diff --git a/toolkit/mozapps/extensions/test/xpcshell/test_system_update_fail.js b/toolkit/mozapps/extensions/test/xpcshell/test_system_update_fail.js
new file mode 100644
index 000000000000..442377d51913
--- /dev/null
+++ b/toolkit/mozapps/extensions/test/xpcshell/test_system_update_fail.js
@@ -0,0 +1,184 @@
+// Tests that system add-on upgrades fail to upgrade in expected cases.
+
+Components.utils.import("resource://testing-common/httpd.js");
+
+BootstrapMonitor.init();
+
+createAppInfo("xpcshell@tests.mozilla.org", "XPCShell", "2");
+
+var testserver = new HttpServer();
+testserver.registerDirectory("/data/", do_get_file("data/system_addons"));
+testserver.start();
+var root = testserver.identity.primaryScheme + "://" +
+           testserver.identity.primaryHost + ":" +
+           testserver.identity.primaryPort + "/data/"
+Services.prefs.setCharPref(PREF_SYSTEM_ADDON_UPDATE_URL, root + "update.xml");
+
+let distroDir = FileUtils.getDir("ProfD", ["sysfeatures", "empty"], true);
+registerDirectory("XREAppFeat", distroDir);
+initSystemAddonDirs();
+
+/**
+ * Defines the set of initial conditions to run each test against. Each should
+ * define the following properties:
+ *
+ * setup:        A task to setup the profile into the initial state.
+ * initialState: The initial expected system add-on state after setup has run.
+ */
+const TEST_CONDITIONS = {
+  // Runs tests with no updated or default system add-ons initially installed
+  blank: {
+    *setup() {
+      clearSystemAddonUpdatesDir();
+      distroDir.leafName = "empty";
+    },
+    initialState: [
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null}
+    ],
+  },
+  // Runs tests with default system add-ons installed
+  withAppSet: {
+    *setup() {
+      clearSystemAddonUpdatesDir();
+      distroDir.leafName = "prefilled";
+    },
+    initialState: [
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: "2.0"},
+      { isUpgrade: false, version: "2.0"},
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null}
+    ]
+  },
+
+  // Runs tests with updated system add-ons installed
+  withProfileSet: {
+    *setup() {
+      buildPrefilledUpdatesDir();
+      distroDir.leafName = "empty";
+    },
+    initialState: [
+      { isUpgrade: false, version: null},
+      { isUpgrade: true, version: "2.0"},
+      { isUpgrade: true, version: "2.0"},
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null}
+    ]
+  },
+
+  // Runs tests with both default and updated system add-ons installed
+  withBothSets: {
+    *setup() {
+      buildPrefilledUpdatesDir();
+      distroDir.leafName = "hidden";
+    },
+    initialState: [
+      { isUpgrade: false, version: "1.0"},
+      { isUpgrade: true, version: "2.0"},
+      { isUpgrade: true, version: "2.0"},
+      { isUpgrade: false, version: null},
+      { isUpgrade: false, version: null}
+    ]
+  },
+};
+
+
+/**
+ * The tests to run. Each test must define an updateList or test. The following
+ * properties are used:
+ *
+ * updateList: The set of add-ons the server should respond with.
+ * test:       A function to run to perform the update check (replaces
+ *             updateList)
+ * fails:      An optional property, if true the update check is expected to
+ *             fail.
+ * finalState: An optional property, the expected final state of system add-ons,
+ *             if missing the test condition's initialState is used.
+ */
+const TESTS = {
+  // Specifying an incorrect version should stop us updating anything
+  badVersion: {
+    fails: true,
+    updateList: [
+      { id: "system2@tests.mozilla.org", version: "4.0", path: "system2_3.xpi" },
+      { id: "system3@tests.mozilla.org", version: "3.0", path: "system3_3.xpi" }
+    ],
+  },
+
+  // Specifying an invalid size should stop us updating anything
+  badSize: {
+    fails: true,
+    updateList: [
+      { id: "system2@tests.mozilla.org", version: "3.0", path: "system2_3.xpi", size: 2 },
+      { id: "system3@tests.mozilla.org", version: "3.0", path: "system3_3.xpi" }
+    ],
+  },
+
+  // Specifying an incorrect hash should stop us updating anything
+  badHash: {
+    fails: true,
+    updateList: [
+      { id: "system2@tests.mozilla.org", version: "3.0", path: "system2_3.xpi" },
+      { id: "system3@tests.mozilla.org", version: "3.0", path: "system3_3.xpi", hashFunction: "sha1", hashValue: "205a4c49bd513ebd30594e380c19e86bba1f83e2" }
+    ],
+  },
+
+  // A bad certificate should stop updates
+  badCert: {
+    fails: true,
+    updateList: [
+      { id: "system1@tests.mozilla.org", version: "1.0", path: "system1_1_badcert.xpi" },
+      { id: "system3@tests.mozilla.org", version: "1.0", path: "system3_1.xpi" }
+    ],
+  },
+
+  // An unpacked add-on should stop updates.
+  notPacked: {
+    fails: true,
+    updateList: [
+      { id: "system6@tests.mozilla.org", version: "1.0", path: "system6_1_unpack.xpi" },
+      { id: "system3@tests.mozilla.org", version: "1.0", path: "system3_1.xpi" }
+    ],
+  },
+
+  // A non-bootstrap add-on should stop updates.
+  notBootstrap: {
+    fails: true,
+    updateList: [
+      { id: "system6@tests.mozilla.org", version: "1.0", path: "system6_2_notBootstrap.xpi" },
+      { id: "system3@tests.mozilla.org", version: "1.0", path: "system3_1.xpi" }
+    ],
+  },
+
+  // A non-multiprocess add-on should stop updates.
+  notMultiprocess: {
+    fails: true,
+    updateList: [
+      { id: "system6@tests.mozilla.org", version: "1.0", path: "system6_3_notMultiprocess.xpi" },
+      { id: "system3@tests.mozilla.org", version: "1.0", path: "system3_1.xpi" }
+    ],
+  }
+}
+
+add_task(function* setup() {
+  // Initialise the profile
+  startupManager();
+  yield promiseShutdownManager();
+});
+
+add_task(function*() {
+  for (let setupName of Object.keys(TEST_CONDITIONS)) {
+    for (let testName of Object.keys(TESTS)) {
+        do_print("Running test " + setupName + " " + testName);
+
+        let setup = TEST_CONDITIONS[setupName];
+        let test = TESTS[testName];
+
+        yield execSystemAddonTest(setupName, setup, test, distroDir);
+    }
+  }
+});
diff --git a/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini b/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini
index 54a695f814e1..6e8740a7bc0b 100644
--- a/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini
+++ b/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini
@@ -28,6 +28,7 @@ skip-if = appname != "firefox"
 [test_ProductAddonChecker.js]
 [test_shutdown.js]
 [test_system_update.js]
+[test_system_update_fail.js]
 [test_system_reset.js]
 [test_XPIcancel.js]
 [test_XPIStates.js]