diff --git a/tests/xfs/163 b/tests/xfs/163
new file mode 100755
index 00000000..b4aec2a5
--- /dev/null
+++ b/tests/xfs/163
@@ -0,0 +1,73 @@
+#! /bin/bash
+# SPDX-License-Identifier: GPL-2.0
+# Copyright (c) 2021 Red Hat, Inc.  All Rights Reserved.
+#
+# FS QA Test No. 163
+#
+# XFS shrinkfs basic functionality test
+#
+# This test attempts to shrink with a small size (512K), half AG size and
+# an out-of-bound size (agsize + 1) to observe if it works as expected.
+#
+seq=`basename $0`
+seqres=$RESULT_DIR/$seq
+echo "QA output created by $seq"
+
+here=`pwd`
+tmp=/tmp/$$
+status=1    # failure is the default!
+trap "rm -f $tmp.*; exit \$status" 0 1 2 3 15
+
+# get standard environment, filters and checks
+. ./common/rc
+. ./common/filter
+
+test_shrink()
+{
+	$XFS_GROWFS_PROG -D"$1" $SCRATCH_MNT >> $seqres.full 2>&1
+	ret=$?
+
+	_scratch_unmount
+	_check_scratch_fs
+	_scratch_mount
+
+	$XFS_INFO_PROG $SCRATCH_MNT 2>&1 | _filter_mkfs 2>$tmp.growfs >/dev/null
+	. $tmp.growfs
+	[ $ret -eq 0 -a $1 -eq $dblocks ]
+}
+
+# real QA test starts here
+_supported_fs xfs
+_require_scratch_xfs_shrink
+
+rm -f $seqres.full
+echo "Format and mount"
+
+# agcount = 1 is forbidden on purpose, and need to ensure shrinking to
+# 2 AGs isn't feasible yet. So agcount = 3 is the minimum number now.
+_scratch_mkfs -dsize="$((512 * 1024 * 1024))" -dagcount=3 2>&1 | \
+	tee -a $seqres.full | _filter_mkfs 2>$tmp.mkfs >/dev/null
+. $tmp.mkfs
+t_dblocks=$dblocks
+_scratch_mount >> $seqres.full
+
+echo "Shrink fs (small size)"
+test_shrink $((t_dblocks-512*1024/dbsize)) || \
+	echo "Shrink fs (small size) failure"
+
+echo "Shrink fs (half AG)"
+test_shrink $((t_dblocks-agsize/2)) || \
+	echo "Shrink fs (half AG) failure"
+
+echo "Shrink fs (out-of-bound)"
+test_shrink $((t_dblocks-agsize-1)) && \
+	echo "Shrink fs (out-of-bound) failure"
+[ $dblocks -ne $((t_dblocks-agsize/2)) ] && \
+	echo "dblocks changed after shrinking failure"
+
+$XFS_INFO_PROG $SCRATCH_MNT >> $seqres.full
+echo "*** done"
+
+# success, all done
+status=0
+exit
diff --git a/tests/xfs/163.out b/tests/xfs/163.out
new file mode 100644
index 00000000..bd66d4a9
--- /dev/null
+++ b/tests/xfs/163.out
@@ -0,0 +1,6 @@
+QA output created by 163
+Format and mount
+Shrink fs (small size)
+Shrink fs (half AG)
+Shrink fs (out-of-bound)
+*** done
diff --git a/tests/xfs/group b/tests/xfs/group
index 6fa4b660..a27f7773 100644
--- a/tests/xfs/group
+++ b/tests/xfs/group
@@ -160,6 +160,7 @@
 160 auto quick bigtime
 161 auto quick bigtime quota
 162 auto quick attr repair
+163 auto quick growfs shrinkfs
 164 rw pattern auto prealloc quick
 165 rw pattern auto prealloc quick
 166 rw metadata auto quick