diff --git a/crates/wallet/src/wallet/mod.rs b/crates/wallet/src/wallet/mod.rs
index 70d26c080..ab07db609 100644
--- a/crates/wallet/src/wallet/mod.rs
+++ b/crates/wallet/src/wallet/mod.rs
@@ -889,6 +889,21 @@ impl Wallet {
             .next()
     }
 
+    /// Get a local output if the txout referenced by `outpoint` exists on chain and can
+    /// be found in the inner tx graph.
+    fn get_output(&self, outpoint: OutPoint) -> Option<LocalOutput> {
+        let ((keychain, index), _) = self.indexed_graph.index.txout(outpoint)?;
+        self.indexed_graph
+            .graph()
+            .filter_chain_txouts(
+                &self.chain,
+                self.chain.tip().block_id(),
+                core::iter::once(((), outpoint)),
+            )
+            .map(|(_, full_txo)| new_local_utxo(keychain, index, full_txo))
+            .next()
+    }
+
     /// Inserts a [`TxOut`] at [`OutPoint`] into the wallet's transaction graph.
     ///
     /// This is used for providing a previous output's value so that we can use [`calculate_fee`]
@@ -1537,7 +1552,9 @@ impl Wallet {
     ///
     /// Returns an error if the transaction is already confirmed or doesn't explicitly signal
     /// *replace by fee* (RBF). If the transaction can be fee bumped then it returns a [`TxBuilder`]
-    /// pre-populated with the inputs and outputs of the original transaction.
+    /// pre-populated with the inputs and outputs of the original transaction. If you just
+    /// want to build a transaction that conflicts with the tx of the given `txid`, consider
+    /// using [`TxBuilder::replace_tx`].
     ///
     /// ## Example
     ///
@@ -2570,7 +2587,7 @@ macro_rules! floating_rate {
 /// Macro for getting a wallet for use in a doctest
 macro_rules! doctest_wallet {
     () => {{
-        use $crate::bitcoin::{BlockHash, Transaction, absolute, TxOut, Network, hashes::Hash};
+        use $crate::bitcoin::{absolute, transaction, Amount, BlockHash, Transaction, TxOut, Network, hashes::Hash};
         use $crate::chain::{ConfirmationBlockTime, BlockId, TxGraph, tx_graph};
         use $crate::{Update, KeychainKind, Wallet};
         use $crate::test_utils::*;
diff --git a/crates/wallet/src/wallet/tx_builder.rs b/crates/wallet/src/wallet/tx_builder.rs
index 7699a3b03..015cdbbd9 100644
--- a/crates/wallet/src/wallet/tx_builder.rs
+++ b/crates/wallet/src/wallet/tx_builder.rs
@@ -274,25 +274,30 @@ impl<'a, Cs> TxBuilder<'a, Cs> {
     /// These have priority over the "unspendable" utxos, meaning that if a utxo is present both in
     /// the "utxos" and the "unspendable" list, it will be spent.
     pub fn add_utxos(&mut self, outpoints: &[OutPoint]) -> Result<&mut Self, AddUtxoError> {
-        {
-            let wallet = &mut self.wallet;
-            let utxos = outpoints
-                .iter()
-                .map(|outpoint| {
-                    wallet
-                        .get_utxo(*outpoint)
-                        .ok_or(AddUtxoError::UnknownUtxo(*outpoint))
-                })
-                .collect::<Result<Vec<_>, _>>()?;
-
-            for utxo in utxos {
-                let descriptor = wallet.public_descriptor(utxo.keychain);
-                let satisfaction_weight = descriptor.max_weight_to_satisfy().unwrap();
-                self.params.utxos.push(WeightedUtxo {
-                    satisfaction_weight,
-                    utxo: Utxo::Local(utxo),
-                });
-            }
+        let utxos = outpoints
+            .iter()
+            .map(|outpoint| {
+                self.wallet
+                    .get_utxo(*outpoint)
+                    .or_else(|| {
+                        // allow selecting a spent output if we're bumping fee
+                        self.params
+                            .bumping_fee
+                            .and_then(|_| self.wallet.get_output(*outpoint))
+                    })
+                    .ok_or(AddUtxoError::UnknownUtxo(*outpoint))
+            })
+            .collect::<Result<Vec<_>, _>>()?;
+
+        for utxo in utxos {
+            let descriptor = self.wallet.public_descriptor(utxo.keychain);
+            let satisfaction_weight = descriptor
+                .max_weight_to_satisfy()
+                .expect("descriptor should be satisfiable");
+            self.params.utxos.push(WeightedUtxo {
+                satisfaction_weight,
+                utxo: Utxo::Local(utxo),
+            });
         }
 
         Ok(self)
@@ -306,6 +311,120 @@ impl<'a, Cs> TxBuilder<'a, Cs> {
         self.add_utxos(&[outpoint])
     }
 
+    /// Replace an unconfirmed transaction.
+    ///
+    /// This method attempts to create a replacement for the transaction with `txid` by
+    /// looking for the largest input that is owned by this wallet and adding it to the
+    /// list of UTXOs to spend.
+    ///
+    /// # Note
+    ///
+    /// Aside from reusing one of the inputs, the method makes no assumptions about the
+    /// structure of the replacement, so if you need to reuse the original recipient(s)
+    /// and/or change address, you should add them manually before [`finish`] is called.
+    ///
+    /// # Example
+    ///
+    /// Create a replacement for an unconfirmed wallet transaction
+    ///
+    /// ```rust,no_run
+    /// # let mut wallet = bdk_wallet::doctest_wallet!();
+    /// let wallet_txs = wallet.transactions().collect::<Vec<_>>();
+    /// let tx = wallet_txs.first().expect("must have wallet tx");
+    ///
+    /// if !tx.chain_position.is_confirmed() {
+    ///     let txid = tx.tx_node.txid;
+    ///     let mut builder = wallet.build_tx();
+    ///     builder.replace_tx(txid).expect("should replace");
+    ///
+    ///     // Continue building tx...
+    ///
+    ///     let psbt = builder.finish()?;
+    /// }
+    /// # Ok::<_, anyhow::Error>(())
+    /// ```
+    ///
+    /// # Errors
+    ///
+    /// - If the original transaction is not found in the tx graph
+    /// - If the orginal transaction is confirmed
+    /// - If none of the inputs are owned by this wallet
+    ///
+    /// [`finish`]: TxBuilder::finish
+    pub fn replace_tx(&mut self, txid: Txid) -> Result<&mut Self, ReplaceTxError> {
+        let tx = self
+            .wallet
+            .indexed_graph
+            .graph()
+            .get_tx(txid)
+            .ok_or(ReplaceTxError::MissingTransaction)?;
+        if self
+            .wallet
+            .transactions()
+            .find(|c| c.tx_node.txid == txid)
+            .map(|c| c.chain_position.is_confirmed())
+            .unwrap_or(false)
+        {
+            return Err(ReplaceTxError::TransactionConfirmed);
+        }
+        let outpoint = tx
+            .input
+            .iter()
+            .filter_map(|txin| {
+                let prev_tx = self
+                    .wallet
+                    .indexed_graph
+                    .graph()
+                    .get_tx(txin.previous_output.txid)?;
+                let txout = &prev_tx.output[txin.previous_output.vout as usize];
+                if self.wallet.is_mine(txout.script_pubkey.clone()) {
+                    Some((txin.previous_output, txout.value))
+                } else {
+                    None
+                }
+            })
+            .max_by_key(|(_, value)| *value)
+            .map(|(op, _)| op)
+            .ok_or(ReplaceTxError::NonReplaceable)?;
+
+        // add previous fee
+        let absolute = self.wallet.calculate_fee(&tx).unwrap_or_default();
+        let rate = absolute / tx.weight();
+        self.params.bumping_fee = Some(PreviousFee { absolute, rate });
+
+        self.add_utxo(outpoint).expect("we must have the utxo");
+
+        // do not try to spend the outputs of the replaced tx including descendants
+        core::iter::once((txid, tx))
+            .chain(
+                self.wallet
+                    .tx_graph()
+                    .walk_descendants(txid, |_, descendant_txid| {
+                        let tx = self.wallet.tx_graph().get_tx(txid)?;
+                        Some((descendant_txid, tx))
+                    }),
+            )
+            .for_each(|(txid, tx)| {
+                self.params
+                    .unspendable
+                    .extend((0..tx.output.len()).map(|vout| OutPoint::new(txid, vout as u32)));
+            });
+
+        Ok(self)
+    }
+
+    /// Get the previous fee and feerate, i.e. the fee of the tx being fee-bumped, if any.
+    ///
+    /// This method may be used in combination with either [`build_fee_bump`] or [`replace_tx`]
+    /// and is useful for deciding what fee to attach to a transaction for the purpose of
+    /// "replace-by-fee" (RBF).
+    ///
+    /// [`build_fee_bump`]: Wallet::build_fee_bump
+    /// [`replace_tx`]: Self::replace_tx
+    pub fn previous_fee(&self) -> Option<(Amount, FeeRate)> {
+        self.params.bumping_fee.map(|p| (p.absolute, p.rate))
+    }
+
     /// Add a foreign UTXO i.e. a UTXO not owned by this wallet.
     ///
     /// At a minimum to add a foreign UTXO we need:
@@ -697,6 +816,30 @@ impl fmt::Display for AddUtxoError {
 #[cfg(feature = "std")]
 impl std::error::Error for AddUtxoError {}
 
+/// Error returned by [`TxBuilder::replace_tx`].
+#[derive(Debug)]
+pub enum ReplaceTxError {
+    /// Transaction was not found in tx graph
+    MissingTransaction,
+    /// Transaction can't be replaced by this wallet
+    NonReplaceable,
+    /// Transaction is already confirmed
+    TransactionConfirmed,
+}
+
+impl fmt::Display for ReplaceTxError {
+    fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
+        match self {
+            Self::MissingTransaction => write!(f, "transaction not found in tx graph"),
+            Self::NonReplaceable => write!(f, "no replaceable input found"),
+            Self::TransactionConfirmed => write!(f, "cannot replace a confirmed tx"),
+        }
+    }
+}
+
+#[cfg(feature = "std")]
+impl std::error::Error for ReplaceTxError {}
+
 #[derive(Debug)]
 /// Error returned from [`TxBuilder::add_foreign_utxo`].
 pub enum AddForeignUtxoError {
@@ -833,6 +976,7 @@ mod test {
         };
     }
 
+    use crate::test_utils::*;
     use bitcoin::consensus::deserialize;
     use bitcoin::hex::FromHex;
     use bitcoin::TxOut;
@@ -1052,4 +1196,135 @@ mod test {
         assert_eq!(filtered.len(), 1);
         assert_eq!(filtered[0].keychain, KeychainKind::Internal);
     }
+
+    #[test]
+    fn replace_tx_allows_selecting_spent_outputs() {
+        let (mut wallet, txid_0) = get_funded_wallet_wpkh();
+        let outpoint_1 = OutPoint::new(txid_0, 0);
+
+        // receive output 2
+        let outpoint_2 = receive_output_in_latest_block(&mut wallet, 49_000);
+        assert_eq!(wallet.list_unspent().count(), 2);
+        assert_eq!(wallet.balance().total().to_sat(), 99_000);
+
+        // create tx1: 2-in/1-out sending all to `recip`
+        let recip = ScriptBuf::from_hex("0014446906a6560d8ad760db3156706e72e171f3a2aa").unwrap();
+        let mut builder = wallet.build_tx();
+        builder.add_recipient(recip.clone(), Amount::from_sat(98_800));
+        let psbt = builder.finish().unwrap();
+        let tx1 = psbt.unsigned_tx;
+        let txid1 = tx1.compute_txid();
+        insert_tx(&mut wallet, tx1);
+        assert!(wallet.list_unspent().next().is_none());
+
+        // now replace tx1 with a new transaction
+        let mut builder = wallet.build_tx();
+        builder.replace_tx(txid1).expect("should replace input");
+        let prev_feerate = builder.previous_fee().unwrap().1;
+        builder.add_recipient(recip, Amount::from_sat(98_500));
+        builder.fee_rate(FeeRate::from_sat_per_kwu(
+            prev_feerate.to_sat_per_kwu() + 250,
+        ));
+
+        // Because outpoint 2 was spent in tx1, by default it won't be available for selection,
+        // but we can add it manually, with the caveat that the builder is in a bump-fee
+        // context.
+        builder.add_utxo(outpoint_2).expect("should add output");
+        let psbt = builder.finish().unwrap();
+
+        assert!(psbt
+            .unsigned_tx
+            .input
+            .iter()
+            .any(|txin| txin.previous_output == outpoint_1));
+        assert!(psbt
+            .unsigned_tx
+            .input
+            .iter()
+            .any(|txin| txin.previous_output == outpoint_2));
+    }
+
+    #[test]
+    fn test_replace_tx_unspendable_with_descendants() {
+        use crate::KeychainKind::External;
+
+        // Replacing a tx should mark the original txouts unspendable
+
+        let (mut wallet, txid_0) = get_funded_wallet_wpkh();
+        let outpoint_0 = OutPoint::new(txid_0, 0);
+        let balance = wallet.balance().total();
+        let fee = Amount::from_sat(256);
+
+        let mut previous_output = outpoint_0;
+
+        // apply 3 unconfirmed txs to wallet
+        for i in 1..=3 {
+            let tx = Transaction {
+                input: vec![TxIn {
+                    previous_output,
+                    ..Default::default()
+                }],
+                output: vec![TxOut {
+                    script_pubkey: wallet.reveal_next_address(External).script_pubkey(),
+                    value: balance - fee * i as u64,
+                }],
+                ..new_tx(i)
+            };
+
+            let txid = tx.compute_txid();
+            insert_tx(&mut wallet, tx);
+            previous_output = OutPoint::new(txid, 0);
+        }
+
+        let unconfirmed_txs: Vec<_> = wallet
+            .transactions()
+            .filter(|c| !c.chain_position.is_confirmed())
+            .collect();
+        let txid_1 = unconfirmed_txs
+            .iter()
+            .find(|c| c.tx_node.input[0].previous_output == outpoint_0)
+            .map(|c| c.tx_node.txid)
+            .unwrap();
+        let unconfirmed_txids: Vec<_> = unconfirmed_txs.iter().map(|c| c.tx_node.txid).collect();
+        assert_eq!(unconfirmed_txids.len(), 3);
+
+        // replace tx1
+        let mut builder = wallet.build_tx();
+        builder.replace_tx(txid_1).unwrap();
+        assert_eq!(
+            builder.params.utxos.first().unwrap().utxo.outpoint(),
+            outpoint_0
+        );
+        for txid in unconfirmed_txids {
+            assert!(builder.params.unspendable.contains(&OutPoint::new(txid, 0)));
+        }
+    }
+
+    #[test]
+    fn test_replace_tx_error() {
+        use bitcoin::hashes::Hash;
+        let (mut wallet, txid_0) = get_funded_wallet_wpkh();
+
+        // tx does not exist
+        let mut builder = wallet.build_tx();
+        let res = builder.replace_tx(Txid::all_zeros());
+        assert!(matches!(res, Err(ReplaceTxError::MissingTransaction)));
+
+        // tx confirmed
+        let mut builder = wallet.build_tx();
+        let res = builder.replace_tx(txid_0);
+        assert!(matches!(res, Err(ReplaceTxError::TransactionConfirmed)));
+
+        // can't replace a foreign tx
+        let tx = Transaction {
+            input: vec![TxIn::default()],
+            output: vec![TxOut::NULL],
+            ..new_tx(0)
+        };
+        let txid = tx.compute_txid();
+        insert_tx(&mut wallet, tx);
+        let mut builder = wallet.build_tx();
+        let res = builder.replace_tx(txid);
+        assert!(matches!(res, Err(ReplaceTxError::NonReplaceable)));
+    }
 }