diff --git a/x/txfees/module_test.go b/x/txfees/module_test.go
index 1e33838057b..250ef732131 100644
--- a/x/txfees/module_test.go
+++ b/x/txfees/module_test.go
@@ -3,16 +3,19 @@ package txfees_test
 import (
 	"encoding/json"
 	"testing"
+	"time"
 
 	abci "github.com/cometbft/cometbft/abci/types"
 	abcitypes "github.com/cometbft/cometbft/abci/types"
 	tmproto "github.com/cometbft/cometbft/proto/tendermint/types"
 	"github.com/cosmos/cosmos-sdk/testutil/sims"
+	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/stretchr/testify/require"
 
 	osmosisapp "github.com/osmosis-labs/osmosis/v21/app"
 
 	simapp "github.com/osmosis-labs/osmosis/v21/app"
+	mempool1559 "github.com/osmosis-labs/osmosis/v21/x/txfees/keeper/mempool-1559"
 )
 
 func TestSetBaseDenomOnInitBlock(t *testing.T) {
@@ -38,3 +41,61 @@ func TestSetBaseDenomOnInitBlock(t *testing.T) {
 	require.Nil(t, err)
 	require.NotEmpty(t, baseDenom)
 }
+
+func TestBeginBlock(t *testing.T) {
+	app := simapp.Setup(false)
+	ctx := app.BaseApp.NewContext(false, tmproto.Header{ChainID: "osmosis-1", Height: 1})
+
+	genesisState := osmosisapp.GenesisStateWithValSet(app)
+	stateBytes, err := json.MarshalIndent(genesisState, "", " ")
+	if err != nil {
+		panic(err)
+	}
+
+	app.InitChain(
+		abcitypes.RequestInitChain{
+			Validators:      []abci.ValidatorUpdate{},
+			ConsensusParams: sims.DefaultConsensusParams,
+			AppStateBytes:   stateBytes,
+			ChainId:         "osmosis-1",
+		},
+	)
+
+	// Begin block hasn't happened yet, target gas should be equal to hard coded default value
+	hardCodedGasTarget := int64(75_000_000)
+	require.Equal(t, hardCodedGasTarget, mempool1559.TargetGas)
+
+	// Run begin block
+	ctx = RunBeginBlock(ctx, app)
+
+	// Target gas should be updated to the value set in InitChain
+	defaultBlockMaxGas := sims.DefaultConsensusParams.Block.MaxGas
+	require.Equal(t, defaultBlockMaxGas, mempool1559.TargetGas)
+
+	// Run begin block again, should not update target gas
+	ctx = RunBeginBlock(ctx, app)
+	require.Equal(t, defaultBlockMaxGas, mempool1559.TargetGas)
+
+	// Update the consensus params
+	newDefaultBlockMaxGas := int64(300_000_000)
+	newConsensusParams := *sims.DefaultConsensusParams
+	newConsensusParams.Block.MaxGas = newDefaultBlockMaxGas
+	app.ConsensusParamsKeeper.Set(ctx, &newConsensusParams)
+
+	// Ensure that the consensus params have not been updated yet
+	require.Equal(t, defaultBlockMaxGas, mempool1559.TargetGas)
+
+	// Run begin block again, should update target gas
+	RunBeginBlock(ctx, app)
+	require.Equal(t, newDefaultBlockMaxGas, mempool1559.TargetGas)
+}
+
+func RunBeginBlock(ctx sdk.Context, app *simapp.OsmosisApp) sdk.Context {
+	oldHeight := ctx.BlockHeight()
+	oldHeader := ctx.BlockHeader()
+	app.Commit()
+	newHeader := tmproto.Header{Height: oldHeight + 1, ChainID: oldHeader.ChainID, Time: oldHeader.Time.Add(time.Second)}
+	app.BeginBlock(abci.RequestBeginBlock{Header: newHeader})
+	ctx = app.GetBaseApp().NewContext(false, newHeader)
+	return ctx
+}