diff --git a/programs/local/LocalServer.cpp b/programs/local/LocalServer.cpp
index 41da477152c..bfc7cac7fc1 100644
--- a/programs/local/LocalServer.cpp
+++ b/programs/local/LocalServer.cpp
@@ -152,6 +152,10 @@ void LocalServer::tryInitPath()
         path += '/';
 
     context->setPath(path);
+
+    context->setTemporaryStorage(path + "tmp");
+    context->setFlagsPath(path + "flags");
+
     context->setUserFilesPath(""); // user's files are everywhere
 }
 
diff --git a/tests/queries/0_stateless/01527_clickhouse_local_optimize.reference b/tests/queries/0_stateless/01527_clickhouse_local_optimize.reference
new file mode 100644
index 00000000000..ea0ec6fe765
--- /dev/null
+++ b/tests/queries/0_stateless/01527_clickhouse_local_optimize.reference
@@ -0,0 +1,16 @@
+202001_1_1_0	1	2020-01-01	String
+202001_4_4_0	1	2020-01-01	String
+202002_2_2_0	2	2020-02-02	Another string
+202002_5_5_0	2	2020-02-02	Another string
+202003_3_3_0	3	2020-03-03	One more string
+202003_6_6_0	3	2020-03-03	One more string
+202001_1_1_0	4	2020-01-02	String for first partition
+202001_4_4_0	4	2020-01-02	String for first partition
+202001_1_4_1	1	2020-01-01	String
+202001_1_4_1	1	2020-01-01	String
+202002_2_5_1	2	2020-02-02	Another string
+202002_2_5_1	2	2020-02-02	Another string
+202003_3_6_1	3	2020-03-03	One more string
+202003_3_6_1	3	2020-03-03	One more string
+202001_1_4_1	4	2020-01-02	String for first partition
+202001_1_4_1	4	2020-01-02	String for first partition
diff --git a/tests/queries/0_stateless/01527_clickhouse_local_optimize.sh b/tests/queries/0_stateless/01527_clickhouse_local_optimize.sh
new file mode 100755
index 00000000000..e51d53c7524
--- /dev/null
+++ b/tests/queries/0_stateless/01527_clickhouse_local_optimize.sh
@@ -0,0 +1,60 @@
+#!/usr/bin/env bash
+
+CURDIR=$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)
+. "$CURDIR"/../shell_config.sh
+
+WORKING_FOLDER="${CLICKHOUSE_TMP}/01527_clickhouse_local_optimize"
+
+rm -rf "${WORKING_FOLDER}"
+mkdir -p "${WORKING_FOLDER}/metadata/local/"
+
+## 1. Imagine we want to process this file:
+cat <<EOF > "${WORKING_FOLDER}/data.csv"
+1,2020-01-01,"String"
+2,2020-02-02,"Another string"
+3,2020-03-03,"One more string"
+4,2020-01-02,"String for first partition"
+EOF
+
+## 2. that is the metadata for the table we want to fill
+## schema should match the schema of the table from server
+## (the easiest way is just to copy it from the server)
+
+## I've added sleepEachRow(0.5) here just to mimic slow insert
+cat <<EOF > "${WORKING_FOLDER}/metadata/local/test.sql"
+ATTACH TABLE local.test (id UInt64, d Date, s String, x MATERIALIZED sleepEachRow(0.5)) Engine=MergeTree ORDER BY id PARTITION BY toYYYYMM(d);
+EOF
+
+## 3a. that is the metadata for the input file we want to read
+## it should match the structure of source file
+
+## use stdin to read from pipe
+cat <<EOF > "${WORKING_FOLDER}/metadata/local/stdin.sql"
+ATTACH TABLE local.stdin (id UInt64, d Date, s String) Engine=File(CSV, stdin);
+EOF
+
+## 3b. Instead of stdin you can use file path
+cat <<EOF > "${WORKING_FOLDER}/metadata/local/data_csv.sql"
+ATTACH TABLE local.data_csv (id UInt64, d Date, s String) Engine=File(CSV, '${WORKING_FOLDER}/data.csv');
+EOF
+
+## All preparations done,
+## the rest is simple:
+
+# option a (if 3a used) with pipe / reading stdin
+cat "${WORKING_FOLDER}/data.csv" | ${CLICKHOUSE_LOCAL} --query "INSERT INTO local.test SELECT * FROM local.stdin" -- --path="${WORKING_FOLDER}"
+
+# option b (if 3b used) 0 with filepath
+${CLICKHOUSE_LOCAL} --query "INSERT INTO local.test SELECT * FROM local.data_csv" -- --path="${WORKING_FOLDER}"
+
+# now you can check what was inserted (i did both options so i have doubled data)
+${CLICKHOUSE_LOCAL} --query "SELECT _part,* FROM local.test ORDER BY id, _part" -- --path="${WORKING_FOLDER}"
+
+# But you can't do OPTIMIZE (local will die with coredump) :) That would be too good
+clickhouse-local --query "OPTIMIZE TABLE local.test FINAL" -- --path="${WORKING_FOLDER}"
+
+# now you can check what was inserted (i did both options so i have doubled data)
+${CLICKHOUSE_LOCAL} --query "SELECT _part,* FROM local.test ORDER BY id, _part" -- --path="${WORKING_FOLDER}"
+
+## now you can upload those parts to a server (in detached subfolder) and attach them.
+rm -rf "${WORKING_FOLDER}"
\ No newline at end of file