diff --git a/cms/envs/bok_choy.py b/cms/envs/bok_choy.py
index a3411dc7a8b2..526f404d70a4 100644
--- a/cms/envs/bok_choy.py
+++ b/cms/envs/bok_choy.py
@@ -49,3 +49,9 @@
 
 # Unfortunately, we need to use debug mode to serve staticfiles
 DEBUG = True
+
+# Point the URL used to test YouTube availability to our stub YouTube server
+YOUTUBE_PORT = 9080
+YOUTUBE['API'] = "127.0.0.1:{0}/get_youtube_api/".format(YOUTUBE_PORT)
+YOUTUBE['TEST_URL'] = "127.0.0.1:{0}/test_youtube/".format(YOUTUBE_PORT)
+YOUTUBE['TEXT_API']['url'] = "127.0.0.1:{0}/test_transcripts_youtube/".format(YOUTUBE_PORT)
diff --git a/common/djangoapps/terrain/stubs/http.py b/common/djangoapps/terrain/stubs/http.py
index 621b1eb0293b..def3450a6edd 100644
--- a/common/djangoapps/terrain/stubs/http.py
+++ b/common/djangoapps/terrain/stubs/http.py
@@ -139,6 +139,17 @@ def path_only(self):
         else:
             return path
 
+    def do_DELETE(self):              # pylint: disable=C0103
+        """
+        Allow callers to delete all the server configurations using the /del_config URL.
+        """
+        if self.path == "/del_config" or self.path == "/del_config/":
+            self.server.config = dict()
+            self.log_message("Reset Server Configuration.")
+            self.send_response(200)
+        else:
+            self.send_response(404)
+
     def do_PUT(self):
         """
         Allow callers to configure the stub server using the /set_config URL.
diff --git a/common/djangoapps/terrain/stubs/start.py b/common/djangoapps/terrain/stubs/start.py
index 0a60d425395f..2ee587a7e0a4 100644
--- a/common/djangoapps/terrain/stubs/start.py
+++ b/common/djangoapps/terrain/stubs/start.py
@@ -3,6 +3,7 @@
 """
 import sys
 import time
+import requests
 import logging
 from .comments import StubCommentsService
 from .xqueue import StubXQueueService
@@ -87,6 +88,9 @@ def main():
     print "Starting stub service '{0}' on port {1}...".format(service_name, port_num)
 
     server = SERVICES[service_name](port_num=port_num)
+    if service_name == 'youtube':
+        config_dict['youtube_api_response'] = requests.get('http://www.youtube.com/iframe_api')
+
     server.config.update(config_dict)
 
     try:
diff --git a/common/djangoapps/terrain/stubs/tests/test_http.py b/common/djangoapps/terrain/stubs/tests/test_http.py
index ba0769ac4527..01241120a156 100644
--- a/common/djangoapps/terrain/stubs/tests/test_http.py
+++ b/common/djangoapps/terrain/stubs/tests/test_http.py
@@ -14,6 +14,7 @@ def setUp(self):
         self.server = StubHttpService()
         self.addCleanup(self.server.shutdown)
         self.url = "http://127.0.0.1:{0}/set_config".format(self.server.port)
+        self.reset_config_url = "http://127.0.0.1:{0}/del_config".format(self.server.port)
 
     def test_configure(self):
         """
@@ -63,6 +64,25 @@ def test_unknown_path(self):
         )
         self.assertEqual(response.status_code, 404)
 
+    def test_reset_configuration(self):
+        # JSON-encode parameter
+        post_params = {'test_reset': json.dumps('This is a reset config test')}
+        requests.put(self.url, data=post_params)
+
+        # ensure that there is some data in server config dict
+        self.assertEqual(self.server.config.get('test_reset'), 'This is a reset config test')
+
+        # reset server configuration
+        response = requests.delete(self.reset_config_url)
+        self.assertEqual(response.status_code, 200)
+
+        # ensure that server config dict is empty after successful reset
+        self.assertEqual(self.server.config, {})
+
+    def test_reset_config_unknown_path(self):
+        response = requests.delete("http://127.0.0.1:{0}/invalid_url".format(self.server.port))
+        self.assertEqual(response.status_code, 404)
+
 
 class RequireRequestHandler(StubHttpRequestHandler):
     @require_params('GET', 'test_param')
diff --git a/common/djangoapps/terrain/stubs/tests/test_youtube_stub.py b/common/djangoapps/terrain/stubs/tests/test_youtube_stub.py
index e2603a82fe8b..e94e4626a393 100644
--- a/common/djangoapps/terrain/stubs/tests/test_youtube_stub.py
+++ b/common/djangoapps/terrain/stubs/tests/test_youtube_stub.py
@@ -60,3 +60,17 @@ def test_transcript_url_not_equal(self):
     def test_transcript_not_found(self):
         response = requests.get(self.url + 'test_transcripts_youtube/some_id')
         self.assertEqual(404, response.status_code)
+
+    def test_reset_configuration(self):
+
+        reset_config_url = self.url + 'del_config'
+
+        # add some configuration data
+        self.server.config['test_reset'] = 'This is a reset config test'
+
+        # reset server configuration
+        response = requests.delete(reset_config_url)
+        self.assertEqual(response.status_code, 200)
+
+        # ensure that server config dict is set to initial values after successful reset
+        self.assertTrue('youtube_api_response' in self.server.config)
diff --git a/common/djangoapps/terrain/stubs/youtube.py b/common/djangoapps/terrain/stubs/youtube.py
index a5b5db864497..0d9d2a7bf2c7 100644
--- a/common/djangoapps/terrain/stubs/youtube.py
+++ b/common/djangoapps/terrain/stubs/youtube.py
@@ -33,6 +33,18 @@ class StubYouTubeHandler(StubHttpRequestHandler):
     # Default number of seconds to delay the response to simulate network latency.
     DEFAULT_DELAY_SEC = 0.5
 
+    def do_DELETE(self):              # pylint: disable=C0103
+        """
+        Allow callers to delete all the server configurations using the /del_config URL.
+        """
+        if self.path == "/del_config" or self.path == "/del_config/":
+            self.server.config = dict()
+            self.server.config['youtube_api_response'] = requests.get('http://www.youtube.com/iframe_api')
+            self.log_message("Reset Server Configuration.")
+            self.send_response(200)
+        else:
+            self.send_response(404)
+
     def do_GET(self):
         """
         Handle a GET request from the client and sends response back.
diff --git a/common/test/acceptance/tests/test_video_module.py b/common/test/acceptance/tests/test_video_module.py
index c62c4c8f5db5..d7c40c3b91b7 100644
--- a/common/test/acceptance/tests/test_video_module.py
+++ b/common/test/acceptance/tests/test_video_module.py
@@ -4,6 +4,9 @@
 Acceptance tests for Video.
 """
 
+import time
+import json
+import requests
 from .helpers import UniqueCourseTest
 from ..pages.lms.video import VideoPage
 from ..pages.lms.tab_nav import TabNavPage
@@ -13,6 +16,8 @@
 from ..fixtures.course import CourseFixture, XBlockFixtureDesc
 
 VIDEO_SOURCE_PORT = 8777
+YOUTUBE_STUB_PORT = 9080
+YOUTUBE_STUB_URL = 'http://127.0.0.1:{}/'.format(YOUTUBE_STUB_PORT)
 
 HTML5_SOURCES = [
     'http://localhost:{0}/gizmo.mp4'.format(VIDEO_SOURCE_PORT),
@@ -25,6 +30,13 @@
 ]
 
 
+class YouTubeConfigError(Exception):
+    """
+    Error occurred while configuring YouTube Stub Server.
+    """
+    pass
+
+
 class VideoBaseTest(UniqueCourseTest):
     """
     Base class for tests of the Video Player
@@ -50,6 +62,10 @@ def setUp(self):
         self.metadata = None
         self.assets = []
         self.verticals = None
+        self.youtube_configuraton = {}
+
+        # reset youtube stub server
+        self.addCleanup(self._reset_youtube_stub_server)
 
     def navigate_to_video(self):
         """ Prepare the course and get to the video and render it """
@@ -76,6 +92,9 @@ def _install_course_fixture(self):
         self.course_fixture.add_children(chapter)
         self.course_fixture.install()
 
+        if self.youtube_configuraton:
+            self._configure_youtube_stub_server()
+
     def _add_course_verticals(self):
         """
         Create XBlockFixtureDesc verticals
@@ -126,6 +145,38 @@ def _navigate_to_courseware_video_no_render(self):
         self._navigate_to_courseware_video()
         self.video.wait_for_video_class()
 
+    def _configure_youtube_stub_server(self):
+        """
+        Allow callers to configure the stub server using the /set_config URL.
+        The request should have PUT data, such that:
+            Each PUT parameter is the configuration key.
+            Each PUT value is a JSON-encoded string value for the configuration.
+        :raise YouTubeConfigError:
+        """
+        youtube_stub_config_url = YOUTUBE_STUB_URL + 'set_config'
+
+        config_data = {param: json.dumps(value) for param, value in self.youtube_configuraton.items()}
+        response = requests.put(youtube_stub_config_url, data=config_data)
+
+        if not response.ok:
+            raise YouTubeConfigError(
+                'YouTube Server Configuration Failed. URL {0}, Configuration Data: {1}, Status was {2}'.format(
+                    youtube_stub_config_url, self.youtube_configuraton, response.status_code))
+
+    def _reset_youtube_stub_server(self):
+        """
+        Reset YouTube Stub Server Configurations using the /del_config URL.
+        :raise YouTubeConfigError:
+        """
+        youtube_stub_config_url = YOUTUBE_STUB_URL + 'del_config'
+
+        response = requests.delete(youtube_stub_config_url)
+
+        if not response.ok:
+            raise YouTubeConfigError(
+                'YouTube Server Configuration Failed. URL: {0} Status was {1}'.format(
+                    youtube_stub_config_url, response.status_code))
+
     def metadata_for_mode(self, player_mode, additional_data=None):
         """
         Create a dictionary for video player configuration according to `player_mode`
@@ -337,6 +388,56 @@ def test_fullscreen_video_alignment_on_transcript_toggle(self):
         # check if video aligned correctly without enabled transcript
         self.assertTrue(self.video.is_aligned(False))
 
+    def test_video_rendered_with_html5_sources(self):
+        """
+        Scenario: Video component is fully rendered in the LMS in Youtube mode with HTML5 sources
+        Given youtube server is up and response time is 0.4 seconds
+        And the course has a Video component in "Youtube_HTML5" mode
+        Then the video has rendered in "Youtube" mode
+        """
+        # configure youtube server
+        self.youtube_configuraton['time_to_response'] = 0.4
+        self.metadata = self.metadata_for_mode('youtube_html5')
+
+        self.navigate_to_video()
+
+        self.assertTrue(self.video.is_video_rendered('youtube'))
+
+    def test_video_not_rendered_with_html5_sources(self):
+        """
+        Scenario: Video component is not rendered in the LMS in Youtube mode with HTML5 sources
+        Given youtube server is up and response time is 2 seconds
+        And the course has a Video component in "Youtube_HTML5" mode
+        Then the video has rendered in "HTML5" mode
+        """
+        # configure youtube server
+        self.youtube_configuraton['time_to_response'] = 2.0
+        self.metadata = self.metadata_for_mode('youtube_html5')
+
+        self.navigate_to_video()
+
+        self.assertTrue(self.video.is_video_rendered('html5'))
+
+    def test_video_with_youtube_api_blocked(self):
+        """
+        Scenario: Video is not rendered in the LMS in Youtube mode with HTML5 sources when YouTube API is blocked
+        Given youtube server is up and response time is 2 seconds
+        And youtube stub server blocks YouTube API
+        And the course has a Video component in "Youtube_HTML5" mode
+        And I wait "3" seconds so that video module completely switch to HTML5
+        Then the video has rendered in "HTML5" mode
+        """
+        # configure youtube server
+        self.youtube_configuraton['time_to_response'] = 2.0
+        self.youtube_configuraton['youtube_api_blocked'] = True
+        self.metadata = self.metadata_for_mode('youtube_html5')
+
+        self.navigate_to_video()
+
+        time.sleep(3.0)
+
+        self.assertTrue(self.video.is_video_rendered('html5'))
+
 
 class YouTubeHtml5VideoTest(VideoBaseTest):
     """ Test YouTube HTML5 Video Player """
diff --git a/lms/envs/acceptance.py b/lms/envs/acceptance.py
index 2496b74e1bef..2754c2165dc6 100644
--- a/lms/envs/acceptance.py
+++ b/lms/envs/acceptance.py
@@ -182,6 +182,6 @@ def seed():
 }
 
 # Point the URL used to test YouTube availability to our stub YouTube server
-YOUTUBE['API'] = 'youtube.com/iframe_api'
+YOUTUBE['API'] = "127.0.0.1:{0}/get_youtube_api/".format(YOUTUBE_PORT)
 YOUTUBE['TEST_URL'] = "127.0.0.1:{0}/test_youtube/".format(YOUTUBE_PORT)
 YOUTUBE['TEXT_API']['url'] = "127.0.0.1:{0}/test_transcripts_youtube/".format(YOUTUBE_PORT)
diff --git a/lms/envs/bok_choy.py b/lms/envs/bok_choy.py
index 88f7f62c7bbd..07969726a704 100644
--- a/lms/envs/bok_choy.py
+++ b/lms/envs/bok_choy.py
@@ -5,6 +5,7 @@
 import os
 from path import path
 
+
 CONFIG_ROOT = path(__file__).abspath().dirname()  # pylint: disable=E1120
 TEST_ROOT = CONFIG_ROOT.dirname().dirname() / "test_root"
 
@@ -60,3 +61,9 @@
 
 # Unfortunately, we need to use debug mode to serve staticfiles
 DEBUG = True
+
+# Point the URL used to test YouTube availability to our stub YouTube server
+YOUTUBE_PORT = 9080
+YOUTUBE['API'] = "127.0.0.1:{0}/get_youtube_api/".format(YOUTUBE_PORT)
+YOUTUBE['TEST_URL'] = "127.0.0.1:{0}/test_youtube/".format(YOUTUBE_PORT)
+YOUTUBE['TEXT_API']['url'] = "127.0.0.1:{0}/test_transcripts_youtube/".format(YOUTUBE_PORT)
diff --git a/rakelib/bok_choy.rake b/rakelib/bok_choy.rake
index 06bf342693af..d773cbbb7685 100644
--- a/rakelib/bok_choy.rake
+++ b/rakelib/bok_choy.rake
@@ -54,7 +54,14 @@ BOK_CHOY_STUBS = {
         :port => 8777,
         :log => File.join(BOK_CHOY_LOG_DIR, "bok_choy_video_sources.log"),
         :config => "root_dir=#{VIDEO_SOURCE_DIR}"
+    },
+
+    :youtube => {
+
+        :port => 9080,
+        :log => File.join(BOK_CHOY_LOG_DIR, "bok_choy_youtube.log")
     }
+
 }
 
 # For the time being, stubs are used by both the bok-choy and lettuce acceptance tests