diff --git a/src/bin/grin.rs b/src/bin/grin.rs
index 1de36cc74..6dd180e84 100644
--- a/src/bin/grin.rs
+++ b/src/bin/grin.rs
@@ -209,6 +209,13 @@ fn main() {
 				.long("min_conf")
 				.default_value("1")
 				.takes_value(true))
+			.arg(Arg::with_name("selection_strategy")
+				.help("Coin/Output selection strategy.")
+				.short("s")
+				.long("selection")
+				.possible_values(&["default", "smallest"])
+				.default_value("default")
+				.takes_value(true))
 			.arg(Arg::with_name("dest")
 				.help("Send the transaction to the provided server")
 				.short("d")
@@ -397,9 +404,12 @@ fn wallet_command(wallet_args: &ArgMatches) {
 				.expect("Could not parse amount as a number with optional decimal point.");
 			let minimum_confirmations: u64 = send_args
 				.value_of("minimum_confirmations")
-				.unwrap_or("1")
+				.unwrap()
 				.parse()
 				.expect("Could not parse minimum_confirmations as a whole number.");
+			let selection_strategy = send_args
+				.value_of("selection_strategy")
+				.expect("Selection strategy required");
 			let mut dest = "stdout";
 			if let Some(d) = send_args.value_of("dest") {
 				dest = d;
@@ -410,6 +420,7 @@ fn wallet_command(wallet_args: &ArgMatches) {
 				amount,
 				minimum_confirmations,
 				dest.to_string(),
+				(selection_strategy == "default"),
 			);
 			match result {
 				Ok(_) => {}, //success messaged logged internally
@@ -425,7 +436,7 @@ fn wallet_command(wallet_args: &ArgMatches) {
 				.expect("Could not parse amount as number with optional decimal point.");
 			let minimum_confirmations: u64 = send_args
 				.value_of("minimum_confirmations")
-				.unwrap_or("1")
+				.unwrap()
 				.parse()
 				.expect("Could not parse minimum_confirmations as a whole number.");
 			wallet::issue_burn_tx(&wallet_config, &keychain, amount, minimum_confirmations)
diff --git a/wallet/src/sender.rs b/wallet/src/sender.rs
index a583a3a4f..7f249a33b 100644
--- a/wallet/src/sender.rs
+++ b/wallet/src/sender.rs
@@ -36,6 +36,7 @@ pub fn issue_send_tx(
 	amount: u64,
 	minimum_confirmations: u64,
 	dest: String,
+	selection_strategy: bool,
 ) -> Result<(), Error> {
 	checker::refresh_outputs(config, keychain)?;
 
@@ -52,6 +53,7 @@ pub fn issue_send_tx(
 		current_height,
 		minimum_confirmations,
 		lock_height,
+		selection_strategy,
 	)?;
 
 	let partial_tx = build_partial_tx(amount, blind_sum, tx);
@@ -79,12 +81,19 @@ fn build_send_tx(
 	current_height: u64,
 	minimum_confirmations: u64,
 	lock_height: u64,
+	default_strategy: bool,
 ) -> Result<(Transaction, BlindingFactor), Error> {
 	let key_id = keychain.clone().root_key_id();
 
 	// select some spendable coins from the wallet
 	let coins = WalletData::read_wallet(&config.data_file_dir, |wallet_data| {
-		wallet_data.select(key_id.clone(), current_height, minimum_confirmations)
+		wallet_data.select(
+			key_id.clone(),
+			amount,
+			current_height,
+			minimum_confirmations,
+			default_strategy,
+		)
 	})?;
 
 	// build transaction skeleton with inputs and change
@@ -124,9 +133,11 @@ pub fn issue_burn_tx(
 
 	// select some spendable coins from the wallet
 	let coins = WalletData::read_wallet(&config.data_file_dir, |wallet_data| {
-		wallet_data.select(key_id.clone(), current_height, minimum_confirmations)
+		wallet_data.select(key_id.clone(), amount, current_height, minimum_confirmations, false)
 	})?;
 
+	debug!(LOGGER, "selected some coins - {}", coins.len());
+
 	let mut parts = inputs_and_change(&coins, config, keychain, key_id, amount)?;
 
 	// add burn output and fees
diff --git a/wallet/src/types.rs b/wallet/src/types.rs
index 06fe6a7bc..145d5cc32 100644
--- a/wallet/src/types.rs
+++ b/wallet/src/types.rs
@@ -499,8 +499,67 @@ impl WalletData {
 		self.outputs.get(&key_id.to_hex())
 	}
 
-	/// Select spendable coins from the wallet
+	/// Select spendable coins from the wallet.
+	/// Default strategy is "aggressive".
+	/// Non-default strategy is "smallest_first".
+	/// When we introduce additional strategies we should pass something other than a bool in.
 	pub fn select(
+		&self,
+		root_key_id: keychain::Identifier,
+		amount: u64,
+		current_height: u64,
+		minimum_confirmations: u64,
+		default_strategy: bool,
+	) -> Vec<OutputData> {
+		if default_strategy {
+			self.select_aggressive(
+				root_key_id,
+				current_height,
+				minimum_confirmations,
+			)
+		} else {
+			self.select_smallest_first(
+				root_key_id,
+				amount,
+				current_height,
+				minimum_confirmations,
+			)
+		}
+	}
+
+	// Selects the smallest number of outputs after ordering them by value.
+	// Reduces "dust" but leaves larger outputs unspent if possible.
+	fn select_smallest_first(
+		&self,
+		root_key_id: keychain::Identifier,
+		amount: u64,
+		current_height: u64,
+		minimum_confirmations: u64,
+	) -> Vec<OutputData> {
+		let mut eligible = self.outputs
+			.values()
+			.filter(|out| {
+				out.root_key_id == root_key_id
+					&& out.eligible_to_spend(current_height, minimum_confirmations)
+			})
+			.cloned()
+			.collect::<Vec<OutputData>>();
+
+		eligible.sort_by_key(|out| out.value);
+
+		let mut total_amount = 0;
+		eligible.iter()
+			.take_while(|out| {
+				let res = total_amount < amount;
+				total_amount += out.value;
+				res
+			})
+			.cloned()
+			.collect::<Vec<_>>()
+	}
+
+	// Selects all eligible outputs to spend to reduce UTXO set as much as possible (the default).
+	fn select_aggressive(
 		&self,
 		root_key_id: keychain::Identifier,
 		current_height: u64,
@@ -512,7 +571,7 @@ impl WalletData {
 				out.root_key_id == root_key_id
 					&& out.eligible_to_spend(current_height, minimum_confirmations)
 			})
-			.map(|out| out.clone())
+			.cloned()
 			.collect()
 	}