diff --git a/homeassistant/components/notify/smtp.py b/homeassistant/components/notify/smtp.py
index 7664753f2ee..27c74571d40 100644
--- a/homeassistant/components/notify/smtp.py
+++ b/homeassistant/components/notify/smtp.py
@@ -6,14 +6,18 @@ https://home-assistant.io/components/notify.smtp/
 """
 import logging
 import smtplib
+from email.mime.multipart import MIMEMultipart
 from email.mime.text import MIMEText
+from email.mime.image import MIMEImage
 
 from homeassistant.components.notify import (
-    ATTR_TITLE, DOMAIN, BaseNotificationService)
+    ATTR_TITLE, ATTR_DATA, DOMAIN, BaseNotificationService)
 from homeassistant.helpers import validate_config
 
 _LOGGER = logging.getLogger(__name__)
 
+ATTR_IMAGES = 'images'  # optional embedded image file attachments
+
 
 def get_service(hass, config):
     """Get the mail notification service."""
@@ -22,52 +26,21 @@ def get_service(hass, config):
                            _LOGGER):
         return None
 
-    smtp_server = config.get('server', 'localhost')
-    port = int(config.get('port', '25'))
-    username = config.get('username', None)
-    password = config.get('password', None)
-    starttls = int(config.get('starttls', 0))
-    debug = config.get('debug', 0)
-
-    server = None
-    try:
-        server = smtplib.SMTP(smtp_server, port, timeout=5)
-        server.set_debuglevel(debug)
-        server.ehlo()
-        if starttls == 1:
-            server.starttls()
-            server.ehlo()
-        if username and password:
-            try:
-                server.login(username, password)
-
-            except (smtplib.SMTPException, smtplib.SMTPSenderRefused):
-                _LOGGER.exception("Please check your settings.")
-                return None
-
-    except smtplib.socket.gaierror:
-        _LOGGER.exception(
-            "SMTP server not found (%s:%s). "
-            "Please check the IP address or hostname of your SMTP server.",
-            smtp_server, port)
+    mail_service = MailNotificationService(
+        config.get('server', 'localhost'),
+        int(config.get('port', '25')),
+        config.get('sender', None),
+        int(config.get('starttls', 0)),
+        config.get('username', None),
+        config.get('password', None),
+        config.get('recipient', None),
+        config.get('debug', 0))
 
+    if mail_service.connection_is_valid():
+        return mail_service
+    else:
         return None
 
-    except smtplib.SMTPAuthenticationError:
-        _LOGGER.exception(
-            "Login not possible. "
-            "Please check your setting and/or your credentials.")
-
-        return None
-
-    finally:
-        if server:
-            server.quit()
-
-    return MailNotificationService(
-        smtp_server, port, config['sender'], starttls, username, password,
-        config['recipient'], debug)
-
 
 # pylint: disable=too-few-public-methods, too-many-instance-attributes
 class MailNotificationService(BaseNotificationService):
@@ -99,17 +72,57 @@ class MailNotificationService(BaseNotificationService):
             mail.login(self.username, self.password)
         return mail
 
-    def send_message(self, message="", **kwargs):
-        """Send a message to a user."""
-        mail = self.connect()
-        subject = kwargs.get(ATTR_TITLE)
+    def connection_is_valid(self):
+        """Check for valid config, verify connectivity."""
+        server = None
+        try:
+            server = self.connect()
+        except smtplib.socket.gaierror:
+            _LOGGER.exception(
+                "SMTP server not found (%s:%s). "
+                "Please check the IP address or hostname of your SMTP server.",
+                self._server, self._port)
+
+            return False
+
+        except (smtplib.SMTPAuthenticationError, ConnectionRefusedError):
+            _LOGGER.exception(
+                "Login not possible. "
+                "Please check your setting and/or your credentials.")
+
+            return False
+
+        finally:
+            if server:
+                server.quit()
+
+        return True
+
+    def send_message(self, message="", **kwargs):
+        """
+        Build and send a message to a user.
+
+        Will send plain text normally, or will build a multipart HTML message
+        with inline image attachments if images config is defined.
+        """
+        subject = kwargs.get(ATTR_TITLE)
+        data = kwargs.get(ATTR_DATA)
+
+        if data:
+            msg = _build_multipart_msg(message, images=data.get(ATTR_IMAGES))
+        else:
+            msg = _build_text_msg(message)
 
-        msg = MIMEText(message)
         msg['Subject'] = subject
         msg['To'] = self.recipient
         msg['From'] = self._sender
         msg['X-Mailer'] = 'HomeAssistant'
 
+        return self._send_email(msg)
+
+    def _send_email(self, msg):
+        """Send the message."""
+        mail = self.connect()
         for _ in range(self.tries):
             try:
                 mail.sendmail(self._sender, self.recipient,
@@ -122,3 +135,36 @@ class MailNotificationService(BaseNotificationService):
                 mail = self.connect()
 
         mail.quit()
+
+
+def _build_text_msg(message):
+    """Build plaintext email."""
+    _LOGGER.debug('Building plain text email.')
+    return MIMEText(message)
+
+
+def _build_multipart_msg(message, images):
+    """Build Multipart message with in-line images."""
+    _LOGGER.debug('Building multipart email with embedded attachment(s).')
+    msg = MIMEMultipart('related')
+    msg_alt = MIMEMultipart('alternative')
+    msg.attach(msg_alt)
+    body_txt = MIMEText(message)
+    msg_alt.attach(body_txt)
+    body_text = ['<p>{}</p><br>'.format(message)]
+
+    for atch_num, atch_name in enumerate(images):
+        cid = 'image{}'.format(atch_num)
+        body_text.append('<img src="cid:{}"><br>'.format(cid))
+        try:
+            with open(atch_name, 'rb') as attachment_file:
+                attachment = MIMEImage(attachment_file.read())
+                msg.attach(attachment)
+                attachment.add_header('Content-ID', '<{}>'.format(cid))
+        except FileNotFoundError:
+            _LOGGER.warning('Attachment %s not found. Skipping.',
+                            atch_name)
+
+    body_html = MIMEText(''.join(body_text), 'html')
+    msg_alt.attach(body_html)
+    return msg
diff --git a/tests/components/notify/test_smtp.py b/tests/components/notify/test_smtp.py
new file mode 100644
index 00000000000..7fa61fbdc24
--- /dev/null
+++ b/tests/components/notify/test_smtp.py
@@ -0,0 +1,52 @@
+"""The tests for the notify smtp platform."""
+import unittest
+
+from homeassistant.components.notify import smtp
+
+from tests.common import get_test_home_assistant
+
+
+class MockSMTP(smtp.MailNotificationService):
+    """Test SMTP object that doesn't need a working server."""
+
+    def connection_is_valid(self):
+        """Pretend connection is always valid for testing."""
+        return True
+
+    def _send_email(self, msg):
+        """Just return string for testing."""
+        return msg.as_string()
+
+
+class TestNotifySmtp(unittest.TestCase):
+    """Test the smtp notify."""
+
+    def setUp(self):  # pylint: disable=invalid-name
+        """Setup things to be run when tests are started."""
+        self.hass = get_test_home_assistant()
+        self.mailer = MockSMTP('localhost', 25, 'test@test.com', 1, 'testuser',
+                               'testpass', 'testrecip@test.com', 0)
+
+    def tearDown(self):  # pylint: disable=invalid-name
+        """"Stop down everything that was started."""
+        self.hass.stop()
+
+    def test_text_email(self):
+        """Test build of default text email behavior."""
+        msg = self.mailer.send_message('Test msg')
+        expected = ('Content-Type: text/plain; charset="us-ascii"\n'
+                    'MIME-Version: 1.0\n'
+                    'Content-Transfer-Encoding: 7bit\n'
+                    'Subject: \n'
+                    'To: testrecip@test.com\n'
+                    'From: test@test.com\n'
+                    'X-Mailer: HomeAssistant\n'
+                    '\n'
+                    'Test msg')
+        self.assertEqual(msg, expected)
+
+    def test_mixed_email(self):
+        """Test build of mixed text email behavior."""
+        msg = self.mailer.send_message('Test msg',
+                                       data={'images': ['test.jpg']})
+        self.assertTrue('Content-Type: multipart/related' in msg)