diff --git a/cms/djangoapps/contentstore/features/video.feature b/cms/djangoapps/contentstore/features/video.feature
index 693ec2a5b6..bb4672c499 100644
--- a/cms/djangoapps/contentstore/features/video.feature
+++ b/cms/djangoapps/contentstore/features/video.feature
@@ -3,16 +3,31 @@ Feature: CMS Video Component
   As a course author, I want to be able to view my created videos in Studio
 
   # 1
+  Scenario: YouTube stub server proxies YouTube API correctly
+    Given youtube stub server proxies YouTube API
+    Given I have created a Video component
+    Then I can see video button "play"
+    And I click video button "play"
+    Then I can see video button "pause"
+
+  # 2
+  Scenario: YouTube stub server can block YouTube API
+    Given youtube stub server blocks YouTube API
+    Given I have created a Video component
+    Given We explicitly wait for YouTube API to not load
+    Then I do not see video button "play"
+
+  # 3
   Scenario: Autoplay is disabled in Studio
     Given I have created a Video component
     Then when I view the video it does not have autoplay enabled
 
-  # 2
+  # 4
   Scenario: Creating a video takes a single click
     Given I have clicked the new unit button
     Then creating a video takes a single click
 
-  # 3
+  # 5
   # Sauce Labs cannot delete cookies
   @skip_sauce
   Scenario: Captions are hidden correctly
@@ -20,14 +35,14 @@ Feature: CMS Video Component
     And I have hidden captions
     Then when I view the video it does not show the captions
 
-  # 4
+  # 6
   # Sauce Labs cannot delete cookies
   @skip_sauce
   Scenario: Captions are shown correctly
     Given I have created a Video component with subtitles
     Then when I view the video it does show the captions
 
-  # 5
+  # 7
   # Sauce Labs cannot delete cookies
   @skip_sauce
   Scenario: Captions are toggled correctly
@@ -35,13 +50,13 @@ Feature: CMS Video Component
     And I have toggled captions
     Then when I view the video it does show the captions
 
-  # 6
+  # 8
   Scenario: Video data is shown correctly
     Given I have created a video with only XML data
     And I reload the page
     Then the correct Youtube video is shown
 
-  # 7
+  # 9
   # Disabled 11/26 due to flakiness in master.
   # Enabled back on 11/29.
   Scenario: When enter key is pressed on a caption shows an outline around it
@@ -51,7 +66,7 @@ Feature: CMS Video Component
     Then I press "enter" button on caption line with data-index "0"
     And I see caption line with data-index "0" has class "focused"
 
-  # 8
+  # 10
   Scenario: When start and end times are specified, a range on slider is shown
     Given I have created a Video component with subtitles
     And Make sure captions are closed
@@ -63,7 +78,7 @@ Feature: CMS Video Component
     And I click video button "play"
     Then I see a range on slider
 
-  # 12
+  # 11
   # Disabled 2/19/14 after intermittent failures in master
   #Scenario: Check that position is stored on page refresh, position within start-end range
   #  Given I have created a Video component with subtitles
@@ -81,7 +96,7 @@ Feature: CMS Video Component
   #  And I click video button "play"
   #  Then I see video starts playing from "0:16" position
 
-  # 13
+  # 12
 # Disabled 2/18/14 after intermittent failures in master
 #  Scenario: Check that position is stored on page refresh, position before start-end range
 #    Given I have created a Video component with subtitles
@@ -99,7 +114,7 @@ Feature: CMS Video Component
 #    And I click video button "play"
 #    Then I see video starts playing from "0:12" position
 
-  # 14
+  # 13
 # Disabled 2/18/14 after intermittent failures in master
 #  Scenario: Check that position is stored on page refresh, position after start-end range
 #    Given I have created a Video component with subtitles
diff --git a/cms/djangoapps/contentstore/features/video.py b/cms/djangoapps/contentstore/features/video.py
index dbcd54a32f..ef48014da6 100644
--- a/cms/djangoapps/contentstore/features/video.py
+++ b/cms/djangoapps/contentstore/features/video.py
@@ -21,11 +21,27 @@ SELECTORS = {
 DELAY = 0.5
 
 
+@step('youtube stub server (.*) YouTube API')
+def configure_youtube_api(_step, action):
+    action=action.strip()
+    if action == 'proxies':
+        world.youtube.config['youtube_api_blocked'] = False
+    elif action == 'blocks':
+        world.youtube.config['youtube_api_blocked'] = True
+    else:
+        raise ValueError('Parameter `action` should be one of "proxies" or "blocks".')
+
+
+@step('We explicitly wait for YouTube API to not load$')
+def wait_for_youtube_api_fail(_step):
+    world.wait(3)
+
+
 @step('I have created a Video component$')
-def i_created_a_video_component(step):
+def i_created_a_video_component(_step):
     world.create_course_with_unit()
     world.create_component_instance(
-        step=step,
+        step=_step,
         category='video',
     )
 
@@ -77,6 +93,8 @@ def i_have_uploaded_subtitles(_step, sub_id):
 
 @step('when I view the (.*) it does not have autoplay enabled$')
 def does_not_autoplay(_step, video_type):
+    world.wait(DELAY)
+    world.wait_for_ajax_complete()
     actual = world.css_find('.%s' % video_type)[0]['data-autoplay']
     expected = [u'False', u'false', False]
     assert actual in expected
@@ -200,6 +218,20 @@ def see_a_range_slider_with_proper_range(_step):
     assert world.css_visible(".slider-range")
 
 
+@step('I (.*) see video button "([^"]*)"$')
+def do_not_see_or_not_button_video(_step, action, button_type):
+    world.wait(DELAY)
+    world.wait_for_ajax_complete()
+    action=action.strip()
+    button = button_type.strip()
+    if action == 'do not':
+        assert not world.is_css_present(VIDEO_BUTTONS[button])
+    elif action == 'can':
+        assert world.css_visible(VIDEO_BUTTONS[button])
+    else:
+        raise ValueError('Parameter `action` should be one of "do not" or "can".')
+
+
 @step('I click video button "([^"]*)"$')
 def click_button_video(_step, button_type):
     world.wait(DELAY)
diff --git a/cms/envs/acceptance.py b/cms/envs/acceptance.py
index 63fa464977..da015be00e 100644
--- a/cms/envs/acceptance.py
+++ b/cms/envs/acceptance.py
@@ -119,6 +119,6 @@ except ImportError:
     pass
 
 # 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/common/djangoapps/terrain/stubs/youtube.py b/common/djangoapps/terrain/stubs/youtube.py
index cf97284936..5e7a0de8ce 100644
--- a/common/djangoapps/terrain/stubs/youtube.py
+++ b/common/djangoapps/terrain/stubs/youtube.py
@@ -20,6 +20,7 @@ To start this stub server on its own from Vagrant:
 from .http import StubHttpRequestHandler, StubHttpService
 import json
 import time
+import requests
 from urlparse import urlparse
 from collections import OrderedDict
 
@@ -75,6 +76,13 @@ class StubYouTubeHandler(StubHttpRequestHandler):
 
             self._send_video_response(youtube_id, "I'm youtube.")
 
+        elif 'get_youtube_api' in self.path:
+            if self.server.config.get('youtube_api_blocked'):
+                self.send_response(404, content='', headers={'Content-type': 'text/plain'})
+            else:
+                response = requests.get('http://www.youtube.com/iframe_api')
+                self.send_response(200, content=response.text, headers={'Content-type': 'text/html'})
+
         else:
             self.send_response(
                 404, content="Unused url", headers={'Content-type': 'text/plain'}