diff --git a/baseapp/baseapp.go b/baseapp/baseapp.go
index d3bf85fe8..36843b776 100644
--- a/baseapp/baseapp.go
+++ b/baseapp/baseapp.go
@@ -35,6 +35,7 @@ type BaseApp struct {
 	// must be set
 	txDecoder   sdk.TxDecoder   // unmarshal []byte into sdk.Tx
 	anteHandler sdk.AnteHandler // ante handler for fee and auth
+	txGasLimit  sdk.Gas         // per-transaction gas limit
 
 	// may be nil
 	initChainer  sdk.InitChainer  // initialize state with validators and state blob
@@ -66,6 +67,7 @@ func NewBaseApp(name string, cdc *wire.Codec, logger log.Logger, db dbm.DB) *Bas
 		router:     NewRouter(),
 		codespacer: sdk.NewCodespacer(),
 		txDecoder:  defaultTxDecoder(cdc),
+		txGasLimit: sdk.Gas(10000),
 	}
 	// Register the undefined & root codespaces, which should not be used by any modules
 	app.codespacer.RegisterOrPanic(sdk.CodespaceUndefined)
@@ -210,9 +212,9 @@ func (app *BaseApp) initFromStore(mainKey sdk.StoreKey) error {
 // NewContext returns a new Context with the correct store, the given header, and nil txBytes.
 func (app *BaseApp) NewContext(isCheckTx bool, header abci.Header) sdk.Context {
 	if isCheckTx {
-		return sdk.NewContext(app.checkState.ms, header, true, nil, app.Logger)
+		return sdk.NewContext(app.checkState.ms, header, true, nil, app.Logger, app.txGasLimit)
 	}
-	return sdk.NewContext(app.deliverState.ms, header, false, nil, app.Logger)
+	return sdk.NewContext(app.deliverState.ms, header, false, nil, app.Logger, app.txGasLimit)
 }
 
 type state struct {
@@ -228,7 +230,7 @@ func (app *BaseApp) setCheckState(header abci.Header) {
 	ms := app.cms.CacheMultiStore()
 	app.checkState = &state{
 		ms:  ms,
-		ctx: sdk.NewContext(ms, header, true, nil, app.Logger),
+		ctx: sdk.NewContext(ms, header, true, nil, app.Logger, app.txGasLimit),
 	}
 }
 
@@ -236,7 +238,7 @@ func (app *BaseApp) setDeliverState(header abci.Header) {
 	ms := app.cms.CacheMultiStore()
 	app.deliverState = &state{
 		ms:  ms,
-		ctx: sdk.NewContext(ms, header, false, nil, app.Logger),
+		ctx: sdk.NewContext(ms, header, false, nil, app.Logger, app.txGasLimit),
 	}
 }
 
diff --git a/examples/democoin/x/cool/keeper_test.go b/examples/democoin/x/cool/keeper_test.go
index d497dee69..10e958ce7 100644
--- a/examples/democoin/x/cool/keeper_test.go
+++ b/examples/democoin/x/cool/keeper_test.go
@@ -30,7 +30,7 @@ func TestCoolKeeper(t *testing.T) {
 	auth.RegisterBaseAccount(cdc)
 
 	am := auth.NewAccountMapper(cdc, capKey, &auth.BaseAccount{})
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, nil)
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, nil, 0)
 	ck := bank.NewKeeper(am)
 	keeper := NewKeeper(capKey, ck, DefaultCodespace)
 
diff --git a/examples/democoin/x/pow/handler_test.go b/examples/democoin/x/pow/handler_test.go
index 30aeafa2a..48e9c53e7 100644
--- a/examples/democoin/x/pow/handler_test.go
+++ b/examples/democoin/x/pow/handler_test.go
@@ -20,7 +20,7 @@ func TestPowHandler(t *testing.T) {
 	auth.RegisterBaseAccount(cdc)
 
 	am := auth.NewAccountMapper(cdc, capKey, &auth.BaseAccount{})
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	config := NewConfig("pow", int64(1))
 	ck := bank.NewKeeper(am)
 	keeper := NewKeeper(capKey, config, ck, DefaultCodespace)
diff --git a/examples/democoin/x/pow/keeper_test.go b/examples/democoin/x/pow/keeper_test.go
index a4afb876a..324cdcdce 100644
--- a/examples/democoin/x/pow/keeper_test.go
+++ b/examples/democoin/x/pow/keeper_test.go
@@ -33,7 +33,7 @@ func TestPowKeeperGetSet(t *testing.T) {
 	auth.RegisterBaseAccount(cdc)
 
 	am := auth.NewAccountMapper(cdc, capKey, &auth.BaseAccount{})
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	config := NewConfig("pow", int64(1))
 	ck := bank.NewKeeper(am)
 	keeper := NewKeeper(capKey, config, ck, DefaultCodespace)
diff --git a/examples/democoin/x/simplestake/keeper_test.go b/examples/democoin/x/simplestake/keeper_test.go
index 302a2e58b..1d19a61d7 100644
--- a/examples/democoin/x/simplestake/keeper_test.go
+++ b/examples/democoin/x/simplestake/keeper_test.go
@@ -33,7 +33,7 @@ func setupMultiStore() (sdk.MultiStore, *sdk.KVStoreKey, *sdk.KVStoreKey) {
 func TestKeeperGetSet(t *testing.T) {
 	ms, _, capKey := setupMultiStore()
 
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	stakeKeeper := NewKeeper(capKey, bank.NewKeeper(nil), DefaultCodespace)
 	addr := sdk.Address([]byte("some-address"))
 
@@ -60,7 +60,7 @@ func TestBonding(t *testing.T) {
 	cdc := wire.NewCodec()
 	auth.RegisterBaseAccount(cdc)
 
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 
 	accountMapper := auth.NewAccountMapper(cdc, authKey, &auth.BaseAccount{})
 	coinKeeper := bank.NewKeeper(accountMapper)
diff --git a/types/context.go b/types/context.go
index b3f30a2e0..33713d353 100644
--- a/types/context.go
+++ b/types/context.go
@@ -30,7 +30,7 @@ type Context struct {
 }
 
 // create a new context
-func NewContext(ms MultiStore, header abci.Header, isCheckTx bool, txBytes []byte, logger log.Logger) Context {
+func NewContext(ms MultiStore, header abci.Header, isCheckTx bool, txBytes []byte, logger log.Logger, gasLimit Gas) Context {
 	c := Context{
 		Context: context.Background(),
 		pst:     newThePast(),
@@ -43,8 +43,7 @@ func NewContext(ms MultiStore, header abci.Header, isCheckTx bool, txBytes []byt
 	c = c.WithIsCheckTx(isCheckTx)
 	c = c.WithTxBytes(txBytes)
 	c = c.WithLogger(logger)
-	c = c.WithGasLimit(0)
-	c = c.WithGasConsumed(0)
+	c = c.WithGasMeter(NewGasMeter(gasLimit))
 	return c
 }
 
@@ -129,8 +128,7 @@ const (
 	contextKeyIsCheckTx
 	contextKeyTxBytes
 	contextKeyLogger
-	contextKeyGasLimit
-	contextKeyGasConsumed
+	contextKeyGasMeter
 )
 
 // NOTE: Do not expose MultiStore.
@@ -159,11 +157,8 @@ func (c Context) TxBytes() []byte {
 func (c Context) Logger() log.Logger {
 	return c.Value(contextKeyLogger).(log.Logger)
 }
-func (c Context) GasLimit() uint64 {
-	return c.Value(contextKeyGasLimit).(uint64)
-}
-func (c Context) GasConsumed() uint64 {
-	return c.Value(contextKeyGasConsumed).(uint64)
+func (c Context) GasMeter() GasMeter {
+	return c.Value(contextKeyGasMeter).(GasMeter)
 }
 func (c Context) WithMultiStore(ms MultiStore) Context {
 	return c.withValue(contextKeyMultiStore, ms)
@@ -187,11 +182,8 @@ func (c Context) WithTxBytes(txBytes []byte) Context {
 func (c Context) WithLogger(logger log.Logger) Context {
 	return c.withValue(contextKeyLogger, logger)
 }
-func (c Context) WithGasLimit(limit uint64) Context {
-	return c.withValue(contextKeyGasLimit, limit)
-}
-func (c Context) WithGasConsumed(consumed uint64) Context {
-	return c.withValue(contextKeyGasConsumed, consumed)
+func (c Context) WithGasMeter(meter GasMeter) Context {
+	return c.withValue(contextKeyGasMeter, meter)
 }
 
 // Cache the multistore and return a new cached context. The cached context is
diff --git a/types/context_test.go b/types/context_test.go
index ec5faab44..9eafed625 100644
--- a/types/context_test.go
+++ b/types/context_test.go
@@ -43,7 +43,7 @@ func (l MockLogger) With(kvs ...interface{}) log.Logger {
 
 func TestContextGetOpShouldNeverPanic(t *testing.T) {
 	var ms types.MultiStore
-	ctx := types.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := types.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	indices := []int64{
 		-10, 1, 0, 10, 20,
 	}
@@ -58,7 +58,7 @@ func defaultContext(key types.StoreKey) types.Context {
 	cms := store.NewCommitMultiStore(db)
 	cms.MountStoreWithDB(key, types.StoreTypeIAVL, db)
 	cms.LoadLatestVersion()
-	ctx := types.NewContext(cms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := types.NewContext(cms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	return ctx
 }
 
diff --git a/types/gas.go b/types/gas.go
new file mode 100644
index 000000000..63aa71c1b
--- /dev/null
+++ b/types/gas.go
@@ -0,0 +1,36 @@
+package types
+
+import ()
+
+type Gas uint64
+
+type GasMeter interface {
+	GasExceeded() bool
+	ConsumeGas(amount Gas)
+	ConsumeGasOrFail(amount Gas) bool
+}
+
+type basicGasMeter struct {
+	limit    Gas
+	consumed Gas
+}
+
+func NewGasMeter(limit Gas) GasMeter {
+	return &basicGasMeter{
+		limit:    limit,
+		consumed: 0,
+	}
+}
+
+func (g *basicGasMeter) GasExceeded() bool {
+	return g.consumed > g.limit
+}
+
+func (g *basicGasMeter) ConsumeGas(amount Gas) {
+	g.consumed += amount
+}
+
+func (g *basicGasMeter) ConsumeGasOrFail(amount Gas) bool {
+	g.ConsumeGas(amount)
+	return g.GasExceeded()
+}
diff --git a/types/lib/mapper_test.go b/types/lib/mapper_test.go
index e1759b06a..ab6fb605a 100644
--- a/types/lib/mapper_test.go
+++ b/types/lib/mapper_test.go
@@ -25,7 +25,7 @@ func defaultComponents(key sdk.StoreKey) (sdk.Context, *wire.Codec) {
 	cms := store.NewCommitMultiStore(db)
 	cms.MountStoreWithDB(key, sdk.StoreTypeIAVL, db)
 	cms.LoadLatestVersion()
-	ctx := sdk.NewContext(cms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(cms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	cdc := wire.NewCodec()
 	return ctx, cdc
 }
diff --git a/x/auth/ante_test.go b/x/auth/ante_test.go
index ec296b12b..8310d3069 100644
--- a/x/auth/ante_test.go
+++ b/x/auth/ante_test.go
@@ -74,7 +74,7 @@ func TestAnteHandlerSigErrors(t *testing.T) {
 	RegisterBaseAccount(cdc)
 	mapper := NewAccountMapper(cdc, capKey, &BaseAccount{})
 	anteHandler := NewAnteHandler(mapper, BurnFeeHandler)
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger(), 0)
 
 	// keys and addresses
 	priv1, addr1 := privAndAddr()
@@ -115,7 +115,7 @@ func TestAnteHandlerSequences(t *testing.T) {
 	RegisterBaseAccount(cdc)
 	mapper := NewAccountMapper(cdc, capKey, &BaseAccount{})
 	anteHandler := NewAnteHandler(mapper, BurnFeeHandler)
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger(), 0)
 
 	// keys and addresses
 	priv1, addr1 := privAndAddr()
@@ -181,7 +181,7 @@ func TestAnteHandlerFees(t *testing.T) {
 	RegisterBaseAccount(cdc)
 	mapper := NewAccountMapper(cdc, capKey, &BaseAccount{})
 	anteHandler := NewAnteHandler(mapper, BurnFeeHandler)
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger(), 0)
 
 	// keys and addresses
 	priv1, addr1 := privAndAddr()
@@ -218,7 +218,7 @@ func TestAnteHandlerBadSignBytes(t *testing.T) {
 	RegisterBaseAccount(cdc)
 	mapper := NewAccountMapper(cdc, capKey, &BaseAccount{})
 	anteHandler := NewAnteHandler(mapper, BurnFeeHandler)
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger(), 0)
 
 	// keys and addresses
 	priv1, addr1 := privAndAddr()
@@ -293,7 +293,7 @@ func TestAnteHandlerSetPubKey(t *testing.T) {
 	RegisterBaseAccount(cdc)
 	mapper := NewAccountMapper(cdc, capKey, &BaseAccount{})
 	anteHandler := NewAnteHandler(mapper, BurnFeeHandler)
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger(), 0)
 
 	// keys and addresses
 	priv1, addr1 := privAndAddr()
diff --git a/x/auth/context_test.go b/x/auth/context_test.go
index 89e318e0a..996a06889 100644
--- a/x/auth/context_test.go
+++ b/x/auth/context_test.go
@@ -13,7 +13,7 @@ import (
 
 func TestContextWithSigners(t *testing.T) {
 	ms, _ := setupMultiStore()
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "mychainid"}, false, nil, log.NewNopLogger(), 0)
 
 	_, _, addr1 := keyPubAddr()
 	_, _, addr2 := keyPubAddr()
diff --git a/x/auth/mapper_test.go b/x/auth/mapper_test.go
index cdd418990..80f673f99 100644
--- a/x/auth/mapper_test.go
+++ b/x/auth/mapper_test.go
@@ -29,7 +29,7 @@ func TestAccountMapperGetSet(t *testing.T) {
 	RegisterBaseAccount(cdc)
 
 	// make context and mapper
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	mapper := NewAccountMapper(cdc, capKey, &BaseAccount{})
 
 	addr := sdk.Address([]byte("some-address"))
diff --git a/x/bank/keeper_test.go b/x/bank/keeper_test.go
index 3db16c5f9..324152df2 100644
--- a/x/bank/keeper_test.go
+++ b/x/bank/keeper_test.go
@@ -31,7 +31,7 @@ func TestKeeper(t *testing.T) {
 	cdc := wire.NewCodec()
 	auth.RegisterBaseAccount(cdc)
 
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	accountMapper := auth.NewAccountMapper(cdc, authKey, &auth.BaseAccount{})
 	coinKeeper := NewKeeper(accountMapper)
 
@@ -117,7 +117,7 @@ func TestSendKeeper(t *testing.T) {
 	cdc := wire.NewCodec()
 	auth.RegisterBaseAccount(cdc)
 
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	accountMapper := auth.NewAccountMapper(cdc, authKey, &auth.BaseAccount{})
 	coinKeeper := NewKeeper(accountMapper)
 	sendKeeper := NewSendKeeper(accountMapper)
@@ -186,7 +186,7 @@ func TestViewKeeper(t *testing.T) {
 	cdc := wire.NewCodec()
 	auth.RegisterBaseAccount(cdc)
 
-	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	accountMapper := auth.NewAccountMapper(cdc, authKey, &auth.BaseAccount{})
 	coinKeeper := NewKeeper(accountMapper)
 	viewKeeper := NewViewKeeper(accountMapper)
diff --git a/x/ibc/ibc_test.go b/x/ibc/ibc_test.go
index 60cc59bad..298b5b462 100644
--- a/x/ibc/ibc_test.go
+++ b/x/ibc/ibc_test.go
@@ -24,7 +24,7 @@ func defaultContext(key sdk.StoreKey) sdk.Context {
 	cms := store.NewCommitMultiStore(db)
 	cms.MountStoreWithDB(key, sdk.StoreTypeIAVL, db)
 	cms.LoadLatestVersion()
-	ctx := sdk.NewContext(cms, abci.Header{}, false, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(cms, abci.Header{}, false, nil, log.NewNopLogger(), 0)
 	return ctx
 }
 
diff --git a/x/stake/test_common.go b/x/stake/test_common.go
index 27acebe08..15c300d41 100644
--- a/x/stake/test_common.go
+++ b/x/stake/test_common.go
@@ -158,7 +158,7 @@ func createTestInput(t *testing.T, isCheckTx bool, initCoins int64) (sdk.Context
 	err := ms.LoadLatestVersion()
 	require.Nil(t, err)
 
-	ctx := sdk.NewContext(ms, abci.Header{ChainID: "foochainid"}, isCheckTx, nil, log.NewNopLogger())
+	ctx := sdk.NewContext(ms, abci.Header{ChainID: "foochainid"}, isCheckTx, nil, log.NewNopLogger(), 0)
 	cdc := makeTestCodec()
 	accountMapper := auth.NewAccountMapper(
 		cdc,                 // amino codec