diff --git a/src/validation.cpp b/src/validation.cpp
index a1c0ec853585..fb74ccb2bf93 100644
--- a/src/validation.cpp
+++ b/src/validation.cpp
@@ -3412,6 +3412,17 @@ bool CChainState::ResetBlockFailureFlags(CBlockIndex *pindex) {
         if (pindex->nStatus & BLOCK_FAILED_MASK) {
             pindex->nStatus &= ~BLOCK_FAILED_MASK;
             setDirtyBlockIndex.insert(pindex);
+            m_failed_blocks.erase(pindex);
+            // Mark all nearest BLOCK_FAILED_CHILD descendants (if any) as BLOCK_FAILED_VALID
+            auto itp = mapPrevBlockIndex.equal_range(pindex->GetBlockHash());
+            for (auto jt = itp.first; jt != itp.second; ++jt) {
+                if (jt->second->nStatus & BLOCK_FAILED_CHILD) {
+                    jt->second->nStatus |= BLOCK_FAILED_VALID;
+                    m_failed_blocks.insert(jt->second);
+                    setDirtyBlockIndex.insert(jt->second);
+                    setBlockIndexCandidates.erase(jt->second);
+                }
+            }
         }
         pindex = pindex->pprev;
     }
diff --git a/test/functional/rpc_invalidateblock.py b/test/functional/rpc_invalidateblock.py
index a69a176d101e..5e843141c3db 100755
--- a/test/functional/rpc_invalidateblock.py
+++ b/test/functional/rpc_invalidateblock.py
@@ -60,5 +60,32 @@ def run_test(self):
         if node1height < 4:
             raise AssertionError("Node 1 reorged to a lower height: %d"%node1height)
 
+        self.log.info("Make sure ResetBlockFailureFlags does the job correctly")
+        self.restart_node(0, extra_args=["-checkblocks=5"])
+        self.restart_node(1, extra_args=["-checkblocks=5"])
+        connect_nodes_bi(self.nodes, 0, 1)
+        self.nodes[0].generate(10)
+        self.sync_blocks(self.nodes[0:2])
+        newheight = self.nodes[0].getblockcount()
+        for j in range(2):
+            self.restart_node(0, extra_args=["-checkblocks=5"])
+            tip = self.nodes[0].generate(10)[-1]
+            self.nodes[1].generate(9)
+            connect_nodes(self.nodes[0], 1)
+            self.sync_blocks(self.nodes[0:2])
+            assert_equal(self.nodes[0].getblockcount(), newheight + 10 * (j + 1))
+            assert_equal(self.nodes[1].getblockcount(), newheight + 10 * (j + 1))
+            assert_equal(self.nodes[1].getbestblockhash(), tip)
+
+        tip = self.nodes[1].getbestblockhash()
+        self.nodes[1].invalidateblock(self.nodes[1].getblockhash(newheight + 1))
+        self.nodes[1].invalidateblock(self.nodes[1].getblockhash(newheight + 1))
+
+        assert_equal(self.nodes[1].getblockcount(), newheight)
+        self.restart_node(1, extra_args=["-checkblocks=5"])
+        wait_until(lambda: self.nodes[1].getblockcount() == newheight + 20)
+        assert_equal(tip, self.nodes[1].getbestblockhash())
+
+
 if __name__ == '__main__':
     InvalidateTest().main()