diff --git a/gossipd/gossip.c b/gossipd/gossip.c
index 531294935..164bc37db 100644
--- a/gossipd/gossip.c
+++ b/gossipd/gossip.c
@@ -398,8 +398,8 @@ static struct io_plan *peer_init_received(struct io_conn *conn,
 		peer->broadcast_index
 			= peer->daemon->rstate->broadcasts->next_index;
 
-	/* This is a full peer now; we keep it around until its
-	 * gossipfd closed (forget_peer) or reconnect. */
+	/* This is a full peer now; we keep it around until master says
+	 * it's dead, or reconnect. */
 	peer_finalized(peer);
 
 	/* We will not have anything queued, since we're not duplex. */
@@ -845,25 +845,12 @@ static struct io_plan *owner_msg_in(struct io_conn *conn,
 		status_broken("peer %s: send us unknown msg of type %s",
 			      type_to_string(tmpctx, struct pubkey, &peer->id),
 			      gossip_wire_type_name(type));
-		/* Calls forget_peer */
 		return io_close(conn);
 	}
 
 	return daemon_conn_read_next(conn, dc);
 }
 
-static void forget_peer(struct io_conn *conn UNUSED, struct daemon_conn *dc)
-{
-	struct peer *peer = dc->ctx;
-
-	status_trace("Forgetting %s peer %s",
-		     peer->local ? "local" : "remote",
-		     type_to_string(tmpctx, struct pubkey, &peer->id));
-
-	/* Free peer. */
-	tal_free(dc->ctx);
-}
-
 /* When a peer is to be owned by another daemon, we create a socket
  * pair to send/receive gossip from it */
 static bool send_peer_with_fds(struct peer *peer, const u8 *msg)
@@ -884,7 +871,7 @@ static bool send_peer_with_fds(struct peer *peer, const u8 *msg)
 	peer->local = tal_free(peer->local);
 	peer->remote = tal(peer, struct daemon_conn);
 	daemon_conn_init(peer, peer->remote, fds[0],
-			 owner_msg_in, forget_peer);
+			 owner_msg_in, NULL);
 	peer->remote->msg_queue_cleared_cb = nonlocal_dump_gossip;
 
 	/* Peer stays around, even though caller will close conn. */
@@ -1871,6 +1858,35 @@ static struct io_plan *peer_important(struct io_conn *conn,
 	return daemon_conn_read_next(conn, &daemon->master);
 }
 
+static struct io_plan *peer_disconnected(struct io_conn *conn,
+					 struct daemon *daemon, const u8 *msg)
+{
+	struct pubkey id;
+	struct peer *peer;
+
+	if (!fromwire_gossipctl_peer_disconnected(msg, &id))
+		master_badmsg(WIRE_GOSSIPCTL_PEER_DISCONNECTED, msg);
+
+	peer = find_peer(daemon, &id);
+	if (!peer)
+		status_failed(STATUS_FAIL_INTERNAL_ERROR,
+			      "peer_disconnected unknown peer: %s",
+			      type_to_string(tmpctx, struct pubkey, &id));
+
+	/* Possible if there's a reconnect: ignore disonnect. */
+	if (peer->local) {
+		status_trace("peer_disconnected %s: reconnected, ignoring",
+			     type_to_string(tmpctx, struct pubkey, &id));
+		return daemon_conn_read_next(conn, &daemon->master);
+	}
+
+	status_trace("Forgetting remote peer %s",
+		     type_to_string(tmpctx, struct pubkey, &peer->id));
+
+	tal_free(peer);
+	return daemon_conn_read_next(conn, &daemon->master);
+}
+
 static struct io_plan *get_peers(struct io_conn *conn,
 				 struct daemon *daemon, const u8 *msg)
 {
@@ -2122,6 +2138,9 @@ static struct io_plan *recv_req(struct io_conn *conn, struct daemon_conn *master
 	case WIRE_GOSSIPCTL_PEER_IMPORTANT:
 		return peer_important(conn, daemon, master->msg_in);
 
+	case WIRE_GOSSIPCTL_PEER_DISCONNECTED:
+		return peer_disconnected(conn, daemon, master->msg_in);
+
 	case WIRE_GOSSIP_GETPEERS_REQUEST:
 		return get_peers(conn, daemon, master->msg_in);
 
diff --git a/gossipd/gossip_wire.csv b/gossipd/gossip_wire.csv
index e021e3029..2c2589228 100644
--- a/gossipd/gossip_wire.csv
+++ b/gossipd/gossip_wire.csv
@@ -92,6 +92,10 @@ gossipctl_hand_back_peer,,crypto_state,struct crypto_state
 gossipctl_hand_back_peer,,len,u16
 gossipctl_hand_back_peer,,msg,len*u8
 
+# master -> gossipd: peer has disconnected.
+gossipctl_peer_disconnected,3015
+gossipctl_peer_disconnected,,id,struct pubkey
+
 # Pass JSON-RPC getnodes call through
 gossip_getnodes_request,3005
 # Can be 0 or 1 currently
diff --git a/lightningd/channel.c b/lightningd/channel.c
index c2ee3d678..54c4d27db 100644
--- a/lightningd/channel.c
+++ b/lightningd/channel.c
@@ -12,13 +12,26 @@
 #include <lightningd/peer_control.h>
 #include <lightningd/subd.h>
 
+static bool connects_to_peer(struct subd *owner)
+{
+	return owner && owner->talks_to_peer;
+}
+
 void channel_set_owner(struct channel *channel, struct subd *owner)
 {
 	struct subd *old_owner = channel->owner;
 	channel->owner = owner;
 
-	if (old_owner)
+	if (old_owner) {
 		subd_release_channel(old_owner, channel);
+		if (channel->connected && !connects_to_peer(owner)) {
+			u8 *msg = towire_gossipctl_peer_disconnected(NULL,
+							     &channel->peer->id);
+			subd_send_msg(channel->peer->ld->gossip, take(msg));
+			channel->connected = false;
+		}
+	}
+	channel->connected = connects_to_peer(owner);
 }
 
 struct htlc_out *channel_has_htlc_out(struct channel *channel)
@@ -155,7 +168,8 @@ struct channel *new_channel(struct peer *peer, u64 dbid,
 			    struct changed_htlc *last_sent_commit,
 			    u32 first_blocknum,
 			    u32 min_possible_feerate,
-			    u32 max_possible_feerate)
+			    u32 max_possible_feerate,
+			    bool connected)
 {
 	struct channel *channel = tal(peer->ld, struct channel);
 
@@ -212,6 +226,7 @@ struct channel *new_channel(struct peer *peer, u64 dbid,
 	channel->first_blocknum = first_blocknum;
 	channel->min_possible_feerate = min_possible_feerate;
 	channel->max_possible_feerate = max_possible_feerate;
+	channel->connected = connected;
 	derive_channel_seed(peer->ld, &channel->seed, &peer->id, channel->dbid);
 
 	list_add_tail(&peer->channels, &channel->list);
diff --git a/lightningd/channel.h b/lightningd/channel.h
index 291d037cd..2684c15a5 100644
--- a/lightningd/channel.h
+++ b/lightningd/channel.h
@@ -96,6 +96,9 @@ struct channel {
 
 	/* Feerate range */
 	u32 min_possible_feerate, max_possible_feerate;
+
+	/* Does gossipd need to know if the owner dies? (ie. not onchaind) */
+	bool connected;
 };
 
 struct channel *new_channel(struct peer *peer, u64 dbid,
@@ -136,7 +139,8 @@ struct channel *new_channel(struct peer *peer, u64 dbid,
 			    struct changed_htlc *last_sent_commit,
 			    u32 first_blocknum,
 			    u32 min_possible_feerate,
-			    u32 max_possible_feerate);
+			    u32 max_possible_feerate,
+			    bool connected);
 
 void delete_channel(struct channel *channel);
 
diff --git a/lightningd/gossip_control.c b/lightningd/gossip_control.c
index 518c3e237..5928b4f9e 100644
--- a/lightningd/gossip_control.c
+++ b/lightningd/gossip_control.c
@@ -137,6 +137,7 @@ static unsigned gossip_msg(struct subd *gossip, const u8 *msg, const int *fds)
 	case WIRE_GOSSIP_MARK_CHANNEL_UNROUTABLE:
 	case WIRE_GOSSIPCTL_PEER_DISCONNECT:
 	case WIRE_GOSSIPCTL_PEER_IMPORTANT:
+	case WIRE_GOSSIPCTL_PEER_DISCONNECTED:
 	/* This is a reply, so never gets through to here. */
 	case WIRE_GOSSIPCTL_INIT_REPLY:
 	case WIRE_GOSSIP_GET_UPDATE_REPLY:
diff --git a/lightningd/opening_control.c b/lightningd/opening_control.c
index 360916ec0..dec49908e 100644
--- a/lightningd/opening_control.c
+++ b/lightningd/opening_control.c
@@ -237,7 +237,9 @@ wallet_commit_channel(struct lightningd *ld,
 			      final_key_idx, false,
 			      NULL, /* No commit sent yet */
 			      uc->first_blocknum,
-			      feerate, feerate);
+			      feerate, feerate,
+			      /* We are connected */
+			      true);
 
 	/* Now we finally put it in the database. */
 	wallet_channel_insert(ld->wallet, channel);
@@ -546,7 +548,9 @@ static void opening_channel_errmsg(struct uncommitted_channel *uc,
 				   const u8 *err_for_them)
 {
 	if (peer_fd == -1) {
+		u8 *msg = towire_gossipctl_peer_disconnected(tmpctx, &uc->peer->id);
 		log_info(uc->log, "%s", desc);
+		subd_send_msg(uc->peer->ld->gossip, msg);
 		if (uc->fc)
 			command_fail(uc->fc->cmd, "%s", desc);
 	} else {
diff --git a/lightningd/peer_control.c b/lightningd/peer_control.c
index 40e7381aa..90055e5dd 100644
--- a/lightningd/peer_control.c
+++ b/lightningd/peer_control.c
@@ -366,6 +366,9 @@ void channel_errmsg(struct channel *channel,
 					     err_for_them,
 					     tal_len(err_for_them), 0);
 
+	/* Make sure channel_fail_permanent doesn't tell gossipd we died! */
+	channel->connected = false;
+
 	/* BOLT #1:
 	 *
 	 * A sending node:
diff --git a/wallet/test/run-wallet.c b/wallet/test/run-wallet.c
index a75d5bcde..6672b90bc 100644
--- a/wallet/test/run-wallet.c
+++ b/wallet/test/run-wallet.c
@@ -376,6 +376,9 @@ u8 *towire_gossipctl_peer_addrhint(const tal_t *ctx UNNEEDED, const struct pubke
 /* Generated stub for towire_gossipctl_peer_disconnect */
 u8 *towire_gossipctl_peer_disconnect(const tal_t *ctx UNNEEDED, const struct pubkey *id UNNEEDED)
 { fprintf(stderr, "towire_gossipctl_peer_disconnect called!\n"); abort(); }
+/* Generated stub for towire_gossipctl_peer_disconnected */
+u8 *towire_gossipctl_peer_disconnected(const tal_t *ctx UNNEEDED, const struct pubkey *id UNNEEDED)
+{ fprintf(stderr, "towire_gossipctl_peer_disconnected called!\n"); abort(); }
 /* Generated stub for towire_gossipctl_peer_important */
 u8 *towire_gossipctl_peer_important(const tal_t *ctx UNNEEDED, const struct pubkey *id UNNEEDED, bool important UNNEEDED)
 { fprintf(stderr, "towire_gossipctl_peer_important called!\n"); abort(); }
diff --git a/wallet/wallet.c b/wallet/wallet.c
index 93e8559e1..14a0a6bd8 100644
--- a/wallet/wallet.c
+++ b/wallet/wallet.c
@@ -651,7 +651,9 @@ static struct channel *wallet_stmt2channel(const tal_t *ctx, struct wallet *w, s
 			   last_sent_commit,
 			   sqlite3_column_int64(stmt, 35),
 			   sqlite3_column_int(stmt, 36),
-			   sqlite3_column_int(stmt, 37));
+			   sqlite3_column_int(stmt, 37),
+			   /* Not connected */
+			   false);
 
 	return chan;
 }