diff --git a/operate/cli.py b/operate/cli.py
index 821fa88ac..aed5c90b1 100644
--- a/operate/cli.py
+++ b/operate/cli.py
@@ -145,6 +145,7 @@ def create_app(  # pylint: disable=too-many-locals, unused-argument, too-many-st
     logger = setup_logger(name="operate")
     operate = OperateApp(home=home, logger=logger)
     funding_jobs: t.Dict[str, asyncio.Task] = {}
+    healthcheck_jobs: t.Dict[str, asyncio.Task] = {}
 
     # Create shutdown endpoint
     shutdown_endpoint = uuid.uuid4().hex
@@ -171,6 +172,23 @@ def schedule_funding_job(
             )
         )
 
+    def schedule_healthcheck_job(
+        service: str,
+    ) -> None:
+        """Schedule a healthcheck job."""
+        logger.info(f"Starting healthcheck job for {service}")
+        if service in healthcheck_jobs:
+            logger.info(f"Cancelling existing healthcheck_jobs job for {service}")
+            cancel_healthcheck_job(service=service)
+
+        loop = asyncio.get_running_loop()
+        healthcheck_jobs[service] = loop.create_task(
+            operate.service_manager().healthcheck_job(
+                hash=service,
+                loop=loop,
+            )
+        )
+
     def cancel_funding_job(service: str) -> None:
         """Cancel funding job."""
         if service not in funding_jobs:
@@ -179,6 +197,14 @@ def cancel_funding_job(service: str) -> None:
         if not status:
             logger.info(f"Funding job cancellation for {service} failed")
 
+    def cancel_healthcheck_job(service: str) -> None:
+        """Cancel healthcheck job."""
+        if service not in healthcheck_jobs:
+            return
+        status = healthcheck_jobs[service].cancel()
+        if not status:
+            logger.info(f"Healthcheck job cancellation for {service} failed")
+
     app = FastAPI()
 
     app.add_middleware(
@@ -506,6 +532,7 @@ async def _create_services(request: Request) -> JSONResponse:
             manager.fund_service(hash=service.hash)
             manager.deploy_service_locally(hash=service.hash)
             schedule_funding_job(service=service.hash)
+            schedule_healthcheck_job(service=service.hash)
 
         return JSONResponse(
             content=operate.service_manager().create_or_load(hash=service.hash).json
@@ -529,6 +556,7 @@ async def _update_services(request: Request) -> JSONResponse:
             manager.fund_service(hash=service.hash)
             manager.deploy_service_locally(hash=service.hash)
             schedule_funding_job(service=service.hash)
+            schedule_healthcheck_job(service=service.hash)
 
         return JSONResponse(content=service.json)
 
@@ -638,6 +666,7 @@ async def _start_service_locally(request: Request) -> JSONResponse:
         manager.fund_service(hash=service)
         manager.deploy_service_locally(hash=service, force=True)
         schedule_funding_job(service=service)
+        schedule_healthcheck_job(service=service.hash)
         return JSONResponse(content=manager.create_or_load(service).deployment)
 
     @app.post("/api/services/{service}/deployment/stop")
diff --git a/operate/services/manage.py b/operate/services/manage.py
index 803ee8527..0de2b497d 100644
--- a/operate/services/manage.py
+++ b/operate/services/manage.py
@@ -25,7 +25,7 @@
 import typing as t
 from concurrent.futures import ThreadPoolExecutor
 from pathlib import Path
-
+import aiohttp
 from aea.helpers.base import IPFSHash
 from aea.helpers.logging import setup_logger
 from autonomy.chain.base import registry_contracts
@@ -56,6 +56,7 @@
 KEYS_JSON = "keys.json"
 DOCKER_COMPOSE_YAML = "docker-compose.yaml"
 SERVICE_YAML = "service.yaml"
+HTTP_OK = 200
 
 
 class ServiceManager:
@@ -824,6 +825,15 @@ def fund_service(  # pylint: disable=too-many-arguments
                 chain_type=service.ledger_config.chain,
             )
 
+    async def check_service_health(
+        self,
+    ) -> bool:
+        async with aiohttp.ClientSession() as session:
+            async with session.get("http://localhost:8000/healthcheck") as resp:
+                status = resp.status
+                response_json = await resp.json()
+                return status == HTTP_OK and response_json.get("is_transitioning_fast", False)
+
     async def funding_job(
         self,
         hash: str,
@@ -853,6 +863,38 @@ async def funding_job(
                     )
                 await asyncio.sleep(60)
 
+    async def healthcheck_job(
+        self,
+        hash: str,
+        loop: t.Optional[asyncio.AbstractEventLoop] = None,
+    ) -> None:
+        """Start a background funding job."""
+        loop = loop or asyncio.get_event_loop()
+        failed_health_checks = 0
+
+        with ThreadPoolExecutor() as executor:
+            while True:
+                try:
+                    # Check the service health
+                    healthy = await loop.run_in_executor(
+                        executor,
+                        self.check_service_health,
+                    )
+                    # Restart the service if the health failed 5 times in a row
+                    if not healthy:
+                        failed_health_checks += 1
+                    else:
+                        failed_health_checks = 0
+                    if failed_health_checks >= 5:
+                        self.stop_service_locally(hash=hash)
+                        self.deploy_service_locally(hash=hash)
+
+                except Exception:  # pylint: disable=broad-except
+                    logging.info(
+                        f"Error occured while checking the service health\n{traceback.format_exc()}"
+                    )
+                await asyncio.sleep(60)
+
     def deploy_service_locally(self, hash: str, force: bool = True) -> Deployment:
         """
         Deploy service locally