diff --git a/integration/rpctest/btcd.go b/integration/rpctest/btcd.go
new file mode 100644
index 00000000..3c875197
--- /dev/null
+++ b/integration/rpctest/btcd.go
@@ -0,0 +1,73 @@
+// Copyright (c) 2017 The btcsuite developers
+// Use of this source code is governed by an ISC
+// license that can be found in the LICENSE file.
+
+package rpctest
+
+import (
+	"fmt"
+	"go/build"
+	"os/exec"
+	"path/filepath"
+	"runtime"
+	"sync"
+)
+
+var (
+	// compileMtx guards access to the executable path so that the project is
+	// only compiled once.
+	compileMtx sync.Mutex
+
+	// executablePath is the path to the compiled executable. This is the empty
+	// string until btcd is compiled. This should not be accessed directly;
+	// instead use the function btcdExecutablePath().
+	executablePath string
+)
+
+// btcdExecutablePath returns a path to the btcd executable to be used by
+// rpctests. To ensure the code tests against the most up-to-date version of
+// btcd, this method compiles btcd the first time it is called. After that, the
+// generated binary is used for subsequent test harnesses. The executable file
+// is not cleaned up, but since it lives at a static path in a temp directory,
+// it is not a big deal.
+func btcdExecutablePath() (string, error) {
+	compileMtx.Lock()
+	defer compileMtx.Unlock()
+
+	// If btcd has already been compiled, just use that.
+	if len(executablePath) != 0 {
+		return executablePath, nil
+	}
+
+	testDir, err := baseDir()
+	if err != nil {
+		return "", err
+	}
+
+	// Determine import path of this package. Not necessarily btcsuite/btcd if
+	// this is a forked repo.
+	_, rpctestDir, _, ok := runtime.Caller(1)
+	if !ok {
+		return "", fmt.Errorf("Cannot get path to btcd source code")
+	}
+	btcdPkgPath := filepath.Join(rpctestDir, "..", "..", "..")
+	btcdPkg, err := build.ImportDir(btcdPkgPath, build.FindOnly)
+	if err != nil {
+		return "", fmt.Errorf("Failed to build btcd: %v", err)
+	}
+
+	// Build btcd and output an executable in a static temp path.
+	outputPath := filepath.Join(testDir, "btcd")
+	if runtime.GOOS == "windows" {
+		outputPath += ".exe"
+	}
+	cmd := exec.Command("go", "build", "-o", outputPath, btcdPkg.ImportPath)
+	err = cmd.Run()
+	if err != nil {
+		return "", fmt.Errorf("Failed to build btcd: %v", err)
+	}
+
+	// Save executable path so future calls do not recompile.
+	executablePath = outputPath
+	return executablePath, nil
+}
diff --git a/integration/rpctest/node.go b/integration/rpctest/node.go
index f56a088a..4d224130 100644
--- a/integration/rpctest/node.go
+++ b/integration/rpctest/node.go
@@ -42,6 +42,11 @@ type nodeConfig struct {
 
 // newConfig returns a newConfig with all default values.
 func newConfig(prefix, certFile, keyFile string, extra []string) (*nodeConfig, error) {
+	btcdPath, err := btcdExecutablePath()
+	if err != nil {
+		return nil, err
+	}
+
 	a := &nodeConfig{
 		listen:    "127.0.0.1:18555",
 		rpcListen: "127.0.0.1:18556",
@@ -49,11 +54,10 @@ func newConfig(prefix, certFile, keyFile string, extra []string) (*nodeConfig, e
 		rpcPass:   "pass",
 		extra:     extra,
 		prefix:    prefix,
-
-		exe:      "btcd",
-		endpoint: "ws",
-		certFile: certFile,
-		keyFile:  keyFile,
+		exe:       btcdPath,
+		endpoint:  "ws",
+		certFile:  certFile,
+		keyFile:   keyFile,
 	}
 	if err := a.setDefaults(); err != nil {
 		return nil, err
diff --git a/integration/rpctest/rpc_harness.go b/integration/rpctest/rpc_harness.go
index 145c2938..653a3782 100644
--- a/integration/rpctest/rpc_harness.go
+++ b/integration/rpctest/rpc_harness.go
@@ -119,8 +119,13 @@ func New(activeNet *chaincfg.Params, handlers *rpcclient.NotificationHandlers,
 			"of the supported chain networks")
 	}
 
+	testDir, err := baseDir()
+	if err != nil {
+		return nil, err
+	}
+
 	harnessID := strconv.Itoa(numTestInstances)
-	nodeTestData, err := ioutil.TempDir("", "rpctest-"+harnessID)
+	nodeTestData, err := ioutil.TempDir(testDir, "harness-"+harnessID)
 	if err != nil {
 		return nil, err
 	}
@@ -453,3 +458,10 @@ func generateListeningAddresses() (string, string) {
 	rpc := net.JoinHostPort(localhost, portString(minRPCPort, maxRPCPort))
 	return p2p, rpc
 }
+
+// baseDir is the directory path of the temp directory for all rpctest files.
+func baseDir() (string, error) {
+	dirPath := filepath.Join(os.TempDir(), "btcd", "rpctest")
+	err := os.MkdirAll(dirPath, 0755)
+	return dirPath, err
+}