diff --git a/physical/postgresql/postgresql_test.go b/physical/postgresql/postgresql_test.go
index 1341533d19..ffa44fa50e 100644
--- a/physical/postgresql/postgresql_test.go
+++ b/physical/postgresql/postgresql_test.go
@@ -1,6 +1,7 @@
 package postgresql
 
 import (
+	"fmt"
 	"os"
 	"testing"
 
@@ -9,12 +10,18 @@ import (
 	"github.com/hashicorp/vault/physical"
 
 	_ "github.com/lib/pq"
+	"github.com/ory/dockertest"
 )
 
 func TestPostgreSQLBackend(t *testing.T) {
+	logger := logging.NewVaultLogger(log.Debug)
+
+	// Use docker as pg backend if no url is provided via environment variables
+	var cleanup func()
 	connURL := os.Getenv("PGURL")
 	if connURL == "" {
-		t.SkipNow()
+		cleanup, connURL = prepareTestContainer(t, logger)
+		defer cleanup()
 	}
 
 	table := os.Getenv("PGTABLE")
@@ -22,8 +29,7 @@ func TestPostgreSQLBackend(t *testing.T) {
 		table = "vault_kv_store"
 	}
 
-	// Run vault tests
-	logger := logging.NewVaultLogger(log.Debug)
+	logger.Info(fmt.Sprintf("Connection URL: %v", connURL))
 
 	b, err := NewPostgreSQLBackend(map[string]string{
 		"connection_url": connURL,
@@ -32,15 +38,89 @@ func TestPostgreSQLBackend(t *testing.T) {
 	if err != nil {
 		t.Fatalf("Failed to create new backend: %v", err)
 	}
+	pg := b.(*PostgreSQLBackend)
+
+	//Read postgres version to test basic connects works
+	var pgversion string
+	if err = pg.client.QueryRow("SELECT current_setting('server_version_num')").Scan(&pgversion); err != nil {
+		t.Fatalf("Failed to check for Postgres version: %v", err)
+	}
+	logger.Info(fmt.Sprintf("Postgres Version: %v", pgversion))
+
+	//Setup tables and indexes if not exists.
+	createTableSQL := fmt.Sprintf(
+		"  CREATE TABLE IF NOT EXISTS %v ( "+
+			"  parent_path TEXT COLLATE \"C\" NOT NULL, "+
+			"  path        TEXT COLLATE \"C\", "+
+			"  key         TEXT COLLATE \"C\", "+
+			"  value       BYTEA, "+
+			"  CONSTRAINT pkey PRIMARY KEY (path, key) "+
+			" ); ", table)
+
+	_, err = pg.client.Exec(createTableSQL)
+	if err != nil {
+		t.Fatalf("Failed to create table: %v", err)
+	}
+
+	createIndexSQL := fmt.Sprintf(" CREATE INDEX IF NOT EXISTS parent_path_idx ON %v (parent_path); ", table)
+
+	_, err = pg.client.Exec(createIndexSQL)
+	if err != nil {
+		t.Fatalf("Failed to create index: %v", err)
+	}
 
 	defer func() {
 		pg := b.(*PostgreSQLBackend)
-		_, err := pg.client.Exec("TRUNCATE TABLE " + pg.table)
+		_, err := pg.client.Exec(fmt.Sprintf(" TRUNCATE TABLE %v ", pg.table))
 		if err != nil {
-			t.Fatalf("Failed to drop table: %v", err)
+			t.Fatalf("Failed to truncate table: %v", err)
 		}
 	}()
 
 	physical.ExerciseBackend(t, b)
 	physical.ExerciseBackend_ListPrefix(t, b)
 }
+
+func prepareTestContainer(t *testing.T, logger log.Logger) (cleanup func(), retConnString string) {
+	// If environment variable is set, use this connectionstring without starting docker container
+	if os.Getenv("PGURL") != "" {
+		return func() {}, os.Getenv("PGURL")
+	}
+
+	pool, err := dockertest.NewPool("")
+	if err != nil {
+		t.Fatalf("Failed to connect to docker: %s", err)
+	}
+	//using 11.1 which is currently latest, use hard version for stabillity of tests
+	resource, err := pool.Run("postgres", "11.1", []string{})
+	if err != nil {
+		t.Fatalf("Could not start docker Postgres: %s", err)
+	}
+
+	retConnString = fmt.Sprintf("postgres://postgres@localhost:%v/postgres?sslmode=disable", resource.GetPort("5432/tcp"))
+
+	cleanup = func() {
+		err := pool.Purge(resource)
+		if err != nil {
+			t.Fatalf("Failed to cleanup docker Postgres: %s", err)
+		}
+	}
+
+	// Provide a test function to the pool to test if docker instance service is up.
+	// We try to setup a pg backend as test for successful connect
+	// exponential backoff-retry, because the dockerinstance may not be able to accept
+	// connections yet, test by trying to setup a postgres backend, max-timeout is 60s
+	if err := pool.Retry(func() error {
+		var err error
+		_, err = NewPostgreSQLBackend(map[string]string{
+			"connection_url": retConnString,
+		}, logger)
+		return err
+
+	}); err != nil {
+		cleanup()
+		t.Fatalf("Could not connect to docker: %s", err)
+	}
+
+	return cleanup, retConnString
+}