diff --git a/zebra-chain/src/transaction.rs b/zebra-chain/src/transaction.rs
index 2fc9a2af..ef5fbdb4 100644
--- a/zebra-chain/src/transaction.rs
+++ b/zebra-chain/src/transaction.rs
@@ -294,8 +294,7 @@ impl Transaction {
     /// Get this transaction's expiry height, if any.
     pub fn expiry_height(&self) -> Option<block::Height> {
         match self {
-            Transaction::V1 { .. } => None,
-            Transaction::V2 { .. } => None,
+            Transaction::V1 { .. } | Transaction::V2 { .. } => None,
             Transaction::V3 { expiry_height, .. }
             | Transaction::V4 { expiry_height, .. }
             | Transaction::V5 { expiry_height, .. } => match expiry_height {
@@ -308,6 +307,32 @@ impl Transaction {
         }
     }
 
+    /// Modify the expiry height of this transaction.
+    ///
+    /// # Panics
+    ///
+    /// - if called on a v1 or v2 transaction
+    #[cfg(any(test, feature = "proptest-impl"))]
+    pub fn expiry_height_mut(&mut self) -> &mut block::Height {
+        match self {
+            Transaction::V1 { .. } | Transaction::V2 { .. } => {
+                panic!("v1 and v2 transactions are not supported")
+            }
+            Transaction::V3 {
+                ref mut expiry_height,
+                ..
+            }
+            | Transaction::V4 {
+                ref mut expiry_height,
+                ..
+            }
+            | Transaction::V5 {
+                ref mut expiry_height,
+                ..
+            } => expiry_height,
+        }
+    }
+
     /// Get this transaction's network upgrade field, if any.
     /// This field is serialized as `nConsensusBranchId` ([7.1]).
     ///
diff --git a/zebrad/src/commands/start.rs b/zebrad/src/commands/start.rs
index afa80bb6..282e149f 100644
--- a/zebrad/src/commands/start.rs
+++ b/zebrad/src/commands/start.rs
@@ -83,7 +83,7 @@ impl StartCmd {
             ));
 
         let (peer_set, address_book) =
-            zebra_network::init(config.network.clone(), inbound, latest_chain_tip).await;
+            zebra_network::init(config.network.clone(), inbound, latest_chain_tip.clone()).await;
 
         info!("initializing syncer");
         let (syncer, sync_status) =
@@ -96,6 +96,7 @@ impl StartCmd {
             state,
             tx_verifier,
             sync_status.clone(),
+            latest_chain_tip,
             chain_tip_change.clone(),
         ));
         let mempool = ServiceBuilder::new().buffer(20).service(mempool_service);
diff --git a/zebrad/src/components/inbound/tests.rs b/zebrad/src/components/inbound/tests.rs
index 41169df2..3828a009 100644
--- a/zebrad/src/components/inbound/tests.rs
+++ b/zebrad/src/components/inbound/tests.rs
@@ -25,7 +25,7 @@ use zebra_test::mock_service::{MockService, PanicAssertion};
 
 #[tokio::test]
 async fn mempool_requests_for_transactions() {
-    let (inbound_service, added_transactions, _, mut peer_set) = setup(true).await;
+    let (inbound_service, added_transactions, _, mut peer_set, _) = setup(true).await;
 
     let added_transaction_ids: Vec<UnminedTxId> = added_transactions
         .clone()
@@ -74,7 +74,7 @@ async fn mempool_push_transaction() -> Result<(), crate::BoxError> {
     // use the first transaction that is not coinbase
     let tx = block.transactions[1].clone();
 
-    let (inbound_service, _, mut tx_verifier, mut peer_set) = setup(false).await;
+    let (inbound_service, _, mut tx_verifier, mut peer_set, _) = setup(false).await;
 
     // Test `Request::PushTransaction`
     let request = inbound_service
@@ -123,7 +123,7 @@ async fn mempool_advertise_transaction_ids() -> Result<(), crate::BoxError> {
     let test_transaction_id = test_transaction.unmined_id();
     let txs = HashSet::from_iter([test_transaction_id]);
 
-    let (inbound_service, _, mut tx_verifier, mut peer_set) = setup(false).await;
+    let (inbound_service, _, mut tx_verifier, mut peer_set, _) = setup(false).await;
 
     // Test `Request::AdvertiseTransactionIds`
     let request = inbound_service
@@ -173,6 +173,178 @@ async fn mempool_advertise_transaction_ids() -> Result<(), crate::BoxError> {
     Ok(())
 }
 
+#[tokio::test]
+async fn mempool_transaction_expiration() -> Result<(), crate::BoxError> {
+    // Get a block that has at least one non coinbase transaction
+    let block: Block = zebra_test::vectors::BLOCK_MAINNET_982681_BYTES.zcash_deserialize_into()?;
+
+    // Use the first transaction that is not coinbase to test expiration
+    let tx1 = &*(block.transactions[1]).clone();
+    let mut tx1_id = tx1.unmined_id();
+
+    // Change the expiration height of the transaction to block 3
+    let mut tx1 = tx1.clone();
+    *tx1.expiry_height_mut() = zebra_chain::block::Height(3);
+
+    // Use the second transaction that is not coinbase to trigger `remove_expired_transactions()`
+    let tx2 = block.transactions[2].clone();
+    let mut tx2_id = tx2.unmined_id();
+
+    // Get services
+    let (inbound_service, _, mut tx_verifier, _peer_set, state_service) = setup(false).await;
+
+    // Push test transaction
+    let request = inbound_service
+        .clone()
+        .oneshot(Request::PushTransaction(tx1.clone().into()));
+    // Simulate a successful transaction verification
+    let verification = tx_verifier.expect_request_that(|_| true).map(|responder| {
+        tx1_id = responder.request().tx_id();
+        responder.respond(tx1_id);
+    });
+    let (response, _) = futures::join!(request, verification);
+    match response {
+        Ok(Response::Nil) => (),
+        _ => unreachable!("`PushTransaction` requests should always respond `Ok(Nil)`"),
+    };
+
+    // Use `Request::MempoolTransactionIds` to check the transaction was inserted to mempool
+    let request = inbound_service
+        .clone()
+        .oneshot(Request::MempoolTransactionIds)
+        .await;
+
+    match request {
+        Ok(Response::TransactionIds(response)) => {
+            assert_eq!(response, vec![tx1_id])
+        }
+        _ => unreachable!(
+            "`MempoolTransactionIds` requests should always respond `Ok(Vec<UnminedTxId>)`"
+        ),
+    };
+
+    // Add a new block to the state (make the chain tip advance)
+    let block_one: Arc<Block> = zebra_test::vectors::BLOCK_MAINNET_2_BYTES
+        .zcash_deserialize_into()
+        .unwrap();
+    state_service
+        .clone()
+        .oneshot(zebra_state::Request::CommitFinalizedBlock(
+            block_one.clone().into(),
+        ))
+        .await
+        .unwrap();
+
+    // Make sure tx1 is still in the mempool as it is not expired yet.
+    let request = inbound_service
+        .clone()
+        .oneshot(Request::MempoolTransactionIds)
+        .await;
+
+    match request {
+        Ok(Response::TransactionIds(response)) => {
+            assert_eq!(response, vec![tx1_id])
+        }
+        _ => unreachable!(
+            "`MempoolTransactionIds` requests should always respond `Ok(Vec<UnminedTxId>)`"
+        ),
+    };
+
+    // As our test transaction will expire at a block height greater or equal to 3 we need to push block 3.
+    let block_two: Arc<Block> = zebra_test::vectors::BLOCK_MAINNET_3_BYTES
+        .zcash_deserialize_into()
+        .unwrap();
+    state_service
+        .clone()
+        .oneshot(zebra_state::Request::CommitFinalizedBlock(
+            block_two.clone().into(),
+        ))
+        .await
+        .unwrap();
+
+    // Push a second transaction to trigger `remove_expired_transactions()`
+    let request = inbound_service
+        .clone()
+        .oneshot(Request::PushTransaction(tx2.clone().into()));
+    // Simulate a successful transaction verification
+    let verification = tx_verifier.expect_request_that(|_| true).map(|responder| {
+        tx2_id = responder.request().tx_id();
+        responder.respond(tx2_id);
+    });
+    let (response, _) = futures::join!(request, verification);
+    match response {
+        Ok(Response::Nil) => (),
+        _ => unreachable!("`PushTransaction` requests should always respond `Ok(Nil)`"),
+    };
+
+    // Use `Request::MempoolTransactionIds` to check the transaction was inserted to mempool
+    let request = inbound_service
+        .clone()
+        .oneshot(Request::MempoolTransactionIds)
+        .await;
+
+    // Only tx2 will be in the mempool while tx1 was expired
+    match request {
+        Ok(Response::TransactionIds(response)) => {
+            assert_eq!(response, vec![tx2_id])
+        }
+        _ => unreachable!(
+            "`MempoolTransactionIds` requests should always respond `Ok(Vec<UnminedTxId>)`"
+        ),
+    };
+
+    // Add all the rest of the continous blocks we have to test tx2 will never expire.
+    let more_blocks: Vec<Arc<Block>> = vec![
+        zebra_test::vectors::BLOCK_MAINNET_4_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+        zebra_test::vectors::BLOCK_MAINNET_5_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+        zebra_test::vectors::BLOCK_MAINNET_6_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+        zebra_test::vectors::BLOCK_MAINNET_7_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+        zebra_test::vectors::BLOCK_MAINNET_8_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+        zebra_test::vectors::BLOCK_MAINNET_9_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+        zebra_test::vectors::BLOCK_MAINNET_10_BYTES
+            .zcash_deserialize_into()
+            .unwrap(),
+    ];
+    for block in more_blocks {
+        state_service
+            .clone()
+            .oneshot(zebra_state::Request::CommitFinalizedBlock(
+                block.clone().into(),
+            ))
+            .await
+            .unwrap();
+
+        let request = inbound_service
+            .clone()
+            .oneshot(Request::MempoolTransactionIds)
+            .await;
+
+        // tx2 is still in the mempool as the blockchain progress because the zero expiration height
+        match request {
+            Ok(Response::TransactionIds(response)) => {
+                assert_eq!(response, vec![tx2_id])
+            }
+            _ => unreachable!(
+                "`MempoolTransactionIds` requests should always respond `Ok(Vec<UnminedTxId>)`"
+            ),
+        };
+    }
+
+    Ok(())
+}
+
 async fn setup(
     add_transactions: bool,
 ) -> (
@@ -180,6 +352,14 @@ async fn setup(
     Option<Vec<UnminedTx>>,
     MockService<transaction::Request, transaction::Response, PanicAssertion, TransactionError>,
     MockService<Request, Response, PanicAssertion>,
+    Buffer<
+        BoxService<
+            zebra_state::Request,
+            zebra_state::Response,
+            Box<dyn std::error::Error + Send + Sync>,
+        >,
+        zebra_state::Request,
+    >,
 ) {
     let network = Network::Mainnet;
     let consensus_config = ConsensusConfig::default();
@@ -187,7 +367,7 @@ async fn setup(
     let address_book = AddressBook::new(SocketAddr::from_str("0.0.0.0:0").unwrap(), Span::none());
     let address_book = Arc::new(std::sync::Mutex::new(address_book));
     let (sync_status, mut recent_syncs) = SyncStatus::new();
-    let (state, _latest_chain_tip, chain_tip_change) =
+    let (state, latest_chain_tip, chain_tip_change) =
         zebra_state::init(state_config.clone(), network);
 
     let mut state_service = ServiceBuilder::new().buffer(1).service(state);
@@ -218,12 +398,27 @@ async fn setup(
         .await
         .unwrap();
 
+    // Also push block 1.
+    // Block one is a network upgrade and the mempool will be cleared at it,
+    // let all our tests start after this event.
+    let block_one: Arc<Block> = zebra_test::vectors::BLOCK_MAINNET_1_BYTES
+        .zcash_deserialize_into()
+        .unwrap();
+    state_service
+        .clone()
+        .oneshot(zebra_state::Request::CommitFinalizedBlock(
+            block_one.clone().into(),
+        ))
+        .await
+        .unwrap();
+
     let mut mempool_service = Mempool::new(
         network,
         buffered_peer_set.clone(),
         state_service.clone(),
         buffered_tx_verifier.clone(),
         sync_status,
+        latest_chain_tip,
         chain_tip_change,
     );
 
@@ -258,6 +453,7 @@ async fn setup(
         added_transactions,
         mock_tx_verifier,
         peer_set,
+        state_service,
     )
 }
 
diff --git a/zebrad/src/components/mempool.rs b/zebrad/src/components/mempool.rs
index 0787e1d7..d1d55a21 100644
--- a/zebrad/src/components/mempool.rs
+++ b/zebrad/src/components/mempool.rs
@@ -12,6 +12,7 @@ use futures::{future::FutureExt, stream::Stream};
 use tower::{buffer::Buffer, timeout::Timeout, util::BoxService, Service};
 
 use zebra_chain::{
+    chain_tip::ChainTip,
     parameters::Network,
     transaction::{UnminedTx, UnminedTxId},
 };
@@ -100,6 +101,8 @@ pub struct Mempool {
     #[allow(dead_code)]
     sync_status: SyncStatus,
 
+    /// Allow efficient access to the best tip of the blockchain.
+    latest_chain_tip: zs::LatestChainTip,
     /// Allows the detection of chain tip resets.
     #[allow(dead_code)]
     chain_tip_change: ChainTipChange,
@@ -125,11 +128,13 @@ impl Mempool {
         state: State,
         tx_verifier: TxVerifier,
         sync_status: SyncStatus,
+        latest_chain_tip: zs::LatestChainTip,
         chain_tip_change: ChainTipChange,
     ) -> Self {
         Mempool {
             active_state: ActiveState::Disabled,
             sync_status,
+            latest_chain_tip,
             chain_tip_change,
             outbound,
             state,
@@ -246,7 +251,7 @@ impl Service<Request> for Mempool {
                     storage.clear();
                 }
 
-                // Clean up completed download tasks and add to mempool if successful
+                // Clean up completed download tasks and add to mempool if successful.
                 while let Poll::Ready(Some(r)) = tx_downloads.as_mut().poll_next(cx) {
                     if let Ok(tx) = r {
                         // Storage handles conflicting transactions or a full mempool internally,
@@ -254,6 +259,11 @@ impl Service<Request> for Mempool {
                         let _ = storage.insert(tx);
                     }
                 }
+
+                // Remove expired transactions from the mempool.
+                if let Some(tip_height) = self.latest_chain_tip.best_tip_height() {
+                    remove_expired_transactions(storage, tip_height);
+                }
             }
             ActiveState::Disabled => {
                 // When the mempool is disabled we still return that the service is ready.
@@ -261,6 +271,7 @@ impl Service<Request> for Mempool {
                 // which may not be the desired behaviour.
             }
         }
+
         Poll::Ready(Ok(()))
     }
 
@@ -322,3 +333,22 @@ impl Service<Request> for Mempool {
         }
     }
 }
+
+/// Remove transactions from the mempool if they have not been mined after a specified height.
+///
+/// https://zips.z.cash/zip-0203#specification
+fn remove_expired_transactions(
+    storage: &mut storage::Storage,
+    tip_height: zebra_chain::block::Height,
+) {
+    let ids = storage.tx_ids().iter().copied().collect();
+    let transactions = storage.transactions(ids);
+
+    for t in transactions {
+        if let Some(expiry_height) = t.transaction.expiry_height() {
+            if tip_height >= expiry_height {
+                storage.remove(&t.id);
+            }
+        }
+    }
+}
diff --git a/zebrad/src/components/mempool/tests.rs b/zebrad/src/components/mempool/tests.rs
index b7965900..dfef11a9 100644
--- a/zebrad/src/components/mempool/tests.rs
+++ b/zebrad/src/components/mempool/tests.rs
@@ -16,7 +16,7 @@ async fn mempool_service_basic() -> Result<(), Report> {
     let state_config = StateConfig::ephemeral();
     let peer_set = MockService::build().for_unit_tests();
     let (sync_status, mut recent_syncs) = SyncStatus::new();
-    let (state, _latest_chain_tip, chain_tip_change) =
+    let (state, latest_chain_tip, chain_tip_change) =
         zebra_state::init(state_config.clone(), network);
 
     let state_service = ServiceBuilder::new().buffer(1).service(state);
@@ -39,6 +39,7 @@ async fn mempool_service_basic() -> Result<(), Report> {
         state_service.clone(),
         tx_verifier,
         sync_status,
+        latest_chain_tip,
         chain_tip_change,
     );
 
@@ -136,7 +137,7 @@ async fn mempool_queue() -> Result<(), Report> {
     let state_config = StateConfig::ephemeral();
     let peer_set = MockService::build().for_unit_tests();
     let (sync_status, mut recent_syncs) = SyncStatus::new();
-    let (state, _latest_chain_tip, chain_tip_change) =
+    let (state, latest_chain_tip, chain_tip_change) =
         zebra_state::init(state_config.clone(), network);
 
     let state_service = ServiceBuilder::new().buffer(1).service(state);
@@ -165,6 +166,7 @@ async fn mempool_queue() -> Result<(), Report> {
         state_service.clone(),
         tx_verifier,
         sync_status,
+        latest_chain_tip,
         chain_tip_change,
     );
 
@@ -238,7 +240,7 @@ async fn mempool_service_disabled() -> Result<(), Report> {
     let peer_set = MockService::build().for_unit_tests();
     let (sync_status, mut recent_syncs) = SyncStatus::new();
 
-    let (state, _latest_chain_tip, chain_tip_change) = zebra_state::init(state_config, network);
+    let (state, latest_chain_tip, chain_tip_change) = zebra_state::init(state_config, network);
     let state_service = ServiceBuilder::new().buffer(1).service(state);
     let (_chain_verifier, tx_verifier) =
         zebra_consensus::chain::init(consensus_config.clone(), network, state_service.clone())
@@ -258,6 +260,7 @@ async fn mempool_service_disabled() -> Result<(), Report> {
         state_service.clone(),
         tx_verifier,
         sync_status,
+        latest_chain_tip,
         chain_tip_change,
     );