash)  # 4 == "CompactBlock"
-                self.test_node.send_message(msg_getdata([inv]))
+                test_node.send_message(msg_getdata([inv]))
 
-        wait_until(self.test_node.received_block_announcement, timeout=30)
+        wait_until(test_node.received_block_announcement, timeout=30)
+        assert(test_node.received_block_announcement())
 
         # Now we should have the compactblock
         header_and_shortids = None
         with mininode_lock:
-            assert(self.test_node.last_cmpctblock is not None)
+            assert(test_node.last_cmpctblock is not None)
             # Convert the on-the-wire representation to absolute indexes
-            header_and_shortids = HeaderAndShortIDs(self.test_node.last_cmpctblock.header_and_shortids)
+            header_and_shortids = HeaderAndShortIDs(test_node.last_cmpctblock.header_and_shortids)
 
         # Check that we got the right block!
         header_and_shortids.header.calc_sha256()
@@ -278,8 +321,17 @@ class CompactBlocksTest(BitcoinTestFramework):
         # Check that all prefilled_txn entries match what's in the block.
         for entry in header_and_shortids.prefilled_txn:
             entry.tx.calc_sha256()
+            # This checks the non-witness parts of the tx agree
             assert_equal(entry.tx.sha256, block.vtx[entry.index].sha256)
 
+            # And this checks the witness
+            wtxid = entry.tx.calc_sha256(True)
+            if version == 2:
+                assert_equal(wtxid, block.vtx[entry.index].calc_sha256(True))
+            else:
+                # Shouldn't have received a witness
+                assert(entry.tx.wit.is_null())
+
         # Check that the cmpctblock message announced all the transactions.
         assert_equal(len(header_and_shortids.prefilled_txn) + len(header_and_shortids.shortids), len(block.vtx))
 
@@ -294,7 +346,10 @@ class CompactBlocksTest(BitcoinTestFramework):
                 # Already checked prefilled transactions above
                 header_and_shortids.prefilled_txn.pop(0)
             else:
-                shortid = calculate_shortid(k0, k1, block.vtx[index].sha256)
+                tx_hash = block.vtx[index].sha256
+                if version == 2:
+                    tx_hash = block.vtx[index].calc_sha256(True)
+                shortid = calculate_shortid(k0, k1, tx_hash)
                 assert_equal(shortid, header_and_shortids.shortids[0])
                 header_and_shortids.shortids.pop(0)
             index += 1
@@ -302,49 +357,50 @@ class CompactBlocksTest(BitcoinTestFramework):
     # Test that bitcoind requests compact blocks when we announce new blocks
     # via header or inv, and that responding to getblocktxn causes the block
     # to be successfully reconstructed.
-    def test_compactblock_requests(self):
-        print("Testing compactblock requests... ")
-
+    # Post-segwit: upgraded nodes would only make this request of cb-version-2,
+    # NODE_WITNESS peers.  Unupgraded nodes would still make this request of
+    # any cb-version-1-supporting peer.
+    def test_compactblock_requests(self, node, test_node):
         # Try announcing a block with an inv or header, expect a compactblock
         # request
         for announce in ["inv", "header"]:
-            block = self.build_block_on_tip()
+            block = self.build_block_on_tip(node)
             with mininode_lock:
-                self.test_node.last_getdata = None
+                test_node.last_getdata = None
 
             if announce == "inv":
-                self.test_node.send_message(msg_inv([CInv(2, block.sha256)]))
+                test_node.send_message(msg_inv([CInv(2, block.sha256)]))
             else:
-                self.test_node.send_header_for_blocks([block])
-            success = wait_until(lambda: self.test_node.last_getdata is not None, timeout=30)
+                test_node.send_header_for_blocks([block])
+            success = wait_until(lambda: test_node.last_getdata is not None, timeout=30)
             assert(success)
-            assert_equal(len(self.test_node.last_getdata.inv), 1)
-            assert_equal(self.test_node.last_getdata.inv[0].type, 4)
-            assert_equal(self.test_node.last_getdata.inv[0].hash, block.sha256)
+            assert_equal(len(test_node.last_getdata.inv), 1)
+            assert_equal(test_node.last_getdata.inv[0].type, 4)
+            assert_equal(test_node.last_getdata.inv[0].hash, block.sha256)
 
             # Send back a compactblock message that omits the coinbase
             comp_block = HeaderAndShortIDs()
             comp_block.header = CBlockHeader(block)
             comp_block.nonce = 0
             comp_block.shortids = [1]  # this is useless, and wrong
-            self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
-            assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.hashPrevBlock)
+            test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
+            assert_equal(int(node.getbestblockhash(), 16), block.hashPrevBlock)
             # Expect a getblocktxn message.
             with mininode_lock:
-                assert(self.test_node.last_getblocktxn is not None)
-                absolute_indexes = self.test_node.last_getblocktxn.block_txn_request.to_absolute()
+                assert(test_node.last_getblocktxn is not None)
+                absolute_indexes = test_node.last_getblocktxn.block_txn_request.to_absolute()
             assert_equal(absolute_indexes, [0])  # should be a coinbase request
 
             # Send the coinbase, and verify that the tip advances.
             msg = msg_blocktxn()
             msg.block_transactions.blockhash = block.sha256
             msg.block_transactions.transactions = [block.vtx[0]]
-            self.test_node.send_and_ping(msg)
-            assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.sha256)
+            test_node.send_and_ping(msg)
+            assert_equal(int(node.getbestblockhash(), 16), block.sha256)
 
     # Create a chain of transactions from given utxo, and add to a new block.
-    def build_block_with_transactions(self, utxo, num_transactions):
-        block = self.build_block_on_tip()
+    def build_block_with_transactions(self, node, utxo, num_transactions):
+        block = self.build_block_on_tip(node)
 
         for i in range(num_transactions):
             tx = CTransaction()
@@ -361,118 +417,113 @@ class CompactBlocksTest(BitcoinTestFramework):
     # Test that we only receive getblocktxn requests for transactions that the
     # node needs, and that responding to them causes the block to be
     # reconstructed.
-    def test_getblocktxn_requests(self):
-        print("Testing getblocktxn requests...")
+    def test_getblocktxn_requests(self, node, test_node, version):
+        with_witness = (version==2)
+
+        def test_getblocktxn_response(compact_block, peer, expected_result):
+            msg = msg_cmpctblock(compact_block.to_p2p())
+            peer.send_and_ping(msg)
+            with mininode_lock:
+                assert(peer.last_getblocktxn is not None)
+                absolute_indexes = peer.last_getblocktxn.block_txn_request.to_absolute()
+            assert_equal(absolute_indexes, expected_result)
+
+        def test_tip_after_message(node, peer, msg, tip):
+            peer.send_and_ping(msg)
+            assert_equal(int(node.getbestblockhash(), 16), tip)
 
         # First try announcing compactblocks that won't reconstruct, and verify
         # that we receive getblocktxn messages back.
         utxo = self.utxos.pop(0)
 
-        block = self.build_block_with_transactions(utxo, 5)
+        block = self.build_block_with_transactions(node, utxo, 5)
         self.utxos.append([block.vtx[-1].sha256, 0, block.vtx[-1].vout[0].nValue])
-
         comp_block = HeaderAndShortIDs()
-        comp_block.initialize_from_block(block)
+        comp_block.initialize_from_block(block, use_witness=with_witness)
 
-        self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
-        with mininode_lock:
-            assert(self.test_node.last_getblocktxn is not None)
-            absolute_indexes = self.test_node.last_getblocktxn.block_txn_request.to_absolute()
-        assert_equal(absolute_indexes, [1, 2, 3, 4, 5])
-        msg = msg_blocktxn()
-        msg.block_transactions = BlockTransactions(block.sha256, block.vtx[1:])
-        self.test_node.send_and_ping(msg)
-        assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.sha256)
+        test_getblocktxn_response(comp_block, test_node, [1, 2, 3, 4, 5])
+
+        msg_bt = msg_blocktxn()
+        if with_witness:
+            msg_bt = msg_witness_blocktxn() # serialize with witnesses
+        msg_bt.block_transactions = BlockTransactions(block.sha256, block.vtx[1:])
+        test_tip_after_message(node, test_node, msg_bt, block.sha256)
 
         utxo = self.utxos.pop(0)
-        block = self.build_block_with_transactions(utxo, 5)
+        block = self.build_block_with_transactions(node, utxo, 5)
         self.utxos.append([block.vtx[-1].sha256, 0, block.vtx[-1].vout[0].nValue])
 
         # Now try interspersing the prefilled transactions
-        comp_block.initialize_from_block(block, prefill_list=[0, 1, 5])
-        self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
-        with mininode_lock:
-            assert(self.test_node.last_getblocktxn is not None)
-            absolute_indexes = self.test_node.last_getblocktxn.block_txn_request.to_absolute()
-        assert_equal(absolute_indexes, [2, 3, 4])
-        msg.block_transactions = BlockTransactions(block.sha256, block.vtx[2:5])
-        self.test_node.send_and_ping(msg)
-        assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.sha256)
+        comp_block.initialize_from_block(block, prefill_list=[0, 1, 5], use_witness=with_witness)
+        test_getblocktxn_response(comp_block, test_node, [2, 3, 4])
+        msg_bt.block_transactions = BlockTransactions(block.sha256, block.vtx[2:5])
+        test_tip_after_message(node, test_node, msg_bt, block.sha256)
 
         # Now try giving one transaction ahead of time.
         utxo = self.utxos.pop(0)
-        block = self.build_block_with_transactions(utxo, 5)
+        block = self.build_block_with_transactions(node, utxo, 5)
         self.utxos.append([block.vtx[-1].sha256, 0, block.vtx[-1].vout[0].nValue])
-        self.test_node.send_and_ping(msg_tx(block.vtx[1]))
-        assert(block.vtx[1].hash in self.nodes[0].getrawmempool())
+        test_node.send_and_ping(msg_tx(block.vtx[1]))
+        assert(block.vtx[1].hash in node.getrawmempool())
 
         # Prefill 4 out of the 6 transactions, and verify that only the one
         # that was not in the mempool is requested.
-        comp_block.initialize_from_block(block, prefill_list=[0, 2, 3, 4])
-        self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
-        with mininode_lock:
-            assert(self.test_node.last_getblocktxn is not None)
-            absolute_indexes = self.test_node.last_getblocktxn.block_txn_request.to_absolute()
-        assert_equal(absolute_indexes, [5])
+        comp_block.initialize_from_block(block, prefill_list=[0, 2, 3, 4], use_witness=with_witness)
+        test_getblocktxn_response(comp_block, test_node, [5])
 
-        msg.block_transactions = BlockTransactions(block.sha256, [block.vtx[5]])
-        self.test_node.send_and_ping(msg)
-        assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.sha256)
+        msg_bt.block_transactions = BlockTransactions(block.sha256, [block.vtx[5]])
+        test_tip_after_message(node, test_node, msg_bt, block.sha256)
 
         # Now provide all transactions to the node before the block is
         # announced and verify reconstruction happens immediately.
         utxo = self.utxos.pop(0)
-        block = self.build_block_with_transactions(utxo, 10)
+        block = self.build_block_with_transactions(node, utxo, 10)
         self.utxos.append([block.vtx[-1].sha256, 0, block.vtx[-1].vout[0].nValue])
         for tx in block.vtx[1:]:
-            self.test_node.send_message(msg_tx(tx))
-        self.test_node.sync_with_ping()
+            test_node.send_message(msg_tx(tx))
+        test_node.sync_with_ping()
         # Make sure all transactions were accepted.
-        mempool = self.nodes[0].getrawmempool()
+        mempool = node.getrawmempool()
         for tx in block.vtx[1:]:
             assert(tx.hash in mempool)
 
         # Clear out last request.
         with mininode_lock:
-            self.test_node.last_getblocktxn = None
+            test_node.last_getblocktxn = None
 
         # Send compact block
-        comp_block.initialize_from_block(block, prefill_list=[0])
-        self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
+        comp_block.initialize_from_block(block, prefill_list=[0], use_witness=with_witness)
+        test_tip_after_message(node, test_node, msg_cmpctblock(comp_block.to_p2p()), block.sha256)
         with mininode_lock:
             # Shouldn't have gotten a request for any transaction
-            assert(self.test_node.last_getblocktxn is None)
-        # Tip should have updated
-        assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.sha256)
+            assert(test_node.last_getblocktxn is None)
 
     # Incorrectly responding to a getblocktxn shouldn't cause the block to be
     # permanently failed.
-    def test_incorrect_blocktxn_response(self):
-        print("Testing handling of incorrect blocktxn responses...")
-
+    def test_incorrect_blocktxn_response(self, node, test_node, version):
         if (len(self.utxos) == 0):
             self.make_utxos()
         utxo = self.utxos.pop(0)
 
-        block = self.build_block_with_transactions(utxo, 10)
+        block = self.build_block_with_transactions(node, utxo, 10)
         self.utxos.append([block.vtx[-1].sha256, 0, block.vtx[-1].vout[0].nValue])
         # Relay the first 5 transactions from the block in advance
         for tx in block.vtx[1:6]:
-            self.test_node.send_message(msg_tx(tx))
-        self.test_node.sync_with_ping()
+            test_node.send_message(msg_tx(tx))
+        test_node.sync_with_ping()
         # Make sure all transactions were accepted.
-        mempool = self.nodes[0].getrawmempool()
+        mempool = node.getrawmempool()
         for tx in block.vtx[1:6]:
             assert(tx.hash in mempool)
 
         # Send compact block
         comp_block = HeaderAndShortIDs()
-        comp_block.initialize_from_block(block, prefill_list=[0])
-        self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
+        comp_block.initialize_from_block(block, prefill_list=[0], use_witness=(version == 2))
+        test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
         absolute_indexes = []
         with mininode_lock:
-            assert(self.test_node.last_getblocktxn is not None)
-            absolute_indexes = self.test_node.last_getblocktxn.block_txn_request.to_absolute()
+            assert(test_node.last_getblocktxn is not None)
+            absolute_indexes = test_node.last_getblocktxn.block_txn_request.to_absolute()
         assert_equal(absolute_indexes, [6, 7, 8, 9, 10])
 
         # Now give an incorrect response.
@@ -484,100 +535,107 @@ class CompactBlocksTest(BitcoinTestFramework):
         # verifying that the block isn't marked bad permanently. This is good
         # enough for now.
         msg = msg_blocktxn()
+        if version==2:
+            msg = msg_witness_blocktxn()
         msg.block_transactions = BlockTransactions(block.sha256, [block.vtx[5]] + block.vtx[7:])
-        self.test_node.send_and_ping(msg)
+        test_node.send_and_ping(msg)
 
         # Tip should not have updated
-        assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.hashPrevBlock)
+        assert_equal(int(node.getbestblockhash(), 16), block.hashPrevBlock)
 
         # We should receive a getdata request
-        success = wait_until(lambda: self.test_node.last_getdata is not None, timeout=10)
+        success = wait_until(lambda: test_node.last_getdata is not None, timeout=10)
         assert(success)
-        assert_equal(len(self.test_node.last_getdata.inv), 1)
-        assert_equal(self.test_node.last_getdata.inv[0].type, 2)
-        assert_equal(self.test_node.last_getdata.inv[0].hash, block.sha256)
+        assert_equal(len(test_node.last_getdata.inv), 1)
+        assert(test_node.last_getdata.inv[0].type == 2 or test_node.last_getdata.inv[0].type == 2|MSG_WITNESS_FLAG)
+        assert_equal(test_node.last_getdata.inv[0].hash, block.sha256)
 
         # Deliver the block
-        self.test_node.send_and_ping(msg_block(block))
-        assert_equal(int(self.nodes[0].getbestblockhash(), 16), block.sha256)
-
-    def test_getblocktxn_handler(self):
-        print("Testing getblocktxn handler...")
+        if version==2:
+            test_node.send_and_ping(msg_witness_block(block))
+        else:
+            test_node.send_and_ping(msg_block(block))
+        assert_equal(int(node.getbestblockhash(), 16), block.sha256)
 
+    def test_getblocktxn_handler(self, node, test_node, version):
         # bitcoind won't respond for blocks whose height is more than 15 blocks
         # deep.
         MAX_GETBLOCKTXN_DEPTH = 15
-        chain_height = self.nodes[0].getblockcount()
+        chain_height = node.getblockcount()
         current_height = chain_height
         while (current_height >= chain_height - MAX_GETBLOCKTXN_DEPTH):
-            block_hash = self.nodes[0].getblockhash(current_height)
-            block = FromHex(CBlock(), self.nodes[0].getblock(block_hash, False))
+            block_hash = node.getblockhash(current_height)
+            block = FromHex(CBlock(), node.getblock(block_hash, False))
 
             msg = msg_getblocktxn()
             msg.block_txn_request = BlockTransactionsRequest(int(block_hash, 16), [])
             num_to_request = random.randint(1, len(block.vtx))
             msg.block_txn_request.from_absolute(sorted(random.sample(range(len(block.vtx)), num_to_request)))
-            self.test_node.send_message(msg)
-            success = wait_until(lambda: self.test_node.last_blocktxn is not None, timeout=10)
+            test_node.send_message(msg)
+            success = wait_until(lambda: test_node.last_blocktxn is not None, timeout=10)
             assert(success)
 
             [tx.calc_sha256() for tx in block.vtx]
             with mininode_lock:
-                assert_equal(self.test_node.last_blocktxn.block_transactions.blockhash, int(block_hash, 16))
+                assert_equal(test_node.last_blocktxn.block_transactions.blockhash, int(block_hash, 16))
                 all_indices = msg.block_txn_request.to_absolute()
                 for index in all_indices:
-                    tx = self.test_node.last_blocktxn.block_transactions.transactions.pop(0)
+                    tx = test_node.last_blocktxn.block_transactions.transactions.pop(0)
                     tx.calc_sha256()
                     assert_equal(tx.sha256, block.vtx[index].sha256)
-                self.test_node.last_blocktxn = None
+                    if version == 1:
+                        # Witnesses should have been stripped
+                        assert(tx.wit.is_null())
+                    else:
+                        # Check that the witness matches
+                        assert_equal(tx.calc_sha256(True), block.vtx[index].calc_sha256(True))
+                test_node.last_blocktxn = None
             current_height -= 1
 
         # Next request should be ignored, as we're past the allowed depth.
-        block_hash = self.nodes[0].getblockhash(current_height)
+        block_hash = node.getblockhash(current_height)
         msg.block_txn_request = BlockTransactionsRequest(int(block_hash, 16), [0])
-        self.test_node.send_and_ping(msg)
+        test_node.send_and_ping(msg)
         with mininode_lock:
-            assert_equal(self.test_node.last_blocktxn, None)
-
-    def test_compactblocks_not_at_tip(self):
-        print("Testing compactblock requests/announcements not at chain tip...")
+            assert_equal(test_node.last_blocktxn, None)
 
+    def test_compactblocks_not_at_tip(self, node, test_node):
         # Test that requesting old compactblocks doesn't work.
         MAX_CMPCTBLOCK_DEPTH = 11
         new_blocks = []
         for i in range(MAX_CMPCTBLOCK_DEPTH):
-            self.test_node.clear_block_announcement()
-            new_blocks.append(self.nodes[0].generate(1)[0])
-            wait_until(self.test_node.received_block_announcement, timeout=30)
+            test_node.clear_block_announcement()
+            new_blocks.append(node.generate(1)[0])
+            wait_until(test_node.received_block_announcement, timeout=30)
 
-        self.test_node.clear_block_announcement()
-        self.test_node.send_message(msg_getdata([CInv(4, int(new_blocks[0], 16))]))
-        success = wait_until(lambda: self.test_node.last_cmpctblock is not None, timeout=30)
+        test_node.clear_block_announcement()
+        test_node.send_message(msg_getdata([CInv(4, int(new_blocks[0], 16))]))
+        success = wait_until(lambda: test_node.last_cmpctblock is not None, timeout=30)
         assert(success)
 
-        self.test_node.clear_block_announcement()
-        self.nodes[0].generate(1)
-        wait_until(self.test_node.received_block_announcement, timeout=30)
-        self.test_node.clear_block_announcement()
-        self.test_node.send_message(msg_getdata([CInv(4, int(new_blocks[0], 16))]))
-        success = wait_until(lambda: self.test_node.last_block is not None, timeout=30)
+        test_node.clear_block_announcement()
+        node.generate(1)
+        wait_until(test_node.received_block_announcement, timeout=30)
+        test_node.clear_block_announcement()
+        test_node.send_message(msg_getdata([CInv(4, int(new_blocks[0], 16))]))
+        success = wait_until(lambda: test_node.last_block is not None, timeout=30)
         assert(success)
         with mininode_lock:
-            self.test_node.last_block.block.calc_sha256()
-            assert_equal(self.test_node.last_block.block.sha256, int(new_blocks[0], 16))
+            test_node.last_block.block.calc_sha256()
+            assert_equal(test_node.last_block.block.sha256, int(new_blocks[0], 16))
 
         # Generate an old compactblock, and verify that it's not accepted.
-        cur_height = self.nodes[0].getblockcount()
-        hashPrevBlock = int(self.nodes[0].getblockhash(cur_height-5), 16)
-        block = self.build_block_on_tip()
+        cur_height = node.getblockcount()
+        hashPrevBlock = int(node.getblockhash(cur_height-5), 16)
+        block = self.build_block_on_tip(node)
         block.hashPrevBlock = hashPrevBlock
         block.solve()
 
         comp_block = HeaderAndShortIDs()
         comp_block.initialize_from_block(block)
-        self.test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
+        test_node.send_and_ping(msg_cmpctblock(comp_block.to_p2p()))
 
-        tips = self.nodes[0].getchaintips()
+        tips = node.getchaintips()
         found = False
         for x in tips:
             if x["hash"] == block.hash:
@@ -591,18 +649,61 @@ class CompactBlocksTest(BitcoinTestFramework):
         msg = msg_getblocktxn()
         msg.block_txn_request = BlockTransactionsRequest(block.sha256, [0])
         with mininode_lock:
-            self.test_node.last_blocktxn = None
-        self.test_node.send_and_ping(msg)
+            test_node.last_blocktxn = None
+        test_node.send_and_ping(msg)
         with mininode_lock:
-            assert(self.test_node.last_blocktxn is None)
+            assert(test_node.last_blocktxn is None)
+
+    def activate_segwit(self, node):
+        node.generate(144*3)
+        assert_equal(get_bip9_status(node, "segwit")["status"], 'active')
+
+    def test_end_to_end_block_relay(self, node, listeners):
+        utxo = self.utxos.pop(0)
+
+        block = self.build_block_with_transactions(node, utxo, 10)
+
+        [l.clear_block_announcement() for l in listeners]
+
+        # ToHex() won't serialize with witness, but this block has no witnesses
+        # anyway. TODO: repeat this test with witness tx's to a segwit node.
+        node.submitblock(ToHex(block))
+
+        for l in listeners:
+            wait_until(lambda: l.received_block_announcement(), timeout=30)
+        with mininode_lock:
+            for l in listeners:
+                assert(l.last_cmpctblock is not None)
+                l.last_cmpctblock.header_and_shortids.header.calc_sha256()
+                assert_equal(l.last_cmpctblock.header_and_shortids.header.sha256, block.sha256)
+
+    # Helper for enabling cb announcements
+    # Send the sendcmpct request and sync headers
+    def request_cb_announcements(self, peer, node, version):
+        tip = node.getbestblockhash()
+        peer.get_headers(locator=[int(tip, 16)], hashstop=0)
+
+        msg = msg_sendcmpct()
+        msg.version = version
+        msg.announce = True
+        peer.send_and_ping(msg)
+
 
     def run_test(self):
         # Setup the p2p connections and start up the network thread.
         self.test_node = TestNode()
+        self.segwit_node = TestNode()
+        self.old_node = TestNode()  # version 1 peer <--> segwit node
 
         connections = []
         connections.append(NodeConn('127.0.0.1', p2p_port(0), self.nodes[0], self.test_node))
+        connections.append(NodeConn('127.0.0.1', p2p_port(1), self.nodes[1],
+                    self.segwit_node, services=NODE_NETWORK|NODE_WITNESS))
+        connections.append(NodeConn('127.0.0.1', p2p_port(1), self.nodes[1],
+                    self.old_node, services=NODE_NETWORK))
         self.test_node.add_connection(connections[0])
+        self.segwit_node.add_connection(connections[1])
+        self.old_node.add_connection(connections[2])
 
         NetworkThread().start()  # Start up network handling in another thread
 
@@ -612,13 +713,107 @@ class CompactBlocksTest(BitcoinTestFramework):
         # We will need UTXOs to construct transactions in later tests.
         self.make_utxos()
 
-        self.test_sendcmpct()
-        self.test_compactblock_construction()
-        self.test_compactblock_requests()
-        self.test_getblocktxn_requests()
-        self.test_getblocktxn_handler()
-        self.test_compactblocks_not_at_tip()
-        self.test_incorrect_blocktxn_response()
+        print("Running tests, pre-segwit activation:")
+
+        print("\tTesting SENDCMPCT p2p message... ")
+        self.test_sendcmpct(self.nodes[0], self.test_node, 1)
+        sync_blocks(self.nodes)
+        self.test_sendcmpct(self.nodes[1], self.segwit_node, 2, old_node=self.old_node)
+        sync_blocks(self.nodes)
+
+        print("\tTesting compactblock construction...")
+        self.test_compactblock_construction(self.nodes[0], self.test_node, 1, False)
+        sync_blocks(self.nodes)
+        self.test_compactblock_construction(self.nodes[1], self.segwit_node, 2, False)
+        sync_blocks(self.nodes)
+
+        print("\tTesting compactblock requests... ")
+        self.test_compactblock_requests(self.nodes[0], self.test_node)
+        sync_blocks(self.nodes)
+        self.test_compactblock_requests(self.nodes[1], self.segwit_node)
+        sync_blocks(self.nodes)
+
+        print("\tTesting getblocktxn requests...")
+        self.test_getblocktxn_requests(self.nodes[0], self.test_node, 1)
+        sync_blocks(self.nodes)
+        self.test_getblocktxn_requests(self.nodes[1], self.segwit_node, 2)
+        sync_blocks(self.nodes)
+
+        print("\tTesting getblocktxn handler...")
+        self.test_getblocktxn_handler(self.nodes[0], self.test_node, 1)
+        sync_blocks(self.nodes)
+        self.test_getblocktxn_handler(self.nodes[1], self.segwit_node, 2)
+        self.test_getblocktxn_handler(self.nodes[1], self.old_node, 1)
+        sync_blocks(self.nodes)
+
+        print("\tTesting compactblock requests/announcements not at chain tip...")
+        self.test_compactblocks_not_at_tip(self.nodes[0], self.test_node)
+        sync_blocks(self.nodes)
+        self.test_compactblocks_not_at_tip(self.nodes[1], self.segwit_node)
+        self.test_compactblocks_not_at_tip(self.nodes[1], self.old_node)
+        sync_blocks(self.nodes)
+
+        print("\tTesting handling of incorrect blocktxn responses...")
+        self.test_incorrect_blocktxn_response(self.nodes[0], self.test_node, 1)
+        sync_blocks(self.nodes)
+        self.test_incorrect_blocktxn_response(self.nodes[1], self.segwit_node, 2)
+        sync_blocks(self.nodes)
+
+        # End-to-end block relay tests
+        print("\tTesting end-to-end block relay...")
+        self.request_cb_announcements(self.test_node, self.nodes[0], 1)
+        self.request_cb_announcements(self.old_node, self.nodes[1], 1)
+        self.request_cb_announcements(self.segwit_node, self.nodes[1], 2)
+        self.test_end_to_end_block_relay(self.nodes[0], [self.segwit_node, self.test_node, self.old_node])
+        self.test_end_to_end_block_relay(self.nodes[1], [self.segwit_node, self.test_node, self.old_node])
+
+        # Advance to segwit activation
+        print ("\nAdvancing to segwit activation\n")
+        self.activate_segwit(self.nodes[1])
+        print ("Running tests, post-segwit activation...")
+
+        print("\tTesting compactblock construction...")
+        self.test_compactblock_construction(self.nodes[1], self.old_node, 1, True)
+        self.test_compactblock_construction(self.nodes[1], self.segwit_node, 2, True)
+        sync_blocks(self.nodes)
+
+        print("\tTesting compactblock requests (unupgraded node)... ")
+        self.test_compactblock_requests(self.nodes[0], self.test_node)
+
+        print("\tTesting getblocktxn requests (unupgraded node)...")
+        self.test_getblocktxn_requests(self.nodes[0], self.test_node, 1)
+
+        # Need to manually sync node0 and node1, because post-segwit activation,
+        # node1 will not download blocks from node0.
+        print("\tSyncing nodes...")
+        assert(self.nodes[0].getbestblockhash() != self.nodes[1].getbestblockhash())
+        while (self.nodes[0].getblockcount() > self.nodes[1].getblockcount()):
+            block_hash = self.nodes[0].getblockhash(self.nodes[1].getblockcount()+1)
+            self.nodes[1].submitblock(self.nodes[0].getblock(block_hash, False))
+        assert_equal(self.nodes[0].getbestblockhash(), self.nodes[1].getbestblockhash())
+
+        print("\tTesting compactblock requests (segwit node)... ")
+        self.test_compactblock_requests(self.nodes[1], self.segwit_node)
+
+        print("\tTesting getblocktxn requests (segwit node)...")
+        self.test_getblocktxn_requests(self.nodes[1], self.segwit_node, 2)
+        sync_blocks(self.nodes)
+
+        print("\tTesting getblocktxn handler (segwit node should return witnesses)...")
+        self.test_getblocktxn_handler(self.nodes[1], self.segwit_node, 2)
+        self.test_getblocktxn_handler(self.nodes[1], self.old_node, 1)
+
+        # Test that if we submitblock to node1, we'll get a compact block
+        # announcement to all peers.
+        # (Post-segwit activation, blocks won't propagate from node0 to node1
+        # automatically, so don't bother testing a block announced to node0.)
+        print("\tTesting end-to-end block relay...")
+        self.request_cb_announcements(self.test_node, self.nodes[0], 1)
+        self.request_cb_announcements(self.old_node, self.nodes[1], 1)
+        self.request_cb_announcements(self.segwit_node, self.nodes[1], 2)
+        self.test_end_to_end_block_relay(self.nodes[1], [self.segwit_node, self.test_node, self.old_node])
+
+        print("\tTesting invalid index in cmpctblock message...")
         self.test_invalid_cmpctblock_message()