diff --git a/lnd_test.go b/lnd_test.go
new file mode 100644
index 00000000..94d98a1a
--- /dev/null
+++ b/lnd_test.go
@@ -0,0 +1,187 @@
+package main
+
+import (
+	"bytes"
+	"context"
+	"fmt"
+	"runtime/debug"
+	"strings"
+	"testing"
+	"time"
+
+	"github.com/lightningnetwork/lnd/lnrpc"
+	"github.com/roasbeef/btcd/rpctest"
+	"github.com/roasbeef/btcd/wire"
+	"github.com/roasbeef/btcutil"
+)
+
+type lndTestCase func(net *networkHarness, t *testing.T)
+
+func assertTxInBlock(block *btcutil.Block, txid *wire.ShaHash, t *testing.T) {
+	for _, tx := range block.Transactions() {
+		if bytes.Equal(txid[:], tx.Sha()[:]) {
+			return
+		}
+	}
+
+	t.Fatalf("funding tx was not included in block")
+}
+
+// testBasicChannelFunding performs a test excercising expected behavior from a
+// basic funding workflow. The test creates a new channel between Alice and
+// Bob, then immediately closes the channel after asserting some expected post
+// conditions. Finally, the chain itelf is checked to ensure the closing
+// transaction was mined.
+func testBasicChannelFunding(net *networkHarness, t *testing.T) {
+	ctxb := context.Background()
+
+	// First establish a channel between Alice and Bob.
+	openReq := &lnrpc.OpenChannelRequest{
+		// TODO(roasbeef): should pass actual id instead, will fail if
+		// more connections added for Alice.
+		TargetPeerId:        1,
+		LocalFundingAmount:  btcutil.SatoshiPerBitcoin / 2,
+		RemoteFundingAmount: 0,
+		NumConfs:            1,
+	}
+	time.Sleep(time.Millisecond * 500)
+	respStream, err := net.AliceClient.OpenChannel(ctxb, openReq)
+	if err != nil {
+		t.Fatalf("unable to open channel between alice and bob: %v", err)
+	}
+
+	// Mine a block, the funding txid should be included, and both nodes should
+	// be aware of the channel.
+	// TODO(roasbeef): replace sleep with something more robust
+	time.Sleep(time.Second * 1)
+	blockHash, err := net.Miner.Node.Generate(1)
+	if err != nil {
+		t.Fatalf("unable to generate block: %v", err)
+	}
+	resp, err := respStream.Recv()
+	if err != nil {
+		t.Fatalf("unable to read rpc resp: %v", err)
+	}
+	block, err := net.Miner.Node.GetBlock(blockHash[0])
+	if err != nil {
+		t.Fatalf("unable to get block: %v", err)
+	}
+	if len(block.Transactions()) < 2 {
+		t.Fatalf("funding transaction not included")
+	}
+
+	fundingTxID, _ := wire.NewShaHash(resp.ChannelPoint.FundingTxid)
+	fundingTxIDStr := fundingTxID.String()
+	assertTxInBlock(block, fundingTxID, t)
+
+	// TODO(roasbeef): remove and use "listchannels" command after
+	// implemented.
+	req := &lnrpc.ListPeersRequest{}
+	alicePeerInfo, err := net.AliceClient.ListPeers(ctxb, req)
+	if err != nil {
+		t.Fatalf("unable to list alice peers: %v", err)
+	}
+	bobPeerInfo, err := net.BobClient.ListPeers(ctxb, req)
+	if err != nil {
+		t.Fatalf("unable to list bob peers: %v", err)
+	}
+
+	// The channel should be listed in the peer information returned by
+	// both peers.
+	aliceTxID := alicePeerInfo.Peers[0].Channels[0].ChannelPoint
+	bobTxID := bobPeerInfo.Peers[0].Channels[0].ChannelPoint
+	if !strings.Contains(bobTxID, fundingTxIDStr) {
+		t.Fatalf("alice's channel not found")
+	}
+	if !strings.Contains(aliceTxID, fundingTxIDStr) {
+		t.Fatalf("bob's channel not found")
+	}
+
+	// Initiate a close from Alice's side. After mining a block, the closing
+	// transaction should be included, and both nodes should have forgotten
+	// about the channel.
+	closeReq := &lnrpc.CloseChannelRequest{
+		ChannelPoint: resp.ChannelPoint,
+	}
+	closeRespStream, err := net.AliceClient.CloseChannel(ctxb, closeReq)
+	if err != nil {
+		t.Fatalf("unable to close channel: %v", err)
+	}
+	time.Sleep(time.Second * 1)
+	blockHash, err = net.Miner.Node.Generate(1)
+	if err != nil {
+		t.Fatalf("unable to generate block: %v", err)
+	}
+	block, err = net.Miner.Node.GetBlock(blockHash[0])
+	if err != nil {
+		t.Fatalf("unable to get block: %v", err)
+	}
+	closeResp, err := closeRespStream.Recv()
+	if err != nil {
+		t.Fatalf("unable to read rpc resp: %v", err)
+	}
+
+	closingTxID, _ := wire.NewShaHash(closeResp.ClosingTxid)
+	assertTxInBlock(block, closingTxID, t)
+}
+
+var lndTestCases = map[string]lndTestCase{
+	"basic funding flow": testBasicChannelFunding,
+}
+
+// TestLightningNetworkDaemon performs a series of integration tests amongst a
+// programatically driven network of lnd nodes.
+func TestLightningNetworkDaemon(t *testing.T) {
+	var btcdHarness *rpctest.Harness
+	var lightningNetwork *networkHarness
+	var currentTest string
+	var err error
+
+	defer func() {
+		// If one of the integration tests caused a panic within the main
+		// goroutine, then tear down all the harnesses in order to avoid
+		// any leaked processes.
+		if r := recover(); r != nil {
+			fmt.Println("recovering from test panic: ", r)
+			if err := btcdHarness.TearDown(); err != nil {
+				fmt.Println("unable to tear btcd harnesses: ", err)
+			}
+			if err := lightningNetwork.TearDownAll(); err != nil {
+				fmt.Println("unable to tear lnd harnesses: ", err)
+			}
+			t.Fatalf("test %v panicked: %s", currentTest, debug.Stack())
+		}
+	}()
+
+	// First create an intance of the btcd's rpctest.Harness. This will be
+	// used to fund the wallets of the nodes within the test network and to
+	// drive blockchain related events within the network.
+	btcdHarness, err = rpctest.New(harnessNetParams, nil, nil)
+	if err != nil {
+		t.Fatalf("unable to create mining node: %v", err)
+	}
+	defer btcdHarness.TearDown()
+	if err = btcdHarness.SetUp(true, 50); err != nil {
+		t.Fatalf("unable to set up mining node: %v", err)
+	}
+
+	// With the btcd harness created, create an instance of the lightning
+	// network harness as it depends on the btcd harness to script network
+	// activity.
+	lightningNetwork, err = newNetworkHarness(btcdHarness, nil)
+	if err != nil {
+		t.Fatalf("unable to create lightning network harness: %v", err)
+	}
+	defer lightningNetwork.TearDownAll()
+	if err = lightningNetwork.SetUp(); err != nil {
+		t.Fatalf("unable to set up test lightning network: %v", err)
+	}
+
+	t.Logf("Running %v integration tests", len(lndTestCases))
+	for testName, lnTest := range lndTestCases {
+		t.Logf("Executing test %v", testName)
+
+		currentTest = testName
+		lnTest(lightningNetwork, t)
+	}
+}
diff --git a/networkharness.go b/networkharness.go
index 9ec41fb4..758d3d73 100644
--- a/networkharness.go
+++ b/networkharness.go
@@ -230,6 +230,9 @@ type networkHarness struct {
 // running instance of btcd's rpctest harness. Any extra command line flags
 // which should be passed to create lnd instance should be formatted properly
 // in the lndArgs slice (--arg=value).
+// TODO(roasbeef): add option to use golang's build library to a binary of the
+// current repo. This'll save developers from having to manually `go install`
+// within the repo each time before changes.
 func newNetworkHarness(r *rpctest.Harness, lndArgs []string) (*networkHarness, error) {
 	var err error