diff --git a/fundingmanager.go b/fundingmanager.go
index e3cd3d94..29f12c00 100644
--- a/fundingmanager.go
+++ b/fundingmanager.go
@@ -994,10 +994,10 @@ func (f *fundingManager) handleFundingOpen(fmsg *fundingOpenMsg) {
 	// party is attempting to dictate for our commitment transaction.
 	err = reservation.CommitConstraints(
 		msg.CsvDelay, msg.MaxAcceptedHTLCs, msg.MaxValueInFlight,
-		msg.HtlcMinimum, msg.ChannelReserve,
+		msg.HtlcMinimum, msg.ChannelReserve, msg.DustLimit,
 	)
 	if err != nil {
-		fndgLog.Errorf("Unaccaptable channel constraints: %v", err)
+		fndgLog.Errorf("Unacceptable channel constraints: %v", err)
 		f.failFundingFlow(fmsg.peerAddress.IdentityKey,
 			fmsg.msg.PendingChannelID, err,
 		)
@@ -1146,7 +1146,7 @@ func (f *fundingManager) handleFundingAccept(fmsg *fundingAcceptMsg) {
 	resCtx.reservation.SetNumConfsRequired(uint16(msg.MinAcceptDepth))
 	err = resCtx.reservation.CommitConstraints(
 		msg.CsvDelay, msg.MaxAcceptedHTLCs, msg.MaxValueInFlight,
-		msg.HtlcMinimum, msg.ChannelReserve,
+		msg.HtlcMinimum, msg.ChannelReserve, msg.DustLimit,
 	)
 	if err != nil {
 		fndgLog.Warnf("Unacceptable channel constraints: %v", err)
diff --git a/lnwallet/errors.go b/lnwallet/errors.go
index 1e113473..403876c3 100644
--- a/lnwallet/errors.go
+++ b/lnwallet/errors.go
@@ -59,6 +59,15 @@ func ErrCsvDelayTooLarge(remoteDelay, maxDelay uint16) ReservationError {
 	}
 }
 
+// ErrChanReserveTooSmall returns an error indicating that the channel reserve
+// the remote is requiring is too small to be accepted.
+func ErrChanReserveTooSmall(reserve, dustLimit btcutil.Amount) ReservationError {
+	return ReservationError{
+		fmt.Errorf("channel reserve of %v sat is too small, min is %v "+
+			"sat", int64(reserve), int64(dustLimit)),
+	}
+}
+
 // ErrChanReserveTooLarge returns an error indicating that the chan reserve the
 // remote is requiring, is too large to be accepted.
 func ErrChanReserveTooLarge(reserve,
diff --git a/lnwallet/interface_test.go b/lnwallet/interface_test.go
index 3bd5f8e3..a549fe86 100644
--- a/lnwallet/interface_test.go
+++ b/lnwallet/interface_test.go
@@ -305,8 +305,14 @@ func testDualFundingReservationWorkflow(miner *rpctest.Harness,
 		t.Fatalf("unable to initialize funding reservation: %v", err)
 	}
 	aliceChanReservation.SetNumConfsRequired(numReqConfs)
-	aliceChanReservation.CommitConstraints(csvDelay, lnwallet.MaxHTLCNumber/2,
-		lnwire.NewMSatFromSatoshis(fundingAmount), 1, 10)
+	err = aliceChanReservation.CommitConstraints(
+		csvDelay, lnwallet.MaxHTLCNumber/2,
+		lnwire.NewMSatFromSatoshis(fundingAmount), 1, fundingAmount/100,
+		lnwallet.DefaultDustLimit(),
+	)
+	if err != nil {
+		t.Fatalf("unable to verify constraints: %v", err)
+	}
 
 	// The channel reservation should now be populated with a multi-sig key
 	// from our HD chain, a change output with 3 BTC, and 2 outputs
@@ -328,8 +334,14 @@ func testDualFundingReservationWorkflow(miner *rpctest.Harness,
 	if err != nil {
 		t.Fatalf("bob unable to init channel reservation: %v", err)
 	}
-	bobChanReservation.CommitConstraints(csvDelay, lnwallet.MaxHTLCNumber/2,
-		lnwire.NewMSatFromSatoshis(fundingAmount), 1, 10)
+	err = bobChanReservation.CommitConstraints(
+		csvDelay, lnwallet.MaxHTLCNumber/2,
+		lnwire.NewMSatFromSatoshis(fundingAmount), 1, fundingAmount/100,
+		lnwallet.DefaultDustLimit(),
+	)
+	if err != nil {
+		t.Fatalf("unable to verify constraints: %v", err)
+	}
 	bobChanReservation.SetNumConfsRequired(numReqConfs)
 
 	assertContributionInitPopulated(t, bobChanReservation.OurContribution())
@@ -675,8 +687,14 @@ func testSingleFunderReservationWorkflow(miner *rpctest.Harness,
 		t.Fatalf("unable to init channel reservation: %v", err)
 	}
 	aliceChanReservation.SetNumConfsRequired(numReqConfs)
-	aliceChanReservation.CommitConstraints(csvDelay, lnwallet.MaxHTLCNumber/2,
-		lnwire.NewMSatFromSatoshis(fundingAmt), 1, 10)
+	err = aliceChanReservation.CommitConstraints(
+		csvDelay, lnwallet.MaxHTLCNumber/2,
+		lnwire.NewMSatFromSatoshis(fundingAmt), 1, fundingAmt/100,
+		lnwallet.DefaultDustLimit(),
+	)
+	if err != nil {
+		t.Fatalf("unable to verify constraints: %v", err)
+	}
 
 	// Verify all contribution fields have been set properly.
 	aliceContribution := aliceChanReservation.OurContribution()
@@ -698,8 +716,14 @@ func testSingleFunderReservationWorkflow(miner *rpctest.Harness,
 	if err != nil {
 		t.Fatalf("unable to create bob reservation: %v", err)
 	}
-	bobChanReservation.CommitConstraints(csvDelay, lnwallet.MaxHTLCNumber/2,
-		lnwire.NewMSatFromSatoshis(fundingAmt), 1, 10)
+	err = bobChanReservation.CommitConstraints(
+		csvDelay, lnwallet.MaxHTLCNumber/2,
+		lnwire.NewMSatFromSatoshis(fundingAmt), 1, fundingAmt/100,
+		lnwallet.DefaultDustLimit(),
+	)
+	if err != nil {
+		t.Fatalf("unable to verify constraints: %v", err)
+	}
 	bobChanReservation.SetNumConfsRequired(numReqConfs)
 
 	// We'll ensure that Bob's contribution also gets generated properly.
diff --git a/lnwallet/reservation.go b/lnwallet/reservation.go
index 554b691a..e8a22f47 100644
--- a/lnwallet/reservation.go
+++ b/lnwallet/reservation.go
@@ -284,7 +284,7 @@ func (r *ChannelReservation) SetNumConfsRequired(numConfs uint16) {
 // if the parameters are seemed unsound.
 func (r *ChannelReservation) CommitConstraints(csvDelay, maxHtlcs uint16,
 	maxValueInFlight, minHtlc lnwire.MilliSatoshi,
-	chanReserve btcutil.Amount) error {
+	chanReserve, dustLimit btcutil.Amount) error {
 
 	r.Lock()
 	defer r.Unlock()
@@ -296,6 +296,12 @@ func (r *ChannelReservation) CommitConstraints(csvDelay, maxHtlcs uint16,
 		return ErrCsvDelayTooLarge(csvDelay, maxDelay)
 	}
 
+	// The dust limit should always be greater or equal to the channel
+	// reserve. The reservation request should be denied if otherwise.
+	if dustLimit > chanReserve {
+		return ErrChanReserveTooSmall(chanReserve, dustLimit)
+	}
+
 	// Fail if we consider the channel reserve to be too large.  We
 	// currently fail if it is greater than 20% of the channel capacity.
 	maxChanReserve := r.partialState.Capacity / 5
@@ -331,6 +337,12 @@ func (r *ChannelReservation) CommitConstraints(csvDelay, maxHtlcs uint16,
 			minNumHtlc*minHtlc)
 	}
 
+	// Our dust limit should always be less than or equal our proposed
+	// channel reserve.
+	if r.ourContribution.DustLimit > chanReserve {
+		r.ourContribution.DustLimit = chanReserve
+	}
+
 	r.ourContribution.ChannelConfig.CsvDelay = csvDelay
 	r.ourContribution.ChannelConfig.ChanReserve = chanReserve
 	r.ourContribution.ChannelConfig.MaxAcceptedHtlcs = maxHtlcs