diff --git a/jerry-core/ecma/operations/ecma-proxy-object.c b/jerry-core/ecma/operations/ecma-proxy-object.c
index c3bf3b458..c3036e175 100644
--- a/jerry-core/ecma/operations/ecma-proxy-object.c
+++ b/jerry-core/ecma/operations/ecma-proxy-object.c
@@ -396,9 +396,93 @@ ecma_proxy_object_set_prototype_of (ecma_object_t *obj_p, /**< proxy object */
                                     ecma_value_t proto) /**< new prototype object */
 {
   JERRY_ASSERT (ECMA_OBJECT_IS_PROXY (obj_p));
+
+  /* 1. */
   JERRY_ASSERT (ecma_is_value_object (proto) || ecma_is_value_null (proto));
-  JERRY_UNUSED_2 (obj_p, proto);
-  return ecma_raise_type_error (ECMA_ERR_MSG ("UNIMPLEMENTED: Proxy.[[SetPrototypeOf]]"));
+
+  ecma_proxy_object_t *proxy_obj_p = (ecma_proxy_object_t *) obj_p;
+
+  /* 2. */
+  ecma_value_t handler = proxy_obj_p->handler;
+
+  /* 3-6. */
+  ecma_value_t trap = ecma_validate_proxy_object (handler, LIT_MAGIC_STRING_SET_PROTOTYPE_OF_UL);
+
+  /* 7.*/
+  if (ECMA_IS_VALUE_ERROR (trap))
+  {
+    return trap;
+  }
+
+  ecma_value_t target = proxy_obj_p->target;
+  ecma_object_t *target_obj_p = ecma_get_object_from_value (target);
+
+  /* 8. */
+  if (ecma_is_value_undefined (trap))
+  {
+    if (ECMA_OBJECT_IS_PROXY (target_obj_p))
+    {
+      return ecma_proxy_object_set_prototype_of (target_obj_p, proto);
+    }
+
+    return ecma_op_ordinary_object_set_prototype_of (target_obj_p, proto);
+  }
+
+  ecma_object_t *func_obj_p = ecma_get_object_from_value (trap);
+  ecma_value_t args[] = { target, proto };
+
+  /* 9. */
+  ecma_value_t trap_result = ecma_op_function_call (func_obj_p, handler, args, 2);
+
+  ecma_deref_object (func_obj_p);
+
+  /* 10. */
+  if (ECMA_IS_VALUE_ERROR (trap_result))
+  {
+    return trap_result;
+  }
+
+  bool boolean_trap_result = ecma_op_to_boolean (trap_result);
+
+  ecma_free_value (trap_result);
+
+  /* 11. */
+  ecma_value_t extensible_target = ecma_builtin_object_object_is_extensible (target_obj_p);
+
+  /* 12. */
+  if (ECMA_IS_VALUE_ERROR (extensible_target))
+  {
+    return extensible_target;
+  }
+
+  /* 13. */
+  if (ecma_is_value_true (extensible_target))
+  {
+    return ecma_make_boolean_value (boolean_trap_result);
+  }
+
+  /* 14. */
+  ecma_value_t target_proto = ecma_builtin_object_object_get_prototype_of (target_obj_p);
+
+  /* 15. */
+  if (ECMA_IS_VALUE_ERROR (target_proto))
+  {
+    return target_proto;
+  }
+
+  ecma_value_t ret_value = ecma_make_boolean_value (boolean_trap_result);
+
+  /* 16. */
+  if (boolean_trap_result && (target_proto != proto))
+  {
+    ret_value = ecma_raise_type_error (ECMA_ERR_MSG ("Target object is non-extensible and trap "
+                                                     "returned different prototype."));
+  }
+
+  ecma_free_value (target_proto);
+
+  /* 17. */
+  return ret_value;
 } /* ecma_proxy_object_set_prototype_of */
 
 /**
diff --git a/jerry-core/lit/lit-magic-strings.inc.h b/jerry-core/lit/lit-magic-strings.inc.h
index fb5a527d8..f40146193 100644
--- a/jerry-core/lit/lit-magic-strings.inc.h
+++ b/jerry-core/lit/lit-magic-strings.inc.h
@@ -814,6 +814,7 @@ LIT_MAGIC_STRING_DEF (LIT_MAGIC_STRING_GET_UTC_FULL_YEAR_UL, "getUTCFullYear")
 #endif
 LIT_MAGIC_STRING_DEF (LIT_MAGIC_STRING_HAS_OWN_PROPERTY_UL, "hasOwnProperty")
 #if ENABLED (JERRY_ES2015) \
+|| ENABLED (JERRY_ES2015_BUILTIN_PROXY) \
 || ENABLED (JERRY_ES2015_BUILTIN_REFLECT)
 LIT_MAGIC_STRING_DEF (LIT_MAGIC_STRING_SET_PROTOTYPE_OF_UL, "setPrototypeOf")
 #endif
diff --git a/tests/jerry/es2015/proxy_set_prototoype_of.js b/tests/jerry/es2015/proxy_set_prototoype_of.js
index c39ef79cf..f215bc499 100644
--- a/tests/jerry/es2015/proxy_set_prototoype_of.js
+++ b/tests/jerry/es2015/proxy_set_prototoype_of.js
@@ -12,7 +12,9 @@
 // See the License for the specific language governing permissions and
 // limitations under the License.
 
-// TODO: Update these tests when the internal routine has been implemented
+// Copyright 2015 the V8 project authors. All rights reserved.
+// Use of this source code is governed by a BSD-style license that can be
+// found in the LICENSE file.
 
 var target = {};
 var handler = { setPrototypeOf (target) {
@@ -25,6 +27,132 @@ try {
   // 19.1.2.18
   Object.setPrototypeOf(proxy, {});
   assert(false);
+} catch (e) {
+  assert(e === 42);
+}
+
+// test basic funcionality
+var targetProto = {};
+var target = {
+  foo: false
+};
+
+var handler = {
+  setPrototypeOf(target, targetrProto) {
+    target.foo = true;
+    return false;
+  }
+};
+
+var proxy = new Proxy(target, handler);
+
+assert(Reflect.setPrototypeOf(proxy, targetProto) === false);
+assert(target.foo === true);
+
+try {
+  Object.setPrototypeOf(proxy, targetProto);
+  assert(false);
+} catch (e) {
+  assert(e instanceof TypeError);
+}
+
+try {
+  Object.setPrototypeOf(proxy, undefined);
+  assert(false);
+} catch (e) {
+  assert(e instanceof TypeError);
+}
+
+try {
+  Object.setPrototypeOf(proxy, 1);
+  assert(false);
+} catch (e) {
+  assert(e instanceof TypeError);
+}
+
+var target = {};
+var handler = {};
+var prototype = [];
+
+var proxy = new Proxy(target, handler);
+
+Object.setPrototypeOf(proxy, prototype);
+assert(Object.getPrototypeOf(target) === prototype);
+
+handler.setPrototypeOf = function(target, proto) {
+  return false;
+};
+
+try {
+  Object.setPrototypeOf(proxy, {});
+  assert(false);
+} catch (e) {
+  assert(e instanceof TypeError);
+}
+
+handler.setPrototypeOf = function(target, proto) {
+  return undefined;
+};
+
+try {
+  Object.setPrototypeOf(proxy, {});
+  assert(false);
+} catch (e) {
+  assert(e instanceof TypeError);
+}
+
+handler.setPrototypeOf = function(proto) {};
+
+try {
+  Object.setPrototypeOf(proxy, {});
+  assert(false);
+} catch (e) {
+  assert(e instanceof TypeError);
+}
+
+var proto = {};
+Object.setPrototypeOf(proto, Function.prototype);
+
+var seen_prototype;
+var seen_target;
+
+handler.setPrototypeOf = function(target, proto) {
+  seen_target = target;
+  seen_prototype = proto;
+  return true;
+}
+
+Object.setPrototypeOf(proxy, proto);
+assert(target === seen_target);
+assert(proto === seen_prototype);
+
+// test when target is proxy
+var target = {};
+var handler = {};
+var handler2 = {};
+var target2 = new Proxy(target, handler2);
+var proxy2 = new Proxy(target2, handler);
+var prototype = [2,3];
+
+Object.setPrototypeOf(proxy2, prototype);
+
+assert(prototype === Object.getPrototypeOf(target));
+
+// test when invariants gets violated
+var target = {};
+var handler = {
+    setPrototypeOf(target, proto) {
+        Object.setPrototypeOf(target, Function.prototype);
+        Object.preventExtensions(target);
+        return true;
+    }
+}
+
+var proxy = new Proxy(target, handler);
+
+try {
+  Object.setPrototypeOf(proxy, Array.prototype);
+  assert(false);
 } catch (e) {
   assert(e instanceof TypeError);
 }
diff --git a/tests/unit-core/test-api.c b/tests/unit-core/test-api.c
index 5bf31fded..a0b55244c 100644
--- a/tests/unit-core/test-api.c
+++ b/tests/unit-core/test-api.c
@@ -733,21 +733,21 @@ main (void)
 
   if (jerry_is_feature_enabled (JERRY_FEATURE_PROXY))
   {
-    /* Note: update this test when the internal method is implemented */
     jerry_value_t target = jerry_create_object ();
     jerry_value_t handler = jerry_create_object ();
     jerry_value_t proxy = jerry_create_proxy (target, handler);
+    new_proto = jerry_eval ((jerry_char_t *) "Function.prototype", 18, JERRY_PARSE_NO_OPTS);
+
+    res = jerry_set_prototype (proxy, new_proto);
+    TEST_ASSERT (!jerry_value_is_error (res));
+    jerry_value_t target_proto = jerry_get_prototype (target);
+    TEST_ASSERT (target_proto == new_proto);
 
     jerry_release_value (target);
     jerry_release_value (handler);
-    new_proto = jerry_create_object ();
-    res = jerry_set_prototype (proxy, new_proto);
-    jerry_release_value (new_proto);
-    TEST_ASSERT (jerry_value_is_error (res));
-    error = jerry_get_value_from_error (res, true);
-    TEST_ASSERT (jerry_get_error_type (error) == JERRY_ERROR_TYPE);
-    jerry_release_value (error);
     jerry_release_value (proxy);
+    jerry_release_value (new_proto);
+    jerry_release_value (target_proto);
   }
 
   /* Test: eval */