diff --git a/src/main.cpp b/src/main.cpp
index efc70af9..8c60a26b 100644
--- a/src/main.cpp
+++ b/src/main.cpp
@@ -365,7 +365,24 @@ bool IsStandardTx(const CTransaction& tx, string& reason)
         return false;
     }
 
-    if (!IsFinalTx(tx)) {
+    // Treat non-final transactions as non-standard to prevent a specific type
+    // of double-spend attack, as well as DoS attacks. (if the transaction
+    // can't be mined, the attacker isn't expending resources broadcasting it)
+    // Basically we don't want to propagate transactions that can't included in
+    // the next block.
+    //
+    // However, IsFinalTx() is confusing... Without arguments, it uses
+    // chainActive.Height() to evaluate nLockTime; when a block is accepted, chainActive.Height()
+    // is set to the value of nHeight in the block. However, when IsFinalTx()
+    // is called within CBlock::AcceptBlock(), the height of the block *being*
+    // evaluated is what is used. Thus if we want to know if a transaction can
+    // be part of the *next* block, we need to call IsFinalTx() with one more
+    // than chainActive.Height().
+    //
+    // Timestamps on the other hand don't get any special treatment, because we
+    // can't know what timestamp the next block will have, and there aren't
+    // timestamp applications where it matters.
+    if (!IsFinalTx(tx, chainActive.Height() + 1)) {
         reason = "non-final";
         return false;
     }
diff --git a/src/miner.cpp b/src/miner.cpp
index ca3b65a1..f9dab4bd 100644
--- a/src/miner.cpp
+++ b/src/miner.cpp
@@ -158,7 +158,7 @@ CBlockTemplate* CreateNewBlock(const CScript& scriptPubKeyIn)
              mi != mempool.mapTx.end(); ++mi)
         {
             const CTransaction& tx = mi->second.GetTx();
-            if (tx.IsCoinBase() || !IsFinalTx(tx))
+            if (tx.IsCoinBase() || !IsFinalTx(tx, pindexPrev->nHeight + 1))
                 continue;
 
             COrphan* porphan = NULL;
diff --git a/src/qt/transactiondesc.cpp b/src/qt/transactiondesc.cpp
index 2c3a9e3a..c76b2986 100644
--- a/src/qt/transactiondesc.cpp
+++ b/src/qt/transactiondesc.cpp
@@ -20,10 +20,10 @@
 
 QString TransactionDesc::FormatTxStatus(const CWalletTx& wtx)
 {
-    if (!IsFinalTx(wtx))
+    if (!IsFinalTx(wtx, chainActive.Height() + 1))
     {
         if (wtx.nLockTime < LOCKTIME_THRESHOLD)
-            return tr("Open for %n more block(s)", "", wtx.nLockTime - chainActive.Height() + 1);
+            return tr("Open for %n more block(s)", "", wtx.nLockTime - chainActive.Height());
         else
             return tr("Open until %1").arg(GUIUtil::dateTimeStr(wtx.nLockTime));
     }
diff --git a/src/qt/transactionrecord.cpp b/src/qt/transactionrecord.cpp
index 6823557e..257151b9 100644
--- a/src/qt/transactionrecord.cpp
+++ b/src/qt/transactionrecord.cpp
@@ -168,12 +168,12 @@ void TransactionRecord::updateStatus(const CWalletTx &wtx)
     status.depth = wtx.GetDepthInMainChain();
     status.cur_num_blocks = chainActive.Height();
 
-    if (!IsFinalTx(wtx))
+    if (!IsFinalTx(wtx, chainActive.Height() + 1))
     {
         if (wtx.nLockTime < LOCKTIME_THRESHOLD)
         {
             status.status = TransactionStatus::OpenUntilBlock;
-            status.open_for = wtx.nLockTime - chainActive.Height() + 1;
+            status.open_for = wtx.nLockTime - chainActive.Height();
         }
         else
         {
diff --git a/src/test/miner_tests.cpp b/src/test/miner_tests.cpp
index 8e3091d5..d35137a6 100644
--- a/src/test/miner_tests.cpp
+++ b/src/test/miner_tests.cpp
@@ -51,7 +51,7 @@ BOOST_AUTO_TEST_CASE(CreateNewBlock_validity)
 {
     CScript scriptPubKey = CScript() << ParseHex("04678afdb0fe5548271967f1a67130b7105cd6a828e03909a67962e0ea1f61deb649f6bc3f4cef38c4f35504e51ec112de5c384df7ba0b8d578a4c702b6bf11d5f") << OP_CHECKSIG;
     CBlockTemplate *pblocktemplate;
-    CTransaction tx;
+    CTransaction tx,tx2;
     CScript script;
     uint256 hash;
 
@@ -204,8 +204,57 @@ BOOST_AUTO_TEST_CASE(CreateNewBlock_validity)
     delete pblocktemplate;
     chainActive.Tip()->nHeight = nHeight;
 
+    // non-final txs in mempool
+    SetMockTime(chainActive.Tip()->GetMedianTimePast()+1);
+
+    // height locked
+    tx.vin[0].prevout.hash = txFirst[0]->GetHash();
+    tx.vin[0].scriptSig = CScript() << OP_1;
+    tx.vin[0].nSequence = 0;
+    tx.vout[0].nValue = 4900000000LL;
+    tx.vout[0].scriptPubKey = CScript() << OP_1;
+    tx.nLockTime = chainActive.Tip()->nHeight+1;
+    hash = tx.GetHash();
+    mempool.addUnchecked(hash, CTxMemPoolEntry(tx, 11, GetTime(), 111.0, 11));
+    BOOST_CHECK(!IsFinalTx(tx, chainActive.Tip()->nHeight + 1));
+
+    // time locked
+    tx2.vin.resize(1);
+    tx2.vin[0].prevout.hash = txFirst[1]->GetHash();
+    tx2.vin[0].prevout.n = 0;
+    tx2.vin[0].scriptSig = CScript() << OP_1;
+    tx2.vin[0].nSequence = 0;
+    tx2.vout.resize(1);
+    tx2.vout[0].nValue = 4900000000LL;
+    tx2.vout[0].scriptPubKey = CScript() << OP_1;
+    tx2.nLockTime = chainActive.Tip()->GetMedianTimePast()+1;
+    hash = tx2.GetHash();
+    mempool.addUnchecked(hash, CTxMemPoolEntry(tx2, 11, GetTime(), 111.0, 11));
+    BOOST_CHECK(!IsFinalTx(tx2));
+
+    BOOST_CHECK(pblocktemplate = CreateNewBlock(scriptPubKey));
+
+    // Neither tx should have make it into the template.
+    BOOST_CHECK_EQUAL(pblocktemplate->block.vtx.size(), 1);
+    delete pblocktemplate;
+
+    // However if we advance height and time by one, both will.
+    chainActive.Tip()->nHeight++;
+    SetMockTime(chainActive.Tip()->GetMedianTimePast()+2);
+
+    BOOST_CHECK(IsFinalTx(tx, chainActive.Tip()->nHeight + 1));
+    BOOST_CHECK(IsFinalTx(tx2));
+
+    BOOST_CHECK(pblocktemplate = CreateNewBlock(scriptPubKey));
+    BOOST_CHECK_EQUAL(pblocktemplate->block.vtx.size(), 3);
+    delete pblocktemplate;
+
+    chainActive.Tip()->nHeight--;
+    SetMockTime(0);
+
     BOOST_FOREACH(CTransaction *tx, txFirst)
         delete tx;
+
 }
 
 BOOST_AUTO_TEST_CASE(sha256transform_equality)