diff --git a/tests/e2e/testdata/cw721_base.wasm.gz b/tests/e2e/testdata/cw721_base.wasm.gz
new file mode 100644
index 0000000000..b8dc3cd8d2
Binary files /dev/null and b/tests/e2e/testdata/cw721_base.wasm.gz differ
diff --git a/tests/e2e/testdata/cw721_receiver.wasm.gz b/tests/e2e/testdata/cw721_receiver.wasm.gz
new file mode 100644
index 0000000000..381ad675a0
Binary files /dev/null and b/tests/e2e/testdata/cw721_receiver.wasm.gz differ
diff --git a/tests/e2e/testdata/version.txt b/tests/e2e/testdata/version.txt
new file mode 100644
index 0000000000..3501468686
--- /dev/null
+++ b/tests/e2e/testdata/version.txt
@@ -0,0 +1,2 @@
+cw721_base      - https://github.com/CosmWasm/cw-nfts/releases/download/v0.17.0/cw721_base.wasm
+cw721-receiver  - https://github.com/CosmWasm/cw-nfts/pull/144
diff --git a/tests/e2e/wasm_test.go b/tests/e2e/wasm_test.go
new file mode 100644
index 0000000000..aac0d830f7
--- /dev/null
+++ b/tests/e2e/wasm_test.go
@@ -0,0 +1,68 @@
+package e2e
+
+import (
+	"encoding/base64"
+	"fmt"
+	"testing"
+
+	"github.com/stretchr/testify/require"
+
+	"github.com/CosmWasm/wasmd/x/wasm/types"
+
+	"github.com/CosmWasm/wasmd/x/wasm/ibctesting"
+)
+
+func TestNFTSubmessages(t *testing.T) {
+	// Given a cw721_base contract and a compatible contract as receiver
+	// and a nft minted
+	// when a send_nft is executed on the base contract, a submessage is emitted
+	// and handled by the receiver contract
+	specs := map[string]struct {
+		submsgPayload string
+		expErr        bool
+	}{
+		"succeed": {
+			submsgPayload: `"succeed"`,
+		},
+		"fail": {
+			submsgPayload: `"fail"`,
+			expErr:        true,
+		},
+	}
+	for name, spec := range specs {
+		t.Run(name, func(t *testing.T) {
+			coord := ibctesting.NewCoordinator(t, 1)
+			chain := coord.GetChain(ibctesting.GetChainID(1))
+			minterAddress := chain.SenderAccount.GetAddress()
+
+			codeID := chain.StoreCodeFile("testdata/cw721_base.wasm.gz").CodeID
+			senderContractAddr := chain.InstantiateContract(codeID, []byte(fmt.Sprintf(`{"name":"Reece #00001", "symbol":"juno-reece-test-#00001", "minter":"%s"}`, minterAddress.String())))
+
+			codeID = chain.StoreCodeFile("testdata/cw721_receiver.wasm.gz").CodeID
+			receiverContractAddr := chain.InstantiateContract(codeID, []byte(`{}`))
+
+			// and token minted
+			execMsg := types.MsgExecuteContract{
+				Sender:   minterAddress.String(),
+				Contract: senderContractAddr.String(),
+				Msg:      []byte(fmt.Sprintf(`{"mint":{"token_id":"00000", "owner":"%s"}}`, minterAddress.String())),
+			}
+			_, err := chain.SendMsgs(&execMsg)
+			require.NoError(t, err)
+
+			// when submessages is emitted
+			execMsg = types.MsgExecuteContract{
+				Sender:   minterAddress.String(),
+				Contract: senderContractAddr.String(),
+				Msg:      []byte(fmt.Sprintf(`{"send_nft": { "contract": "%s", "token_id": "00000", "msg": "%s" }}`, receiverContractAddr.String(), base64.RawStdEncoding.EncodeToString([]byte(spec.submsgPayload)))),
+			}
+			_, gotErr := chain.SendMsgs(&execMsg)
+			// then
+			if spec.expErr {
+				require.Error(t, gotErr)
+				return
+			}
+			require.NoError(t, err)
+		})
+	}
+}
diff --git a/tests/system/.gitignore b/tests/system/.gitignore
index 73423081ac..22873da42d 100644
--- a/tests/system/.gitignore
+++ b/tests/system/.gitignore
@@ -1 +1,2 @@
 /testnet
+/binaries
diff --git a/tests/system/basic_test.go b/tests/system/basic_test.go
index 1fba127648..e2a2b15c4b 100644
--- a/tests/system/basic_test.go
+++ b/tests/system/basic_test.go
@@ -122,3 +122,38 @@ func TestMultiContract(t *testing.T) {
 	assert.Equal(t, int64(0), cli.QueryBalance(hackatomContractAddr, "stake"))
 	assert.Equal(t, int64(70), cli.QueryBalance(bobAddr, "stake"))
 }
+
+func TestNFTSubmessages(t *testing.T) {
+	// Given a cw721_base contract and a compatible contract as receiver
+	// and a nft minted
+	// when a send_nft is executed on the base contract, a submessage is emitted
+	// and handled by the receiver contract
+
+	sut.ResetChain(t)
+	sut.StartChain(t)
+
+	cli := NewWasmdCLI(t, sut, verbose)
+
+	minterAddress := cli.GetKeyAddr(defaultSrcAddr)
+
+	t.Log("Upload cw721-base code")
+	codeID := cli.WasmStore("../e2e/testdata/cw721_base.wasm.gz", "--from=node0", "--gas=auto", "--gas-adjustment=1.4", "--fees=4stake")
+	t.Log("Instantiate cw721-base code")
+	msg := fmt.Sprintf(`{"name":"Reece #00001", "symbol":"juno-reece-test-#00001", "minter":"%s"}`, minterAddress)
+	senderContractAddr := cli.WasmInstantiate(codeID, msg, "--admin="+defaultSrcAddr, "--label=reflect_contract", "--from="+defaultSrcAddr, "--amount=100stake")
+
+	t.Log("Upload cw721-receiver code")
+	codeID = cli.WasmStore("../e2e/testdata/cw721_receiver.wasm.gz", "--from=node0", "--gas=auto", "--gas-adjustment=1.4", "--fees=4stake")
+	t.Log("Instantiate cw721-receiver code")
+	receiverContractAddr := cli.WasmInstantiate(codeID, "{}", "--admin="+defaultSrcAddr, "--label=reflect_contract", "--from="+defaultSrcAddr, "--amount=100stake")
+
+	// and token minted
+	msg = fmt.Sprintf(`{"mint":{"token_id":"00000", "owner":"%s"}}`, minterAddress)
+	rsp := cli.WasmExecute(senderContractAddr, msg, defaultSrcAddr, "--gas=auto", "--gas-adjustment=1.4", "--fees=4stake")
+	RequireTxSuccess(t, rsp)
+
+	// when submessages is emitted
+	msg = fmt.Sprintf(`{"send_nft": { "contract": "%s", "token_id": "00000", "msg": "%s" }}`, receiverContractAddr, base64.RawStdEncoding.EncodeToString([]byte(`"succeed"`)))
+	rsp = cli.WasmExecute(senderContractAddr, msg, defaultSrcAddr, "--gas=auto", "--gas-adjustment=1.4", "--fees=4stake")
+	RequireTxSuccess(t, rsp)
+}