diff --git a/nova/conductor/tasks/live_migrate.py b/nova/conductor/tasks/live_migrate.py
index 52383acd736b..0234b6b9ad04 100644
--- a/nova/conductor/tasks/live_migrate.py
+++ b/nova/conductor/tasks/live_migrate.py
@@ -14,6 +14,7 @@ from oslo_log import log as logging
 import oslo_messaging as messaging
 import six
 
+from nova import availability_zones
 from nova.compute import power_state
 from nova.conductor.tasks import base
 from nova.conductor.tasks import migrate
@@ -99,6 +100,10 @@ class LiveMigrationTask(base.TaskBase):
             # node name off it to set in the Migration object below.
             dest_node = dest_node.hypervisor_hostname
 
+        self.instance.availability_zone = (
+            availability_zones.get_host_availability_zone(
+                self.context, self.destination))
+
         self.migration.source_node = self.instance.node
         self.migration.dest_node = dest_node
         self.migration.dest_compute = self.destination
diff --git a/nova/tests/functional/test_availability_zones.py b/nova/tests/functional/test_availability_zones.py
new file mode 100644
index 000000000000..0db39942d7b7
--- /dev/null
+++ b/nova/tests/functional/test_availability_zones.py
@@ -0,0 +1,131 @@
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#    http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+from nova import context
+from nova import objects
+from nova import test
+from nova.tests import fixtures as nova_fixtures
+from nova.tests.functional import integrated_helpers
+from nova.tests.unit.image import fake as fake_image
+from nova.tests.unit import policy_fixture
+from nova.virt import fake
+
+
+class TestAvailabilityZoneScheduling(
+        test.TestCase, integrated_helpers.InstanceHelperMixin):
+
+    def setUp(self):
+        super(TestAvailabilityZoneScheduling, self).setUp()
+
+        self.useFixture(policy_fixture.RealPolicyFixture())
+        self.useFixture(nova_fixtures.NeutronFixture(self))
+        self.useFixture(nova_fixtures.PlacementFixture())
+
+        api_fixture = self.useFixture(nova_fixtures.OSAPIFixture(
+            api_version='v2.1'))
+
+        self.api = api_fixture.admin_api
+        self.api.microversion = 'latest'
+
+        fake_image.stub_out_image_service(self)
+        self.addCleanup(fake_image.FakeImageService_reset)
+
+        self.start_service('conductor')
+        self.start_service('scheduler')
+
+    def _start_host_in_zone(self, host, zone):
+        # Start the nova-compute service.
+        fake.set_nodes([host])
+        self.addCleanup(fake.restore_nodes)
+        self.start_service('compute', host=host)
+        # Create a host aggregate with a zone in which to put this host.
+        aggregate_body = {
+            "aggregate": {
+                "name": zone,
+                "availability_zone": zone
+            }
+        }
+        aggregate = self.api.api_post(
+            '/os-aggregates', aggregate_body).body['aggregate']
+        # Now add the compute host to the aggregate.
+        add_host_body = {
+            "add_host": {
+                "host": host
+            }
+        }
+        self.api.api_post(
+            '/os-aggregates/%s/action' % aggregate['id'], add_host_body)
+
+    def test_live_migrate_implicit_az(self):
+        """Tests live migration of an instance with an implicit AZ.
+
+        Before Pike, a server created without an explicit availability zone
+        was assigned a default AZ based on the "default_schedule_zone" config
+        option which defaults to None, which allows the instance to move
+        freely between availability zones.
+
+        With change I8d426f2635232ffc4b510548a905794ca88d7f99 in Pike, if the
+        user does not request an availability zone, the
+        instance.availability_zone field is set based on the host chosen by
+        the scheduler. The default AZ for all nova-compute services is
+        determined by the "default_availability_zone" config option which
+        defaults to "nova".
+
+        This test creates two nova-compute services in separate zones, creates
+        a server without specifying an explicit zone, and then tries to live
+        migrate the instance to the other compute which should succeed because
+        the request spec does not include an explicit AZ, so the instance is
+        still not restricted to its current zone even if it says it is in one.
+        """
+        # Start two compute services in separate zones.
+        self._start_host_in_zone('host1', 'zone1')
+        self._start_host_in_zone('host2', 'zone2')
+
+        # Create a server, it doesn't matter which host it ends up in.
+        server_body = self._build_minimal_create_server_request(
+            self.api, 'test_live_migrate_implicit_az_restriction',
+            image_uuid=fake_image.get_valid_image_id(),
+            networks='none')
+        server = self.api.post_server({'server': server_body})
+        server = self._wait_for_state_change(self.api, server, 'ACTIVE')
+        original_host = server['OS-EXT-SRV-ATTR:host']
+        # Assert the server has the AZ set (not None or 'nova').
+        expected_zone = 'zone1' if original_host == 'host1' else 'zone2'
+        self.assertEqual(expected_zone, server['OS-EXT-AZ:availability_zone'])
+
+        # Attempt to live migrate the instance; again, we don't specify a host
+        # because there are only two hosts so the scheduler would only be able
+        # to pick the second host which is in a different zone.
+        live_migrate_req = {
+            'os-migrateLive': {
+                'block_migration': 'auto',
+                'host': None
+            }
+        }
+        self.api.post_server_action(server['id'], live_migrate_req)
+
+        # Poll the migration until it is done.
+        migration = self._wait_for_migration_status(server, ['completed'])
+        self.assertEqual('live-migration', migration['migration_type'])
+
+        # Assert that the server did move. Note that we check both the API and
+        # the database because the API will return the AZ from the host
+        # aggregate if instance.host is not None.
+        server = self.api.get_server(server['id'])
+        expected_zone = 'zone2' if original_host == 'host1' else 'zone1'
+        self.assertEqual(expected_zone, server['OS-EXT-AZ:availability_zone'])
+
+        ctxt = context.get_admin_context()
+        with context.target_cell(
+                ctxt, self.cell_mappings[test.CELL1_NAME]) as cctxt:
+            instance = objects.Instance.get_by_uuid(cctxt, server['id'])
+            self.assertEqual(expected_zone, instance.availability_zone)
diff --git a/nova/tests/unit/conductor/tasks/test_live_migrate.py b/nova/tests/unit/conductor/tasks/test_live_migrate.py
index b65f5c20f182..fd8ec25a01c7 100644
--- a/nova/tests/unit/conductor/tasks/test_live_migrate.py
+++ b/nova/tests/unit/conductor/tasks/test_live_migrate.py
@@ -66,7 +66,9 @@ class LiveMigrationTaskTestCase(test.NoDBTestCase):
             servicegroup.API(), scheduler_client.SchedulerClient(),
             self.fake_spec)
 
-    def test_execute_with_destination(self, new_mode=True):
+    @mock.patch('nova.availability_zones.get_host_availability_zone',
+                return_value='fake-az')
+    def test_execute_with_destination(self, mock_get_az, new_mode=True):
         dest_node = objects.ComputeNode(hypervisor_hostname='dest_node')
         with test.nested(
             mock.patch.object(self.task, '_check_host_is_up'),
@@ -107,6 +109,8 @@ class LiveMigrationTaskTestCase(test.NoDBTestCase):
                 migration=self.migration,
                 migrate_data=None)
             self.assertTrue(mock_save.called)
+            mock_get_az.assert_called_once_with(self.context, self.destination)
+            self.assertEqual('fake-az', self.instance.availability_zone)
             # make sure the source/dest fields were set on the migration object
             self.assertEqual(self.instance.node, self.migration.source_node)
             self.assertEqual(dest_node.hypervisor_hostname,
@@ -123,7 +127,9 @@ class LiveMigrationTaskTestCase(test.NoDBTestCase):
     def test_execute_with_destination_old_school(self):
         self.test_execute_with_destination(new_mode=False)
 
-    def test_execute_without_destination(self):
+    @mock.patch('nova.availability_zones.get_host_availability_zone',
+                return_value='nova')
+    def test_execute_without_destination(self, mock_get_az):
         self.destination = None
         self._generate_task()
         self.assertIsNone(self.task.destination)
@@ -155,6 +161,7 @@ class LiveMigrationTaskTestCase(test.NoDBTestCase):
                 migration=self.migration,
                 migrate_data=None)
             self.assertTrue(mock_save.called)
+            mock_get_az.assert_called_once_with(self.context, 'found_host')
             self.assertEqual('found_host', self.migration.dest_compute)
             self.assertEqual('found_node', self.migration.dest_node)
             self.assertEqual(self.instance.node, self.migration.source_node)