diff --git a/cmd/lncli/cmd_walletunlocker.go b/cmd/lncli/cmd_walletunlocker.go
index 7712cc095..2bc560482 100644
--- a/cmd/lncli/cmd_walletunlocker.go
+++ b/cmd/lncli/cmd_walletunlocker.go
@@ -10,8 +10,10 @@ import (
 	"strconv"
 	"strings"
 
+	"github.com/lightninglabs/protobuf-hex-display/jsonpb"
 	"github.com/lightningnetwork/lnd/lncfg"
 	"github.com/lightningnetwork/lnd/lnrpc"
+	"github.com/lightningnetwork/lnd/lnrpc/walletrpc"
 	"github.com/lightningnetwork/lnd/walletunlocker"
 	"github.com/urfave/cli"
 )
@@ -638,6 +640,129 @@ func changePassword(ctx *cli.Context) error {
 	return nil
 }
 
+var createWatchOnlyCommand = cli.Command{
+	Name:      "createwatchonly",
+	Category:  "Startup",
+	ArgsUsage: "accounts-json-file",
+	Usage: "Initialize a watch-only wallet after starting lnd for the " +
+		"first time.",
+	Description: `
+	The create command is used to initialize an lnd wallet from scratch for
+	the very first time, in watch-only mode. Watch-only means, there will be
+	no private keys in lnd's wallet. This is only useful in combination with
+	a remote signer or when lnd should be used as an on-chain wallet with
+	PSBT interaction only.
+
+	This is an interactive command that takes a JSON file as its first and
+	only argument. The JSON is in the same format as the output of the
+	'lncli wallet accounts list' command. This makes it easy to initialize
+	the remote signer with the seed, then export the extended public account
+	keys (xpubs) to import the watch-only wallet.
+
+	Example JSON (non-mandatory or ignored fields are omitted):
+	{
+	    "accounts": [
+		{
+		    "extended_public_key": "upub5Eep7....",
+		    "derivation_path": "m/49'/0'/0'"
+		},
+		{
+		    "extended_public_key": "vpub5ZU1PH...",
+		    "derivation_path": "m/84'/0'/0'"
+		},
+		{
+		    "extended_public_key": "tpubDDXFH...",
+		    "derivation_path": "m/1017'/1'/0'"
+		},
+	        ...
+		{
+		    "extended_public_key": "tpubDDXFH...",
+		    "derivation_path": "m/1017'/1'/9'"
+		}
+	   ]
+	}
+
+	There must be an account for each of the existing key families that lnd
+	uses internally (currently 0-9, see keychain/derivation.go).
+
+	Read the documentation under docs/remote-signing.md for more information
+	on how to set up a remote signing node over RPC.
+	`,
+	Action: actionDecorator(createWatchOnly),
+}
+
+func createWatchOnly(ctx *cli.Context) error {
+	ctxc := getContext()
+	client, cleanUp := getWalletUnlockerClient(ctx)
+	defer cleanUp()
+
+	if ctx.NArg() != 1 {
+		return cli.ShowCommandHelp(ctx, "createwatchonly")
+	}
+
+	jsonFile := lncfg.CleanAndExpandPath(ctx.Args().First())
+	jsonBytes, err := ioutil.ReadFile(jsonFile)
+	if err != nil {
+		return fmt.Errorf("error reading JSON from file %v: %v",
+			jsonFile, err)
+	}
+
+	jsonAccts := &walletrpc.ListAccountsResponse{}
+	err = jsonpb.Unmarshal(bytes.NewReader(jsonBytes), jsonAccts)
+	if err != nil {
+		return fmt.Errorf("error parsing JSON: %v", err)
+	}
+	if len(jsonAccts.Accounts) == 0 {
+		return fmt.Errorf("cannot import empty account list")
+	}
+
+	walletPassword, err := capturePassword(
+		"Input wallet password: ", false,
+		walletunlocker.ValidatePassword,
+	)
+	if err != nil {
+		return err
+	}
+
+	extendedRootKeyBirthday, err := askBirthdayTimestamp()
+	if err != nil {
+		return err
+	}
+
+	recoveryWindow, err := askRecoveryWindow()
+	if err != nil {
+		return err
+	}
+
+	rpcAccounts, err := walletrpc.AccountsToWatchOnly(jsonAccts.Accounts)
+	if err != nil {
+		return err
+	}
+
+	rpcResp := &lnrpc.WatchOnly{
+		MasterKeyBirthdayTimestamp: extendedRootKeyBirthday,
+		Accounts:                   rpcAccounts,
+	}
+
+	// We assume that all accounts were exported from the same master root
+	// key. So if one is set, we just forward that. If other accounts should
+	// be watched later on, they should be imported into the watch-only
+	// node, that then also forwards the import request to the remote
+	// signer.
+	for _, acct := range jsonAccts.Accounts {
+		if len(acct.MasterKeyFingerprint) > 0 {
+			rpcResp.MasterKeyFingerprint = acct.MasterKeyFingerprint
+		}
+	}
+
+	_, err = client.InitWallet(ctxc, &lnrpc.InitWalletRequest{
+		WalletPassword: walletPassword,
+		WatchOnly:      rpcResp,
+		RecoveryWindow: recoveryWindow,
+	})
+	return err
+}
+
 // storeOrPrintAdminMac either stores the admin macaroon to a file specified or
 // prints it to standard out, depending on the user flags set.
 func storeOrPrintAdminMac(ctx *cli.Context, adminMac []byte) error {
diff --git a/cmd/lncli/main.go b/cmd/lncli/main.go
index 808b5d7eb..28c3c9bb6 100644
--- a/cmd/lncli/main.go
+++ b/cmd/lncli/main.go
@@ -327,6 +327,7 @@ func main() {
 	}
 	app.Commands = []cli.Command{
 		createCommand,
+		createWatchOnlyCommand,
 		unlockCommand,
 		changePasswordCommand,
 		newAddressCommand,
diff --git a/lnrpc/walletrpc/walletkit_util.go b/lnrpc/walletrpc/walletkit_util.go
new file mode 100644
index 000000000..e840a9660
--- /dev/null
+++ b/lnrpc/walletrpc/walletkit_util.go
@@ -0,0 +1,76 @@
+package walletrpc
+
+import (
+	"fmt"
+	"strconv"
+	"strings"
+
+	"github.com/lightningnetwork/lnd/lnrpc"
+)
+
+// AccountsToWatchOnly converts the accounts returned by the walletkit's
+// ListAccounts RPC into a struct that can be used to create a watch-only
+// wallet.
+func AccountsToWatchOnly(exported []*Account) ([]*lnrpc.WatchOnlyAccount,
+	error) {
+
+	result := make([]*lnrpc.WatchOnlyAccount, len(exported))
+	for idx, acct := range exported {
+		parsedPath, err := parseDerivationPath(acct.DerivationPath)
+		if err != nil {
+			return nil, fmt.Errorf("error parsing derivation path "+
+				"of account %d: %v", idx, err)
+		}
+		if len(parsedPath) < 3 {
+			return nil, fmt.Errorf("derivation path of account %d "+
+				"has invalid derivation path, need at least "+
+				"path of depth 3, instead has depth %d", idx,
+				len(parsedPath))
+		}
+
+		result[idx] = &lnrpc.WatchOnlyAccount{
+			Purpose:  parsedPath[0],
+			CoinType: parsedPath[1],
+			Account:  parsedPath[2],
+			Xpub:     acct.ExtendedPublicKey,
+		}
+	}
+
+	return result, nil
+}
+
+// parseDerivationPath parses a path in the form of m/x'/y'/z'/a/b into a slice
+// of [x, y, z, a, b], meaning that the apostrophe is ignored and 2^31 is _not_
+// added to the numbers.
+func parseDerivationPath(path string) ([]uint32, error) {
+	path = strings.TrimSpace(path)
+	if len(path) == 0 {
+		return nil, fmt.Errorf("path cannot be empty")
+	}
+	if !strings.HasPrefix(path, "m/") {
+		return nil, fmt.Errorf("path must start with m/")
+	}
+
+	// Just the root key, no path was provided. This is valid but not useful
+	// in most cases.
+	rest := strings.ReplaceAll(path, "m/", "")
+	if rest == "" {
+		return []uint32{}, nil
+	}
+
+	parts := strings.Split(rest, "/")
+	indices := make([]uint32, len(parts))
+	for i := 0; i < len(parts); i++ {
+		part := parts[i]
+		if strings.Contains(parts[i], "'") {
+			part = strings.TrimRight(parts[i], "'")
+		}
+		parsed, err := strconv.ParseInt(part, 10, 32)
+		if err != nil {
+			return nil, fmt.Errorf("could not parse part \"%s\": "+
+				"%v", part, err)
+		}
+		indices[i] = uint32(parsed)
+	}
+	return indices, nil
+}
diff --git a/lnrpc/walletrpc/walletkit_util_test.go b/lnrpc/walletrpc/walletkit_util_test.go
new file mode 100644
index 000000000..fdc8d2e0a
--- /dev/null
+++ b/lnrpc/walletrpc/walletkit_util_test.go
@@ -0,0 +1,74 @@
+package walletrpc
+
+import (
+	"testing"
+
+	"github.com/stretchr/testify/require"
+)
+
+func TestParseDerivationPath(t *testing.T) {
+	testCases := []struct {
+		name           string
+		path           string
+		expectedErr    string
+		expectedResult []uint32
+	}{{
+		name:        "empty path",
+		path:        "",
+		expectedErr: "path cannot be empty",
+	}, {
+		name:        "just whitespace",
+		path:        " \n\t\r",
+		expectedErr: "path cannot be empty",
+	}, {
+		name:        "incorrect prefix",
+		path:        "0/0",
+		expectedErr: "path must start with m/",
+	}, {
+		name:        "invalid number",
+		path:        "m/a'/0'",
+		expectedErr: "could not parse part \"a\": strconv.ParseInt",
+	}, {
+		name:        "double slash",
+		path:        "m/0'//",
+		expectedErr: "could not parse part \"\": strconv.ParseInt",
+	}, {
+		name:        "number too large",
+		path:        "m/99999999999999",
+		expectedErr: "could not parse part \"99999999999999\": strconv",
+	}, {
+		name:           "empty path",
+		path:           "m/",
+		expectedResult: []uint32{},
+	}, {
+		name:           "mixed path",
+		path:           "m/0'/1'/2'/3/4/5/6'/7'",
+		expectedResult: []uint32{0, 1, 2, 3, 4, 5, 6, 7},
+	}, {
+		name:           "short path",
+		path:           "m/0'",
+		expectedResult: []uint32{0},
+	}, {
+		name:           "plain path",
+		path:           "m/0/1/2",
+		expectedResult: []uint32{0, 1, 2},
+	}}
+
+	for _, tc := range testCases {
+		tc := tc
+
+		t.Run(tc.name, func(tt *testing.T) {
+			result, err := parseDerivationPath(tc.path)
+
+			if tc.expectedErr != "" {
+				require.Error(tt, err)
+				require.Contains(
+					tt, err.Error(), tc.expectedErr,
+				)
+			} else {
+				require.NoError(tt, err)
+				require.Equal(tt, tc.expectedResult, result)
+			}
+		})
+	}
+}