diff --git a/src/secp256k1/include/secp256k1_schnorrsig.h b/src/secp256k1/include/secp256k1_schnorrsig.h
index c796129813..67f198fd73 100644
--- a/src/secp256k1/include/secp256k1_schnorrsig.h
+++ b/src/secp256k1/include/secp256k1_schnorrsig.h
@@ -8,7 +8,55 @@
 extern "C" {
 #endif
 
-    /* TODO */
+/** This module implements a variant of Schnorr signatures compliant with
+ *  Bitcoin Improvement Proposal 340 "Schnorr Signatures for secp256k1"
+ *  (https://github.com/bitcoin/bips/blob/master/bip-0340.mediawiki).
+ */
+
+/** A pointer to a function to deterministically generate a nonce.
+ *
+ *  Same as secp256k1_nonce function with the exception of accepting an
+ *  additional pubkey argument and not requiring an attempt argument. The pubkey
+ *  argument can protect signature schemes with key-prefixed challenge hash
+ *  inputs against reusing the nonce when signing with the wrong precomputed
+ *  pubkey.
+ *
+ *  Returns: 1 if a nonce was successfully generated. 0 will cause signing to
+ *           return an error.
+ *  Out:     nonce32:   pointer to a 32-byte array to be filled by the function.
+ *  In:      msg32:     the 32-byte message hash being verified (will not be NULL)
+ *           key32:     pointer to a 32-byte secret key (will not be NULL)
+ *      xonly_pk32:     the 32-byte serialized xonly pubkey corresponding to key32
+ *                      (will not be NULL)
+ *           algo16:    pointer to a 16-byte array describing the signature
+ *                      algorithm (will not be NULL).
+ *           data:      Arbitrary data pointer that is passed through.
+ *
+ *  Except for test cases, this function should compute some cryptographic hash of
+ *  the message, the key, the pubkey, the algorithm description, and data.
+ */
+typedef int (*secp256k1_nonce_function_hardened)(
+    unsigned char *nonce32,
+    const unsigned char *msg32,
+    const unsigned char *key32,
+    const unsigned char *xonly_pk32,
+    const unsigned char *algo16,
+    void *data
+);
+
+/** An implementation of the nonce generation function as defined in Bitcoin
+ *  Improvement Proposal 340 "Schnorr Signatures for secp256k1"
+ *  (https://github.com/bitcoin/bips/blob/master/bip-0340.mediawiki).
+ *
+ *  If a data pointer is passed, it is assumed to be a pointer to 32 bytes of
+ *  auxiliary random data as defined in BIP-340. If the data pointer is NULL,
+ *  schnorrsig_sign does not produce BIP-340 compliant signatures. The algo16
+ *  argument must be non-NULL, otherwise the function will fail and return 0.
+ *  The hash will be tagged with algo16 after removing all terminating null
+ *  bytes. Therefore, to create BIP-340 compliant signatures, algo16 must be set
+ *  to "BIP0340/nonce\0\0\0"
+ */
+SECP256K1_API extern const secp256k1_nonce_function_hardened secp256k1_nonce_function_bip340;
 
 #ifdef __cplusplus
 }
diff --git a/src/secp256k1/src/modules/schnorrsig/main_impl.h b/src/secp256k1/src/modules/schnorrsig/main_impl.h
index fa9b125836..3f0c2bab3e 100644
--- a/src/secp256k1/src/modules/schnorrsig/main_impl.h
+++ b/src/secp256k1/src/modules/schnorrsig/main_impl.h
@@ -11,6 +11,86 @@
 #include "include/secp256k1_schnorrsig.h"
 #include "hash.h"
 
-/* TODO */
+/* Initializes SHA256 with fixed midstate. This midstate was computed by applying
+ * SHA256 to SHA256("BIP0340/nonce")||SHA256("BIP0340/nonce"). */
+static void secp256k1_nonce_function_bip340_sha256_tagged(secp256k1_sha256 *sha) {
+    secp256k1_sha256_initialize(sha);
+    sha->s[0] = 0x46615b35ul;
+    sha->s[1] = 0xf4bfbff7ul;
+    sha->s[2] = 0x9f8dc671ul;
+    sha->s[3] = 0x83627ab3ul;
+    sha->s[4] = 0x60217180ul;
+    sha->s[5] = 0x57358661ul;
+    sha->s[6] = 0x21a29e54ul;
+    sha->s[7] = 0x68b07b4cul;
+
+    sha->bytes = 64;
+}
+
+/* Initializes SHA256 with fixed midstate. This midstate was computed by applying
+ * SHA256 to SHA256("BIP0340/aux")||SHA256("BIP0340/aux"). */
+static void secp256k1_nonce_function_bip340_sha256_tagged_aux(secp256k1_sha256 *sha) {
+    secp256k1_sha256_initialize(sha);
+    sha->s[0] = 0x24dd3219ul;
+    sha->s[1] = 0x4eba7e70ul;
+    sha->s[2] = 0xca0fabb9ul;
+    sha->s[3] = 0x0fa3166dul;
+    sha->s[4] = 0x3afbe4b1ul;
+    sha->s[5] = 0x4c44df97ul;
+    sha->s[6] = 0x4aac2739ul;
+    sha->s[7] = 0x249e850aul;
+
+    sha->bytes = 64;
+}
+
+/* algo16 argument for nonce_function_bip340 to derive the nonce exactly as stated in BIP-340
+ * by using the correct tagged hash function. */
+static const unsigned char bip340_algo16[16] = "BIP0340/nonce\0\0\0";
+
+static int nonce_function_bip340(unsigned char *nonce32, const unsigned char *msg32, const unsigned char *key32, const unsigned char *xonly_pk32, const unsigned char *algo16, void *data) {
+    secp256k1_sha256 sha;
+    unsigned char masked_key[32];
+    int i;
+
+    if (algo16 == NULL) {
+        return 0;
+    }
+
+    if (data != NULL) {
+        secp256k1_nonce_function_bip340_sha256_tagged_aux(&sha);
+        secp256k1_sha256_write(&sha, data, 32);
+        secp256k1_sha256_finalize(&sha, masked_key);
+        for (i = 0; i < 32; i++) {
+            masked_key[i] ^= key32[i];
+        }
+    }
+
+    /* Tag the hash with algo16 which is important to avoid nonce reuse across
+     * algorithms. If this nonce function is used in BIP-340 signing as defined
+     * in the spec, an optimized tagging implementation is used. */
+    if (memcmp(algo16, bip340_algo16, 16) == 0) {
+        secp256k1_nonce_function_bip340_sha256_tagged(&sha);
+    } else {
+        int algo16_len = 16;
+        /* Remove terminating null bytes */
+        while (algo16_len > 0 && !algo16[algo16_len - 1]) {
+            algo16_len--;
+        }
+        secp256k1_sha256_initialize_tagged(&sha, algo16, algo16_len);
+    }
+
+    /* Hash (masked-)key||pk||msg using the tagged hash as per the spec */
+    if (data != NULL) {
+        secp256k1_sha256_write(&sha, masked_key, 32);
+    } else {
+        secp256k1_sha256_write(&sha, key32, 32);
+    }
+    secp256k1_sha256_write(&sha, xonly_pk32, 32);
+    secp256k1_sha256_write(&sha, msg32, 32);
+    secp256k1_sha256_finalize(&sha, nonce32);
+    return 1;
+}
+
+const secp256k1_nonce_function_hardened secp256k1_nonce_function_bip340 = nonce_function_bip340;
 
 #endif
diff --git a/src/secp256k1/src/modules/schnorrsig/tests_impl.h b/src/secp256k1/src/modules/schnorrsig/tests_impl.h
index 9c2a4b2565..6ea4d880ac 100644
--- a/src/secp256k1/src/modules/schnorrsig/tests_impl.h
+++ b/src/secp256k1/src/modules/schnorrsig/tests_impl.h
@@ -10,8 +10,96 @@
 
 #include "secp256k1_schnorrsig.h"
 
+/* Checks that a bit flip in the n_flip-th argument (that has n_bytes many
+ * bytes) changes the hash function
+ */
+void nonce_function_bip340_bitflip(unsigned char **args, size_t n_flip, size_t n_bytes) {
+    unsigned char nonces[2][32];
+    CHECK(nonce_function_bip340(nonces[0], args[0], args[1], args[2], args[3], args[4]) == 1);
+    secp256k1_rand_flip(args[n_flip], n_bytes);
+    CHECK(nonce_function_bip340(nonces[1], args[0], args[1], args[2], args[3], args[4]) == 1);
+    CHECK(memcmp(nonces[0], nonces[1], 32) != 0);
+}
+
+/* Tests for the equality of two sha256 structs. This function only produces a
+ * correct result if an integer multiple of 64 many bytes have been written
+ * into the hash functions. */
+void test_sha256_eq(const secp256k1_sha256 *sha1, const secp256k1_sha256 *sha2) {
+    /* Is buffer fully consumed? */
+    CHECK((sha1->bytes & 0x3F) == 0);
+
+    CHECK(sha1->bytes == sha2->bytes);
+    CHECK(memcmp(sha1->s, sha2->s, sizeof(sha1->s)) == 0);
+}
+
+void run_nonce_function_bip340_tests(void) {
+    unsigned char tag[13] = "BIP0340/nonce";
+    unsigned char aux_tag[11] = "BIP0340/aux";
+    unsigned char algo16[16] = "BIP0340/nonce\0\0\0";
+    secp256k1_sha256 sha;
+    secp256k1_sha256 sha_optimized;
+    unsigned char nonce[32];
+    unsigned char msg[32];
+    unsigned char key[32];
+    unsigned char pk[32];
+    unsigned char aux_rand[32];
+    unsigned char *args[5];
+    int i;
+
+    /* Check that hash initialized by
+     * secp256k1_nonce_function_bip340_sha256_tagged has the expected
+     * state. */
+    secp256k1_sha256_initialize_tagged(&sha, tag, sizeof(tag));
+    secp256k1_nonce_function_bip340_sha256_tagged(&sha_optimized);
+    test_sha256_eq(&sha, &sha_optimized);
+
+   /* Check that hash initialized by
+    * secp256k1_nonce_function_bip340_sha256_tagged_aux has the expected
+    * state. */
+    secp256k1_sha256_initialize_tagged(&sha, aux_tag, sizeof(aux_tag));
+    secp256k1_nonce_function_bip340_sha256_tagged_aux(&sha_optimized);
+    test_sha256_eq(&sha, &sha_optimized);
+
+    secp256k1_rand256(msg);
+    secp256k1_rand256(key);
+    secp256k1_rand256(pk);
+    secp256k1_rand256(aux_rand);
+
+    /* Check that a bitflip in an argument results in different nonces. */
+    args[0] = msg;
+    args[1] = key;
+    args[2] = pk;
+    args[3] = algo16;
+    args[4] = aux_rand;
+    for (i = 0; i < count; i++) {
+        nonce_function_bip340_bitflip(args, 0, 32);
+        nonce_function_bip340_bitflip(args, 1, 32);
+        nonce_function_bip340_bitflip(args, 2, 32);
+        /* Flip algo16 special case "BIP0340/nonce" */
+        nonce_function_bip340_bitflip(args, 3, 16);
+        /* Flip algo16 again */
+        nonce_function_bip340_bitflip(args, 3, 16);
+        nonce_function_bip340_bitflip(args, 4, 32);
+    }
+
+    /* NULL algo16 is disallowed */
+    CHECK(nonce_function_bip340(nonce, msg, key, pk, NULL, NULL) == 0);
+    /* Empty algo16 is fine */
+    memset(algo16, 0x00, 16);
+    CHECK(nonce_function_bip340(nonce, msg, key, pk, algo16, NULL) == 1);
+    /* algo16 with terminating null bytes is fine */
+    algo16[1] = 65;
+    CHECK(nonce_function_bip340(nonce, msg, key, pk, algo16, NULL) == 1);
+    /* Other algo16 is fine */
+    memset(algo16, 0xFF, 16);
+    CHECK(nonce_function_bip340(nonce, msg, key, pk, algo16, NULL) == 1);
+
+    /* NULL aux_rand argument is allowed. */
+    CHECK(nonce_function_bip340(nonce, msg, key, pk, algo16, NULL) == 1);
+}
+
 void run_schnorrsig_tests(void) {
-    /* TODO */
+    run_nonce_function_bip340_tests();
 }
 
 #endif
diff --git a/src/secp256k1/src/testrand.h b/src/secp256k1/src/testrand.h
index f1f9be077e..bcbe15a6f1 100644
--- a/src/secp256k1/src/testrand.h
+++ b/src/secp256k1/src/testrand.h
@@ -35,4 +35,7 @@ static void secp256k1_rand256_test(unsigned char *b32);
 /** Generate pseudorandom bytes with long sequences of zero and one bits. */
 static void secp256k1_rand_bytes_test(unsigned char *bytes, size_t len);
 
+/** Flip a single random bit in a byte array */
+static void secp256k1_rand_flip(unsigned char *b, size_t len);
+
 #endif /* SECP256K1_TESTRAND_H */
diff --git a/src/secp256k1/src/testrand_impl.h b/src/secp256k1/src/testrand_impl.h
index 30a91e5296..dfb658d9c6 100644
--- a/src/secp256k1/src/testrand_impl.h
+++ b/src/secp256k1/src/testrand_impl.h
@@ -107,4 +107,8 @@ static void secp256k1_rand256_test(unsigned char *b32) {
     secp256k1_rand_bytes_test(b32, 32);
 }
 
+static void secp256k1_rand_flip(unsigned char *b, size_t len) {
+    b[secp256k1_rand_int(len)] ^= (1 << secp256k1_rand_int(8));
+}
+
 #endif /* SECP256K1_TESTRAND_IMPL_H */