diff --git a/src/consensus/consensus.h b/src/consensus/consensus.h
index 384f70bc104ee..cffe9cdafd795 100644
--- a/src/consensus/consensus.h
+++ b/src/consensus/consensus.h
@@ -27,4 +27,11 @@ static const size_t MIN_SERIALIZABLE_TRANSACTION_WEIGHT = WITNESS_SCALE_FACTOR *
 /** Interpret sequence numbers as relative lock-time constraints. */
 static constexpr unsigned int LOCKTIME_VERIFY_SEQUENCE = (1 << 0);
 
+/**
+ * Maximum number of seconds that the timestamp of the first
+ * block of a difficulty adjustment period is allowed to
+ * be earlier than the last block of the previous period (BIP94).
+ */
+static constexpr int64_t MAX_TIMEWARP = 600;
+
 #endif // BITCOIN_CONSENSUS_CONSENSUS_H
diff --git a/src/node/miner.cpp b/src/node/miner.cpp
index fa2d979b86a63..5c476e154f443 100644
--- a/src/node/miner.cpp
+++ b/src/node/miner.cpp
@@ -33,6 +33,14 @@ int64_t UpdateTime(CBlockHeader* pblock, const Consensus::Params& consensusParam
     int64_t nOldTime = pblock->nTime;
     int64_t nNewTime{std::max<int64_t>(pindexPrev->GetMedianTimePast() + 1, TicksSinceEpoch<std::chrono::seconds>(NodeClock::now()))};
 
+    if (consensusParams.enforce_BIP94) {
+        // Height of block to be mined.
+        const int height{pindexPrev->nHeight + 1};
+        if (height % consensusParams.DifficultyAdjustmentInterval() == 0) {
+            nNewTime = std::max<int64_t>(nNewTime, pindexPrev->GetBlockTime() - MAX_TIMEWARP);
+        }
+    }
+
     if (nOldTime < nNewTime) {
         pblock->nTime = nNewTime;
     }
diff --git a/src/validation.cpp b/src/validation.cpp
index 8c80e35c01723..8f75b2e30a0cb 100644
--- a/src/validation.cpp
+++ b/src/validation.cpp
@@ -107,13 +107,6 @@ const std::vector<std::string> CHECKLEVEL_DOC {
  * */
 static constexpr int PRUNE_LOCK_BUFFER{10};
 
-/**
- * Maximum number of seconds that the timestamp of the first
- * block of a difficulty adjustment period is allowed to
- * be earlier than the last block of the previous period (BIP94).
- */
-static constexpr int64_t MAX_TIMEWARP = 600;
-
 GlobalMutex g_best_block_mutex;
 std::condition_variable g_best_block_cv;
 uint256 g_best_block;
diff --git a/test/functional/mining_basic.py b/test/functional/mining_basic.py
index b183023b2f79f..c0df120c65a26 100755
--- a/test/functional/mining_basic.py
+++ b/test/functional/mining_basic.py
@@ -28,6 +28,7 @@
 from test_framework.test_framework import BitcoinTestFramework
 from test_framework.util import (
     assert_equal,
+    assert_greater_than_or_equal,
     assert_raises_rpc_error,
     get_fee,
 )
@@ -139,24 +140,24 @@ def test_timewarp(self):
 
         self.log.info("First block template of retarget period can't use wall clock time")
         self.nodes[0].setmocktime(t)
-        assert_raises_rpc_error(-1, "time-timewarp-attack, block's timestamp is too early on diff adjustment block",
-                                lambda: node.getblocktemplate(NORMAL_GBT_REQUEST_PARAMS))
-
-        # Create template with an acceptable timestamp and then modify it
-        self.nodes[0].setmocktime(t + MAX_FUTURE_BLOCK_TIME)
+        # The template will have an adjusted timestamp, which we then modify
         tmpl = node.getblocktemplate(NORMAL_GBT_REQUEST_PARAMS)
+        assert_greater_than_or_equal(tmpl['curtime'], t + MAX_FUTURE_BLOCK_TIME - MAX_TIMEWARP)
 
         block = CBlock()
         block.nVersion = tmpl["version"]
         block.hashPrevBlock = int(tmpl["previousblockhash"], 16)
-        block.nTime = t
+        block.nTime = tmpl["curtime"]
         block.nBits = int(tmpl["bits"], 16)
         block.nNonce = 0
         block.vtx = [create_coinbase(height=int(tmpl["height"]))]
         block.solve()
+        assert_template(node, block, None)
 
-        self.nodes[0].setmocktime(t)
-        assert_raises_rpc_error(-25, 'time-timewarp-attack', lambda: node.submitheader(hexdata=CBlockHeader(block).serialize().hex()))
+        bad_block = copy.deepcopy(block)
+        bad_block.nTime = t
+        bad_block.solve()
+        assert_raises_rpc_error(-25, 'time-timewarp-attack', lambda: node.submitheader(hexdata=CBlockHeader(bad_block).serialize().hex()))
 
     def run_test(self):
         node = self.nodes[0]