diff --git a/pygmt/tests/test_grdfilter.py b/pygmt/tests/test_grdfilter.py
new file mode 100644
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+++ b/pygmt/tests/test_grdfilter.py
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+"""
+Tests for grdfilter.
+"""
+import os
+
+import numpy as np
+import numpy.testing as npt
+import pytest
+import xarray as xr
+from pygmt import grdfilter, grdinfo
+from pygmt.datasets import load_earth_relief
+from pygmt.exceptions import GMTInvalidInput
+from pygmt.helpers import GMTTempFile
+
+
+@pytest.fixture(scope="module", name="grid")
+def fixture_grid():
+    """
+    Load the grid data from the sample earth_relief file.
+    """
+    return load_earth_relief(registration="pixel")
+
+
+def test_grfilter_dataarray_in_dataarray_out(grid):
+    """
+    grdfilter an input DataArray, and output as DataArray.
+    """
+    result = grdfilter(grid=grid, filter="g600", distance="4")
+    # check information of the output grid
+    assert isinstance(result, xr.DataArray)
+    assert result.coords["lat"].data.min() == -89.5
+    assert result.coords["lat"].data.max() == 89.5
+    assert result.coords["lon"].data.min() == -179.5
+    assert result.coords["lon"].data.max() == 179.5
+    npt.assert_almost_equal(result.data.min(), -6147.47265625, decimal=2)
+    npt.assert_almost_equal(result.data.max(), 5164.1157, decimal=2)
+    assert result.sizes["lat"] == 180
+    assert result.sizes["lon"] == 360
+
+
+def test_grdfilter_dataarray_in_file_out(grid):
+    """
+    grdfilter an input DataArray, and output to a grid file.
+    """
+    with GMTTempFile(suffix=".nc") as tmpfile:
+        result = grdfilter(grid, outgrid=tmpfile.name, filter="g600", distance="4")
+        assert result is None  # grdfilter returns None if output to a file
+        result = grdinfo(tmpfile.name, C=True)
+        assert (
+            result == "-180 180 -90 90 -6147.47265625 5164.11572266 1 1 360 180 1 1\n"
+        )
+
+
+def test_grfilter_file_in_dataarray_out():
+    """
+    grdfilter an input grid file, and output as DataArray.
+    """
+    outgrid = grdfilter(
+        "@earth_relief_01d", region="0/180/0/90", filter="g600", distance="4"
+    )
+    assert isinstance(outgrid, xr.DataArray)
+    assert outgrid.gmt.registration == 1  # Pixel registration
+    assert outgrid.gmt.gtype == 1  # Geographic type
+    # check information of the output DataArray
+    # the '@earth_relief_01d' is in pixel registration, so the grid range is
+    # not exactly 0/180/0/90
+    assert outgrid.coords["lat"].data.min() == 0.5
+    assert outgrid.coords["lat"].data.max() == 89.5
+    assert outgrid.coords["lon"].data.min() == 0.5
+    assert outgrid.coords["lon"].data.max() == 179.5
+    npt.assert_almost_equal(outgrid.data.min(), -6147.4907, decimal=2)
+    npt.assert_almost_equal(outgrid.data.max(), 5164.06, decimal=2)
+    assert outgrid.sizes["lat"] == 90
+    assert outgrid.sizes["lon"] == 180
+
+
+def test_grdfilter_file_in_file_out():
+    """
+    grdfilter an input grid file, and output to a grid file.
+    """
+    with GMTTempFile(suffix=".nc") as tmpfile:
+        result = grdfilter(
+            "@earth_relief_01d",
+            outgrid=tmpfile.name,
+            region=[0, 180, 0, 90],
+            filter="g600",
+            distance="4",
+        )
+        assert result is None  # return value is None
+        assert os.path.exists(path=tmpfile.name)  # check that outgrid exists
+        result = grdinfo(tmpfile.name, C=True)
+        assert result == "0 180 0 90 -6147.49072266 5164.06005859 1 1 180 90 1 1\n"
+
+
+def test_grdfilter_fails():
+    """
+    Check that grdfilter fails correctly.
+    """
+    with pytest.raises(GMTInvalidInput):
+        grdfilter(np.arange(10).reshape((5, 2)))