diff --git a/functional/tests/compute/v2/test_security_group_rule.py b/functional/tests/compute/v2/test_security_group_rule.py
new file mode 100644
index 000000000..e864b08f6
--- /dev/null
+++ b/functional/tests/compute/v2/test_security_group_rule.py
@@ -0,0 +1,59 @@
+#    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.
+
+import uuid
+
+from functional.common import test
+
+
+class SecurityGroupRuleTests(test.TestCase):
+    """Functional tests for security group rule. """
+    SECURITY_GROUP_NAME = uuid.uuid4().hex
+    SECURITY_GROUP_RULE_ID = None
+    NAME_FIELD = ['name']
+    ID_FIELD = ['id']
+    ID_HEADER = ['ID']
+
+    @classmethod
+    def setUpClass(cls):
+        # Create the security group to hold the rule.
+        opts = cls.get_show_opts(cls.NAME_FIELD)
+        raw_output = cls.openstack('security group create ' +
+                                   cls.SECURITY_GROUP_NAME +
+                                   opts)
+        expected = cls.SECURITY_GROUP_NAME + '\n'
+        cls.assertOutput(expected, raw_output)
+
+        # Create the security group rule.
+        opts = cls.get_show_opts(cls.ID_FIELD)
+        raw_output = cls.openstack('security group rule create ' +
+                                   cls.SECURITY_GROUP_NAME +
+                                   ' --proto tcp --dst-port 80:80' +
+                                   opts)
+        cls.SECURITY_GROUP_RULE_ID = raw_output.strip('\n')
+
+    @classmethod
+    def tearDownClass(cls):
+        raw_output = cls.openstack('security group rule delete ' +
+                                   cls.SECURITY_GROUP_RULE_ID)
+        cls.assertOutput('', raw_output)
+
+        raw_output = cls.openstack('security group delete ' +
+                                   cls.SECURITY_GROUP_NAME)
+        cls.assertOutput('', raw_output)
+
+    def test_security_group_rule_list(self):
+        opts = self.get_list_opts(self.ID_HEADER)
+        raw_output = self.openstack('security group rule list ' +
+                                    self.SECURITY_GROUP_NAME +
+                                    opts)
+        self.assertIn(self.SECURITY_GROUP_RULE_ID, raw_output)