diff --git a/grpc_pass.t b/grpc_pass.t
new file mode 100644
index 0000000..35027de
--- /dev/null
+++ b/grpc_pass.t
@@ -0,0 +1,192 @@
+#!/usr/bin/perl
+
+# (C) Sergey Kandaurov
+# (C) Nginx, Inc.
+
+# Tests for the grpc_pass directive with variables.
+
+###############################################################################
+
+use warnings;
+use strict;
+
+use Test::More;
+
+BEGIN { use FindBin; chdir($FindBin::Bin); }
+
+use lib 'lib';
+use Test::Nginx;
+
+###############################################################################
+
+select STDERR; $| = 1;
+select STDOUT; $| = 1;
+
+my $t = Test::Nginx->new()->has(qw/http http_ssl http_v2 grpc rewrite/)
+	->has_daemon('openssl')->write_file_expand('nginx.conf', <<'EOF');
+
+%%TEST_GLOBALS%%
+
+daemon off;
+
+events {
+}
+
+http {
+    %%TEST_GLOBALS_HTTP%%
+
+    upstream u {
+        server 127.0.0.1:8081;
+    }
+
+    resolver 127.0.0.1:%%PORT_8982_UDP%%;
+
+    server {
+        listen       127.0.0.1:8080;
+        server_name  localhost;
+
+        location / {
+            grpc_pass $host:%%PORT_8081%%;
+        }
+
+        location /grpc {
+            grpc_pass grpc://$host:%%PORT_8081%%;
+        }
+
+        location /grpcs {
+            grpc_pass grpcs://$host:%%PORT_8082%%;
+        }
+
+        location /arg {
+            grpc_pass $arg_b;
+        }
+    }
+
+    server {
+        listen       127.0.0.1:8081 http2;
+        listen       127.0.0.1:8082 http2 ssl;
+        server_name  localhost;
+
+        ssl_certificate_key localhost.key;
+        ssl_certificate localhost.crt;
+
+        location / {
+            return 200 $http_host;
+        }
+    }
+}
+
+EOF
+
+$t->write_file('openssl.conf', <<EOF);
+[ req ]
+default_bits = 2048
+encrypt_key = no
+distinguished_name = req_distinguished_name
+[ req_distinguished_name ]
+EOF
+
+my $d = $t->testdir();
+
+foreach my $name ('localhost') {
+	system('openssl req -x509 -new '
+		. "-config $d/openssl.conf -subj /CN=$name/ "
+		. "-out $d/$name.crt -keyout $d/$name.key "
+		. ">>$d/openssl.out 2>&1") == 0
+		or die "Can't create certificate for $name: $!\n";
+}
+
+$t->run_daemon(\&dns_daemon, port(8982), $t);
+$t->try_run('no grpc_pass variables')->plan(5);
+
+$t->waitforfile($t->testdir . '/' . port(8982));
+
+###############################################################################
+
+like(http_get('/basic'), qr/200 OK/, 'no scheme');
+like(http_get('/grpc'), qr/200 OK/, 'grpc scheme');
+
+SKIP: {
+$t->{_configure_args} =~ /OpenSSL ([\d\.]+)/;
+skip 'OpenSSL too old', 1 unless defined $1 and $1 ge '1.0.2';
+
+like(http_get('/grpcs'), qr/200 OK/, 'grpcs scheme');
+
+}
+
+like(http_get('/arg?b=grpc://127.0.0.1:' . port(8081)), qr/200 OK/, 'addrs');
+like(http_get('/arg?b=grpc://u'), qr/200 OK/, 'no_port');
+
+###############################################################################
+
+sub reply_handler {
+	my ($recv_data) = @_;
+
+	my (@name, @rdata);
+
+	use constant NOERROR	=> 0;
+	use constant A		=> 1;
+	use constant IN		=> 1;
+
+	# default values
+
+	my ($hdr, $rcode, $ttl) = (0x8180, NOERROR, 3600);
+
+	# decode name
+
+	my ($len, $offset) = (undef, 12);
+	while (1) {
+		$len = unpack("\@$offset C", $recv_data);
+		last if $len == 0;
+		$offset++;
+		push @name, unpack("\@$offset A$len", $recv_data);
+		$offset += $len;
+	}
+
+	$offset -= 1;
+	my ($id, $type, $class) = unpack("n x$offset n2", $recv_data);
+
+	my $name = join('.', @name);
+	if ($name eq 'localhost' && $type == A) {
+		push @rdata, rd_addr($ttl, '127.0.0.1');
+	}
+
+	$len = @name;
+	pack("n6 (C/a*)$len x n2", $id, $hdr | $rcode, 1, scalar @rdata,
+		0, 0, @name, $type, $class) . join('', @rdata);
+}
+
+sub rd_addr {
+	my ($ttl, $addr) = @_;
+
+	my $code = 'split(/\./, $addr)';
+
+	return pack 'n3N', 0xc00c, A, IN, $ttl if $addr eq '';
+
+	pack 'n3N nC4', 0xc00c, A, IN, $ttl, eval "scalar $code", eval($code);
+}
+
+sub dns_daemon {
+	my ($port, $t) = @_;
+
+	my ($data, $recv_data);
+	my $socket = IO::Socket::INET->new(
+		LocalAddr => '127.0.0.1',
+		LocalPort => $port,
+		Proto => 'udp',
+	)
+		or die "Can't create listening socket: $!\n";
+
+	# signal we are ready
+
+	open my $fh, '>', $t->testdir() . '/' . $port;
+	close $fh;
+
+	while (1) {
+		$socket->recv($recv_data, 65536);
+		$data = reply_handler($recv_data);
+		$socket->send($data);
+	}
+}
+
+###############################################################################