diff --git a/README.md b/README.md
index 80b6f55f..0d720378 100644
--- a/README.md
+++ b/README.md
@@ -208,8 +208,7 @@ You can submit bug reports using the
 
 ### Setting up a local development environment
 
- 1. Follow the instructions in the IPFS documentation to install go-IPFS into your `${PATH}`:  
-    https://docs.ipfs.io/install/command-line/
+ 1. [Install and configure a local IPFS server](tools/ipfs/README.md):
  2. Follow the instructions in the (Python) tox documentation to install the `tox` Python environment runner:  
     https://tox.readthedocs.io/en/latest/install.html
  3. Clone the GIT repository if you haven't already:  
@@ -235,7 +234,13 @@ make sure that your code passes both the
 
     $ tox -e styleck -e typeck
 
-As well as the unit tests:
+As well as the tests:
+
+1. Start IPFS server (do this once in a separate terminal):
+
+	$ ./tools/ipfs/run.sh
+
+2. Execute unit and functional tests:
 
     $ tox -e py3 -e py3-httpx
 
diff --git a/tools/ipfs/README.md b/tools/ipfs/README.md
new file mode 100644
index 00000000..9ddf6d61
--- /dev/null
+++ b/tools/ipfs/README.md
@@ -0,0 +1,27 @@
+
+# Local IPFS Server
+
+`py-ipfs-httpclient` requires a live local server to run its 
+functional tests.
+
+## Installation
+
+To install it, follow the [official instructions](https://docs.ipfs.io/install/command-line/),
+then finish with some [local configuration](configure.sh):
+
+	$ ./configure.sh
+
+The above script is run once after installing.
+
+## Running Tests
+
+You can run unit tests without a live server; `pytest` will skip
+over the functional tests when our fixtures detect the server
+isn't running.
+
+In a separate terminal, start IPFS with:
+
+	$ ./run.sh
+
+Stop it with Ctrl+C. You can keep it running across multiple
+executions of the functional test suite.
diff --git a/tools/ipfs/configure.sh b/tools/ipfs/configure.sh
new file mode 100755
index 00000000..849976d8
--- /dev/null
+++ b/tools/ipfs/configure.sh
@@ -0,0 +1,12 @@
+#!/bin/bash
+
+# Configures, but does not start, the IPFS daemon. Run once in your environment.
+#
+# Description of experimental features:
+#    https://github.com/ipfs/go-ipfs/blob/master/docs/experimental-features.md#ipfs-filestore
+
+set -e
+
+ipfs init
+ipfs config --json Experimental.FilestoreEnabled true
+ipfs config --json Experimental.UrlstoreEnabled true
diff --git a/tools/ipfs/run.sh b/tools/ipfs/run.sh
new file mode 100755
index 00000000..4dc91c86
--- /dev/null
+++ b/tools/ipfs/run.sh
@@ -0,0 +1,5 @@
+#!/bin/bash
+
+# Run the IPFS server. To stop it, press Ctrl+C.
+
+ipfs daemon --enable-namesys-pubsub