diff --git a/src/Makefile.am b/src/Makefile.am
index 175501d4a69..53ad03d41f8 100644
--- a/src/Makefile.am
+++ b/src/Makefile.am
@@ -201,6 +201,7 @@ BITCOIN_CORE_H = \
   script/signingprovider.h \
   script/standard.h \
   shutdown.h \
+  signet.h \
   streams.h \
   support/allocators/secure.h \
   support/allocators/zeroafterfree.h \
@@ -321,6 +322,7 @@ libbitcoin_server_a_SOURCES = \
   rpc/server.cpp \
   script/sigcache.cpp \
   shutdown.cpp \
+  signet.cpp \
   timedata.cpp \
   torcontrol.cpp \
   txdb.cpp \
diff --git a/src/consensus/params.h b/src/consensus/params.h
index 61b1fbc2e5a..85ab3f61ef5 100644
--- a/src/consensus/params.h
+++ b/src/consensus/params.h
@@ -80,6 +80,13 @@ struct Params {
     int64_t DifficultyAdjustmentInterval() const { return nPowTargetTimespan / nPowTargetSpacing; }
     uint256 nMinimumChainWork;
     uint256 defaultAssumeValid;
+
+    /**
+     * If true, witness commitments contain a payload equal to a Bitcoin Script solution
+     * to the signet challenge. See BIP325.
+     */
+    bool signet_blocks{false};
+    std::vector<uint8_t> signet_challenge;
 };
 } // namespace Consensus
 
diff --git a/src/signet.cpp b/src/signet.cpp
new file mode 100644
index 00000000000..a29f89b58e7
--- /dev/null
+++ b/src/signet.cpp
@@ -0,0 +1,149 @@
+// Copyright (c) 2019-2020 The Bitcoin Core developers
+// Distributed under the MIT software license, see the accompanying
+// file COPYING or http://www.opensource.org/licenses/mit-license.php.
+
+#include <signet.h>
+
+#include <array>
+#include <cstdint>
+#include <vector>
+
+#include <consensus/merkle.h>
+#include <consensus/params.h>
+#include <consensus/validation.h>
+#include <core_io.h>
+#include <hash.h>
+#include <primitives/block.h>
+#include <primitives/transaction.h>
+#include <span.h>
+#include <script/interpreter.h>
+#include <script/standard.h>
+#include <streams.h>
+#include <util/strencodings.h>
+#include <util/system.h>
+#include <uint256.h>
+
+static constexpr uint8_t SIGNET_HEADER[4] = {0xec, 0xc7, 0xda, 0xa2};
+
+static constexpr unsigned int BLOCK_SCRIPT_VERIFY_FLAGS = SCRIPT_VERIFY_P2SH | SCRIPT_VERIFY_WITNESS | SCRIPT_VERIFY_DERSIG | SCRIPT_VERIFY_NULLDUMMY;
+
+static bool FetchAndClearCommitmentSection(const Span<const uint8_t> header, CScript& witness_commitment, std::vector<uint8_t>& result)
+{
+    CScript replacement;
+    bool found_header = false;
+    result.clear();
+
+    opcodetype opcode;
+    CScript::const_iterator pc = witness_commitment.begin();
+    std::vector<uint8_t> pushdata;
+    while (witness_commitment.GetOp(pc, opcode, pushdata)) {
+        if (pushdata.size() > 0) {
+            if (!found_header && pushdata.size() > (size_t) header.size() && Span<const uint8_t>(pushdata.data(), header.size()) == header) {
+                // pushdata only counts if it has the header _and_ some data
+                result.insert(result.end(), pushdata.begin() + header.size(), pushdata.end());
+                pushdata.erase(pushdata.begin() + header.size(), pushdata.end());
+                found_header = true;
+            }
+            replacement << pushdata;
+        } else {
+            replacement << opcode;
+        }
+    }
+
+    if (found_header) witness_commitment = replacement;
+    return found_header;
+}
+
+static uint256 ComputeModifiedMerkleRoot(const CMutableTransaction& cb, const CBlock& block)
+{
+    std::vector<uint256> leaves;
+    leaves.resize(block.vtx.size());
+    leaves[0] = cb.GetHash();
+    for (size_t s = 1; s < block.vtx.size(); ++s) {
+        leaves[s] = block.vtx[s]->GetHash();
+    }
+    return ComputeMerkleRoot(std::move(leaves));
+}
+
+SignetTxs SignetTxs::Create(const CBlock& block, const CScript& challenge)
+{
+    CMutableTransaction tx_to_spend;
+    tx_to_spend.nVersion = 0;
+    tx_to_spend.nLockTime = 0;
+    tx_to_spend.vin.emplace_back(COutPoint(), CScript(OP_0), 0);
+    tx_to_spend.vout.emplace_back(0, challenge);
+
+    CMutableTransaction tx_spending;
+    tx_spending.nVersion = 0;
+    tx_spending.nLockTime = 0;
+    tx_spending.vin.emplace_back(COutPoint(), CScript(), 0);
+    tx_spending.vout.emplace_back(0, CScript(OP_RETURN));
+
+    // can't fill any other fields before extracting signet
+    // responses from block coinbase tx
+
+    // find and delete signet signature
+    if (block.vtx.empty()) return invalid(); // no coinbase tx in block; invalid
+    CMutableTransaction modified_cb(*block.vtx.at(0));
+
+    const int cidx = GetWitnessCommitmentIndex(block);
+    if (cidx == NO_WITNESS_COMMITMENT) {
+        return invalid(); // require a witness commitment
+    }
+
+    CScript& witness_commitment = modified_cb.vout.at(cidx).scriptPubKey;
+
+    std::vector<uint8_t> signet_solution;
+    if (!FetchAndClearCommitmentSection(SIGNET_HEADER, witness_commitment, signet_solution)) {
+        // no signet solution -- allow this to support OP_TRUE as trivial block challenge
+    } else {
+        try {
+            VectorReader v(SER_NETWORK, INIT_PROTO_VERSION, signet_solution, 0);
+            v >> tx_spending.vin[0].scriptSig;
+            v >> tx_spending.vin[0].scriptWitness.stack;
+            if (!v.empty()) return invalid(); // extraneous data encountered
+        } catch (const std::exception&) {
+            return invalid(); // parsing error
+        }
+    }
+    uint256 signet_merkle = ComputeModifiedMerkleRoot(modified_cb, block);
+
+    std::vector<uint8_t> block_data;
+    CVectorWriter writer(SER_NETWORK, INIT_PROTO_VERSION, block_data, 0);
+    writer << block.nVersion;
+    writer << block.hashPrevBlock;
+    writer << signet_merkle;
+    writer << block.nTime;
+    tx_to_spend.vin[0].scriptSig << block_data;
+    tx_spending.vin[0].prevout = COutPoint(tx_to_spend.GetHash(), 0);
+
+    return {tx_to_spend, tx_spending};
+}
+
+// Signet block solution checker
+bool CheckSignetBlockSolution(const CBlock& block, const Consensus::Params& consensusParams)
+{
+    if (block.GetHash() == consensusParams.hashGenesisBlock) {
+        // genesis block solution is always valid
+        return true;
+    }
+
+    const CScript challenge(consensusParams.signet_challenge.begin(), consensusParams.signet_challenge.end());
+    const SignetTxs signet_txs(block, challenge);
+
+    if (!signet_txs.m_valid) {
+        LogPrint(BCLog::VALIDATION, "CheckSignetBlockSolution: Errors in block (block solution parse failure)\n");
+        return false;
+    }
+
+    const CScript& scriptSig = signet_txs.m_to_sign.vin[0].scriptSig;
+    const CScriptWitness& witness = signet_txs.m_to_sign.vin[0].scriptWitness;
+
+    TransactionSignatureChecker sigcheck(&signet_txs.m_to_sign, /*nIn=*/ 0, /*amount=*/ signet_txs.m_to_spend.vout[0].nValue);
+
+    if (!VerifyScript(scriptSig, signet_txs.m_to_spend.vout[0].scriptPubKey, &witness, BLOCK_SCRIPT_VERIFY_FLAGS, sigcheck)) {
+        LogPrint(BCLog::VALIDATION, "CheckSignetBlockSolution: Errors in block (block solution invalid)\n");
+        return false;
+    }
+    return true;
+}
diff --git a/src/signet.h b/src/signet.h
new file mode 100644
index 00000000000..5694716fb61
--- /dev/null
+++ b/src/signet.h
@@ -0,0 +1,42 @@
+// Copyright (c) 2019-2020 The Bitcoin Core developers
+// Distributed under the MIT software license, see the accompanying
+// file COPYING or http://www.opensource.org/licenses/mit-license.php.
+
+#ifndef BITCOIN_SIGNET_H
+#define BITCOIN_SIGNET_H
+
+#include <consensus/params.h>
+#include <primitives/block.h>
+#include <primitives/transaction.h>
+
+/**
+ * Extract signature and check whether a block has a valid solution
+ */
+bool CheckSignetBlockSolution(const CBlock& block, const Consensus::Params& consensusParams);
+
+/**
+ * Generate the signet tx corresponding to the given block
+ *
+ * The signet tx commits to everything in the block except:
+ * 1. It hashes a modified merkle root with the signet signature removed.
+ * 2. It skips the nonce.
+ */
+class SignetTxs {
+private:
+    struct invalid {};
+    SignetTxs(invalid i) : m_to_spend(), m_to_sign(), m_valid(false) { }
+
+    template<class T1, class T2>
+    SignetTxs(const T1& to_spend, const T2& to_sign) : m_to_spend{to_spend}, m_to_sign{to_sign}, m_valid(true) { }
+
+    static SignetTxs Create(const CBlock& block, const CScript& challenge);
+
+public:
+    SignetTxs(const CBlock& block, const CScript& challenge) : SignetTxs(Create(block, challenge)) { }
+
+    const CTransaction m_to_spend;
+    const CTransaction m_to_sign;
+    const bool m_valid;
+};
+
+#endif // BITCOIN_SIGNET_H