diff --git a/build/log_test.go b/build/log_test.go
new file mode 100644
index 00000000..1c7e8e61
--- /dev/null
+++ b/build/log_test.go
@@ -0,0 +1,104 @@
+package build_test
+
+import (
+	"testing"
+
+	"github.com/btcsuite/btclog"
+	"github.com/lightningnetwork/lnd/build"
+	"github.com/stretchr/testify/require"
+)
+
+type mockSubLogger struct {
+	globalLogLevel string
+	subLogLevels   map[string]string
+}
+
+func (m *mockSubLogger) SubLoggers() build.SubLoggers {
+	return build.SubLoggers{
+		"PEER": btclog.Disabled,
+		"SRVR": btclog.Disabled,
+	}
+}
+
+func (m *mockSubLogger) SupportedSubsystems() []string {
+	return nil
+}
+
+func (m *mockSubLogger) SetLogLevel(subsystemID string, logLevel string) {
+	m.subLogLevels[subsystemID] = logLevel
+}
+
+func (m *mockSubLogger) SetLogLevels(logLevel string) {
+	m.globalLogLevel = logLevel
+}
+
+// TestParseAndSetDebugLevels tests tha we can properly set the log levels for
+// all andspecified subsystems.
+func TestParseAndSetDebugLevels(t *testing.T) {
+	testCases := []struct {
+		name         string
+		debugLevel   string
+		expErr       string
+		expGlobal    string
+		expSubLevels map[string]string
+	}{
+		{
+			name:       "empty log level",
+			debugLevel: "",
+			expErr:     "invalid",
+		},
+		{
+			name:       "invalid global debug level",
+			debugLevel: "ddddddebug",
+			expErr:     "invalid",
+		},
+		{
+			name:       "global debug level",
+			debugLevel: "debug",
+			expGlobal:  "debug",
+		},
+		{
+			name:       "invalid global debug level#2",
+			debugLevel: "debug,info",
+			expErr:     "invalid",
+		},
+		{
+			name:       "invalid subsystem debug level",
+			debugLevel: "AAAA=debug",
+			expErr:     "invalid",
+		},
+		{
+			name:       "valid subsystem debug level",
+			debugLevel: "PEER=info,SRVR=debug",
+			expSubLevels: map[string]string{
+				"PEER": "info",
+				"SRVR": "debug",
+			},
+		},
+	}
+
+	for _, test := range testCases {
+		test := test
+		t.Run(test.name, func(t *testing.T) {
+			m := &mockSubLogger{
+				subLogLevels: make(map[string]string),
+			}
+
+			// If the subsystem map is empty, make and empty one to ensure
+			// the equal test later succeeds.
+			if len(test.expSubLevels) == 0 {
+				test.expSubLevels = make(map[string]string)
+			}
+
+			err := build.ParseAndSetDebugLevels(test.debugLevel, m)
+			if test.expErr != "" {
+				require.Contains(t, err.Error(), test.expErr)
+				return
+			}
+			require.NoError(t, err)
+
+			require.Equal(t, test.expGlobal, m.globalLogLevel)
+			require.Equal(t, test.expSubLevels, m.subLogLevels)
+		})
+	}
+}