diff --git a/lnd.go b/lnd.go
index 295a277d..d88affda 100644
--- a/lnd.go
+++ b/lnd.go
@@ -39,12 +39,14 @@ import (
 	"github.com/lightningnetwork/lnd/channeldb"
 	"github.com/lightningnetwork/lnd/lnrpc"
 	"github.com/lightningnetwork/lnd/lnwallet"
+	"github.com/lightningnetwork/lnd/lnwallet/btcwallet"
 	"github.com/lightningnetwork/lnd/lnwire"
 	"github.com/lightningnetwork/lnd/macaroons"
 	"github.com/lightningnetwork/lnd/walletunlocker"
 	"github.com/roasbeef/btcd/btcec"
 	"github.com/roasbeef/btcd/wire"
 	"github.com/roasbeef/btcutil"
+	"github.com/roasbeef/btcwallet/wallet"
 )
 
 const (
@@ -820,14 +822,47 @@ func waitForWalletPassword(grpcEndpoints, restEndpoints []string,
 		"Use `lncli create` to create wallet, or " +
 		"`lncli unlock` to unlock already created wallet.")
 
-	// We currently don't distinguish between getting a password to
-	// be used for creation or unlocking, as a new wallet db will be
-	// created if none exists when creating the chain control.
+	// We currently don't distinguish between getting a password to be used
+	// for creation or unlocking, as a new wallet db will be created if
+	// none exists when creating the chain control.
 	select {
-	case walletPw := <-pwService.CreatePasswords:
-		return walletPw, walletPw, nil
+
+	// The wallet is being created for the first time, we'll check to see
+	// if the user provided any entropy for seed creation. If so, then
+	// we'll create the wallet early to load the seed.
+	case initMsg := <-pwService.InitMsgs:
+		password := initMsg.Passphrase
+		cipherSeed := initMsg.WalletSeed
+
+		netDir := btcwallet.NetworkDir(
+			chainConfig.ChainDir, activeNetParams.Params,
+		)
+		loader := wallet.NewLoader(activeNetParams.Params, netDir)
+
+		// With the seed, we can now use the wallet loader to create
+		// the wallet, then unload it so it can be opened shortly
+		// after.
+		//
+		// TODO(roasbeef): extend loader to also accept birthday
+		//  * also check with keychain version
+		_, err = loader.CreateNewWallet(
+			password, password, cipherSeed.Entropy[:],
+		)
+		if err != nil {
+			return nil, nil, err
+		}
+
+		if err := loader.UnloadWallet(); err != nil {
+			return nil, nil, err
+		}
+
+		return password, password, nil
+
+	// The wallet has already been created in the past, and is simply being
+	// unlocked. So we'll just return these passphrases.
 	case walletPw := <-pwService.UnlockPasswords:
 		return walletPw, walletPw, nil
+
 	case <-shutdownChannel:
 		return nil, nil, fmt.Errorf("shutting down")
 	}