diff --git a/.github/workflows/main.yml b/.github/workflows/main.yml
index cb25f1a874..1d755b671a 100644
--- a/.github/workflows/main.yml
+++ b/.github/workflows/main.yml
@@ -528,7 +528,23 @@ jobs:
 
       - name: release notes check
         run: scripts/check-release-notes.sh
-  
+
+  ########################
+  # Backwards Compatibility Test
+  ########################
+  backwards-compatability-test:
+    name: backwards compatability test
+    runs-on: ubuntu-latest
+    steps:
+      - name: git checkout
+        uses: actions/checkout@v4
+
+      - name: 🐳 Set up Docker Buildx
+        uses: docker/setup-buildx-action@v3
+
+      - name: 🛡️ backwards compatibility test
+        run: make backwards-compat-test
+
   # Notify about the completion of all coverage collecting jobs.
   finish:
     if: ${{ always() }}
diff --git a/Makefile b/Makefile
index fc7a041182..511344d83f 100644
--- a/Makefile
+++ b/Makefile
@@ -364,6 +364,11 @@ help: Makefile
 	@$(call print, "Listing commands:")
 	@sed -n 's/^#?//p' $< | column -t -s ':' |  sort | sed -e 's/^/ /'
 
+#? backwards-compat-test: Run basic backwards compatibility test
+backwards-compat-test:
+	@$(call print, "Running backwards compatability test")
+	./scripts/bw-compatibility-test/test.sh
+
 #? sqlc: Generate sql models and queries in Go
 sqlc:
 	@$(call print, "Generating sql models and queries in Go")
diff --git a/docs/release-notes/release-notes-0.19.0.md b/docs/release-notes/release-notes-0.19.0.md
index 1e3da2f326..118c1fde5d 100644
--- a/docs/release-notes/release-notes-0.19.0.md
+++ b/docs/release-notes/release-notes-0.19.0.md
@@ -319,6 +319,9 @@ The underlying functionality between those two options remain the same.
 
 * [Fixed](https://github.com/lightningnetwork/lnd/pull/9549) a long standing
   unit test flake found in the `chainntnfs/bitcoindnotify` package.
+ 
+* Add a new CI-step to do some basic [backwards compatibility 
+  testing](https://github.com/lightningnetwork/lnd/pull/9540) for each PR. 
 
 ## Database
 
diff --git a/scripts/bw-compatibility-test/.env b/scripts/bw-compatibility-test/.env
new file mode 100644
index 0000000000..7fbd8d106e
--- /dev/null
+++ b/scripts/bw-compatibility-test/.env
@@ -0,0 +1,3 @@
+BITCOIND_VERSION=26
+LND_LATEST_VERSION=v0.18.5-beta
+TIMEOUT=15
diff --git a/scripts/bw-compatibility-test/README.md b/scripts/bw-compatibility-test/README.md
new file mode 100644
index 0000000000..0db91ad83f
--- /dev/null
+++ b/scripts/bw-compatibility-test/README.md
@@ -0,0 +1,125 @@
+# Basic Backwards Compatibility Test
+
+This directory houses some docker compose files and various bash helpers all 
+used by the main `test.sh` file which runs the test. The idea is to be able to 
+test that a node can be upgraded from a stable release to a checked out branch
+of LND and still function as expected with nodes running the stable release.
+
+## Test Flow
+
+The test sets up the following network:
+
+```
+Alice <---> Bob <---> Charlie <---> Dave
+```
+
+Initially, all the nodes are running a tagged LND release. This is all 
+configured via the main `docker-compose.yaml` file. 
+
+1. The Bob node is the node we will focus on. While Bob is still on a stable 
+   version of LND, we ensure that he can: send and receive multi-hop payments as
+   well as route payments.
+
+2. Bob is then shutdown. 
+
+3. The `docker-compose.override.yaml` file is then loaded and used to spin up
+   Bob again but this time using the checked out branch of LND. This is done by 
+   using the `dev.Dockerfile` in the LND repo. 
+
+4. The test now waits for this new version of Bob (which uses the same data 
+   directory as the previous version) to sync up with the network, reactivate 
+   its channels.
+ 
+5. Finally, basic send, receive and routing tests are run to ensure that Bob
+   is still functional after the upgrade. 
+
+## How to use this directory
+
+1. If you would just like to run the full test from start to finish, then all 
+   you need to do is run: 
+  
+   ```bash
+    ./test.sh
+   ```
+   
+2. If you would like to run the test in parts, then you can use the `execute.sh`
+   script to call the various functions in the directory. Here is an example:
+   ```bash
+   # Spin up the docker containers.
+   ./execute.sh compose_up
+   
+   # Wait for the nodes to start.
+   ./execute.sh wait_for_nodes alice bob charlie dave
+   
+   # Query various nodes.
+   ./execute.sh alice getinfo
+   
+   # Set-up a basic channel network.
+   ./execute.sh setup-network
+   
+   # Wait for bob to see all the channels in the network.
+    ./execute.sh wait_graph_sync bob 3
+   
+   # Open a channel between Bob and Charlie.
+   ./execute.sh open_channel bob charlie
+   
+   # Send a payment from Alice to Dave.
+   ./execute.sh send_payment alice dave
+   
+   # Take down a single node. 
+   ./execute.sh compose_stop dave
+   
+   # Start a single node.
+   ./execute.sh compose_start dave
+   
+   ```
+
+## File Descriptions:
+
+##### `test.sh`
+
+This script runs the full backwards compatibility test. 
+
+ ```bash
+   ./test.sh
+ ```
+
+##### `execute.sh`
+
+A helper script that allows you to call the various functions in the directory.
+
+This is useful if you are debugging something and want to step through the test
+steps manually while keeping the main network running.
+
+For example: 
+```bash
+ # Spin up the docker containers.
+ ./execute.sh compose_up
+ 
+ # Query various nodes.
+ ./execute.sh alice getinfo
+```
+
+#### `compose.sh`
+
+This script contains all the docker-compose variables and helper functions that 
+are used in the test.
+
+#### `network.sh`
+
+This script contains all the various helper functions that can be used to 
+interact with the Lightning nodes in the network.
+
+### `vars.sh`
+
+Any global variables used across the other scripts are defined here.
+
+#### `docker-compose.yaml`
+
+This docker compose file contains the network configuration for all the nodes
+running a stable LND tag. 
+
+#### `docker-compose.override.yaml`
+
+This compose file adds defines the `bob-pr` service which will pull and build
+the LND branch that is currently checked out.
diff --git a/scripts/bw-compatibility-test/compose.sh b/scripts/bw-compatibility-test/compose.sh
new file mode 100755
index 0000000000..6c06cbc67b
--- /dev/null
+++ b/scripts/bw-compatibility-test/compose.sh
@@ -0,0 +1,61 @@
+#!/bin/bash
+
+# DIR is set to the directory of this script.
+DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+
+# The way we call docker-compose depends on the installation.
+if which docker-compose > /dev/null; then
+  COMPOSE_CMD="docker-compose"
+else
+  COMPOSE_CMD="docker compose"
+fi
+
+# Common arguments that we want to pass to docker-compose.
+# By default, this only includes the main docker-compose file
+# and not the override file. Use the `compose_upgrade` method
+# to load both docker compose files.
+COMPOSE_ARGS="-f $DIR/docker-compose.yaml -p regtest"
+COMPOSE="$COMPOSE_CMD $COMPOSE_ARGS"
+
+# compose_upgrade sets COMPOSE_ARGS and COMPOSE such that
+# both the main docker-compose file and the override file
+# are loaded.
+function compose_upgrade() {
+  export COMPOSE_ARGS="-p regtest"
+  export COMPOSE="$COMPOSE_CMD $COMPOSE_ARGS"
+}
+
+# compose_up starts the docker-compose cluster.
+function compose_up() {
+  echo "🐳 Starting the cluster"
+  $COMPOSE up -d --quiet-pull
+}
+
+# compose_down tears down the docker-compose cluster
+# and removes all volumes and orphans.
+function compose_down() {
+  echo "🐳 Tearing down the cluster"
+  $COMPOSE down --volumes --remove-orphans
+}
+
+# compose_stop stops a specific service in the cluster.
+function compose_stop() {
+  local service="$1"
+  echo "🐳 Stopping $service"
+  $COMPOSE stop "$service"
+}
+
+# compose_start starts a specific service in the cluster.
+function compose_start() {
+  local service="$1"
+  echo "🐳 Starting $service"
+  $COMPOSE up -d $service
+}
+
+# compose_rebuild forces the rebuild of the image for a
+# specific service in the cluster.
+function compose_rebuild() {
+  local service="$1"
+  echo "🐳 Rebuilding $service"
+  $COMPOSE build --no-cache $service
+}
diff --git a/scripts/bw-compatibility-test/docker-compose.override.yaml b/scripts/bw-compatibility-test/docker-compose.override.yaml
new file mode 100644
index 0000000000..52e53d72b1
--- /dev/null
+++ b/scripts/bw-compatibility-test/docker-compose.override.yaml
@@ -0,0 +1,43 @@
+services:
+  bob-pr:
+    build:
+      context: ../../
+      dockerfile: dev.Dockerfile
+    container_name: bob-pr
+    restart: unless-stopped
+    ports:
+      - 10012:10009
+      - 9742:9735
+      - 8092:8080
+    networks:
+      regtest:
+        aliases:
+          - bob
+    volumes:
+      - "bob:/root/.lnd"
+    depends_on:
+      - bitcoind
+    command: >
+      lnd
+      --logdir=/root/.lnd
+      --alias=bob
+      --rpclisten=0.0.0.0:10009
+      --restlisten=0.0.0.0:8080
+      --color=#cccccc
+      --noseedbackup
+      --bitcoin.active
+      --bitcoin.regtest
+      --bitcoin.node=bitcoind
+      --bitcoind.rpchost=bitcoind
+      --bitcoind.rpcuser=lightning
+      --bitcoind.rpcpass=lightning
+      --bitcoind.zmqpubrawblock=tcp://bitcoind:28332
+      --bitcoind.zmqpubrawtx=tcp://bitcoind:28333
+      --debuglevel=debug
+      --externalip=bob
+      --tlsextradomain=bob
+      --accept-keysend
+      --protocol.option-scid-alias
+      --protocol.zero-conf
+      --protocol.simple-taproot-chans
+      --trickledelay=50
\ No newline at end of file
diff --git a/scripts/bw-compatibility-test/docker-compose.yaml b/scripts/bw-compatibility-test/docker-compose.yaml
new file mode 100644
index 0000000000..8e39447c22
--- /dev/null
+++ b/scripts/bw-compatibility-test/docker-compose.yaml
@@ -0,0 +1,197 @@
+services:
+  bitcoind:
+    image: lightninglabs/bitcoin-core:${BITCOIND_VERSION}
+    container_name: bitcoind
+    restart: unless-stopped
+    ports:
+      - 18443:18443
+      - 18444:18444
+      - 28332:28332
+      - 28333:28333
+    networks:
+      regtest:
+        aliases:
+          - bitcoind
+    command:
+      - "-txindex"
+      - "-regtest"
+      - "-rest"
+      - "-printtoconsole"
+      - "-zmqpubrawblock=tcp://0.0.0.0:28332"
+      - "-zmqpubrawtx=tcp://0.0.0.0:28333"
+      - "-rpcport=18443"
+      - "-rpcbind=0.0.0.0"
+      - "-rpcauth=lightning:8492220e715bbfdf5f165102bfd7ed4$$88090545821ed5e9db614588c0afbad575ccc14681fb77f3cae6899bc419af67"
+      - "-rpcallowip=0.0.0.0/0"
+      - "-fallbackfee=0.0002"
+      - "-peerblockfilters=1"
+      - "-blockfilterindex=1"
+      - "-wallet=/home/bitcoin/.bitcoin/regtest/wallets/miner"
+    environment:
+      - HOME=/home/bitcoin
+    volumes:
+      - bitcoind:/home/bitcoin/.bitcoin
+
+  alice:
+    image: lightninglabs/lnd:${LND_LATEST_VERSION}
+    container_name: alice
+    restart: unless-stopped
+    ports:
+      - 10011:10009
+      - 9741:9735
+      - 8091:8080
+    networks:
+      regtest:
+        aliases:
+          - alice
+    volumes:
+      - "alice:/root/.lnd"
+    depends_on:
+      - bitcoind
+    command:
+      - "--logdir=/root/.lnd"
+      - "--alias=alice"
+      - "--rpclisten=0.0.0.0:10009"
+      - "--restlisten=0.0.0.0:8080"
+      - "--color=#cccccc"
+      - "--noseedbackup"
+      - "--bitcoin.active"
+      - "--bitcoin.regtest"
+      - "--bitcoin.node=bitcoind"
+      - "--bitcoind.rpchost=bitcoind"
+      - "--bitcoind.rpcuser=lightning"
+      - "--bitcoind.rpcpass=lightning"
+      - "--bitcoind.zmqpubrawblock=tcp://bitcoind:28332"
+      - "--bitcoind.zmqpubrawtx=tcp://bitcoind:28333"
+      - "--debuglevel=debug"
+      - "--externalip=alice"
+      - "--tlsextradomain=alice"
+      - "--accept-keysend"
+      - "--protocol.option-scid-alias"
+      - "--protocol.zero-conf"
+      - "--protocol.simple-taproot-chans"
+      - "--trickledelay=50"
+
+  bob:
+    image: lightninglabs/lnd:${LND_LATEST_VERSION}
+    container_name: bob
+    restart: unless-stopped
+    ports:
+      - 10012:10009
+      - 9742:9735
+      - 8092:8080
+    networks:
+      regtest:
+        aliases:
+          - bob
+    volumes:
+      - "bob:/root/.lnd"
+    depends_on:
+      - bitcoind
+    command:
+      - "--logdir=/root/.lnd"
+      - "--alias=bob"
+      - "--rpclisten=0.0.0.0:10009"
+      - "--restlisten=0.0.0.0:8080"
+      - "--color=#cccccc"
+      - "--noseedbackup"
+      - "--bitcoin.active"
+      - "--bitcoin.regtest"
+      - "--bitcoin.node=bitcoind"
+      - "--bitcoind.rpchost=bitcoind"
+      - "--bitcoind.rpcuser=lightning"
+      - "--bitcoind.rpcpass=lightning"
+      - "--bitcoind.zmqpubrawblock=tcp://bitcoind:28332"
+      - "--bitcoind.zmqpubrawtx=tcp://bitcoind:28333"
+      - "--debuglevel=debug"
+      - "--externalip=bob"
+      - "--tlsextradomain=bob"
+      - "--accept-keysend"
+      - "--protocol.option-scid-alias"
+      - "--protocol.zero-conf"
+      - "--protocol.simple-taproot-chans"
+      - "--trickledelay=50"
+
+  charlie:
+    image: lightninglabs/lnd:${LND_LATEST_VERSION}
+    container_name: charlie
+    restart: unless-stopped
+    ports:
+      - 10013:10009
+      - 9743:9735
+      - 8093:8080
+    networks:
+      regtest:
+        aliases:
+          - charlie
+    volumes:
+      - "charlie:/root/.lnd"
+    depends_on:
+      - bitcoind
+    command:
+      - "--logdir=/root/.lnd"
+      - "--alias=charlie"
+      - "--rpclisten=0.0.0.0:10009"
+      - "--restlisten=0.0.0.0:8080"
+      - "--color=#cccccc"
+      - "--noseedbackup"
+      - "--bitcoin.active"
+      - "--bitcoin.regtest"
+      - "--bitcoin.node=bitcoind"
+      - "--bitcoind.rpchost=bitcoind"
+      - "--bitcoind.rpcuser=lightning"
+      - "--bitcoind.rpcpass=lightning"
+      - "--bitcoind.zmqpubrawblock=tcp://bitcoind:28332"
+      - "--bitcoind.zmqpubrawtx=tcp://bitcoind:28333"
+      - "--debuglevel=debug"
+      - "--externalip=charlie"
+      - "--tlsextradomain=charlie"
+      - "--accept-keysend"
+      - "--trickledelay=50"
+
+  dave:
+    image: lightninglabs/lnd:${LND_LATEST_VERSION}
+    container_name: dave
+    restart: unless-stopped
+    ports:
+      - 10014:10009
+      - 9744:9735
+      - 8094:8080
+    networks:
+      regtest:
+        aliases:
+          - dave
+    volumes:
+      - "dave:/root/.lnd"
+    depends_on:
+      - bitcoind
+    command:
+      - "--logdir=/root/.lnd"
+      - "--alias=dave"
+      - "--rpclisten=0.0.0.0:10009"
+      - "--restlisten=0.0.0.0:8080"
+      - "--color=#cccccc"
+      - "--noseedbackup"
+      - "--bitcoin.active"
+      - "--bitcoin.regtest"
+      - "--bitcoin.node=bitcoind"
+      - "--bitcoind.rpchost=bitcoind"
+      - "--bitcoind.rpcuser=lightning"
+      - "--bitcoind.rpcpass=lightning"
+      - "--bitcoind.zmqpubrawblock=tcp://bitcoind:28332"
+      - "--bitcoind.zmqpubrawtx=tcp://bitcoind:28333"
+      - "--debuglevel=debug"
+      - "--externalip=dave"
+      - "--tlsextradomain=dave"
+      - "--accept-keysend"
+      - "--trickledelay=50"
+
+networks:
+  regtest:
+
+volumes:
+  bitcoind:
+  alice:
+  bob:
+  charlie:
+  dave:
diff --git a/scripts/bw-compatibility-test/execute.sh b/scripts/bw-compatibility-test/execute.sh
new file mode 100755
index 0000000000..d88c0f4fb2
--- /dev/null
+++ b/scripts/bw-compatibility-test/execute.sh
@@ -0,0 +1,16 @@
+#!/bin/bash
+
+# The execute.sh file can be used to call any helper functions directly
+# from the command line. For example:
+#   $ ./execute.sh compose-up
+
+# DIR is set to the directory of this script.
+DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+
+source "$DIR/.env"
+source "$DIR/compose.sh"
+source "$DIR/network.sh"
+
+CMD=$1
+shift
+$CMD "$@"
\ No newline at end of file
diff --git a/scripts/bw-compatibility-test/network.sh b/scripts/bw-compatibility-test/network.sh
new file mode 100644
index 0000000000..77a558e8ee
--- /dev/null
+++ b/scripts/bw-compatibility-test/network.sh
@@ -0,0 +1,337 @@
+#!/bin/bash
+
+# DIR is set to the directory of this script.
+DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+
+source "$DIR/.env"
+
+# Global variable to keep track of which Bob container to use.
+# Once Bob is upgraded to the PR version, this variable must
+# be updated to 'bob-pr'.
+BOB=bob
+
+# upgrade_bob shuts down the stable Bob container, upgrades the
+# compose variables to use the PR version of Bob, rebuilds the
+# Bob container, and starts the PR version of Bob.
+function upgrade_bob() {
+  # Shutdown Bob.
+  compose_stop bob
+
+  # Upgrade the compose variables so that the Bob configuration
+  # is swapped out for the PR version.
+  compose_upgrade
+  export BOB=bob-pr
+
+  # Force the rebuild of the Bob container.
+  compose_rebuild bob-pr
+
+  # This should now start with the new version of Bob.
+  compose_start bob-pr
+}
+
+# wait_for_nodes waits for all the nodes in the argument list to
+# start.
+function wait_for_nodes() {
+  local nodes=("$@")
+
+  for node in "${nodes[@]}"; do
+    wait_for_node $node
+  done
+  echo "🏎️ All nodes have started!"
+}
+
+# wait_for_node waits for the given node in the cluster to start, with a timeout.
+wait_for_node() {
+  if [[ $# -ne 1 ]]; then
+      echo "❌ Error: wait_for_node requires exactly 1 argument (node)"
+      echo "Usage: wait_for_node <node>"
+      return 1
+  fi
+
+  local node="$1"
+  local start_time=$(date +%s)
+
+  echo -n "⌛ Waiting for $node to start (timeout: ${TIMEOUT}s)"
+
+  while ! $node getinfo 2>/dev/null | grep -q identity_pubkey; do
+      echo -n "."
+      sleep 0.5
+
+      # Check if timeout has been reached
+      local elapsed_time=$(( $(date +%s) - start_time ))
+      if [[ $elapsed_time -ge $TIMEOUT ]]; then
+          echo
+          echo "❌ Error: Timeout after $TIMEOUT seconds waiting for $node to start"
+          return 1
+      fi
+  done
+
+  echo
+  echo "✅ $node has started"
+}
+
+# do_for is a generic function to execute a command for a set of nodes.
+do_for() {
+  if [[ $# -lt 2 ]]; then
+      echo "❌ Error: do_for requires at least 2 arguments (function and nodes)"
+      echo "Usage: do_for <function> [node1] [node2] [node3]..."
+      return 1
+  fi
+
+  local func="$1"
+  shift
+  local nodes=("$@")
+
+  for node in "${nodes[@]}"; do
+      "$func" "$node"
+  done
+}
+
+# setup_network sets up the basic A <> B <> C <> D network.
+function setup_network() {
+  wait_for_nodes alice bob charlie dave
+
+  setup_bitcoin
+
+  do_for fund_node alice bob charlie dave
+  mine 6
+
+  connect_nodes alice bob
+  connect_nodes bob charlie
+  connect_nodes charlie dave
+
+  open_channel alice bob
+  open_channel bob charlie
+  open_channel charlie dave
+
+  echo "Set up network: Alice <-> Bob <-> Charlie <-> Dave"
+
+  mine 7
+
+  wait_graph_sync alice 3
+  wait_graph_sync bob 3
+  wait_graph_sync charlie 3
+  wait_graph_sync dave 3
+}
+
+# fund_node funds the specified node with 5 BTC.
+function fund_node() {
+  local node="$1"
+
+  ADDR=$( $node newaddress p2wkh | jq .address -r)
+
+  bitcoin sendtoaddress "$ADDR" 5 > /dev/null
+
+  echo "💰 Funded $node with 5 BTC"
+}
+
+# connect_nodes connects two specified nodes.
+function connect_nodes() {
+  if [[ $# -ne 2 ]]; then
+      echo "❌ Error: connect_nodes requires exactly 2 arguments (node1 and node2)"
+      echo "Usage: connect_nodes <node1> <node2>"
+      return 1
+  fi
+
+  local node1="$1"
+  local node2="$2"
+
+  echo -ne "📞 Connecting $node1 to $node2...\r"
+
+  KEY_2=$( $node2 getinfo | jq .identity_pubkey -r)
+
+  $node1 connect "$KEY_2"@$node2:9735 > /dev/null
+
+  echo -ne "                        \r"
+  echo "📞 Connected $node1 to $node2"
+}
+
+# open_channel opens a channel between two specified nodes.
+function open_channel() {
+  if [[ $# -ne 2 ]]; then
+      echo "❌ Error: open_channel requires exactly 2 arguments (node1 and node2)"
+      echo "Usage: open_channel <node1> <node2>"
+      return 1
+  fi
+
+  local node1="$1"
+  local node2="$2"
+
+  KEY_2=$( $node2 getinfo | jq .identity_pubkey -r)
+
+  $node1 openchannel --node_key "$KEY_2" --local_amt 15000000 --push_amt 7000000 > /dev/null
+
+  echo "🔗 Opened channel between $node1 and $node2"
+}
+
+# Function to check if a node's graph has the expected number of channels
+wait_graph_sync() {
+  if [[ $# -ne 2 ]]; then
+       echo "❌ Error: graph_synced requires exactly 2 arguments (node and num_chans)"
+       echo "Usage: graph_synced <node> <num_chans>"
+       return 1
+  fi
+
+  local node="$1"
+  local num_chans="$2"
+
+  while :; do
+    num_channels=$($node getnetworkinfo | jq -r '.num_channels')
+
+    # Ensure num_channels is a valid number before proceeding
+    if [[ "$num_channels" =~ ^[0-9]+$ ]]; then
+      echo -ne "⌛ $node sees $num_channels channels...\r"
+
+      if [[ "$num_channels" -eq num_chans ]]; then
+        echo "👀 $node sees all the channels!"
+        break  # Exit loop when num_channels reaches num_chans
+      fi
+    fi
+
+    sleep 1
+  done
+}
+
+# send_payment attempts to send a payment between two specified nodes.
+send_payment() {
+  if [[ $# -ne 2 ]]; then
+      echo "❌ Error: send_payment requires exactly 2 arguments (from_node and to_node)"
+      echo "Usage: send_payment <from_node> <to_node>"
+      return 1
+  fi
+
+  local from_node="$1"
+  local to_node="$2"
+
+  # Generate invoice and capture error output
+  local invoice_output
+  if ! invoice_output=$($to_node addinvoice 10000 2>&1); then
+      echo "❌ Error: Failed to generate invoice from $to_node"
+      echo "📜 Details: $invoice_output"
+      return 1
+  fi
+
+  # Extract payment request
+  local PAY_REQ
+  PAY_REQ=$(echo "$invoice_output" | jq -r '.payment_request')
+
+  # Ensure invoice creation was successful
+  if [[ -z "$PAY_REQ" || "$PAY_REQ" == "null" ]]; then
+      echo "❌ Error: Invoice response did not contain a valid payment request."
+      echo "📜 Raw Response: $invoice_output"
+      return 1
+  fi
+
+  # Send payment and capture error output
+  local payment_output
+  if ! payment_output=$($from_node payinvoice --force "$PAY_REQ" 2>&1); then
+      echo "❌ Error: Payment failed from $from_node to $to_node"
+      echo "📜 Details: $payment_output"
+      return 1
+  fi
+
+  echo "💸 Payment sent from $from_node to $to_node"
+}
+
+# print_version prints the commit hash that the given node is running.
+print_version() {
+  if [[ $# -ne 1 ]]; then
+      echo "❌ Error: print_version requires exactly 1 argument (node)"
+      echo "Usage: print_version <node>"
+      return 1
+  fi
+
+  local node="$1"
+
+  # Get the commit hash
+  local commit_hash
+  commit_hash=$($node version 2>/dev/null | jq -r '.lnd.commit_hash' | sed 's/^[ \t]*//')
+
+  # Ensure commit hash is retrieved
+  if [[ -z "$commit_hash" || "$commit_hash" == "null" ]]; then
+      echo "❌ Error: Could not retrieve commit hash for $node"
+      return 1
+  fi
+
+  echo "ℹ️ $node is running on commit $commit_hash"
+}
+
+# wait_for_active_chans waits for a node to have the expected number of active channels.
+wait_for_active_chans() {
+  if [[ $# -ne 2 ]]; then
+      echo "❌ Error: wait_for_active_chans requires exactly 2 arguments (node and expected_active_channels)"
+      echo "Usage: wait_for_active_chans <node> <num_channels>"
+      return 1
+  fi
+
+  local node="$1"
+  local expected_channels="$2"
+
+  echo "🟠 Waiting for $node to have exactly $expected_channels active channels..."
+
+  while :; do
+      # Get the active channel count
+      local active_count
+      active_count=$($node --network=regtest listchannels 2>/dev/null | jq '[.channels[] | select(.active == true)] | length')
+
+      # Ensure active_count is a valid number
+      if [[ "$active_count" =~ ^[0-9]+$ ]]; then
+          echo -ne "⌛ $node sees $active_count active channels...\r"
+
+          # Exit loop only if the expected number of channels is active
+          if [[ "$active_count" -eq "$expected_channels" ]]; then
+              break
+          fi
+      fi
+
+      sleep 1
+  done
+
+  echo
+  echo "🟢 $node now has exactly $expected_channels active channels!"
+}
+
+# mine mines a number of blocks on the regtest network. If no
+# argument is provided, it defaults to 6 blocks.
+function mine() {
+  NUMBLOCKS="${1-6}"
+  bitcoin generatetoaddress "$NUMBLOCKS" "$(bitcoin getnewaddress "" legacy)" > /dev/null
+}
+
+# setup_bitcoin performs various operations on the regtest bitcoind node
+# so that it is ready to be used by the Lightning nodes and so that it can
+# be used to fund the nodes.
+function setup_bitcoin() {
+  echo "🔗 Setting up Bitcoin node"
+  bitcoin createwallet miner  > /dev/null
+
+  ADDR_BTC=$(bitcoin getnewaddress "" legacy)
+  bitcoin generatetoaddress 106 "$ADDR_BTC" > /dev/null
+  bitcoin getbalance > /dev/null
+
+  echo "🔗 Bitcoin node is set up"
+}
+
+function bitcoin() {
+  docker exec -i -u bitcoin bitcoind bitcoin-cli -regtest -rpcuser=lightning -rpcpassword=lightning "$@"
+}
+
+function alice() {
+  docker exec -i alice lncli --network regtest "$@"
+}
+
+function bob() {
+  docker exec -i "$BOB" lncli --network regtest "$@"
+}
+
+function bob-pr() {
+  docker exec -i bob-pr lncli --network regtest "$@"
+}
+
+function charlie() {
+  docker exec -i charlie lncli --network regtest "$@"
+}
+
+function dave() {
+  docker exec -i dave lncli --network regtest "$@"
+}
diff --git a/scripts/bw-compatibility-test/test.sh b/scripts/bw-compatibility-test/test.sh
new file mode 100755
index 0000000000..af22e5d1b6
--- /dev/null
+++ b/scripts/bw-compatibility-test/test.sh
@@ -0,0 +1,53 @@
+#!/bin/bash
+
+# Stop the script if an error is returned by any step.
+set -e
+
+# DIR is set to the directory of this script.
+DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+
+source "$DIR/compose.sh"
+source "$DIR/network.sh"
+source "$DIR/.env"
+
+cd $DIR
+
+# Spin up the network in detached mode.
+compose_up
+
+# Ensure that the cluster is shut down when the script exits
+# regardless of success
+trap compose_down EXIT
+
+# Set up the network.
+setup_network
+
+# Print the initial version of each node.
+do_for print_version alice bob charlie dave
+
+# Test that Bob can send a multi-hop payment.
+send_payment bob dave
+
+# Test that Bob can receive a multi-hop payment.
+send_payment dave bob
+
+# Test that Bob can route a payment.
+send_payment alice dave
+
+# Upgrade the compose variables so that the Bob configuration
+# is swapped out for the PR version.
+upgrade_bob
+
+# Wait for Bob to start.
+wait_for_node bob
+wait_for_active_chans bob 2
+
+# Show that Bob is now running the current branch.
+do_for print_version bob
+
+# Repeat the basic tests.
+send_payment bob dave
+send_payment dave bob
+send_payment alice dave
+
+echo "🛡️⚔️🫡 Backwards compatibility test passed! 🫡⚔️🛡️"