diff --git a/test/e2e-tests.sh b/test/e2e-tests.sh
index bf21ddba9c66..1d5afa92cadf 100755
--- a/test/e2e-tests.sh
+++ b/test/e2e-tests.sh
@@ -292,6 +292,7 @@ set +o pipefail
 
 wait_until_pods_running knative-serving
 wait_until_pods_running istio-system
+wait_until_service_has_external_ip istio-system knative-ingressgateway
 abort_if_failed
 
 # Run the tests
diff --git a/test/library.sh b/test/library.sh
index 0b2baccba0ec..d3cb7b7acce8 100755
--- a/test/library.sh
+++ b/test/library.sh
@@ -80,10 +80,11 @@ function delete_gcr_images() {
 # Parameters: $1 - namespace.
 function wait_until_pods_running() {
   echo -n "Waiting until all pods in namespace $1 are up"
+  local ns="$1"
   for i in {1..150}; do  # timeout after 5 minutes
+    local has_pending="$(kubectl get pods -n $ns -o jsonpath='{.items[*].status.phase}' | grep Pending)"
     local pods="$(kubectl get pods -n $1 2>/dev/null | grep -v NAME)"
-    local not_running=$(echo "${pods}" | grep -v Running | wc -l)
-    if [[ -n "${pods}" && ${not_running} == 0 ]]; then
+    if [[ -n "${pods}" && -z "${has_pending}" ]]; then
       echo -e "\nAll pods are up:"
       kubectl get pods -n $1
       return 0
@@ -96,6 +97,27 @@ function wait_until_pods_running() {
   return 1
 }
 
+# Waits until the given service has an external IP address.
+# Parameters: $1 - namespace.
+# Parameters: $2 - service name.
+function wait_until_service_has_external_ip() {
+  local ns=$1
+  local svc=$2
+  echo -n "Waiting until service $svc in namespace $ns has an external IP"
+  for i in {1..150}; do  # timeout after 15 minutes
+    local ip=$(kubectl get svc -n $ns $svc -o jsonpath="{.status.loadBalancer.ingress[0].ip}")
+    if [[ -n "${ip}" ]]; then
+      echo -e "\nService $svc.$ns has IP $ip"
+      return 0
+    fi
+    echo -n "."
+    sleep 6
+  done
+  echo -e "\n\nERROR: timeout waiting for service $svc.$ns to have external IP"
+  kubectl get pods -n $1
+  return 1
+}
+
 # Returns the name of the Knative Serving pod of the given app.
 # Parameters: $1 - Knative Serving app name.
 function get_knative_pod() {