diff --git a/examples/apps/cli/README.md b/examples/apps/cli/README.md
index 86af4037f..284ec6f2c 100644
--- a/examples/apps/cli/README.md
+++ b/examples/apps/cli/README.md
@@ -23,6 +23,12 @@ $ cd <path-to-openthread>/output/<platform>/bin
 $ ./ot-cli 1
 ```
 
+Set the PAN ID:
+
+```bash
+> panid 0x1234
+```
+
 Bring up the IPv6 interface:
 
 ```bash
@@ -65,6 +71,12 @@ $ cd <path-to-openthread>/output/<platform>/bin
 $ ./ot-cli 2
 ```
 
+Set the PAN ID:
+
+```bash
+> panid 0x1234
+```
+
 Bring up the IPv6 interface:
 
 ```bash
diff --git a/src/core/openthread.cpp b/src/core/openthread.cpp
index 06794a816..fa2bfbdcd 100644
--- a/src/core/openthread.cpp
+++ b/src/core/openthread.cpp
@@ -276,7 +276,17 @@ otPanId otGetPanId(void)
 
 ThreadError otSetPanId(otPanId aPanId)
 {
-    return sThreadNetif->GetMac().SetPanId(aPanId);
+    ThreadError error = kThreadError_None;
+
+    // do not allow setting PAN ID to broadcast if Thread is running
+    VerifyOrExit(aPanId != Mac::kPanIdBroadcast ||
+                 sThreadNetif->GetMle().GetDeviceState() != Mle::kDeviceStateDisabled,
+                 error = kThreadError_InvalidState);
+
+    error = sThreadNetif->GetMac().SetPanId(aPanId);
+
+exit:
+    return error;
 }
 
 bool otIsRouterRoleEnabled(void)
@@ -894,6 +904,7 @@ ThreadError otThreadStart(void)
     ThreadError error = kThreadError_None;
 
     VerifyOrExit(mEnabled, error = kThreadError_InvalidState);
+    VerifyOrExit(sThreadNetif->GetMac().GetPanId() != Mac::kPanIdBroadcast, error = kThreadError_InvalidState);
 
     error = sThreadNetif->GetMle().Start();