diff --git a/cmd/geth/main.go b/cmd/geth/main.go
index fa9beafd0..2c4cb5ae1 100644
--- a/cmd/geth/main.go
+++ b/cmd/geth/main.go
@@ -314,6 +314,7 @@ JavaScript API. See https://github.com/ethereum/go-ethereum/wiki/Javascipt-Conso
 		utils.ExecFlag,
 		utils.WhisperEnabledFlag,
 		utils.DevModeFlag,
+		utils.TestNetFlag,
 		utils.VMDebugFlag,
 		utils.VMForceJitFlag,
 		utils.VMJitCacheFlag,
diff --git a/cmd/utils/flags.go b/cmd/utils/flags.go
index dea43bc5c..67f8f0c57 100644
--- a/cmd/utils/flags.go
+++ b/cmd/utils/flags.go
@@ -125,6 +125,10 @@ var (
 		Name:  "dev",
 		Usage: "Developer mode. This mode creates a private network and sets several debugging flags",
 	}
+	TestNetFlag = cli.BoolFlag{
+		Name:  "testnet",
+		Usage: "Testnet mode. This enables your node to operate on the testnet",
+	}
 	IdentityFlag = cli.StringFlag{
 		Name:  "identity",
 		Usage: "Custom node name",
@@ -452,6 +456,17 @@ func MakeEthConfig(clientID, version string, ctx *cli.Context) *eth.Config {
 		AutoDAG:                 ctx.GlobalBool(AutoDAGFlag.Name) || ctx.GlobalBool(MiningEnabledFlag.Name),
 	}
 
+	if ctx.GlobalBool(DevModeFlag.Name) && ctx.GlobalBool(TestNetFlag.Name) {
+		glog.Fatalf("%s and %s are mutually exclusive\n", DevModeFlag.Name, TestNetFlag.Name)
+	}
+
+	if ctx.GlobalBool(TestNetFlag.Name) {
+		// testnet is always stored in the testnet folder
+		cfg.DataDir += "/testnet"
+		cfg.NetworkId = 2
+		cfg.TestNet = true
+	}
+
 	if ctx.GlobalBool(DevModeFlag.Name) {
 		if !ctx.GlobalIsSet(VMDebugFlag.Name) {
 			cfg.VmDebug = true
@@ -540,6 +555,9 @@ func MakeChain(ctx *cli.Context) (chain *core.BlockChain, chainDb ethdb.Database
 // MakeChain creates an account manager from set command line flags.
 func MakeAccountManager(ctx *cli.Context) *accounts.Manager {
 	dataDir := MustDataDir(ctx)
+	if ctx.GlobalBool(TestNetFlag.Name) {
+		dataDir += "/testnet"
+	}
 	ks := crypto.NewKeyStorePassphrase(filepath.Join(dataDir, "keystore"))
 	return accounts.NewManager(ks)
 }
diff --git a/core/genesis.go b/core/genesis.go
index bf97da2e2..bfa8696af 100644
--- a/core/genesis.go
+++ b/core/genesis.go
@@ -155,6 +155,27 @@ func WriteGenesisBlockForTesting(db ethdb.Database, accounts ...GenesisAccount)
 }
 
 func WriteTestNetGenesisBlock(chainDb ethdb.Database, nonce uint64) (*types.Block, error) {
+	testGenesis := fmt.Sprintf(`{
+        "nonce": "0x%x",
+        "difficulty": "0x20000",
+        "mixhash": "0x00000000000000000000000000000000000000647572616c65787365646c6578",
+        "coinbase": "0x0000000000000000000000000000000000000000",
+        "timestamp": "0x00",
+        "parentHash": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "extraData": "0x",
+        "gasLimit": "0x2FEFD8",
+        "alloc": {
+                "0000000000000000000000000000000000000001": { "balance": "1" },
+                "0000000000000000000000000000000000000002": { "balance": "1" },
+                "0000000000000000000000000000000000000003": { "balance": "1" },
+                "0000000000000000000000000000000000000004": { "balance": "1" },
+		"102e61f5d8f9bc71d0ad4a084df4e65e05ce0e1c": { "balance": "1606938044258990275541962092341162602522202993782792835301376" }
+        }
+}`, types.EncodeNonce(nonce))
+	return WriteGenesisBlock(chainDb, strings.NewReader(testGenesis))
+}
+
+func WriteOlympicGenesisBlock(chainDb ethdb.Database, nonce uint64) (*types.Block, error) {
 	testGenesis := fmt.Sprintf(`{
 	"nonce":"0x%x",
 	"gasLimit":"0x%x",
diff --git a/core/state/statedb.go b/core/state/statedb.go
index 499ea5f52..ad673aecb 100644
--- a/core/state/statedb.go
+++ b/core/state/statedb.go
@@ -28,6 +28,10 @@ import (
 	"github.com/ethereum/go-ethereum/trie"
 )
 
+// The starting nonce determines the default nonce when new accounts are being
+// created.
+var StartingNonce uint64
+
 // StateDBs within the ethereum protocol are used to store anything
 // within the merkle trie. StateDBs take care of caching and storing
 // nested states. It's the general query interface to retrieve:
@@ -263,6 +267,7 @@ func (self *StateDB) newStateObject(addr common.Address) *StateObject {
 	}
 
 	stateObject := NewStateObject(addr, self.db)
+	stateObject.SetNonce(StartingNonce)
 	self.stateObjects[addr.Str()] = stateObject
 
 	return stateObject
diff --git a/eth/backend.go b/eth/backend.go
index a480b4931..83eefca5b 100644
--- a/eth/backend.go
+++ b/eth/backend.go
@@ -34,6 +34,7 @@ import (
 	"github.com/ethereum/go-ethereum/common"
 	"github.com/ethereum/go-ethereum/common/compiler"
 	"github.com/ethereum/go-ethereum/core"
+	"github.com/ethereum/go-ethereum/core/state"
 	"github.com/ethereum/go-ethereum/core/types"
 	"github.com/ethereum/go-ethereum/core/vm"
 	"github.com/ethereum/go-ethereum/crypto"
@@ -69,12 +70,17 @@ var (
 		discover.MustParseNode("enode://979b7fa28feeb35a4741660a16076f1943202cb72b6af70d327f053e248bab9ba81760f39d0701ef1d8f89cc1fbd2cacba0710a12cd5314d5e0c9021aa3637f9@5.1.83.226:30303"),
 	}
 
+	defaultTestNetBootNodes = []*discover.Node{
+		discover.MustParseNode("enode://5374c1bff8df923d3706357eeb4983cd29a63be40a269aaa2296ee5f3b2119a8978c0ed68b8f6fc84aad0df18790417daadf91a4bfbb786a16c9b0a199fa254a@92.51.165.126:30303"),
+	}
+
 	staticNodes  = "static-nodes.json"  // Path within <datadir> to search for the static node list
 	trustedNodes = "trusted-nodes.json" // Path within <datadir> to search for the trusted node list
 )
 
 type Config struct {
 	DevMode bool
+	TestNet bool
 
 	Name         string
 	NetworkId    int
@@ -133,6 +139,10 @@ type Config struct {
 
 func (cfg *Config) parseBootNodes() []*discover.Node {
 	if cfg.BootNodes == "" {
+		if cfg.TestNet {
+			return defaultTestNetBootNodes
+		}
+
 		return defaultBootNodes
 	}
 	var ns []*discover.Node
@@ -309,7 +319,13 @@ func New(config *Config) (*Ethereum, error) {
 		glog.V(logger.Error).Infoln("Starting Olympic network")
 		fallthrough
 	case config.DevMode:
-		_, err := core.WriteTestNetGenesisBlock(chainDb, 42)
+		_, err := core.WriteOlympicGenesisBlock(chainDb, 42)
+		if err != nil {
+			return nil, err
+		}
+	case config.TestNet:
+		state.StartingNonce = 1048576 // (2**20)
+		_, err := core.WriteTestNetGenesisBlock(chainDb, 0x6d6f7264656e)
 		if err != nil {
 			return nil, err
 		}