diff --git a/src/com/google/bitcoin/core/Transaction.java b/src/com/google/bitcoin/core/Transaction.java
index 542eb564..cf723658 100644
--- a/src/com/google/bitcoin/core/Transaction.java
+++ b/src/com/google/bitcoin/core/Transaction.java
@@ -204,6 +204,17 @@ public class Transaction extends Message implements Serializable {
         return null;
     }
 
+    /**
+     * @return true if every output is marked as spent.
+     */
+    public boolean isEveryOutputSpent() {
+        for (TransactionOutput output : outputs) {
+            if (output.isAvailableForSpending())
+                return false;
+        }
+        return true;
+    }
+
     /**
      * These constants are a part of a scriptSig signature on the inputs. They define the details of how a
      * transaction can be redeemed, specifically, they control how the hash of the transaction is calculated.
diff --git a/src/com/google/bitcoin/core/Wallet.java b/src/com/google/bitcoin/core/Wallet.java
index 4b6f1518..ecc505b0 100644
--- a/src/com/google/bitcoin/core/Wallet.java
+++ b/src/com/google/bitcoin/core/Wallet.java
@@ -330,12 +330,19 @@ public class Wallet implements Serializable {
      * there's no need to go through and do it again.
      */
     private void updateForSpends(Transaction tx) throws VerificationException {
+        // tx is on the best chain by this point.
         for (TransactionInput input : tx.inputs) {
             TransactionInput.ConnectionResult result = input.connect(unspent, false);
             if (result == TransactionInput.ConnectionResult.NO_SUCH_TX) {
-                // Doesn't spend any of our outputs or is coinbase.
-                continue;
-            } else if (result == TransactionInput.ConnectionResult.ALREADY_SPENT) {
+                // Not found in the unspent map. Try again with the spent map.
+                result = input.connect(spent, false);
+                if (result == TransactionInput.ConnectionResult.NO_SUCH_TX) {
+                    // Doesn't spend any of our outputs or is coinbase.
+                    continue;
+                }
+            }
+
+            if (result == TransactionInput.ConnectionResult.ALREADY_SPENT) {
                 // Double spend! This must have overridden a pending tx, or the block is bad (contains transactions
                 // that illegally double spend: should never occur if we are connected to an honest node).
                 //
@@ -370,14 +377,21 @@ public class Wallet implements Serializable {
                 // The outputs are already marked as spent by the connect call above, so check if there are any more for
                 // us to use. Move if not.
                 Transaction connected = input.outpoint.fromTx;
-                if (connected.getValueSentToMe(this, false).equals(BigInteger.ZERO)) {
-                    // There's nothing left I can spend in this transaction.
-                    if (unspent.remove(connected.getHash()) != null) {
-                        log.info("  prevtx <-unspent");
-                        log.info("  prevtx ->spent");
-                        spent.put(connected.getHash(), connected);
-                    }
+                maybeMoveTxToSpent(connected, "prevtx");
+            }
+        }
+    }
+
+    /** If the transactions outputs are all marked as spent, and it's in the unspent map, move it. */
+    private void maybeMoveTxToSpent(Transaction tx, String context) {
+        if (tx.isEveryOutputSpent()) {
+            // There's nothing left I can spend in this transaction.
+            if (unspent.remove(tx.getHash()) != null) {
+                if (log.isInfoEnabled()) {
+                    log.info("  " + context + " <-unspent");
+                    log.info("  " + context + " ->spent");
                 }
+                spent.put(tx.getHash(), tx);
             }
         }
     }
@@ -411,12 +425,36 @@ public class Wallet implements Serializable {
         // Mark the outputs of the used transcations as spent, so we don't try and spend it again.
         for (TransactionInput input : tx.inputs) {
             TransactionOutput connectedOutput = input.outpoint.getConnectedOutput();
+            Transaction connectedTx = connectedOutput.parentTransaction;
             connectedOutput.markAsSpent(input);
+            maybeMoveTxToSpent(connectedTx, "spent tx");
         }
         // Add to the pending pool. It'll be moved out once we receive this transaction on the best chain.
         pending.put(tx.getHash(), tx);
     }
 
+    // This is used only for unit testing, it's an internal API.
+    enum Pool {
+        UNSPENT,
+        SPENT,
+        PENDING,
+        INACTIVE,
+        DEAD,
+        ALL,
+    }
+
+    int getPoolSize(Pool pool) {
+        switch (pool) {
+            case UNSPENT: return unspent.size();
+            case SPENT: return spent.size();
+            case PENDING: return pending.size();
+            case INACTIVE: return inactive.size();
+            case DEAD: return dead.size();
+            case ALL: return unspent.size() + spent.size() + pending.size() + inactive.size() + dead.size();
+        }
+        throw new RuntimeException("Unreachable");
+    }
+
     /**
      * Statelessly creates a transaction that sends the given number of nanocoins to address. The change is sent to
      * the first address in the wallet, so you must have added at least one key.<p>
diff --git a/tests/com/google/bitcoin/core/WalletTest.java b/tests/com/google/bitcoin/core/WalletTest.java
index 0f5e69fe..4101f595 100644
--- a/tests/com/google/bitcoin/core/WalletTest.java
+++ b/tests/com/google/bitcoin/core/WalletTest.java
@@ -56,16 +56,25 @@ public class WalletTest {
 
         wallet.receive(t1, null, BlockChain.NewBlockType.BEST_CHAIN);
         assertEquals(v1, wallet.getBalance());
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.UNSPENT));
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.ALL));
 
         ECKey k2 = new ECKey();
         BigInteger v2 = toNanoCoins(0, 50);
         Transaction t2 = wallet.createSend(k2.toAddress(params), v2);
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.UNSPENT));
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.ALL));
 
         // Do some basic sanity checks.
         assertEquals(1, t2.inputs.size());
         assertEquals(myAddress, t2.inputs.get(0).getScriptSig().getFromAddress());
 
         // We have NOT proven that the signature is correct!
+
+        wallet.confirmSend(t2);
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.PENDING));
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.SPENT));
+        assertEquals(2, wallet.getPoolSize(Wallet.Pool.ALL));
     }
 
     @Test
@@ -76,10 +85,14 @@ public class WalletTest {
 
         wallet.receive(t1, null, BlockChain.NewBlockType.BEST_CHAIN);
         assertEquals(v1, wallet.getBalance());
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.UNSPENT));
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.ALL));
 
         BigInteger v2 = toNanoCoins(0, 50);
         Transaction t2 = createFakeTx(params, v2, myAddress);
         wallet.receive(t2, null, BlockChain.NewBlockType.SIDE_CHAIN);
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.INACTIVE));
+        assertEquals(2, wallet.getPoolSize(Wallet.Pool.ALL));
 
         assertEquals(v1, wallet.getBalance());
     }
@@ -207,6 +220,8 @@ public class WalletTest {
         wallet.receive(inbound1, null, BlockChain.NewBlockType.BEST_CHAIN);
         // Send half to some other guy. Sending only half then waiting for a confirm is important to ensure the tx is
         // in the unspent pool, not pending or spent.
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.UNSPENT));
+        assertEquals(1, wallet.getPoolSize(Wallet.Pool.ALL));
         Address someOtherGuy = new ECKey().toAddress(params);
         Transaction outbound1 = wallet.createSend(someOtherGuy, coinHalf);
         wallet.confirmSend(outbound1);