diff --git a/peewee.py b/peewee.py
index 8cfcbb57a..06bd9e115 100644
--- a/peewee.py
+++ b/peewee.py
@@ -452,12 +452,12 @@ class DatabaseProxy(Proxy):
     """
     def connection_context(self):
         return ConnectionContext(self)
-    def atomic(self, *args):
-        return _atomic(self, *args)
+    def atomic(self, *args, **kwargs):
+        return _atomic(self, *args, **kwargs)
     def manual_commit(self):
         return _manual(self)
-    def transaction(self, *args):
-        return _transaction(self, *args)
+    def transaction(self, *args, **kwargs):
+        return _transaction(self, *args, **kwargs)
     def savepoint(self):
         return _savepoint(self)
 
@@ -3188,14 +3188,14 @@ def top_transaction(self):
         if self._state.transactions:
             return self._state.transactions[-1]
 
-    def atomic(self, *args):
-        return _atomic(self, *args)
+    def atomic(self, *args, **kwargs):
+        return _atomic(self, *args, **kwargs)
 
     def manual_commit(self):
         return _manual(self)
 
-    def transaction(self, *args):
-        return _transaction(self, *args)
+    def transaction(self, *args, **kwargs):
+        return _transaction(self, *args, **kwargs)
 
     def savepoint(self):
         return _savepoint(self)
@@ -4065,13 +4065,14 @@ def __exit__(self, exc_type, exc_val, exc_tb):
 
 
 class _atomic(_callable_context_manager):
-    def __init__(self, db, *args):
+    def __init__(self, db, *args, **kwargs):
         self.db = db
-        self._transaction_args = args
+        self._transaction_args = (args, kwargs)
 
     def __enter__(self):
         if self.db.transaction_depth() == 0:
-            self._helper = self.db.transaction(*self._transaction_args)
+            args, kwargs = self._transaction_args
+            self._helper = self.db.transaction(*args, **kwargs)
         elif isinstance(self.db.top_transaction(), _manual):
             raise ValueError('Cannot enter atomic commit block while in '
                              'manual commit mode.')
@@ -4084,12 +4085,13 @@ def __exit__(self, exc_type, exc_val, exc_tb):
 
 
 class _transaction(_callable_context_manager):
-    def __init__(self, db, *args):
+    def __init__(self, db, *args, **kwargs):
         self.db = db
-        self._begin_args = args
+        self._begin_args = (args, kwargs)
 
     def _begin(self):
-        self.db.begin(*self._begin_args)
+        args, kwargs = self._begin_args
+        self.db.begin(*args, **kwargs)
 
     def commit(self, begin=True):
         self.db.commit()
diff --git a/tests/base.py b/tests/base.py
index 2694449d0..c7b782e91 100644
--- a/tests/base.py
+++ b/tests/base.py
@@ -79,8 +79,8 @@ def make_db_params(key):
     handler.setLevel(logging.DEBUG)
 
 
-def new_connection():
-    return db_loader(BACKEND, 'peewee_test')
+def new_connection(**kwargs):
+    return db_loader(BACKEND, 'peewee_test', **kwargs)
 
 
 db = new_connection()
diff --git a/tests/transactions.py b/tests/transactions.py
index 673969e75..7c601b785 100644
--- a/tests/transactions.py
+++ b/tests/transactions.py
@@ -2,9 +2,12 @@
 
 from .base import DatabaseTestCase
 from .base import IS_CRDB
+from .base import IS_SQLITE
 from .base import ModelTestCase
 from .base import db
+from .base import new_connection
 from .base import skip_if
+from .base import skip_unless
 from .base_models import Register
 
 
@@ -345,3 +348,31 @@ def test_session_commit(self):
 
         self.assertTrue(db.session_rollback())
         self.assertRegister([1, 2, 3])
+
+
+@skip_unless(IS_SQLITE, 'requires sqlite for transaction lock type')
+class TestTransactionLockType(BaseTransactionTestCase):
+    def test_lock_type(self):
+        db2 = new_connection(timeout=0.001)
+        db2.connect()
+
+        with self.database.atomic(lock_type='EXCLUSIVE') as txn:
+            with self.assertRaises(OperationalError):
+                with db2.atomic(lock_type='IMMEDIATE') as t2:
+                    self._save(1)
+            self._save(2)
+        self.assertRegister([2])
+
+        with self.database.atomic('IMMEDIATE') as txn:
+            with self.assertRaises(OperationalError):
+                with db2.atomic('EXCLUSIVE') as t2:
+                    self._save(3)
+            self._save(4)
+        self.assertRegister([2, 4])
+
+        with self.database.transaction(lock_type='DEFERRED') as txn:
+            self._save(5)  # Deferred -> Exclusive after our write.
+            with self.assertRaises(OperationalError):
+                with db2.transaction(lock_type='IMMEDIATE') as t2:
+                    self._save(6)
+        self.assertRegister([2, 4, 5])