diff --git a/CHANGELOG.md b/CHANGELOG.md
index 4c61b7aabc1..6b23135c2af 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -16,11 +16,13 @@
 - Fix intermittent errors in partial parsing tests ([#4060](https://github.com/dbt-labs/dbt-core/issues/4060), [#4068](https://github.com/dbt-labs/dbt-core/pull/4068))
 - Make finding disabled nodes more consistent ([#4069](https://github.com/dbt-labs/dbt-core/issues/4069), [#4073](https://github.com/dbt-labas/dbt-core/pull/4073))
 - Remove connection from `render_with_context` during parsing, thereby removing misleading log message ([#3137](https://github.com/dbt-labs/dbt-core/issues/3137), [#4062](https://github.com/dbt-labas/dbt-core/pull/4062))
+- Wait for postgres docker container to be ready in `setup_db.sh`. ([#3876](https://github.com/dbt-labs/dbt-core/issues/3876), [#3908](https://github.com/dbt-labs/dbt-core/pull/3908))
 
 Contributors:
 - [@sungchun12](https://github.com/sungchun12) ([#4017](https://github.com/dbt-labs/dbt/pull/4017))
 - [@matt-winkler](https://github.com/matt-winkler) ([#4017](https://github.com/dbt-labs/dbt/pull/4017))
 - [@NiallRees](https://github.com/NiallRees) ([#3625](https://github.com/dbt-labs/dbt/pull/3625))
+- [@rvacaru](https://github.com/rvacaru) ([#3908](https://github.com/dbt-labs/dbt/pull/3908))
 
 ## dbt-core 1.0.0b1 (October 11, 2021)
 
diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 38a81cbde68..5397d5e3716 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -174,8 +174,6 @@ docker-compose up -d database
 PGHOST=localhost PGUSER=root PGPASSWORD=password PGDATABASE=postgres bash test/setup_db.sh
 ```
 
-Note that you may need to run the previous command twice as it does not currently wait for the database to be running before attempting to run commands against it.  This will be fixed with [#3876](https://github.com/dbt-labs/dbt-core/issues/3876).
-
 `dbt` uses test credentials specified in a `test.env` file in the root of the repository for non-Postgres databases. This `test.env` file is git-ignored, but please be _extra_ careful to never check in credentials or other sensitive information when developing against `dbt`. To create your `test.env` file, copy the provided sample file, then supply your relevant credentials. This step is only required to use non-Postgres databases.
 
 ```
diff --git a/test/setup_db.sh b/test/setup_db.sh
index b52c3c487d8..b8b869e143b 100644
--- a/test/setup_db.sh
+++ b/test/setup_db.sh
@@ -1,6 +1,5 @@
 #!/bin/bash
 set -x
-
 env | grep '^PG'
 
 # If you want to run this script for your own postgresql (run with
@@ -30,6 +29,15 @@ if [[ -n $CIRCLECI ]]; then
 	connect_circle
 fi
 
+for i in {1..10}; do
+	if $(pg_isready -h "${PGHOST}" -p "${PGPORT}" -U "${PGUSER}") ; then
+		break
+	fi
+
+    echo "Waiting for postgres to be ready..."
+    sleep 2;
+done;
+
 createdb dbt
 psql -c "CREATE ROLE root WITH PASSWORD 'password';"
 psql -c "ALTER ROLE root WITH LOGIN;"