diff --git a/packages/sdk/src/mintlayer-connect-sdk.ts b/packages/sdk/src/mintlayer-connect-sdk.ts
index cf94cf3..1d00e93 100644
--- a/packages/sdk/src/mintlayer-connect-sdk.ts
+++ b/packages/sdk/src/mintlayer-connect-sdk.ts
@@ -46,6 +46,7 @@ import initWasm, {
   SignatureHashType,
   encode_output_htlc,
   extract_htlc_secret,
+  verify_challenge,
 } from '@mintlayer/wasm-lib';
 
 const BASE58_ALPHABET = '123456789ABCDEFGHJKLMNPQRSTUVWXYZabcdefghijkmnopqrstuvwxyz';
@@ -877,6 +878,12 @@ export type SignChallengeResponse = {
   signature: string;
 };
 
+export type VerifyChallengeArgs = {
+  message: string;
+  address: string;
+  signature: string;
+};
+
 class Client {
   private network: 'mainnet' | 'testnet';
   private connectedAddresses: {
@@ -3605,6 +3612,25 @@ class Client {
     });
   }
 
+  /**
+   * Verifies a signed challenge message.
+   * Used to verify that a signature was produced by the private key corresponding to the given address.
+   *
+   * Note: The provided address must be a 'pubkeyhash' address.
+   *
+   * @param args - Object containing message, address, and signature
+   * @returns Promise that resolves to true if the signature is valid, throws an error otherwise
+   */
+  async verifyChallenge(args: VerifyChallengeArgs): Promise<boolean> {
+    this.ensureInitialized();
+
+    const messageBytes = stringToUint8Array(args.message);
+    const signatureBytes = hexToUint8Array(args.signature);
+    const network = this.getMLNetwork();
+
+    return verify_challenge(args.address, network, signatureBytes, messageBytes);
+  }
+
   /**
    * Requests a secret hash from the wallet for HTLC operations.
    * @param args - Additional arguments (currently unused)
diff --git a/packages/sdk/tests/verify-challenge.test.ts b/packages/sdk/tests/verify-challenge.test.ts
new file mode 100644
index 0000000..8f623ef
--- /dev/null
+++ b/packages/sdk/tests/verify-challenge.test.ts
@@ -0,0 +1,75 @@
+import { Client } from '../src/mintlayer-connect-sdk';
+import fetchMock from 'jest-fetch-mock';
+
+beforeEach(() => {
+  fetchMock.resetMocks();
+
+  (window as any).mojito = {
+    isExtension: true,
+    connect: jest.fn().mockResolvedValue({
+      addressesByChain: {
+        mintlayer: {
+          receiving: ['tmt1q9cz2dkuqqrdv2g3kl8zqvjvqtu3u6j3j8z9z9z9'],
+          change: ['tmt1q9cz2dkuqqrdv2g3kl8zqvjvqtu3u6j3j8z9z9z8'],
+        },
+      },
+    }),
+    restore: jest.fn().mockResolvedValue({
+      testnet: {
+        receiving: ['tmt1q9cz2dkuqqrdv2g3kl8zqvjvqtu3u6j3j8z9z9z9'],
+      },
+    }),
+    disconnect: jest.fn().mockResolvedValue(undefined),
+    request: jest.fn().mockResolvedValue('signed-transaction'),
+  };
+
+  fetchMock.doMock();
+
+  fetchMock.mockResponse(async req => {
+    const url = req.url;
+
+    if (url.endsWith('/chain/tip')) {
+      return JSON.stringify({ height: 200000 });
+    }
+
+    console.warn('No mock for:', url);
+    return JSON.stringify({ error: 'No mock defined' });
+  });
+});
+
+test('verifyChallenge should verify a valid signature', async () => {
+  const client = await Client.create({
+    network: 'testnet',
+    autoRestore: false,
+  });
+
+  await client.connect();
+
+  // This is a test case - in real usage, the signature would come from signChallenge
+  // For now, we're testing that the method exists and can be called
+  const testMessage = 'Hello, Mintlayer!';
+  const testAddress = 'tmt1q9cz2dkuqqrdv2g3kl8zqvjvqtu3u6j3j8z9z9z9';
+  const testSignature = '0123456789abcdef'; // This would be a real signature in practice
+
+  // The actual verification will fail with invalid signature, but we're testing the method exists
+  try {
+    await client.verifyChallenge({
+      message: testMessage,
+      address: testAddress,
+      signature: testSignature,
+    });
+  } catch (error) {
+    // Expected to fail with invalid signature, but the method should exist and be callable
+    expect(error).toBeDefined();
+  }
+});
+
+test('verifyChallenge should be a function on Client', async () => {
+  const client = await Client.create({
+    network: 'testnet',
+    autoRestore: false,
+  });
+
+  expect(typeof client.verifyChallenge).toBe('function');
+});
+