diff --git a/lib/block/merkleblock.js b/lib/block/merkleblock.js
index d2012664a..a95d64ec1 100644
--- a/lib/block/merkleblock.js
+++ b/lib/block/merkleblock.js
@@ -154,16 +154,11 @@ MerkleBlock.prototype.validMerkleTree = function validMerkleTree() {
     return false;
   }
 
-  var height = 0;
-  while (this._calcTreeWidth(height) > 1) {
-    height++;
-  }
-
-  this._flagBitsUsed = 0;
-  this._hashesUsed = 0;
-  var root = this._traverseMerkleTree(height, 0);
-  if(this._hashesUsed !== this.hashes.length) {
-    false;
+  var height = this._calcTreeHeight();
+  var opts = { hashesUsed: 0, flagBitsUsed: 0 };
+  var root = this._traverseMerkleTree(height, 0, opts);
+  if(opts.hashesUsed !== this.hashes.length) {
+    return false;
   }
   return BufferUtil.equals(root, this.header.merkleRoot);
 }
@@ -172,27 +167,37 @@ MerkleBlock.prototype.validMerkleTree = function validMerkleTree() {
  *  Modeled after Bitcoin Core merkleblock.cpp TraverseAndExtract()
  * @param {Number} - Current height
  * @param {Number} - Current position in the tree
- * @returns {Buffer|null} - Buffer containing the Merkle Hash far that height
+ * @param {Object} - Object with values that need to be mutated throughout the traversal
+ *   @param {flagBitsUsed} - Number of flag bits used, should start at 0
+ *   @param {hashesUsed} - Number of hashes used, should start at 0
+ *   @param {tx} - Will finish populated by transactions found during traversal
+ * @returns {Buffer|null} - Buffer containing the Merkle Hash for that height
  * @private
  */
-MerkleBlock.prototype._traverseMerkleTree = function traverseMerkleTree(depth, pos) {
-  if(this._flagBitsUsed > this.flags.length * 8) {
+MerkleBlock.prototype._traverseMerkleTree = function traverseMerkleTree(depth, pos, opts) {
+  opts = opts || {};
+  opts.txs = opts.txs || [];
+  opts.flagBitsUsed = opts.flagBitsUsed || 0;
+  opts.hashesUsed = opts.hashesUsed || 0;
+
+  if(opts.flagBitsUsed > this.flags.length * 8) {
     return null;
   }
-  var isParentOfMatch = (this.flags[this._flagBitsUsed >> 3] >>> (this._flagBitsUsed++ & 7)) & 1;
+  var isParentOfMatch = (this.flags[opts.flagBitsUsed >> 3] >>> (opts.flagBitsUsed++ & 7)) & 1;
   if(depth === 0 || !isParentOfMatch) {
-    if(this._hashesUsed >= this.hashes.length) {
+    if(opts.hashesUsed >= this.hashes.length) {
       return null;
     }
-    var hash = this.hashes[this._hashesUsed++];
+    var hash = this.hashes[opts.hashesUsed++];
+    if(depth === 0 && isParentOfMatch) {
+      opts.txs.push(hash);
+    }
     return new Buffer(hash, 'hex');
   } else {
-    var left = this._traverseMerkleTree(depth-1, pos*2);
-    var right;
+    var left = this._traverseMerkleTree(depth-1, pos*2, opts);
+    var right = left;;
     if(pos*2+1 < this._calcTreeWidth(depth-1)) {
-      right = this._traverseMerkleTree(depth-1, pos*2+1);
-    } else {
-      right = left;
+      right = this._traverseMerkleTree(depth-1, pos*2+1, opts);
     }
     return Hash.sha256sha256(new Buffer.concat([left, right]));
   }
@@ -208,6 +213,19 @@ MerkleBlock.prototype._calcTreeWidth = function calcTreeWidth(height) {
   return (this.numTransactions + (1 << height) - 1) >> height;
 }
 
+/** Calculates the height of the merkle tree in this MerkleBlock
+ * @param {Number} - Height at which we want the tree width
+ * @returns {Number} - Height of the merkle tree in this MerkleBlock
+ * @private
+ */
+MerkleBlock.prototype._calcTreeHeight = function calcTreeHeight() {
+  var height = 0;
+  while (this._calcTreeWidth(height) > 1) {
+    height++;
+  }
+  return height;
+}
+
 /**
  * @param {Transaction|String} - Transaction or Transaction ID Hash
  * @returns {Bool} - return true/false if this MerkleBlock has the TX or not
@@ -218,11 +236,16 @@ MerkleBlock.prototype.hasTransaction = function hasTransaction(tx) {
   $.checkArgument(tx instanceof Transaction || typeof tx === 'string',
       'Invalid tx given, tx must be a "string" or "Transaction"');
 
-  var hash = tx.id || tx;
-  var revHash = BufferUtil.reverse(new Buffer(hash,'hex')).toString('hex');
+  var hash = tx;
+  if(tx instanceof Transaction) {
+    // We need to reverse the id hash for the lookup
+    hash = BufferUtil.reverse(new Buffer(tx.id, 'hex')).toString('hex');
+  }
 
-  return (this.hashes.indexOf(hash) !== -1
-    || this.hashes.indexOf(revHash) !== -1);
+  var txs = [];
+  var height = this._calcTreeHeight();
+  this._traverseMerkleTree(height, 0, { txs: txs });
+  return txs.indexOf(hash) !== -1
 }
 
 /**
diff --git a/test/merkleblock.js b/test/merkleblock.js
index 236f863fa..ed020f36f 100644
--- a/test/merkleblock.js
+++ b/test/merkleblock.js
@@ -3,7 +3,6 @@ var bitcore = require('..');
 var MerkleBlock = bitcore.MerkleBlock;
 var BufferReader = bitcore.encoding.BufferReader;
 var BufferWriter = bitcore.encoding.BufferWriter;
-var BufferUtil = bitcore.util.buffer;
 var Transaction = bitcore.Transaction;
 var data = require('./data/merkleblocks.js');
 var transactionVector = require('./data/tx_creation');
@@ -154,7 +153,7 @@ describe('MerkleBlock', function() {
 
     it('should find transactions via hash string', function() {
       var json = data.JSON[0];
-      var txId = BufferUtil.reverse(new Buffer(json.hashes[1],'hex')).toString('hex');
+      var txId = new Buffer(json.hashes[1],'hex').toString('hex');
       var b = MerkleBlock(JSON.stringify(json));
       b.hasTransaction(txId).should.equal(true);
       b.hasTransaction(txId + 'abcd').should.equal(false);