diff --git a/src/Interpreters/executeQuery.cpp b/src/Interpreters/executeQuery.cpp
index 5feff841ca9..7697bbda36b 100644
--- a/src/Interpreters/executeQuery.cpp
+++ b/src/Interpreters/executeQuery.cpp
@@ -17,6 +17,7 @@
 
 #include <Parsers/ASTInsertQuery.h>
 #include <Parsers/ASTSelectQuery.h>
+#include <Parsers/ASTSelectWithUnionQuery.h>
 #include <Parsers/ASTShowProcesslistQuery.h>
 #include <Parsers/ASTIdentifier.h>
 #include <Parsers/ASTLiteral.h>
@@ -337,6 +338,27 @@ static std::tuple<ASTPtr, BlockIO> executeQueryImpl(
         /// TODO Parser should fail early when max_query_size limit is reached.
         ast = parseQuery(parser, begin, end, "", max_query_size, settings.max_parser_depth);
 
+        /// Interpret SETTINGS clauses as early as possible (before invoking the corresponding interpreter),
+        /// to allow settings to take effect.
+        if (const auto * select_query = ast->as<ASTSelectQuery>())
+        {
+            if (auto new_settings = select_query->settings())
+                InterpreterSetQuery(new_settings, context).executeForCurrentContext();
+        }
+        else if (const auto * select_with_union_query = ast->as<ASTSelectWithUnionQuery>())
+        {
+            if (!select_with_union_query->list_of_selects->children.empty())
+            {
+                if (auto new_settings = select_with_union_query->list_of_selects->children.back()->as<ASTSelectQuery>()->settings())
+                    InterpreterSetQuery(new_settings, context).executeForCurrentContext();
+            }
+        }
+        else if (const auto * query_with_output = dynamic_cast<const ASTQueryWithOutput *>(ast.get()))
+        {
+            if (query_with_output->settings_ast)
+                InterpreterSetQuery(query_with_output->settings_ast, context).executeForCurrentContext();
+        }
+
         auto * insert_query = ast->as<ASTInsertQuery>();
 
         if (insert_query && insert_query->settings_ast)
@@ -802,12 +824,12 @@ BlockIO executeQuery(
 }
 
 BlockIO executeQuery(
-        const String & query,
-        Context & context,
-        bool internal,
-        QueryProcessingStage::Enum stage,
-        bool may_have_embedded_data,
-        bool allow_processors)
+    const String & query,
+    Context & context,
+    bool internal,
+    QueryProcessingStage::Enum stage,
+    bool may_have_embedded_data,
+    bool allow_processors)
 {
     BlockIO res = executeQuery(query, context, internal, stage, may_have_embedded_data);
 
@@ -876,7 +898,6 @@ void executeQuery(
         }
         else if (streams.in)
         {
-            /// FIXME: try to prettify this cast using `as<>()`
             const auto * ast_query_with_output = dynamic_cast<const ASTQueryWithOutput *>(ast.get());
 
             WriteBuffer * out_buf = &ostr;
@@ -895,9 +916,6 @@ void executeQuery(
                 ? getIdentifierName(ast_query_with_output->format)
                 : context.getDefaultFormat();
 
-            if (ast_query_with_output && ast_query_with_output->settings_ast)
-                InterpreterSetQuery(ast_query_with_output->settings_ast, context).executeForCurrentContext();
-
             BlockOutputStreamPtr out = context.getOutputFormat(format_name, *out_buf, streams.in->getHeader());
 
             /// Save previous progress callback if any. TODO Do it more conveniently.
@@ -936,9 +954,6 @@ void executeQuery(
                                  ? getIdentifierName(ast_query_with_output->format)
                                  : context.getDefaultFormat();
 
-            if (ast_query_with_output && ast_query_with_output->settings_ast)
-                InterpreterSetQuery(ast_query_with_output->settings_ast, context).executeForCurrentContext();
-
             if (!pipeline.isCompleted())
             {
                 pipeline.addSimpleTransform([](const Block & header)
diff --git a/tests/queries/0_stateless/01553_settings_early_apply.reference b/tests/queries/0_stateless/01553_settings_early_apply.reference
new file mode 100644
index 00000000000..3dad208be5d
--- /dev/null
+++ b/tests/queries/0_stateless/01553_settings_early_apply.reference
@@ -0,0 +1,43 @@
+ number
+
+      0 
+ number
+
+      1 
+0
+1
+2
+3
+4
+5
+6
+7
+8
+9
+{
+	"meta":
+	[
+		{
+			"name": "number",
+			"type": "UInt64"
+		}
+	],
+
+	"data":
+	[
+		["0"],
+		["1"],
+		["2"],
+		["3"],
+		["4"],
+		["5"],
+		["6"],
+		["7"],
+		["8"],
+		["9"]
+	],
+
+	"rows": 10,
+
+	"rows_before_limit_at_least": 10
+}
diff --git a/tests/queries/0_stateless/01553_settings_early_apply.sql b/tests/queries/0_stateless/01553_settings_early_apply.sql
new file mode 100644
index 00000000000..48178c38f33
--- /dev/null
+++ b/tests/queries/0_stateless/01553_settings_early_apply.sql
@@ -0,0 +1,8 @@
+select * from numbers(100) settings max_result_rows = 1; -- { serverError 396 }
+select * from numbers(100) FORMAT JSON settings max_result_rows = 1; -- { serverError 396 }
+
+SET max_result_rows = 1;
+select * from numbers(10); -- { serverError 396 }
+select * from numbers(10) SETTINGS result_overflow_mode = 'break', max_block_size = 1 FORMAT PrettySpaceNoEscapes;
+select * from numbers(10) settings max_result_rows = 10;
+select * from numbers(10) FORMAT JSONCompact settings max_result_rows = 10, output_format_write_statistics = 0;