diff --git a/selftest/knownfail b/selftest/knownfail
index 710fd33894e..10e368a1084 100644
--- a/selftest/knownfail
+++ b/selftest/knownfail
@@ -343,3 +343,4 @@
 # Disabling NTLM means you can't use samr to change the password
 ^samba.tests.ntlmdisabled.python\(ktest\).ntlmdisabled.NtlmDisabledTests.test_samr_change_password\(ktest\)
 ^samba.tests.ntlmdisabled.python\(ad_dc_no_ntlm\).ntlmdisabled.NtlmDisabledTests.test_ntlm_connection\(ad_dc_no_ntlm\)
+^samba3.blackbox.smbd_error.check_panic_2
diff --git a/source3/script/tests/test_smbd_error.sh b/source3/script/tests/test_smbd_error.sh
new file mode 100755
index 00000000000..e9af47aea51
--- /dev/null
+++ b/source3/script/tests/test_smbd_error.sh
@@ -0,0 +1,56 @@
+#!/bin/sh
+#
+# Test smbd with failing chdir system call.
+#
+# Verify that smbd does not panic when the chdir system call is
+# returning an error.  ensure that the output format for ACL entries
+#
+# Copyright (C) 2017 Christof Schmitt
+
+. $(dirname $0)/../../../testprogs/blackbox/subunit.sh
+failed=0
+error_inject_conf=$(dirname $SMB_CONF_PATH)/error_inject.conf
+
+panic_count_0=$(grep -c PANIC $SMBD_TEST_LOG)
+
+#
+# Verify that a panic in smbd will result in a PANIC message in the log
+#
+
+# As a panic is expected here, also overwrite the default "panic
+# action" in selftest to not start a debugger
+echo 'error_inject:chdir = panic' > $error_inject_conf
+echo '[global]' >> $error_inject_conf
+echo 'panic action = ""' >> $error_inject_conf
+
+testit_expect_failure "smbclient" $VALGRIND \
+		      $BINDIR/smbclient //$SERVER_IP/error_inject \
+		      -U$USERNAME%$PASSWORD  -c dir ||
+	failed=$(expr $failed + 1)
+
+rm $error_inject_conf
+
+panic_count_1=$(grep -c PANIC $SMBD_TEST_LOG)
+
+testit "check_panic_1" test $(expr $panic_count_0 + 1) -eq $panic_count_1 ||
+	failed=$(expr $failed + 1)
+
+#
+# Verify that a failing chdir vfs call does not result in a smbd panic
+#
+
+echo 'error_inject:chdir = ESTALE' > $error_inject_conf
+
+testit_expect_failure "smbclient" $VALGRIND \
+		      $BINDIR/smbclient //$SERVER_IP/error_inject \
+		      -U$USERNAME%$PASSWORD  -c dir ||
+	failed=$(expr $failed + 1)
+
+panic_count_2=$(grep -c PANIC $SMBD_TEST_LOG)
+
+testit "check_panic_2" test $panic_count_1 -eq $panic_count_2 ||
+	failed=$(expr $failed + 1)
+
+rm $error_inject_conf
+
+testok $0 $failed
diff --git a/source3/selftest/tests.py b/source3/selftest/tests.py
index f8d2a4de9ba..4bb37077ff7 100755
--- a/source3/selftest/tests.py
+++ b/source3/selftest/tests.py
@@ -585,6 +585,9 @@ plantestsuite("samba3.blackbox.net_tdb", "simpleserver:local",
                 smbclient3, '$SERVER', 'tmp', '$USERNAME', '$PASSWORD',
                 configuration, '$LOCAL_PATH', '$LOCK_DIR' ])
 
+plantestsuite("samba3.blackbox.smbd_error", "simpleserver:local",
+              [ os.path.join(samba3srcdir, "script/tests/test_smbd_error.sh") ])
+
 plantestsuite("samba3.blackbox.net_cache_samlogon", "ad_member:local",
               [ os.path.join(samba3srcdir, "script/tests/test_net_cache_samlogon.sh"),
                 '$SERVER', 'tmp', '$DC_USERNAME', '$DC_PASSWORD'])