diff --git a/lntest/itest/lnd_test.go b/lntest/itest/lnd_test.go
index b5a532a85..c3071b28d 100644
--- a/lntest/itest/lnd_test.go
+++ b/lntest/itest/lnd_test.go
@@ -14378,6 +14378,10 @@ var testsCases = []*testCase{
 		name: "maximum channel size",
 		test: testMaxChannelSize,
 	},
+	{
+		name: "connection timeout",
+		test: testNetworkConnectionTimeout,
+	},
 }
 
 // TestLightningNetworkDaemon performs a series of integration tests amongst a
diff --git a/lntest/itest/log_error_whitelist.txt b/lntest/itest/log_error_whitelist.txt
index 86717c7e7..d79512808 100644
--- a/lntest/itest/log_error_whitelist.txt
+++ b/lntest/itest/log_error_whitelist.txt
@@ -221,3 +221,9 @@
 <time> [ERR] RPCS: [/lnrpc.Lightning/BakeMacaroon]: invalid permission entity. supported actions are [read write generate], supported entities are [onchain offchain address message peers info invoices signer macaroon uri]
 <time> [ERR] RPCS: [/lnrpc.Lightning/BakeMacaroon]: permission list cannot be empty. specify at least one action/entity pair. supported actions are [read write generate], supported entities are [onchain offchain address message peers info invoices signer macaroon uri]
 <time> [ERR] RPCS: [/lnrpc.Lightning/DeleteMacaroonID]: the specified ID cannot be deleted
+<time> [ERR] RPCS: [/lnrpc.Lightning/ConnectPeer]: dial tcp <ip>: i/o timeout
+<time> [ERR] RPCS: [connectpeer]: error connecting to peer: dial tcp <ip>: i/o timeout
+<time> [ERR] SRVR: Unable to connect to <hex>@<ip>: dial tcp <ip>: i/o timeout
+<time> [ERR] RPCS: [/lnrpc.Lightning/ConnectPeer]: dial tcp <ip>: i/o timeout
+<time> [ERR] RPCS: [connectpeer]: error connecting to peer: dial tcp <ip>: i/o timeout
+<time> [ERR] SRVR: Unable to connect to <hex>@<ip>: dial tcp <ip>: i/o timeout
diff --git a/lntest/itest/network.go b/lntest/itest/network.go
new file mode 100644
index 000000000..c934c1ab0
--- /dev/null
+++ b/lntest/itest/network.go
@@ -0,0 +1,125 @@
+// +build rpctest
+
+package itest
+
+import (
+	"context"
+	"fmt"
+	"strings"
+	"time"
+
+	"github.com/lightningnetwork/lnd"
+	"github.com/lightningnetwork/lnd/lnrpc"
+	"github.com/lightningnetwork/lnd/lntest"
+	"github.com/stretchr/testify/require"
+)
+
+// testNetworkConnectionTimeout checks that the connectiontimeout is taking
+// effect. It creates a node with a small connection timeout value, and connects
+// it to a non-routable IP address.
+func testNetworkConnectionTimeout(net *lntest.NetworkHarness, t *harnessTest) {
+	var (
+		ctxt, _ = context.WithTimeout(
+			context.Background(), defaultTimeout,
+		)
+		// testPub is a random public key for testing only.
+		testPub = "0332bda7da70fefe4b6ab92f53b3c4f4ee7999" +
+			"f312284a8e89c8670bb3f67dbee2"
+		// testHost is a non-routable IP address. It's used to cause a
+		// connection timeout.
+		testHost = "10.255.255.255"
+	)
+
+	// First, test the global timeout settings.
+	// Create Carol with a connection timeout of 1 millisecond.
+	carol, err := net.NewNode("Carol", []string{"--connectiontimeout=1ms"})
+	if err != nil {
+		t.Fatalf("unable to create new node carol: %v", err)
+	}
+	defer shutdownAndAssert(net, t, carol)
+
+	// Try to connect Carol to a non-routable IP address, which should give
+	// us a timeout error.
+	req := &lnrpc.ConnectPeerRequest{
+		Addr: &lnrpc.LightningAddress{
+			Pubkey: testPub,
+			Host:   testHost,
+		},
+	}
+	assertTimeoutError(ctxt, t, carol, req)
+
+	// Second, test timeout on the connect peer request.
+	// Create Dave with the default timeout setting.
+	dave, err := net.NewNode("Dave", nil)
+	if err != nil {
+		t.Fatalf("unable to create new node dave: %v", err)
+	}
+	defer shutdownAndAssert(net, t, dave)
+
+	// Try to connect Dave to a non-routable IP address, using a timeout
+	// value of 1ms, which should give us a timeout error immediately.
+	req = &lnrpc.ConnectPeerRequest{
+		Addr: &lnrpc.LightningAddress{
+			Pubkey: testPub,
+			Host:   testHost,
+		},
+		Timeout: 1,
+	}
+	assertTimeoutError(ctxt, t, dave, req)
+}
+
+// assertTimeoutError asserts that a connection timeout error is raised. A
+// context with a default timeout is used to make the request. If our customized
+// connection timeout is less than the default, we won't see the request context
+// times out, instead a network connection timeout will be returned.
+func assertTimeoutError(ctxt context.Context, t *harnessTest,
+	node *lntest.HarnessNode, req *lnrpc.ConnectPeerRequest) {
+
+	t.t.Helper()
+
+	// Create a context with a timeout value.
+	ctxt, cancel := context.WithTimeout(ctxt, defaultTimeout)
+	defer cancel()
+
+	err := connect(node, ctxt, req)
+
+	// a DeadlineExceeded error will appear in the context if the above
+	// ctxtTimeout value is reached.
+	require.NoError(t.t, ctxt.Err(), "context time out")
+
+	// Check that the network returns a timeout error.
+	require.Containsf(
+		t.t, err.Error(), "i/o timeout",
+		"expected to get a timeout error, instead got: %v", err,
+	)
+}
+
+func connect(node *lntest.HarnessNode, ctxt context.Context,
+	req *lnrpc.ConnectPeerRequest) error {
+
+	syncTimeout := time.After(15 * time.Second)
+	ticker := time.NewTicker(time.Millisecond * 100)
+	defer ticker.Stop()
+
+	for {
+		select {
+		case <-ticker.C:
+			_, err := node.ConnectPeer(ctxt, req)
+			// If there's no error, return nil
+			if err == nil {
+				return err
+			}
+			// If the error is no ErrServerNotActive, return it.
+			// Otherwise, we will retry until timeout.
+			if !strings.Contains(err.Error(),
+				lnd.ErrServerNotActive.Error()) {
+
+				return err
+			}
+		case <-syncTimeout:
+			return fmt.Errorf("chain backend did not " +
+				"finish syncing")
+		}
+	}
+	return nil
+}