diff --git a/lib/services/mempool.js b/lib/services/mempool.js
new file mode 100644
index 00000000..f1ac531d
--- /dev/null
+++ b/lib/services/mempool.js
@@ -0,0 +1,312 @@
+'use strict';
+var BaseService = require('../Service');
+var util = require('util');
+var EventEmitter = require('events').EventEmitter;
+var bitcore = require('bitcore-lib');
+var MempoolService = function(options) {
+  EventEmitter.call(this);
+
+  this.node = options.node;
+  this.name = options.name;
+  this._txIndex = {};
+  this._addressIndex = {};
+  this.store = this.nodes.services.db.store;
+  this._handleBlocks = false;
+};
+
+util.inherits(MempoolService, BaseService);
+
+/**
+ * Describes the dependencies that should be loaded before this service.
+ */
+MempoolService.dependencies = [ 'bitcoind', 'db' ];
+
+MempoolService.prototype.blockHandler = function(block, connectBlock, callback) {
+  var self = this;
+
+  if (!self._handleBlocks) {
+    return setImmediate(callback);
+  }
+
+  var txs = block.transactions;
+
+  var action = 'del';
+  if (!connectBlock) {
+    action = 'put';
+  }
+
+  var transactionLength = txs.length;
+  for(var i = 0; i < txs.length; i++) {
+
+    var tx = txs[i];
+    self._updateMempool(tx, action);
+  }
+  setImmediate(callback);
+};
+
+MempoolService.prototype.getPublishEvents = function() {
+  return [];
+};
+
+MempoolService.prototype.getAPIMethods = function() {
+  return [];
+};
+
+MempoolService.prototype.start = function(callback) {
+  var self = this;
+  self.node.services.db.on('synced', function() {
+    var bus = self.node.openBus({ remoteAddress: 'localhost' });
+    bus.subscribe('bitcoind/rawtransaction');
+
+    bus.on('bitcoind/rawtransaction', function(txHex) {
+      var tx = new bitcore.Transaction(txHex);
+      self._updateMempool(tx, 'put');
+    });
+    self._handleBlocks = true;
+  });
+  self.node.services.db.getPrefix(self.name, function(err, servicePrefix) {
+    if(err) {
+      return callback(err);
+    }
+    self.servicePrefix = servicePrefix;
+    self._encoding = new Encoding(self.servicePrefix);
+    callback();
+  });
+};
+
+/**
+ * Function to be called when bitcore-node is stopped
+ */
+MempoolService.prototype.stop = function(done) {
+  setImmediate(done);
+};
+
+/**
+ * Setup express routes
+ * @param  {Express} app
+ */
+MempoolService.prototype.setupRoutes = function() {
+  // Setup express routes here
+};
+
+MempoolService.prototype.getRoutePrefix = function() {
+  return this.name;
+};
+
+MempoolService.prototype._getTransactionAddressDetailOperations = function(tx, action) {
+  var self = this;
+  var operations = [];
+
+  var txid = tx.id;
+  var inputs = tx.inputs;
+  var outputs = tx.outputs;
+
+  var outputLength = outputs.length;
+  for (var outputIndex = 0; outputIndex < outputLength; outputIndex++) {
+    var output = outputs[outputIndex];
+
+    var script = output.script;
+
+    if(!script) {
+      log.debug('Invalid script');
+      continue;
+    }
+
+    var address = self..getAddressString(script);
+
+    if(!address) {
+      continue;
+    }
+
+    var key = self.encoding.encodeMempoolAddressIndexKey(address, txid);
+    operations.push({
+      type: action,
+      key: key
+    });
+
+  }
+
+  if(tx.isCoinbase()) {
+    continue;
+  }
+
+  //TODO deal with P2PK
+  async.eachLimit(inputs, 10, function(input, next) {
+
+    if(!input.script) {
+      log.debug('Invalid script');
+      return next();
+    }
+
+    var inputAddress = self.getAddressString(input.script);
+
+    if(!inputAddress) {
+      return next();
+    }
+
+    var inputKey = self.encodeMempoolAddressIndexKey(inputAddress, txid);
+
+    operations.push({
+      type: action,
+      key: inputKey
+    });
+
+  }
+  return operations;
+};
+
+MempoolService.prototype.getAddressString = function(script, output) {
+  var address = script.toAddress();
+  if(address) {
+    return address.toString();
+  }
+
+  try {
+    var pubkey = script.getPublicKey();
+    if(pubkey) {
+      return pubkey.toString('hex');
+    }
+  } catch(e) {
+    //log.warn('Error getting public key from: ', script.toASM(), script.toHex());
+    // if there is an error, it's because a pubkey can not be extracted from the script
+    // continue on and return null
+  }
+
+  //TODO add back in P2PK, but for this we need to look up the utxo for this script
+  if(output && output.script && output.script.isPublicKeyOut()) {
+    return output.script.getPublicKey().toString('hex');
+  }
+
+  //log.warn('No utxo given for script spending a P2PK: ', script.toASM(), script.toHex());
+  return null;
+};
+
+MempoolService.prototype._getInputValues = function(tx, callback) {
+  var self = this;
+
+  if (tx.isCoinbase()) {
+    return callback(null, []);
+  }
+
+  async.mapLimit(tx.inputs, this.concurrency, function(input, next) {
+    self.getTransaction(input.prevTxId.toString('hex'), {}, function(err, prevTx) {
+      if(err) {
+        return next(err);
+      }
+      if (!prevTx) {
+        return next(null, 0);
+      }
+      if (!prevTx.outputs[input.outputIndex]) {
+        return next(new Error('Input did not have utxo.'));
+      }
+      var satoshis = prevTx.outputs[input.outputIndex].satoshis;
+      next(null, satoshis);
+    });
+  }, callback);
+};
+
+
+MempoolService.prototype._updateCache = function(operation) {
+  if (operation.type === 'del') {
+    return this._cache.del(operation.key);
+  }
+  this._cache.set(operation.key, operation.value);
+};
+
+MempoolService.prototype.getTransaction = function(txid, callback) {
+  var self = this;
+  var key = self._encoding.encodeMempoolTransactionKey(txid);
+  var txBuffer = self._cache.get(key);
+  if (txBuffer) {
+    return setImmediate(function() {
+      callback(null, self._encoding.decodeMempoolTransactionValue(txBuffer));
+    });
+  }
+  self.store.get(key, function(err, value) {
+    if(err) {
+      return callback(err);
+    }
+    callback(null, self._encoding.decodeMempoolTransactionValue(value));
+  });
+};
+
+MempoolService.prototype._getTransactionOperation = function(tx, action, callback) {
+  var self = this;
+  self._getInputValues(tx, function(err, inputValues) {
+    if(err) {
+      return callback(err);
+    }
+    tx.__inputValues = inputValues;
+    var operation = {
+      type: action,
+      key: self._encoding.encodeMempoolTransactionKey(tx.id),
+      value: self._encoding.encodeMempoolTransactionValue(tx)
+    };
+    callback(null, operation);
+  });
+};
+
+MempoolService.prototype._updateMempool = function(tx, action, callback) {
+  var self = this;
+  self._getTransactionOperation(tx, action, function(err, operation) {
+    if(err) {
+      return callback(err);
+    }
+    var operations = [operation].concat(self._getTransactionAddressDetailOperations(tx, action));
+    self.store.batch(operations, function(err) {
+      if(err) {
+        log.error('batch operation for updating Mempool failed.');
+        return;
+      }
+      operations.forEach(self._updateCache);
+    });
+  });
+};
+
+MempoolService.prototype.getTransactionsByAddress = function(address, callback) {
+  var self = this;
+  var txids = [];
+  var maxTxid = new Buffer(new Array(65).join('f'), 'hex');
+  var start = self._encoding.encodeMempoolAddressKey(address);
+  var end = Buffer.concat([self._encoding.encodeMempoolAddressKey(address), maxTxid]);
+  var stream = self.store.createKeyStream({
+    gte: start,
+    lte: end
+  });
+  var streamErr;
+  stream.on('error', function(err) {
+    streamErr = err;
+  });
+  stream.on('data', function(data) {
+    var key = self._encoding.decodeMempoolAddressKey(data);
+    txids.push(key.txid);
+  });
+  stream.on('end', function() {
+    async.mapLimit(txids, 10, function(txid, next) {
+      self.getTransaction(txid, next);
+    }, callback);
+  });
+};
+
+MempoolService.prototype.getTransactionsByAddresses = function(addresses, callback) {
+  var transactions = {};
+  async.eachLimit(addresses, 10, function(address, next) {
+    self.getTransactionsByAddress(address, function(err, txs) {
+      if(err) {
+        return next(err);
+      }
+      txs.forEach(function(tx) {
+        transactions[tx.id] = tx;
+      });
+      next();
+    });
+  }, function(err) {
+    if(err) {
+      return callback(err);
+    }
+    callback(null, Object.values(transactions));
+  });
+};
+
+module.exports = MempoolService;
+
diff --git a/lib/services/transaction.js b/lib/services/transaction.js
index 31ec1877..f2630dad 100644
--- a/lib/services/transaction.js
+++ b/lib/services/transaction.js
@@ -9,7 +9,7 @@ var Encoding = require('../encoding');
 var LRU = require('lru-cache');
 var utils = require('./wallet-api/utils');
 var index = require('../');
-var log = index.log;
+
 /**
  * The Transaction Service builds upon the Database Service and the Bitcoin Service to add additional
  * functionality for getting information by bitcoin transaction hash/id. This includes the current
@@ -21,24 +21,6 @@ var log = index.log;
 function TransactionService(options) {
   BaseService.call(this, options);
   this.concurrency = options.concurrency || 20;
-  this.maxMemPoolSize = options.maxMemPoolSize || 100 * 1024 * 1024; // 100 MB
-  /* upon initialization of the mempool, only txids are obtained from
-  *  a trusted bitcoin node (the bitcoind service's rpchost or p2p option)
-  *  Since, the mempool is very temporal, I see no reason to take the
-  *  resources to gather the actual tx data. Any NEW txs that arrive
-  *  after the mempool is initialized will have their full tx data
-  *  If a tx is queried from the mempool and it does not have tx data,
-  *  then call to the trusted bitcoind will take place and the result set.
-  */
-  this._mempool = LRU({
-    max: utils.parseByteCount(this.maxMemPoolSize),
-    length: function(tx) {
-      if (tx) {
-        return tx.toBuffer().length;
-      }
-      return 1;
-    }
-  });
   this.currentTransactions = {};
 }
 
@@ -46,7 +28,8 @@ inherits(TransactionService, BaseService);
 
 TransactionService.dependencies = [
   'db',
-  'timestamp'
+  'timestamp',
+  'mempool'
 ];
 
 TransactionService.prototype.start = function(callback) {
@@ -54,39 +37,13 @@ TransactionService.prototype.start = function(callback) {
 
   self.store = this.node.services.db.store;
 
-  var bus = self.node.openBus({ remoteAddress: 'localhost' });
-  bus.subscribe('bitcoind/rawtransaction');
-
-  bus.on('bitcoind/rawtransaction', function(txHex) {
-    var tx = new bitcore.Transaction(txHex);
-    self._updateMempool(tx);
-  });
-
-  async.series([
-    function(next) {
-      self.node.services.bitcoind.getMempool(function(err, txidList) {
-        if(err) {
-          return next(err);
-        }
-        for(var i = 0; i < txidList.length; i++) {
-          self._updateMempool(txidList[i]);
-        }
-        next();
-      });
-    }, function(next) {
-      self.node.services.db.getPrefix(self.name, function(err, prefix) {
-        if(err) {
-          return callback(err);
-        }
-        self.prefix = prefix;
-        self.encoding = new Encoding(self.prefix);
-        next();
-      });
-    }], function(err) {
-      if(err) {
-        return callback(err);
-      }
-      callback();
+  self.node.services.db.getPrefix(self.name, function(err, prefix) {
+    if(err) {
+      return callback(err);
+    }
+    self.prefix = prefix;
+    self.encoding = new Encoding(self.prefix);
+    callback();
   });
 };
 
@@ -94,31 +51,6 @@ TransactionService.prototype.stop = function(callback) {
   setImmediate(callback);
 };
 
-//TODO should we maintain a mempool whilst bitcoind is syncing from a start up to latest height?
-TransactionService.prototype._updateMempool = function(tx, action) {
-  if (action === 'del') {
-    return this._mempool.del(tx.id);
-  }
-  var val, key;
-  if (_.isString(tx)) {
-    val = false;
-    key = tx;
-  } else {
-    val = tx;
-    key = tx.id;
-  }
-  this._mempool.set(key, val);
-  return this._checkMempoolSize();
-};
-
-TransactionService.prototype._checkMempoolSize = function() {
-  var warningPercentage = 80;
-  var percentage = this._mempool.length / this.maxMemPoolSize  * 100.0;
-  if (percentage >= warningPercentage) {
-    log.warn('Mempool size has reached ' + percentage + '% of the max size of the mempool (' + this.maxMemPoolSize + 'bytes)');
-  }
-};
-
 TransactionService.prototype.blockHandler = function(block, connectBlock, callback) {
   var self = this;
   var action = 'put';
@@ -175,6 +107,33 @@ TransactionService.prototype.blockHandler = function(block, connectBlock, callba
     });
 
 };
+TransactionService.prototype._getMissingInputValues = function(tx, callback) {
+  var self = this;
+
+  if (tx.isCoinbase()) {
+    return callback(null, []);
+  }
+
+  async.eachOf(tx.inputs, function(input, index, next) {
+    if (tx.__inputValues[index]) {
+      return next();
+    }
+    self.getTransaction(input.prevTxId.toString('hex'), {}, function(err, prevTx) {
+      if(err) {
+        return next(err);
+      }
+      if (!prevTx) {
+        return next(new Error('previous Tx missing.'));
+      }
+      if (!prevTx.outputs[input.outputIndex]) {
+        return next(new Error('Input did not have utxo.'));
+      }
+      var satoshis = prevTx.outputs[input.outputIndex].satoshis;
+      tx.__inputValues[index] = satoshis;
+      next();
+    });
+  }, callback);
+};
 
 TransactionService.prototype._getInputValues = function(tx, callback) {
   var self = this;
@@ -206,32 +165,34 @@ TransactionService.prototype.getTransaction = function(txid, options, callback)
     });
   }
 
-  var memPoolTx = self._mempool.get(txid);
-  if (options && options.queryMempool && memPoolTx) {
-    return setImmediate(function() {
-      callback(null, memPoolTx);
-    });
-  } else if (memPoolTx === false) {
-    self.node.services.bitcoind.getTransaction(txid, function(err, tx) {
-      if(err) {
-        return callback(err);
-      }
-      self._updateMempool(tx);
-      callback(null, tx);
-    });
-  }
-
-  //transaction was not in our mempool, lookup in the database
   var key = self.encoding.encodeTransactionKey(txid);
 
-  self.node.services.db.store.get(key, function(err, buffer) {
-    if(err) {
-      return callback(err);
-    }
-
-    var tx = self.encoding.decodeTransactionValue(buffer);
-    callback(null, tx);
-  });
+  async.waterfall([
+    function(next) {
+      self.node.services.db.store.get(key, function(err, buffer) {
+        if(err) {
+          return callback(err);
+        }
+        var tx = self.encoding.decodeTransactionValue(buffer);
+        callback(null, tx);
+      });
+    }, function(next, tx) {
+      if (tx) {
+        return next(null, tx);
+      }
+      if (!options || !options.queryMempool) {
+        return next();
+      }
+      self.node.services.mempool.getTransaction(txid, function(err, tx) {
+          if(err) {
+            return next(err);
+          }
+          if (!tx) {
+            return next();
+          }
+          self._getMissingInputValues(tx, next);
+      });
+    }], callback);
 };
 
 
diff --git a/lib/services/wallet-api/index.js b/lib/services/wallet-api/index.js
index 636062d5..1725feac 100644
--- a/lib/services/wallet-api/index.js
+++ b/lib/services/wallet-api/index.js
@@ -569,10 +569,25 @@ WalletService.prototype._getTransactions = function(walletId, options, callback)
     end: options.end || Math.pow(2, 32) - 1
   };
   var key = walletId + opts.start + opts.end;
+
   function finish(transactions) {
     var from = options.from || 0;
     var to = options.to || transactions.length;
-    callback(null, transactions.slice(from, to), transactions.length);
+    if (!options.queryMempool) {
+      return callback(null, transactions.slice(from, to), transactions.length);
+    }
+    self._getAddresses(walletId, function(err, addresses) {
+      if(err) {
+        return callback(err);
+      }
+      self.mempool.getTransactionsByAddresses(addresses, function(err, mempoolTxs) {
+        if(err) {
+          return callback(err);
+        }
+        transactions = transaction.concat(mempoolTxs);
+        callback(null, transactions.slice(from, to), transactions.length);
+      });
+    });
   }
 
   if (!self._cache.peek(key)) {
@@ -650,8 +665,17 @@ WalletService.prototype._getTransactions = function(walletId, options, callback)
 };
 
 WalletService.prototype._getAddresses = function(walletId, callback) {
-  var key = this._encoding.encodeWalletAddressKey(walletId);
-  this.store.get(key, callback);
+  var self = this;
+  var key = self._encoding.encodeWalletAddressKey(walletId);
+  self.store.get(key, function(err, value) {
+    if(err) {
+      return callback(err);
+    }
+    if (!value) {
+      return callback(null, []);
+    }
+    callback(null, self._encoding.decodeWalletAddressValue(value));
+  });
 };
 
 WalletService.prototype._importAddresses = function(walletId, addresses, callback) {