diff --git a/state/state.go b/state/state.go
index 516af2411..451377079 100644
--- a/state/state.go
+++ b/state/state.go
@@ -331,10 +331,7 @@ func MakeGenesisState(genDoc *types.GenesisDoc) (State, error) {
 		nextValidatorSet = types.NewValidatorSet(validators).CopyIncrementProposerPriority(1)
 	}
 
-	appVersion := uint64(0)
-	if genDoc.ConsensusParams != nil {
-		appVersion = genDoc.ConsensusParams.Version.AppVersion
-	}
+	appVersion := getAppVersion(genDoc)
 
 	return State{
 		Version:       InitStateVersion(appVersion),
@@ -356,3 +353,13 @@ func MakeGenesisState(genDoc *types.GenesisDoc) (State, error) {
 		AppHash: genDoc.AppHash,
 	}, nil
 }
+
+func getAppVersion(genDoc *types.GenesisDoc) uint64 {
+	if genDoc.ConsensusParams != nil &&
+		genDoc.ConsensusParams.Version.AppVersion != 0 {
+		return genDoc.ConsensusParams.Version.AppVersion
+	}
+	// Default to app version 1 because some chains (e.g. mocha-4) did not set
+	// an explicit app version in genesis.json.
+	return uint64(1)
+}
diff --git a/state/state_test.go b/state/state_test.go
index fb3eb4fbf..b7abc418f 100644
--- a/state/state_test.go
+++ b/state/state_test.go
@@ -88,6 +88,18 @@ func TestMakeGenesisStateSetsAppVersion(t *testing.T) {
 	require.Nil(t, err)
 	require.Equal(t, appVersion, state.Version.Consensus.App)
 	require.Equal(t, version.BlockProtocol, state.Version.Consensus.Block)
+	t.Run("MakeGenesisState defaults to 1 if app version is not set", func(t *testing.T) {
+		cp := types.DefaultConsensusParams()
+		cp.Version = cmtproto.VersionParams{} // zero value
+		doc := types.GenesisDoc{
+			ChainID:         "chain-id",
+			ConsensusParams: cp,
+		}
+		require.NoError(t, doc.ValidateAndComplete())
+		state, err := sm.MakeGenesisState(&doc)
+		require.NoError(t, err)
+		require.Equal(t, uint64(1), state.Version.Consensus.App)
+	})
 }
 
 // TestStateSaveLoad tests saving and loading State from a db.