diff --git a/.github/CHANGELOG.md b/.github/CHANGELOG.md
index 70215ad2d..96f118850 100644
--- a/.github/CHANGELOG.md
+++ b/.github/CHANGELOG.md
@@ -55,6 +55,9 @@
   information about the results.
   [(#493)](https://github.com/XanaduAI/strawberryfields/pull/493)
 
+* `TDMProgram.run_options` is now correctly used when running a TDM program.
+  [(#500)](https://github.com/XanaduAI/strawberryfields/pull/500)
+
 * Fixes a bug where a single parameter list passed to the `TDMProgram`
   context results in an error.
   [(#503)](https://github.com/XanaduAI/strawberryfields/pull/503)
diff --git a/strawberryfields/engine.py b/strawberryfields/engine.py
index 82a7343ea..eb349fd4e 100644
--- a/strawberryfields/engine.py
+++ b/strawberryfields/engine.py
@@ -424,8 +424,9 @@ def run(self, program, *, args=None, compile_options=None, **kwargs):
             not isinstance(program, collections.abc.Sequence) and program.type == "tdm"
         )
         if valid_tdm_program:
+            # priority order for the shots value should be kwargs > run_options > 1
+            shots = kwargs.get("shots", program.run_options.get("shots", 1))
 
-            shots = kwargs.get("shots", 1)
             program.unroll(shots=shots)
             # Shots >1 for a TDM program simply corresponds to creating
             # multiple copies of the program, and appending them to run sequentially.
diff --git a/tests/frontend/test_engine.py b/tests/frontend/test_engine.py
index ae3e6792c..c80a6fc9a 100644
--- a/tests/frontend/test_engine.py
+++ b/tests/frontend/test_engine.py
@@ -69,6 +69,46 @@ def test_bad_backend(self):
 class TestEngineProgramInteraction:
     """Test the Engine class and its interaction with Program instances."""
 
+    def test_shots_default(self):
+        """Test that default shots (1) is used"""
+        prog = sf.Program(1)
+        eng = sf.Engine("gaussian")
+
+        with prog.context as q:
+            ops.Sgate(0.5) | q[0]
+            ops.MeasureFock() | q
+
+        results = eng.run(prog)
+        assert results.samples.shape[0] == 1
+
+    def test_shots_run_options(self):
+        """Test that run_options takes precedence over default"""
+        prog = sf.Program(1)
+        eng = sf.Engine("gaussian")
+
+        with prog.context as q:
+            ops.Sgate(0.5) | q[0]
+            ops.MeasureFock() | q
+
+        prog.run_options = {"shots": 5}
+        results = eng.run(prog)
+        assert results.samples.shape[0] == 5
+
+    def test_shots_passed(self):
+        """Test that shots supplied via eng.run takes precedence over
+        run_options and that run_options isn't changed"""
+        prog = sf.Program(1)
+        eng = sf.Engine("gaussian")
+
+        with prog.context as q:
+            ops.Sgate(0.5) | q[0]
+            ops.MeasureFock() | q
+
+        prog.run_options = {"shots": 5}
+        results = eng.run(prog, shots=2)
+        assert results.samples.shape[0] == 2
+        assert prog.run_options["shots"] == 5
+
     def test_history(self, eng, prog):
         """Engine history."""
         # no programs have been run
diff --git a/tests/frontend/test_tdmprogram.py b/tests/frontend/test_tdmprogram.py
index 2bf21dcfe..22c2cf62f 100644
--- a/tests/frontend/test_tdmprogram.py
+++ b/tests/frontend/test_tdmprogram.py
@@ -724,3 +724,46 @@ def test_move_vac_modes(self, N, crop, expected):
         res = move_vac_modes(samples, N, crop=crop)
 
         assert np.all(res == expected)
+
+class TestEngineTDMProgramInteraction:
+    """Test the Engine class and its interaction with TDMProgram instances."""
+
+    def test_shots_default(self):
+        """Test that default shots (1) is used"""
+        prog = sf.TDMProgram(2)
+        eng = sf.Engine("gaussian")
+
+        with prog.context([1,2], [3,4]) as (p, q):
+            ops.Sgate(p[0]) | q[0]
+            ops.MeasureHomodyne(p[1]) | q[0]
+
+        results = eng.run(prog)
+        assert results.samples.shape[0] == 1
+
+    def test_shots_run_options(self):
+        """Test that run_options takes precedence over default"""
+        prog = sf.TDMProgram(2)
+        eng = sf.Engine("gaussian")
+
+        with prog.context([1,2], [3,4]) as (p, q):
+            ops.Sgate(p[0]) | q[0]
+            ops.MeasureHomodyne(p[1]) | q[0]
+
+        prog.run_options = {"shots": 5}
+        results = eng.run(prog)
+        assert results.samples.shape[0] == 5
+
+    def test_shots_passed(self):
+        """Test that shots supplied via eng.run takes precedence over
+        run_options and that run_options isn't changed"""
+        prog = sf.TDMProgram(2)
+        eng = sf.Engine("gaussian")
+
+        with prog.context([1,2], [3,4]) as (p, q):
+            ops.Sgate(p[0]) | q[0]
+            ops.MeasureHomodyne(p[1]) | q[0]
+
+        prog.run_options = {"shots": 5}
+        results = eng.run(prog, shots=2)
+        assert results.samples.shape[0] == 2
+        assert prog.run_options["shots"] == 5