diff --git a/sdk/src/client/api/block_builder/input_selection/mod.rs b/sdk/src/client/api/block_builder/input_selection/mod.rs
index 445a7cc3cc..113513f103 100644
--- a/sdk/src/client/api/block_builder/input_selection/mod.rs
+++ b/sdk/src/client/api/block_builder/input_selection/mod.rs
@@ -68,6 +68,7 @@ impl InputSelection {
             Address::Account(account_address) => Ok(Some(Requirement::Account(*account_address.account_id()))),
             Address::Nft(nft_address) => Ok(Some(Requirement::Nft(*nft_address.nft_id()))),
             Address::Anchor(_) => Err(Error::UnsupportedAddressType(AnchorAddress::KIND)),
+            Address::Restricted(_) => Ok(None),
             _ => todo!("What do we do here?"),
         }
     }
@@ -234,7 +235,11 @@ impl InputSelection {
                 .unwrap()
                 .0;
 
-            self.addresses.contains(&required_address)
+            if let Address::Restricted(restricted_address) = required_address {
+                self.addresses.contains(restricted_address.address())
+            } else {
+                self.addresses.contains(&required_address)
+            }
         })
     }
 
diff --git a/sdk/src/client/api/block_builder/input_selection/requirement/sender.rs b/sdk/src/client/api/block_builder/input_selection/requirement/sender.rs
index 0dfc1fc516..ecebdc5826 100644
--- a/sdk/src/client/api/block_builder/input_selection/requirement/sender.rs
+++ b/sdk/src/client/api/block_builder/input_selection/requirement/sender.rs
@@ -42,6 +42,11 @@ impl InputSelection {
                     Err(e) => Err(e),
                 }
             }
+            Address::Restricted(restricted_address) => {
+                log::debug!("Forwarding {address:?} sender requirement to inner address");
+
+                self.fulfill_sender_requirement(restricted_address.address())
+            }
             _ => Err(Error::UnsupportedAddressType(address.kind())),
         }
     }
diff --git a/sdk/tests/client/input_selection/basic_outputs.rs b/sdk/tests/client/input_selection/basic_outputs.rs
index 201d6c0686..8eedd759ac 100644
--- a/sdk/tests/client/input_selection/basic_outputs.rs
+++ b/sdk/tests/client/input_selection/basic_outputs.rs
@@ -6,7 +6,7 @@ use std::str::FromStr;
 use iota_sdk::{
     client::api::input_selection::{Error, InputSelection, Requirement},
     types::block::{
-        address::{AccountAddress, Address, Bech32Address, NftAddress},
+        address::{AccountAddress, Address, Bech32Address, NftAddress, RestrictedAddress, ToBech32Ext},
         output::{AccountId, NftId},
         protocol::protocol_parameters,
     },
@@ -1389,3 +1389,181 @@ fn too_many_outputs_with_remainder() {
         iota_sdk::client::api::input_selection::Error::InvalidOutputCount(129)
     )
 }
+
+#[test]
+fn restricted_ed25519() {
+    let protocol_parameters = protocol_parameters();
+    let address = Address::try_from_bech32(BECH32_ADDRESS_ED25519_1).unwrap();
+    let restricted = RestrictedAddress::new(address.clone()).unwrap();
+    let restricted_bech32 = restricted.to_bech32_unchecked("rms").to_string();
+
+    let inputs = build_inputs([
+        Basic(1_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+        Basic(1_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+        Basic(1_000_000, &restricted_bech32, None, None, None, None, None, None),
+        Basic(1_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+        Basic(1_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+    ]);
+    let outputs = build_outputs([Basic(
+        1_000_000,
+        BECH32_ADDRESS_ED25519_0,
+        None,
+        None,
+        None,
+        None,
+        None,
+        None,
+    )]);
+
+    let selected = InputSelection::new(
+        inputs.clone(),
+        outputs.clone(),
+        addresses([BECH32_ADDRESS_ED25519_1]),
+        protocol_parameters,
+    )
+    .select()
+    .unwrap();
+
+    assert_eq!(selected.inputs.len(), 1);
+    assert_eq!(selected.inputs, [inputs[2].clone()]);
+    assert!(unsorted_eq(&selected.outputs, &outputs));
+}
+
+#[test]
+fn restricted_nft() {
+    let protocol_parameters = protocol_parameters();
+    let nft_id_1 = NftId::from_str(NFT_ID_1).unwrap();
+    let nft_address = Address::from(nft_id_1);
+    let restricted = RestrictedAddress::new(nft_address.clone()).unwrap();
+    let restricted_bech32 = restricted.to_bech32_unchecked("rms").to_string();
+
+    let inputs = build_inputs([
+        Basic(2_000_000, &restricted_bech32, None, None, None, None, None, None),
+        Nft(
+            2_000_000,
+            nft_id_1,
+            BECH32_ADDRESS_ED25519_0,
+            None,
+            None,
+            None,
+            None,
+            None,
+            None,
+        ),
+    ]);
+    let outputs = build_outputs([Basic(
+        3_000_000,
+        BECH32_ADDRESS_ED25519_0,
+        None,
+        None,
+        None,
+        None,
+        None,
+        None,
+    )]);
+
+    let selected = InputSelection::new(
+        inputs.clone(),
+        outputs.clone(),
+        addresses([BECH32_ADDRESS_ED25519_0]),
+        protocol_parameters,
+    )
+    .select()
+    .unwrap();
+
+    assert!(unsorted_eq(&selected.inputs, &inputs));
+    assert_eq!(selected.outputs.len(), 2);
+    assert!(selected.outputs.contains(&outputs[0]));
+}
+
+#[test]
+fn restricted_account() {
+    let protocol_parameters = protocol_parameters();
+    let account_id_1 = AccountId::from_str(ACCOUNT_ID_1).unwrap();
+    let account_address = Address::from(account_id_1);
+    let restricted = RestrictedAddress::new(account_address.clone()).unwrap();
+    let restricted_bech32 = restricted.to_bech32_unchecked("rms").to_string();
+
+    let inputs = build_inputs([
+        Basic(2_000_000, &restricted_bech32, None, None, None, None, None, None),
+        Account(
+            2_000_000,
+            account_id_1,
+            BECH32_ADDRESS_ED25519_0,
+            None,
+            None,
+            None,
+            None,
+        ),
+    ]);
+
+    let outputs = build_outputs([Basic(
+        3_000_000,
+        BECH32_ADDRESS_ED25519_0,
+        None,
+        None,
+        None,
+        None,
+        None,
+        None,
+    )]);
+
+    let selected = InputSelection::new(
+        inputs.clone(),
+        outputs.clone(),
+        addresses([BECH32_ADDRESS_ED25519_0]),
+        protocol_parameters,
+    )
+    .select()
+    .unwrap();
+
+    assert!(unsorted_eq(&selected.inputs, &inputs));
+    assert_eq!(selected.outputs.len(), 2);
+    assert!(selected.outputs.contains(&outputs[0]));
+}
+
+#[test]
+fn restricted_ed25519_sender() {
+    let protocol_parameters = protocol_parameters();
+    let sender = Address::try_from_bech32(BECH32_ADDRESS_ED25519_1).unwrap();
+    let restricted_sender = RestrictedAddress::new(sender.clone()).unwrap();
+    let restricted_sender_bech32 = restricted_sender.to_bech32_unchecked("rms").to_string();
+
+    let inputs = build_inputs([
+        Basic(2_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+        Basic(2_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+        Basic(1_000_000, BECH32_ADDRESS_ED25519_1, None, None, None, None, None, None),
+        Basic(2_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+        Basic(2_000_000, BECH32_ADDRESS_ED25519_0, None, None, None, None, None, None),
+    ]);
+    let outputs = build_outputs([Basic(
+        2_000_000,
+        BECH32_ADDRESS_ED25519_0,
+        None,
+        Some(&restricted_sender_bech32),
+        None,
+        None,
+        None,
+        None,
+    )]);
+
+    let selected = InputSelection::new(
+        inputs.clone(),
+        outputs.clone(),
+        addresses([BECH32_ADDRESS_ED25519_0, BECH32_ADDRESS_ED25519_1]),
+        protocol_parameters,
+    )
+    .select()
+    .unwrap();
+
+    // Sender + another for amount
+    assert_eq!(selected.inputs.len(), 2);
+    assert!(
+        selected
+            .inputs
+            .iter()
+            .any(|input| *input.output.as_basic().address() == sender)
+    );
+    // Provided output + remainder
+    assert_eq!(selected.outputs.len(), 2);
+}