diff --git a/zebra-network/src/config.rs b/zebra-network/src/config.rs
index e2fc0854..19c0e21f 100644
--- a/zebra-network/src/config.rs
+++ b/zebra-network/src/config.rs
@@ -6,6 +6,8 @@ use crate::network::Network;
 #[derive(Clone, Debug, Deserialize, Serialize)]
 #[serde(deny_unknown_fields)]
 pub struct Config {
+    /// The address on which this node should listen for connections.
+    pub listen_addr: SocketAddr,
     /// The network to connect to.
     pub network: Network,
     /// The user-agent to advertise.
@@ -23,6 +25,9 @@ pub struct Config {
 impl Default for Config {
     fn default() -> Config {
         Config {
+            listen_addr: "127.0.0.1:28233"
+                .parse()
+                .expect("Hardcoded address should be parseable"),
             user_agent: crate::constants::USER_AGENT.to_owned(),
             network: Network::Mainnet,
             initial_peers: Vec::new(),
diff --git a/zebra-network/src/peer_set.rs b/zebra-network/src/peer_set.rs
index 4577a958..3d34402c 100644
--- a/zebra-network/src/peer_set.rs
+++ b/zebra-network/src/peer_set.rs
@@ -10,15 +10,31 @@ mod unready_service;
 pub use discover::PeerDiscover;
 pub use set::PeerSet;
 
-use std::pin::Pin;
+use std::{net::SocketAddr, pin::Pin};
 
-use futures::future::Future;
-use tower::Service;
+use futures::{
+    channel::mpsc,
+    future::{self, Future, FutureExt},
+    sink::SinkExt,
+    stream::{FuturesUnordered, StreamExt},
+};
+use tokio::net::{TcpListener, TcpStream};
+use tower::{
+    buffer::Buffer,
+    discover::{Change, ServiceStream},
+    Service, ServiceExt,
+};
+use tower_load::{peak_ewma::PeakEwmaDiscover, NoInstrument};
+use tracing::Level;
+use tracing_futures::Instrument;
 
-use crate::config::Config;
-use crate::protocol::internal::{Request, Response};
-use crate::BoxedStdError;
-use crate::{peer::PeerConnector, timestamp_collector::TimestampCollector};
+use crate::{
+    config::Config,
+    peer::{HandshakeError, PeerClient, PeerConnector},
+    protocol::internal::{Request, Response},
+    timestamp_collector::TimestampCollector,
+    BoxedStdError,
+};
 
 type BoxedZebraService = Box<
     dyn Service<
@@ -30,55 +46,113 @@ type BoxedZebraService = Box<
         + 'static,
 >;
 
+type PeerChange = Result<Change<SocketAddr, PeerClient>, BoxedStdError>;
+
 /// Initialize a peer set with the given `config`, forwarding peer requests to the `inbound_service`.
 pub fn init<S>(config: Config, inbound_service: S) -> (BoxedZebraService, TimestampCollector)
 where
     S: Service<Request, Response = Response, Error = BoxedStdError> + Clone + Send + 'static,
-    S::Future: Send,
+    S::Future: Send + 'static,
 {
-    use futures::{
-        future,
-        stream::{FuturesUnordered, StreamExt},
-    };
-    use tokio::net::TcpStream;
-    use tower::{
-        buffer::Buffer,
-        discover::{Change, ServiceStream},
-        ServiceExt,
-    };
-    use tower_load::{peak_ewma::PeakEwmaDiscover, NoInstrument};
+    let timestamp_collector = TimestampCollector::new();
+    let peer_connector = Buffer::new(
+        PeerConnector::new(config.clone(), inbound_service, &timestamp_collector),
+        1,
+    );
 
-    let tc = TimestampCollector::new();
-    let pc = Buffer::new(PeerConnector::new(config.clone(), inbound_service, &tc), 1);
+    // Create an mpsc channel for peer changes, with a generous buffer.
+    let (peerset_tx, peerset_rx) = mpsc::channel::<PeerChange>(100);
 
-    // construct a stream of services XXX currently the stream is based on a
-    // static stream from config.initial_peers; this should be replaced with a
-    // channel that starts with initial_peers but also accetps incoming, dials
-    // new, etc.
-    let client_stream = PeakEwmaDiscover::new(
+    // Connect the rx end to a PeerSet, wrapping new peers in load instruments.
+    let peer_set = PeerSet::new(PeakEwmaDiscover::new(
         ServiceStream::new(
-            config
-                .initial_peers
-                .into_iter()
-                .map(|addr| {
-                    let mut pc = pc.clone();
-                    async move {
-                        let stream = TcpStream::connect(addr).await?;
-                        pc.ready().await?;
-                        let client = pc.call((stream, addr)).await?;
-                        Ok::<_, BoxedStdError>(Change::Insert(addr, client))
-                    }
-                })
-                .collect::<FuturesUnordered<_>>()
-                // Discard any errored connections...
-                .filter(|result| future::ready(result.is_ok())),
+            // ServiceStream interprets an error as stream termination,
+            // so discard any errored connections...
+            peerset_rx.filter(|result| future::ready(result.is_ok())),
         ),
         config.ewma_default_rtt,
         config.ewma_decay_time,
         NoInstrument,
+    ));
+
+    // Connect the tx end to the 3 peer sources:
+
+    // 1. Initial peers, specified in the config.
+    tokio::spawn(add_initial_peers(
+        config.initial_peers.clone(),
+        peer_connector.clone(),
+        peerset_tx.clone(),
+    ));
+
+    // 2. Incoming peer connections, via a listener.
+    tokio::spawn(
+        listen(config.listen_addr, peer_connector, peerset_tx).map(|result| {
+            if let Err(e) = result {
+                error!(%e);
+            }
+        }),
     );
 
-    let peer_set = PeerSet::new(client_stream);
+    // 3. Outgoing peers we connect to in response to load.
 
-    (Box::new(peer_set), tc)
+    (Box::new(peer_set), timestamp_collector)
+}
+
+/// Use the provided `peer_connector` to connect to `initial_peers`, then send
+/// the results over `tx`.
+#[instrument(skip(initial_peers, tx, peer_connector))]
+async fn add_initial_peers<S>(
+    initial_peers: Vec<SocketAddr>,
+    peer_connector: S,
+    mut tx: mpsc::Sender<PeerChange>,
+) where
+    S: Service<(TcpStream, SocketAddr), Response = PeerClient, Error = BoxedStdError> + Clone,
+    S::Future: Send + 'static,
+{
+    info!(?initial_peers, "Connecting to initial peer set");
+    let mut handshakes = initial_peers
+        .into_iter()
+        .map(|addr| {
+            let mut pc = peer_connector.clone();
+            async move {
+                let stream = TcpStream::connect(addr).await?;
+                pc.ready().await?;
+                let client = pc.call((stream, addr)).await?;
+                Ok::<_, BoxedStdError>(Change::Insert(addr, client))
+            }
+        })
+        .collect::<FuturesUnordered<_>>();
+    while let Some(handshake_result) = handshakes.next().await {
+        let _ = tx.send(handshake_result).await;
+    }
+}
+
+/// Bind to `addr`, listen for peers using `peer_connector`, then send the
+/// results over `tx`.
+#[instrument(skip(tx, peer_connector))]
+async fn listen<S>(
+    addr: SocketAddr,
+    mut peer_connector: S,
+    tx: mpsc::Sender<PeerChange>,
+) -> Result<(), BoxedStdError>
+where
+    S: Service<(TcpStream, SocketAddr), Response = PeerClient, Error = BoxedStdError> + Clone,
+    S::Future: Send + 'static,
+{
+    let mut listener = TcpListener::bind(addr).await?;
+    loop {
+        if let Ok((tcp_stream, addr)) = listener.accept().await {
+            debug!(?addr, "got incoming connection");
+            peer_connector.ready().await?;
+            // Construct a handshake future but do not drive it yet....
+            let handshake = peer_connector.call((tcp_stream, addr));
+            // ... instead, spawn a new task to handle this connection
+            let mut tx2 = tx.clone();
+            tokio::spawn(async move {
+                if let Ok(client) = handshake.await {
+                    let _ = tx2.send(Ok(Change::Insert(addr, client))).await;
+                }
+            });
+        }
+    }
 }