diff --git a/fundingmanager.go b/fundingmanager.go
index a1fe9dbd..3f265e8c 100644
--- a/fundingmanager.go
+++ b/fundingmanager.go
@@ -70,10 +70,29 @@ type reservationWithCtx struct {
 
 	chanAmt btcutil.Amount
 
+	lastUpdated time.Time
+
 	updates chan *lnrpc.OpenStatusUpdate
 	err     chan error
 }
 
+// isLocked checks the reservation's timestamp to determine whether it is locked.
+func (r *reservationWithCtx) isLocked() bool {
+	// The time zero value represents a locked reservation.
+	return r.lastUpdated.IsZero()
+}
+
+// lock locks the reservation from zombie pruning by setting its timestamp to the
+// zero value.
+func (r *reservationWithCtx) lock() {
+	r.lastUpdated = time.Time{}
+}
+
+// updateTimestamp updates the reservation's timestamp with the current time.
+func (r *reservationWithCtx) updateTimestamp() {
+	r.lastUpdated = time.Now()
+}
+
 // initFundingMsg is sent by an outside subsystem to the funding manager in
 // order to kick off a funding workflow with a specified target peer. The
 // original request which defines the parameters of the funding workflow are
@@ -266,6 +285,14 @@ type fundingConfig struct {
 	// discovered short channel ID of a formerly pending channel to outside
 	// sub-systems.
 	ReportShortChanID func(wire.OutPoint, lnwire.ShortChannelID) error
+
+	// ZombieSweeperInterval is the periodic time interval in which the zombie
+	// sweeper is run.
+	ZombieSweeperInterval time.Duration
+
+	// ReservationTimeout is the length of idle time that must pass before a
+	// reservation is considered a zombie.
+	ReservationTimeout time.Duration
 }
 
 // fundingManager acts as an orchestrator/bridge between the wallet's
@@ -307,7 +334,7 @@ type fundingManager struct {
 	signedReservations map[lnwire.ChannelID][32]byte
 
 	// resMtx guards both of the maps above to ensure that all access is
-	// goroutine stafe.
+	// goroutine safe.
 	resMtx sync.RWMutex
 
 	// fundingMsgs is a channel which receives wrapped wire messages
@@ -764,6 +791,9 @@ func (f *fundingManager) failFundingFlow(peer *btcec.PublicKey,
 func (f *fundingManager) reservationCoordinator() {
 	defer f.wg.Done()
 
+	zombieSweepTicker := time.NewTicker(f.cfg.ZombieSweeperInterval)
+	defer zombieSweepTicker.Stop()
+
 	for {
 		select {
 
@@ -786,6 +816,9 @@ func (f *fundingManager) reservationCoordinator() {
 		case req := <-f.fundingRequests:
 			f.handleInitFundingMsg(req)
 
+		case <-zombieSweepTicker.C:
+			f.pruneZombieReservations()
+
 		case req := <-f.queries:
 			switch msg := req.(type) {
 			case *pendingChansReq:
@@ -944,20 +977,24 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 		amt, msg.PushAmount)
 
 	// Once the reservation has been created successfully, we add it to
-	// this peers map of pending reservations to track this particular
+	// this peer's map of pending reservations to track this particular
 	// reservation until either abort or completion.
 	f.resMtx.Lock()
 	if _, ok := f.activeReservations[peerIDKey]; !ok {
 		f.activeReservations[peerIDKey] = make(pendingChannels)
 	}
-	f.activeReservations[peerIDKey][msg.PendingChannelID] = &reservationWithCtx{
+	resCtx := &reservationWithCtx{
 		reservation: reservation,
 		chanAmt:     amt,
 		err:         make(chan error, 1),
 		peerAddress: fmsg.peerAddress,
 	}
+	f.activeReservations[peerIDKey][msg.PendingChannelID] = resCtx
 	f.resMtx.Unlock()
 
+	// Update the timestamp once the fundingOpenMsg has been handled.
+	defer resCtx.updateTimestamp()
+
 	// Using the RequiredRemoteDelay closure, we'll compute the remote CSV
 	// delay we require given the total amount of funds within the channel.
 	remoteCsvDelay := f.cfg.RequiredRemoteDelay(amt)
@@ -1066,6 +1103,9 @@ func (f *fundingManager) handleFundingAccept(fmsg *fundingAcceptMsg) {
 		return
 	}
 
+	// Update the timestamp once the fundingAcceptMsg has been handled.
+	defer resCtx.updateTimestamp()
+
 	fndgLog.Infof("Recv'd fundingResponse for pendingID(%x)", pendingChanID[:])
 
 	// We'll also specify the responder's preference for the number of
@@ -1307,6 +1347,13 @@ func (f *fundingManager) handleFundingCreated(fmsg *fundingCreatedMsg) {
 	f.localDiscoverySignals[channelID] = make(chan struct{})
 	f.localDiscoveryMtx.Unlock()
 
+	// At this point we have sent our last funding message to the
+	// initiating peer before the funding transaction will be broadcast.
+	// The only thing left to do before we can delete this reservation
+	// is wait for the funding transaction. Lock the reservation so it
+	// is not pruned by the zombie sweeper.
+	resCtx.lock()
+
 	// With this last message, our job as the responder is now complete.
 	// We'll wait for the funding transaction to reach the specified number
 	// of confirmations, then start normal operations.
@@ -1457,6 +1504,12 @@ func (f *fundingManager) handleFundingSigned(fmsg *fundingSignedMsg) {
 		},
 	}
 
+	// At this point we have broadcast the funding transaction and done all
+	// necessary processing. The only thing left to do before we can delete
+	// this reservation is wait for the funding transaction. Lock the
+	// reservation so it is not pruned by the zombie sweeper.
+	resCtx.lock()
+
 	f.wg.Add(1)
 	go func() {
 		defer f.wg.Done()
@@ -2457,15 +2510,19 @@ func (f *fundingManager) handleInitFundingMsg(msg *initFundingMsg) {
 		f.activeReservations[peerIDKey] = make(pendingChannels)
 	}
 
-	f.activeReservations[peerIDKey][chanID] = &reservationWithCtx{
+	resCtx := &reservationWithCtx{
 		chanAmt:     capacity,
 		reservation: reservation,
 		peerAddress: msg.peerAddress,
 		updates:     msg.updates,
 		err:         msg.err,
 	}
+	f.activeReservations[peerIDKey][chanID] = resCtx
 	f.resMtx.Unlock()
 
+	// Update the timestamp once the initFundingMsg has been handled.
+	defer resCtx.updateTimestamp()
+
 	// Using the RequiredRemoteDelay closure, we'll compute the remote CSV
 	// delay we require given the total amount of funds within the channel.
 	remoteCsvDelay := f.cfg.RequiredRemoteDelay(capacity)
@@ -2547,7 +2604,7 @@ func (f *fundingManager) waitUntilChannelOpen(targetChan lnwire.ChannelID) {
 	}
 }
 
-// processErrorGeneric sends a message to the fundingManager allowing it to
+// processFundingError sends a message to the fundingManager allowing it to
 // process the occurred generic error.
 func (f *fundingManager) processFundingError(err *lnwire.Error,
 	peerAddress *lnwire.NetAddress) {
@@ -2559,7 +2616,7 @@ func (f *fundingManager) processFundingError(err *lnwire.Error,
 	}
 }
 
-// handleErrorGenericMsg process the error which was received from remote peer,
+// handleErrorMsg processes the error which was received from remote peer,
 // depending on the type of error we should do different clean up steps and
 // inform the user about it.
 func (f *fundingManager) handleErrorMsg(fmsg *fundingErrorMsg) {
@@ -2592,7 +2649,7 @@ func (f *fundingManager) handleErrorMsg(fmsg *fundingErrorMsg) {
 			lnErr.ToGrpcCode(), string(protocolErr.Data),
 		)
 	} else {
-		// Otherwise, we'll attempt tto display just the error code
+		// Otherwise, we'll attempt to display just the error code
 		// itself.
 		resCtx.err <- grpc.Errorf(
 			lnErr.ToGrpcCode(), lnErr.String(),
@@ -2605,7 +2662,35 @@ func (f *fundingManager) handleErrorMsg(fmsg *fundingErrorMsg) {
 	}
 }
 
-// cancelReservationCtx do all needed work in order to securely cancel the
+// pruneZombieReservations loops through all pending reservations and fails the
+// funding flow for any reservations that have not been updated since the
+// ReservationTimeout and are not locked waiting for the funding transaction.
+func (f *fundingManager) pruneZombieReservations() {
+	zombieReservations := make(pendingChannels)
+
+	f.resMtx.RLock()
+	for _, pendingReservations := range f.activeReservations {
+		for pendingChanID, resCtx := range pendingReservations {
+			if resCtx.isLocked() {
+				continue
+			}
+
+			if time.Since(resCtx.lastUpdated) > f.cfg.ReservationTimeout {
+				zombieReservations[pendingChanID] = resCtx
+			}
+		}
+	}
+	f.resMtx.RUnlock()
+
+	for pendingChanID, resCtx := range zombieReservations {
+		err := fmt.Errorf("reservation timed out waiting for peer (peerID:%v, "+
+			"chanID:%x)", resCtx.peerAddress.IdentityKey, pendingChanID[:])
+		fndgLog.Warnf(err.Error())
+		f.failFundingFlow(resCtx.peerAddress.IdentityKey, pendingChanID, err)
+	}
+}
+
+// cancelReservationCtx does all needed work in order to securely cancel the
 // reservation.
 func (f *fundingManager) cancelReservationCtx(peerKey *btcec.PublicKey,
 	pendingChanID [32]byte) (*reservationWithCtx, error) {
diff --git a/fundingmanager_test.go b/fundingmanager_test.go
index 3fbc27b4..1c9df88e 100644
--- a/fundingmanager_test.go
+++ b/fundingmanager_test.go
@@ -107,6 +107,7 @@ func (m *mockNotifier) RegisterConfirmationsNtfn(txid *chainhash.Hash, numConfs,
 		Confirmed: m.oneConfChannel,
 	}, nil
 }
+
 func (m *mockNotifier) RegisterBlockEpochNtfn() (*chainntnfs.BlockEpochEvent, error) {
 	return &chainntnfs.BlockEpochEvent{
 		Epochs: m.epochChan,
@@ -121,6 +122,7 @@ func (m *mockNotifier) Start() error {
 func (m *mockNotifier) Stop() error {
 	return nil
 }
+
 func (m *mockNotifier) RegisterSpendNtfn(outpoint *wire.OutPoint,
 	heightHint uint32) (*chainntnfs.SpendEvent, error) {
 	return &chainntnfs.SpendEvent{
@@ -304,6 +306,8 @@ func createTestFundingManager(t *testing.T, privKey *btcec.PrivateKey,
 		ReportShortChanID: func(wire.OutPoint, lnwire.ShortChannelID) error {
 			return nil
 		},
+		ZombieSweeperInterval: 1 * time.Hour,
+		ReservationTimeout:    1 * time.Nanosecond,
 	})
 	if err != nil {
 		t.Fatalf("failed creating fundingManager: %v", err)
@@ -381,6 +385,8 @@ func recreateAliceFundingManager(t *testing.T, alice *testNode) {
 			publishChan <- txn
 			return nil
 		},
+		ZombieSweeperInterval: oldCfg.ZombieSweeperInterval,
+		ReservationTimeout:    oldCfg.ReservationTimeout,
 	})
 	if err != nil {
 		t.Fatalf("failed recreating aliceFundingManager: %v", err)
@@ -485,68 +491,26 @@ func openChannel(t *testing.T, alice, bob *testNode, localFundingAmt,
 	// Let Bob handle the init message.
 	bob.fundingMgr.processFundingOpen(openChannelReq, aliceAddr)
 
-	// Bob should answer with an AcceptChannel.
-	var bobMsg lnwire.Message
-	select {
-	case bobMsg = <-bob.msgChan:
-	case <-time.After(time.Second * 5):
-		t.Fatalf("bob did not send AcceptChannel message")
-	}
-
-	acceptChannelResponse, ok := bobMsg.(*lnwire.AcceptChannel)
-	if !ok {
-		errorMsg, gotError := bobMsg.(*lnwire.Error)
-		if gotError {
-			t.Fatalf("expected AcceptChannel to be sent "+
-				"from bob, instead got error: %v",
-				lnwire.ErrorCode(errorMsg.Data[0]))
-		}
-		t.Fatalf("expected AcceptChannel to be sent from bob, "+
-			"instead got %T", bobMsg)
-	}
+	// Bob should answer with an AcceptChannel message.
+	acceptChannelResponse := assertFundingMsgSent(
+		t, bob.msgChan, "AcceptChannel",
+	).(*lnwire.AcceptChannel)
 
 	// Forward the response to Alice.
 	alice.fundingMgr.processFundingAccept(acceptChannelResponse, bobAddr)
 
-	// Alice responds with a FundingCreated messages.
-	select {
-	case aliceMsg = <-alice.msgChan:
-	case <-time.After(time.Second * 5):
-		t.Fatalf("alice did not send FundingCreated message")
-	}
-	fundingCreated, ok := aliceMsg.(*lnwire.FundingCreated)
-	if !ok {
-		errorMsg, gotError := aliceMsg.(*lnwire.Error)
-		if gotError {
-			t.Fatalf("expected FundingCreated to be sent "+
-				"from bob, instead got error: %v",
-				lnwire.ErrorCode(errorMsg.Data[0]))
-		}
-		t.Fatalf("expected FundingCreated to be sent from "+
-			"alice, instead got %T", aliceMsg)
-	}
+	// Alice responds with a FundingCreated message.
+	fundingCreated := assertFundingMsgSent(
+		t, alice.msgChan, "FundingCreated",
+	).(*lnwire.FundingCreated)
 
 	// Give the message to Bob.
 	bob.fundingMgr.processFundingCreated(fundingCreated, aliceAddr)
 
 	// Finally, Bob should send the FundingSigned message.
-	select {
-	case bobMsg = <-bob.msgChan:
-	case <-time.After(time.Second * 5):
-		t.Fatalf("bob did not send FundingSigned message")
-	}
-
-	fundingSigned, ok := bobMsg.(*lnwire.FundingSigned)
-	if !ok {
-		errorMsg, gotError := bobMsg.(*lnwire.Error)
-		if gotError {
-			t.Fatalf("expected FundingSigned to be "+
-				"sent from bob, instead got error: %v",
-				lnwire.ErrorCode(errorMsg.Data[0]))
-		}
-		t.Fatalf("expected FundingSigned to be sent from "+
-			"bob, instead got %T", bobMsg)
-	}
+	fundingSigned := assertFundingMsgSent(
+		t, bob.msgChan, "FundingSigned",
+	).(*lnwire.FundingSigned)
 
 	// Forward the signature to Alice.
 	alice.fundingMgr.processFundingSigned(fundingSigned, bobAddr)
@@ -581,6 +545,81 @@ func openChannel(t *testing.T, alice, bob *testNode, localFundingAmt,
 	return fundingOutPoint
 }
 
+func assertErrorNotSent(t *testing.T, msgChan chan lnwire.Message) {
+	select {
+	case <-msgChan:
+		t.Fatalf("error sent unexpectedly")
+	case <- time.After(100 * time.Millisecond):
+		// Expected, return.
+	}
+}
+
+func assertErrorSent(t *testing.T, msgChan chan lnwire.Message) {
+	var msg lnwire.Message
+	select {
+	case msg = <-msgChan:
+	case <-time.After(time.Second * 5):
+		t.Fatalf("node did not send Error message")
+	}
+	_, ok := msg.(*lnwire.Error)
+	if !ok {
+		t.Fatalf("expected Error to be sent from "+
+			"node, instead got %T", msg)
+	}
+}
+
+func assertFundingMsgSent(t *testing.T, msgChan chan lnwire.Message,
+	msgType string) lnwire.Message {
+	var msg lnwire.Message
+	select {
+	case msg = <-msgChan:
+	case <-time.After(time.Second * 5):
+		t.Fatalf("peer did not send %s message", msgType)
+	}
+
+	var (
+		sentMsg lnwire.Message
+		ok bool
+	)
+	switch msgType {
+	case "AcceptChannel":
+		sentMsg, ok = msg.(*lnwire.AcceptChannel)
+	case "FundingCreated":
+		sentMsg, ok = msg.(*lnwire.FundingCreated)
+	case "FundingSigned":
+		sentMsg, ok = msg.(*lnwire.FundingSigned)
+	case "FundingLocked":
+		sentMsg, ok = msg.(*lnwire.FundingLocked)
+	default:
+		t.Fatalf("unknown message type: %s", msgType)
+	}
+
+	if !ok {
+		errorMsg, gotError := msg.(*lnwire.Error)
+		if gotError {
+			t.Fatalf("expected %s to be sent, instead got error: %v",
+				msgType, lnwire.ErrorCode(errorMsg.Data[0]))
+		}
+		t.Fatalf("expected %s to be sent, instead got %T",
+			msgType, msg)
+	}
+
+	return sentMsg
+}
+
+func assertNumPendingReservations(t *testing.T, node *testNode,
+	peerPubKey *btcec.PublicKey, expectedNum int) {
+	serializedPubKey := newSerializedKey(peerPubKey)
+	actualNum := len(node.fundingMgr.activeReservations[serializedPubKey])
+	if actualNum == expectedNum {
+		// Success, return.
+		return
+	}
+
+	t.Fatalf("Expected node to have %d pending reservations, had %v",
+		expectedNum, actualNum)
+}
+
 func assertNumPendingChannelsBecomes(t *testing.T, node *testNode, expectedNum int) {
 	var numPendingChans int
 	for i := 0; i < testPollNumTries; i++ {
@@ -665,28 +704,6 @@ func assertMarkedOpen(t *testing.T, alice, bob *testNode,
 	assertDatabaseState(t, bob, fundingOutPoint, markedOpen)
 }
 
-func checkNodeSendingFundingLocked(t *testing.T, node *testNode) *lnwire.FundingLocked {
-	var msg lnwire.Message
-	select {
-	case msg = <-node.msgChan:
-	case <-time.After(time.Second * 5):
-		t.Fatalf("node did not send fundingLocked")
-	}
-
-	fundingLocked, ok := msg.(*lnwire.FundingLocked)
-	if !ok {
-		errorMsg, gotError := msg.(*lnwire.Error)
-		if gotError {
-			t.Fatalf("expected FundingLocked to be sent "+
-				"from node, instead got error: %v",
-				lnwire.ErrorCode(errorMsg.Data[0]))
-		}
-		t.Fatalf("expected FundingLocked to be sent from node, "+
-			"instead got %T", msg)
-	}
-	return fundingLocked
-}
-
 func assertFundingLockedSent(t *testing.T, alice, bob *testNode,
 	fundingOutPoint *wire.OutPoint) {
 	assertDatabaseState(t, alice, fundingOutPoint, fundingLockedSent)
@@ -874,7 +891,20 @@ func TestFundingManagerNormalWorkflow(t *testing.T) {
 	fundingOutPoint := openChannel(t, alice, bob, 500000, 0, 1, updateChan,
 		true)
 
-	// Notify that transaction was mined
+	// Make sure both reservations time out and then run both zombie sweepers.
+	time.Sleep(1 * time.Millisecond)
+	go alice.fundingMgr.pruneZombieReservations()
+	go bob.fundingMgr.pruneZombieReservations()
+
+	// Check that neither Alice nor Bob sent an error message.
+	assertErrorNotSent(t, alice.msgChan)
+	assertErrorNotSent(t, bob.msgChan)
+
+	// Check that neither reservation has been pruned.
+	assertNumPendingReservations(t, alice, bobPubKey, 1)
+	assertNumPendingReservations(t, bob, alicePubKey, 1)
+
+	// Notify that transaction was mined.
 	alice.mockNotifier.oneConfChannel <- &chainntnfs.TxConfirmation{}
 	bob.mockNotifier.oneConfChannel <- &chainntnfs.TxConfirmation{}
 
@@ -885,10 +915,14 @@ func TestFundingManagerNormalWorkflow(t *testing.T) {
 
 	// After the funding transaction is mined, Alice will send
 	// fundingLocked to Bob.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// And similarly Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Check that the state machine is updated accordingly
 	assertFundingLockedSent(t, alice, bob, fundingOutPoint)
@@ -970,7 +1004,9 @@ func TestFundingManagerRestartBehavior(t *testing.T) {
 	}
 
 	// Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Alice should still be markedOpen
 	assertDatabaseState(t, alice, fundingOutPoint, markedOpen)
@@ -987,7 +1023,9 @@ func TestFundingManagerRestartBehavior(t *testing.T) {
 		return fmt.Errorf("intentional error in SendAnnouncement")
 	}
 
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// The state should now be fundingLockedSent
 	assertDatabaseState(t, alice, fundingOutPoint, fundingLockedSent)
@@ -1088,7 +1126,9 @@ func TestFundingManagerOfflinePeer(t *testing.T) {
 	}
 
 	// Bob will send funding locked to Alice
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Alice should still be markedOpen
 	assertDatabaseState(t, alice, fundingOutPoint, markedOpen)
@@ -1131,7 +1171,9 @@ func TestFundingManagerOfflinePeer(t *testing.T) {
 	close(con)
 
 	// This should make Alice send the fundingLocked.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// The state should now be fundingLockedSent
 	assertDatabaseState(t, alice, fundingOutPoint, fundingLockedSent)
@@ -1168,6 +1210,212 @@ func TestFundingManagerOfflinePeer(t *testing.T) {
 	assertNoChannelState(t, alice, bob, fundingOutPoint)
 }
 
+// TestFundingManagerPeerTimeoutAfterInitFunding checks that the zombie sweeper
+// will properly clean up a zombie reservation that times out after the
+// initFundingMsg has been handled.
+func TestFundingManagerPeerTimeoutAfterInitFunding(t *testing.T) {
+	alice, bob := setupFundingManagers(t)
+	defer tearDownFundingManagers(t, alice, bob)
+
+	// We will consume the channel updates as we go, so no buffering is needed.
+	updateChan := make(chan *lnrpc.OpenStatusUpdate)
+
+	// Create a funding request and start the workflow.
+	errChan := make(chan error, 1)
+	initReq := &openChanReq{
+		targetPubkey:    bob.privKey.PubKey(),
+		chainHash:       *activeNetParams.GenesisHash,
+		localFundingAmt: 500000,
+		pushAmt:         lnwire.NewMSatFromSatoshis(0),
+		private:         false,
+		updates:         updateChan,
+		err:             errChan,
+	}
+
+	alice.fundingMgr.initFundingWorkflow(bobAddr, initReq)
+
+	// Alice should have sent the OpenChannel message to Bob.
+	var aliceMsg lnwire.Message
+	select {
+	case aliceMsg = <-alice.msgChan:
+	case err := <-initReq.err:
+		t.Fatalf("error init funding workflow: %v", err)
+	case <-time.After(time.Second * 5):
+		t.Fatalf("alice did not send OpenChannel message")
+	}
+
+	_, ok := aliceMsg.(*lnwire.OpenChannel)
+	if !ok {
+		errorMsg, gotError := aliceMsg.(*lnwire.Error)
+		if gotError {
+			t.Fatalf("expected OpenChannel to be sent "+
+				"from bob, instead got error: %v",
+				lnwire.ErrorCode(errorMsg.Data[0]))
+		}
+		t.Fatalf("expected OpenChannel to be sent from "+
+			"alice, instead got %T", aliceMsg)
+	}
+
+	// Alice should have a new pending reservation.
+	assertNumPendingReservations(t, alice, bobPubKey, 1)
+
+	// Make sure Alice's reservation times out and then run her zombie sweeper.
+	time.Sleep(1 * time.Millisecond)
+	go alice.fundingMgr.pruneZombieReservations()
+
+	// Alice should have sent an Error message to Bob.
+	assertErrorSent(t, alice.msgChan)
+
+	// Alice's zombie reservation should have been pruned.
+	assertNumPendingReservations(t, alice, bobPubKey, 0)
+}
+
+// TestFundingManagerPeerTimeoutAfterFundingOpen checks that the zombie sweeper
+// will properly clean up a zombie reservation that times out after the
+// fundingOpenMsg has been handled.
+func TestFundingManagerPeerTimeoutAfterFundingOpen(t *testing.T) {
+	alice, bob := setupFundingManagers(t)
+	defer tearDownFundingManagers(t, alice, bob)
+
+	// We will consume the channel updates as we go, so no buffering is needed.
+	updateChan := make(chan *lnrpc.OpenStatusUpdate)
+
+	// Create a funding request and start the workflow.
+	errChan := make(chan error, 1)
+	initReq := &openChanReq{
+		targetPubkey:    bob.privKey.PubKey(),
+		chainHash:       *activeNetParams.GenesisHash,
+		localFundingAmt: 500000,
+		pushAmt:         lnwire.NewMSatFromSatoshis(0),
+		private:         false,
+		updates:         updateChan,
+		err:             errChan,
+	}
+
+	alice.fundingMgr.initFundingWorkflow(bobAddr, initReq)
+
+	// Alice should have sent the OpenChannel message to Bob.
+	var aliceMsg lnwire.Message
+	select {
+	case aliceMsg = <-alice.msgChan:
+	case err := <-initReq.err:
+		t.Fatalf("error init funding workflow: %v", err)
+	case <-time.After(time.Second * 5):
+		t.Fatalf("alice did not send OpenChannel message")
+	}
+
+	openChannelReq, ok := aliceMsg.(*lnwire.OpenChannel)
+	if !ok {
+		errorMsg, gotError := aliceMsg.(*lnwire.Error)
+		if gotError {
+			t.Fatalf("expected OpenChannel to be sent "+
+				"from bob, instead got error: %v",
+				lnwire.ErrorCode(errorMsg.Data[0]))
+		}
+		t.Fatalf("expected OpenChannel to be sent from "+
+			"alice, instead got %T", aliceMsg)
+	}
+
+	// Alice should have a new pending reservation.
+	assertNumPendingReservations(t, alice, bobPubKey, 1)
+
+	// Let Bob handle the init message.
+	bob.fundingMgr.processFundingOpen(openChannelReq, aliceAddr)
+
+	// Bob should answer with an AcceptChannel.
+	assertFundingMsgSent(t, bob.msgChan, "AcceptChannel")
+
+	// Bob should have a new pending reservation.
+	assertNumPendingReservations(t, bob, alicePubKey, 1)
+
+	// Make sure Bob's reservation times out and then run his zombie sweeper.
+	time.Sleep(1 * time.Millisecond)
+	go bob.fundingMgr.pruneZombieReservations()
+
+	// Bob should have sent an Error message to Alice.
+	assertErrorSent(t, bob.msgChan)
+
+	// Bob's zombie reservation should have been pruned.
+	assertNumPendingReservations(t, bob, alicePubKey, 0)
+}
+
+// TestFundingManagerPeerTimeoutAfterFundingAccept checks that the zombie sweeper
+// will properly clean up a zombie reservation that times out after the
+// fundingAcceptMsg has been handled.
+func TestFundingManagerPeerTimeoutAfterFundingAccept(t *testing.T) {
+	alice, bob := setupFundingManagers(t)
+	defer tearDownFundingManagers(t, alice, bob)
+
+	// We will consume the channel updates as we go, so no buffering is needed.
+	updateChan := make(chan *lnrpc.OpenStatusUpdate)
+
+	// Create a funding request and start the workflow.
+	errChan := make(chan error, 1)
+	initReq := &openChanReq{
+		targetPubkey:    bob.privKey.PubKey(),
+		chainHash:       *activeNetParams.GenesisHash,
+		localFundingAmt: 500000,
+		pushAmt:         lnwire.NewMSatFromSatoshis(0),
+		private:         false,
+		updates:         updateChan,
+		err:             errChan,
+	}
+
+	alice.fundingMgr.initFundingWorkflow(bobAddr, initReq)
+
+	// Alice should have sent the OpenChannel message to Bob.
+	var aliceMsg lnwire.Message
+	select {
+	case aliceMsg = <-alice.msgChan:
+	case err := <-initReq.err:
+		t.Fatalf("error init funding workflow: %v", err)
+	case <-time.After(time.Second * 5):
+		t.Fatalf("alice did not send OpenChannel message")
+	}
+
+	openChannelReq, ok := aliceMsg.(*lnwire.OpenChannel)
+	if !ok {
+		errorMsg, gotError := aliceMsg.(*lnwire.Error)
+		if gotError {
+			t.Fatalf("expected OpenChannel to be sent "+
+				"from bob, instead got error: %v",
+				lnwire.ErrorCode(errorMsg.Data[0]))
+		}
+		t.Fatalf("expected OpenChannel to be sent from "+
+			"alice, instead got %T", aliceMsg)
+	}
+
+	// Alice should have a new pending reservation.
+	assertNumPendingReservations(t, alice, bobPubKey, 1)
+
+	// Let Bob handle the init message.
+	bob.fundingMgr.processFundingOpen(openChannelReq, aliceAddr)
+
+	// Bob should answer with an AcceptChannel.
+	acceptChannelResponse := assertFundingMsgSent(
+		t, bob.msgChan, "AcceptChannel",
+	).(*lnwire.AcceptChannel)
+
+	// Bob should have a new pending reservation.
+	assertNumPendingReservations(t, bob, alicePubKey, 1)
+
+	// Forward the response to Alice.
+	alice.fundingMgr.processFundingAccept(acceptChannelResponse, bobAddr)
+
+	// Alice responds with a FundingCreated messages.
+	assertFundingMsgSent(t, alice.msgChan, "FundingCreated")
+
+	// Make sure Alice's reservation times out and then run her zombie sweeper.
+	time.Sleep(1 * time.Millisecond)
+	go alice.fundingMgr.pruneZombieReservations()
+
+	// Alice should have sent an Error message to Bob.
+	assertErrorSent(t, alice.msgChan)
+
+	// Alice's zombie reservation should have been pruned.
+	assertNumPendingReservations(t, alice, bobPubKey, 0)
+}
+
 func TestFundingManagerFundingTimeout(t *testing.T) {
 	alice, bob := setupFundingManagers(t)
 	defer tearDownFundingManagers(t, alice, bob)
@@ -1208,7 +1456,7 @@ func TestFundingManagerFundingTimeout(t *testing.T) {
 }
 
 // TestFundingManagerFundingNotTimeoutInitiator checks that if the user was
-// the channel initiator, that it does not timeout when the lnd restarts
+// the channel initiator, that it does not timeout when the lnd restarts.
 func TestFundingManagerFundingNotTimeoutInitiator(t *testing.T) {
 
 	alice, bob := setupFundingManagers(t)
@@ -1297,10 +1545,14 @@ func TestFundingManagerReceiveFundingLockedTwice(t *testing.T) {
 
 	// After the funding transaction is mined, Alice will send
 	// fundingLocked to Bob.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// And similarly Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Check that the state machine is updated accordingly
 	assertFundingLockedSent(t, alice, bob, fundingOutPoint)
@@ -1394,10 +1646,14 @@ func TestFundingManagerRestartAfterChanAnn(t *testing.T) {
 
 	// After the funding transaction is mined, Alice will send
 	// fundingLocked to Bob.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// And similarly Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Check that the state machine is updated accordingly
 	assertFundingLockedSent(t, alice, bob, fundingOutPoint)
@@ -1464,10 +1720,14 @@ func TestFundingManagerRestartAfterReceivingFundingLocked(t *testing.T) {
 
 	// After the funding transaction is mined, Alice will send
 	// fundingLocked to Bob.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// And similarly Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Check that the state machine is updated accordingly
 	assertFundingLockedSent(t, alice, bob, fundingOutPoint)
@@ -1530,10 +1790,14 @@ func TestFundingManagerPrivateChannel(t *testing.T) {
 
 	// After the funding transaction is mined, Alice will send
 	// fundingLocked to Bob.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// And similarly Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Check that the state machine is updated accordingly
 	assertFundingLockedSent(t, alice, bob, fundingOutPoint)
@@ -1606,10 +1870,14 @@ func TestFundingManagerPrivateRestart(t *testing.T) {
 
 	// After the funding transaction is mined, Alice will send
 	// fundingLocked to Bob.
-	fundingLockedAlice := checkNodeSendingFundingLocked(t, alice)
+	fundingLockedAlice := assertFundingMsgSent(
+		t, alice.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// And similarly Bob will send funding locked to Alice.
-	fundingLockedBob := checkNodeSendingFundingLocked(t, bob)
+	fundingLockedBob := assertFundingMsgSent(
+		t, bob.msgChan, "FundingLocked",
+	).(*lnwire.FundingLocked)
 
 	// Check that the state machine is updated accordingly
 	assertFundingLockedSent(t, alice, bob, fundingOutPoint)
diff --git a/lnd.go b/lnd.go
index b2685f90..9b2f5088 100644
--- a/lnd.go
+++ b/lnd.go
@@ -414,6 +414,8 @@ func lndMain() error {
 			// channel bandwidth.
 			return uint16(lnwallet.MaxHTLCNumber / 2)
 		},
+		ZombieSweeperInterval: 1 * time.Minute,
+		ReservationTimeout:    10 * time.Minute,
 	})
 	if err != nil {
 		return err
diff --git a/lnwallet/reservation.go b/lnwallet/reservation.go
index 21a365bd..2865c74b 100644
--- a/lnwallet/reservation.go
+++ b/lnwallet/reservation.go
@@ -58,8 +58,8 @@ type InputScript struct {
 }
 
 // ChannelReservation represents an intent to open a lightning payment channel
-// a counterparty. The funding processes from reservation to channel opening is
-// a 3-step process. In order to allow for full concurrency during the
+// with a counterparty. The funding processes from reservation to channel opening
+// is a 3-step process. In order to allow for full concurrency during the
 // reservation workflow, resources consumed by a contribution are "locked"
 // themselves. This prevents a number of race conditions such as two funding
 // transactions double-spending the same input. A reservation can also be
@@ -69,12 +69,12 @@ type InputScript struct {
 // The reservation workflow consists of the following three steps:
 //  1. lnwallet.InitChannelReservation
 //     * One requests the wallet to allocate the necessary resources for a
-//      channel reservation. These resources a put in limbo for the lifetime
-//      of a reservation.
-//    * Once completed the reservation will have the wallet's contribution
-//      accessible via the .OurContribution() method. This contribution
-//      contains the necessary items to allow the remote party to build both
-//      the funding, and commitment transactions.
+//       channel reservation. These resources are put in limbo for the lifetime
+//       of a reservation.
+//     * Once completed the reservation will have the wallet's contribution
+//       accessible via the .OurContribution() method. This contribution
+//       contains the necessary items to allow the remote party to build both
+//       the funding, and commitment transactions.
 //  2. ChannelReservation.ProcessContribution/ChannelReservation.ProcessSingleContribution
 //     * The counterparty presents their contribution to the payment channel.
 //       This allows us to build the funding, and commitment transactions
diff --git a/lnwallet/wallet.go b/lnwallet/wallet.go
index 61f09c2f..f64efc95 100644
--- a/lnwallet/wallet.go
+++ b/lnwallet/wallet.go
@@ -52,9 +52,8 @@ func (e *ErrInsufficientFunds) Error() string {
 // will be created in order to track the lifetime of this pending channel.
 // Outputs selected will be 'locked', making them unavailable, for any other
 // pending reservations. Therefore, all channels in reservation limbo will be
-// periodically after a timeout period in order to avoid "exhaustion" attacks.
-//
-// TODO(roasbeef): zombie reservation sweeper goroutine.
+// periodically timed out after an idle period in order to avoid "exhaustion"
+// attacks.
 type initFundingReserveMsg struct {
 	// chainHash denotes that chain to be used to ultimately open the
 	// target channel.
@@ -261,8 +260,6 @@ type LightningWallet struct {
 	fundingLimbo  map[uint64]*ChannelReservation
 	nextFundingID uint64
 	limboMtx      sync.RWMutex
-	// TODO(roasbeef): zombie garbage collection routine to solve
-	// lost-object/starvation problem/attack.
 
 	// lockedOutPoints is a set of the currently locked outpoint. This
 	// information is kept in order to provide an easy way to unlock all
@@ -366,7 +363,7 @@ func (l *LightningWallet) ActiveReservations() []*ChannelReservation {
 }
 
 // requestHandler is the primary goroutine(s) responsible for handling, and
-// dispatching relies to all messages.
+// dispatching replies to all messages.
 func (l *LightningWallet) requestHandler() {
 out:
 	for {
@@ -403,14 +400,14 @@ out:
 // successful, a ChannelReservation containing our completed contribution is
 // returned. Our contribution contains all the items necessary to allow the
 // counterparty to build the funding transaction, and both versions of the
-// commitment transaction. Otherwise, an error occurred a nil pointer along with
-// an error are returned.
+// commitment transaction. Otherwise, an error occurred and a nil pointer along
+// with an error are returned.
 //
 // Once a ChannelReservation has been obtained, two additional steps must be
 // processed before a payment channel can be considered 'open'. The second step
 // validates, and processes the counterparty's channel contribution. The third,
 // and final step verifies all signatures for the inputs of the funding
-// transaction, and that the signature we records for our version of the
+// transaction, and that the signature we record for our version of the
 // commitment transaction is valid.
 func (l *LightningWallet) InitChannelReservation(
 	capacity, ourFundAmt btcutil.Amount, pushMSat lnwire.MilliSatoshi,
@@ -579,7 +576,7 @@ func (l *LightningWallet) handleFundingReserveRequest(req *initFundingReserveMsg
 	reservation.partialState.RevocationProducer = producer
 	reservation.ourContribution.ChannelConstraints = l.Cfg.DefaultConstraints
 
-	// TODO(roasbeef): turn above into: initContributio()
+	// TODO(roasbeef): turn above into: initContribution()
 
 	// Create a limbo and record entry for this newly pending funding
 	// request.