diff --git a/Makefile b/Makefile
index a7a8ee7b..33812fa0 100644
--- a/Makefile
+++ b/Makefile
@@ -86,7 +86,7 @@ Dockerfile: Dockerfile.in
 	sed -e 's|@BASEIMAGE@|$(BASEIMAGE)|g' $< >$@
 
 test: vet fmt
-	go test -timeout=1m -v -race ./pkg/... $(BUILD_TAGS)
+	go test -timeout=1m -v -race ./cmd/options ./pkg/... $(BUILD_TAGS)
 
 build-container: ./bin/node-problem-detector Dockerfile
 	docker build -t $(IMAGE) .
diff --git a/cmd/options/options_test.go b/cmd/options/options_test.go
new file mode 100644
index 00000000..34a15b42
--- /dev/null
+++ b/cmd/options/options_test.go
@@ -0,0 +1,84 @@
+/*
+Copyright 2018 The Kubernetes Authors.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package options
+
+import (
+	"os"
+	"testing"
+)
+
+type options struct {
+	Nodename         string
+	HostnameOverride string
+}
+
+// TestSetNodeNameOrDie tests for permutations of nodename, hostname and hostnameoverride.
+func TestSetNodeNameOrDie(t *testing.T) {
+	hostName, err := os.Hostname()
+	if err != nil {
+		t.Errorf("Query hostname error: %v", err)
+	}
+
+	uts := map[string]struct {
+		WantedNodeName string
+		Meta           options
+	}{
+		"Check hostname override only": {
+			WantedNodeName: "hostname-override",
+			Meta: options{
+				Nodename:         "node-name-env",
+				HostnameOverride: "hostname-override",
+			},
+		},
+		"Check hostname override and NDDE_NAME env": {
+			WantedNodeName: "node-name-env",
+			Meta: options{
+				Nodename:         "node-name-env",
+				HostnameOverride: "",
+			},
+		},
+		"Check hostname override, NODE_NAME env and hostname": {
+			WantedNodeName: hostName,
+			Meta: options{
+				Nodename:         "",
+				HostnameOverride: "",
+			},
+		},
+	}
+
+	for desc, ut := range uts {
+		err := os.Unsetenv("NODE_NAME")
+		if err != nil {
+			t.Errorf("Desc: %v. Unset NODE_NAME env error: %v", desc, err)
+		}
+
+		if len(ut.Meta.Nodename) != 0 {
+			err := os.Setenv("NODE_NAME", ut.Meta.Nodename)
+			if err != nil {
+				t.Errorf("Desc: %v. Set NODE_NAME env error: %v", desc, err)
+			}
+		}
+
+		npdOpts := NewNodeProblemDetectorOptions()
+		npdOpts.HostnameOverride = ut.Meta.HostnameOverride
+		npdOpts.SetNodeNameOrDie()
+
+		if npdOpts.NodeName != ut.WantedNodeName {
+			t.Errorf("Desc: %v. Set node name error. Wanted: %v. Got: %v", desc, ut.WantedNodeName, npdOpts.NodeName)
+		}
+	}
+}