diff --git a/mempool/mempool.go b/mempool/mempool.go
index 1d9302e1..91e428ff 100644
--- a/mempool/mempool.go
+++ b/mempool/mempool.go
@@ -113,6 +113,11 @@ type Config struct {
 	// tip within the best chain.
 	PastMedianTime func() time.Time
 
+	// CalcSequenceLock defines the function to use in order to generate
+	// the current sequence lock for the given transaction using the passed
+	// utxo view.
+	CalcSequenceLock func(*dcrutil.Tx, *blockchain.UtxoViewpoint) (*blockchain.SequenceLock, error)
+
 	// SubsidyCache defines a subsidy cache to use.
 	SubsidyCache *blockchain.SubsidyCache
 
@@ -831,8 +836,8 @@ func (mp *TxPool) maybeAcceptTransaction(tx *dcrutil.Tx, isNew, rateLimit, allow
 
 	// Don't allow non-standard transactions if the network parameters
 	// forbid their relaying.
+	medianTime := mp.cfg.PastMedianTime()
 	if !mp.cfg.Policy.RelayNonStd {
-		medianTime := mp.cfg.PastMedianTime()
 		err := checkTransactionStandard(tx, txType, nextBlockHeight,
 			medianTime, mp.cfg.Policy.MinRelayTxFee,
 			mp.cfg.Policy.MaxTxVersion)
@@ -991,6 +996,21 @@ func (mp *TxPool) maybeAcceptTransaction(tx *dcrutil.Tx, isNew, rateLimit, allow
 		return missingParents, nil
 	}
 
+	// Don't allow the transaction into the mempool unless its sequence
+	// lock is active, meaning that it'll be allowed into the next block
+	// with respect to its defined relative lock times.
+	seqLock, err := mp.cfg.CalcSequenceLock(tx, utxoView)
+	if err != nil {
+		if cerr, ok := err.(blockchain.RuleError); ok {
+			return nil, chainRuleError(cerr)
+		}
+		return nil, err
+	}
+	if !blockchain.SequenceLockActive(seqLock, nextBlockHeight, medianTime) {
+		return nil, txRuleError(wire.RejectNonstandard,
+			"transaction sequence locks on inputs not met")
+	}
+
 	// Perform several checks on the transaction inputs using the invariant
 	// rules in chain for what transactions are allowed into blocks.
 	// Also returns the fees associated with the transaction which will be
diff --git a/mempool/mempool_test.go b/mempool/mempool_test.go
index f9287985..08ca17c2 100644
--- a/mempool/mempool_test.go
+++ b/mempool/mempool_test.go
@@ -152,6 +152,15 @@ func (s *fakeChain) SetPastMedianTime(medianTime time.Time) {
 	s.Unlock()
 }
 
+// CalcSequenceLock returns the current sequence lock for the passed transaction
+// associated with the fake chain instance.
+func (s *fakeChain) CalcSequenceLock(tx *dcrutil.Tx, view *blockchain.UtxoViewpoint) (*blockchain.SequenceLock, error) {
+	return &blockchain.SequenceLock{
+		MinHeight: -1,
+		MinTime:   -1,
+	}, nil
+}
+
 // StandardVerifyFlags returns the standard verification script flags associated
 // with the fake chain instance.
 func (s *fakeChain) StandardVerifyFlags() (txscript.ScriptFlags, error) {
@@ -389,6 +398,7 @@ func newPoolHarness(chainParams *chaincfg.Params) (*poolHarness, []spendableOutp
 			BestHash:            chain.BestHash,
 			BestHeight:          chain.BestHeight,
 			PastMedianTime:      chain.PastMedianTime,
+			CalcSequenceLock:    chain.CalcSequenceLock,
 			SubsidyCache:        subsidyCache,
 			SigCache:            nil,
 			AddrIndex:           nil,
diff --git a/server.go b/server.go
index c162f4a3..2b18e2e5 100644
--- a/server.go
+++ b/server.go
@@ -2420,7 +2420,7 @@ func newServer(listenAddrs []string, db database.DB, chainParams *chaincfg.Param
 
 	txC := mempool.Config{
 		Policy: mempool.Policy{
-			MaxTxVersion:         1,
+			MaxTxVersion:         2,
 			DisableRelayPriority: cfg.NoRelayPriority,
 			RelayNonStd:          cfg.RelayNonStd,
 			FreeTxRelayLimit:     cfg.FreeTxRelayLimit,
@@ -2440,15 +2440,16 @@ func newServer(listenAddrs []string, db database.DB, chainParams *chaincfg.Param
 			bm.chainState.Unlock()
 			return sDiff, nil
 		},
-		FetchUtxoView:   bm.chain.FetchUtxoView,
-		BlockByHash:     bm.chain.BlockByHash,
-		BestHash:        func() *chainhash.Hash { return bm.chain.BestSnapshot().Hash },
-		BestHeight:      func() int64 { return bm.chain.BestSnapshot().Height },
-		SubsidyCache:    bm.chain.FetchSubsidyCache(),
-		SigCache:        s.sigCache,
-		PastMedianTime:  func() time.Time { return bm.chain.BestSnapshot().MedianTime },
-		AddrIndex:       s.addrIndex,
-		ExistsAddrIndex: s.existsAddrIndex,
+		FetchUtxoView:    bm.chain.FetchUtxoView,
+		BlockByHash:      bm.chain.BlockByHash,
+		BestHash:         func() *chainhash.Hash { return bm.chain.BestSnapshot().Hash },
+		BestHeight:       func() int64 { return bm.chain.BestSnapshot().Height },
+		CalcSequenceLock: bm.chain.CalcSequenceLock,
+		SubsidyCache:     bm.chain.FetchSubsidyCache(),
+		SigCache:         s.sigCache,
+		PastMedianTime:   func() time.Time { return bm.chain.BestSnapshot().MedianTime },
+		AddrIndex:        s.addrIndex,
+		ExistsAddrIndex:  s.existsAddrIndex,
 	}
 	s.txMemPool = mempool.New(&txC)