diff --git a/lib/nghttp2_session.c b/lib/nghttp2_session.c
index fbf4ecc3..4ecc5260 100644
--- a/lib/nghttp2_session.c
+++ b/lib/nghttp2_session.c
@@ -1908,8 +1908,8 @@ static int nghttp2_session_update_initial_window_size
                           &arg);
 }
 
-static int nghttp2_disable_flow_control_func(nghttp2_map_entry *entry,
-                                             void *ptr)
+static int nghttp2_disable_remote_flow_control_func(nghttp2_map_entry *entry,
+                                                    void *ptr)
 {
   nghttp2_session *session;
   nghttp2_stream *stream;
@@ -1934,14 +1934,38 @@ static int nghttp2_disable_flow_control_func(nghttp2_map_entry *entry,
 }
 
 /*
- * Disable connection-level flow control and stream-level flow control
- * of existing streams.
+ * Disable remote side connection-level flow control and stream-level
+ * flow control of existing streams.
  */
-static int nghttp2_session_disable_flow_control(nghttp2_session *session)
+static int nghttp2_session_disable_remote_flow_control
+(nghttp2_session *session)
 {
   session->remote_flow_control = 0;
   return nghttp2_map_each(&session->streams,
-                          nghttp2_disable_flow_control_func, session);
+                          nghttp2_disable_remote_flow_control_func, session);
+}
+
+static int nghttp2_disable_local_flow_control_func(nghttp2_map_entry *entry,
+                                                   void *ptr)
+{
+  nghttp2_stream *stream;
+  stream = (nghttp2_stream*)entry;
+  stream->local_flow_control = 0;
+  return 0;
+}
+
+/*
+ * Disable stream-level flow control in local side of existing
+ * streams.
+ */
+static void nghttp2_session_disable_local_flow_control
+(nghttp2_session *session)
+{
+  int rv;
+  session->local_flow_control = 0;
+  rv = nghttp2_map_each(&session->streams,
+                        nghttp2_disable_local_flow_control_func, NULL);
+  assert(rv == 0);
 }
 
 void nghttp2_session_update_local_settings(nghttp2_session *session,
@@ -1949,10 +1973,17 @@ void nghttp2_session_update_local_settings(nghttp2_session *session,
                                            size_t niv)
 {
   size_t i;
+  uint8_t old_flow_control =
+    session->local_settings[NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS];
+
   for(i = 0; i < niv; ++i) {
     assert(iv[i].settings_id > 0 && iv[i].settings_id <= NGHTTP2_SETTINGS_MAX);
     session->local_settings[iv[i].settings_id] = iv[i].value;
   }
+  if(old_flow_control == 0 &&
+     session->local_settings[NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS]) {
+    nghttp2_session_disable_local_flow_control(session);
+  }
 }
 
 int nghttp2_session_on_settings_received(nghttp2_session *session,
@@ -1993,7 +2024,7 @@ int nghttp2_session_on_settings_received(nghttp2_session *session,
     case NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS:
       if(entry->value & 0x1) {
         if(session->remote_settings[entry->settings_id] == 0) {
-          rv = nghttp2_session_disable_flow_control(session);
+          rv = nghttp2_session_disable_remote_flow_control(session);
           if(rv != 0) {
             return rv;
           }
diff --git a/tests/main.c b/tests/main.c
index ca87916f..16c56fb8 100644
--- a/tests/main.c
+++ b/tests/main.c
@@ -165,8 +165,10 @@ int main(int argc, char* argv[])
                    test_nghttp2_session_defer_data) ||
       !CU_add_test(pSuite, "session_flow_control",
                    test_nghttp2_session_flow_control) ||
-      !CU_add_test(pSuite, "session_flow_control_disable",
-                   test_nghttp2_session_flow_control_disable) ||
+      !CU_add_test(pSuite, "session_flow_control_disable_remote",
+                   test_nghttp2_session_flow_control_disable_remote) ||
+      !CU_add_test(pSuite, "session_flow_control_disable_local",
+                   test_nghttp2_session_flow_control_disable_local) ||
       !CU_add_test(pSuite, "session_data_read_temporal_failure",
                    test_nghttp2_session_data_read_temporal_failure) ||
       !CU_add_test(pSuite, "session_on_request_recv_callback",
diff --git a/tests/nghttp2_session_test.c b/tests/nghttp2_session_test.c
index e570440c..170190af 100644
--- a/tests/nghttp2_session_test.c
+++ b/tests/nghttp2_session_test.c
@@ -1770,7 +1770,7 @@ void test_nghttp2_submit_settings(void)
   my_user_data ud;
   nghttp2_outbound_item *item;
   nghttp2_frame *frame;
-  nghttp2_settings_entry iv[3];
+  nghttp2_settings_entry iv[4];
 
   iv[0].settings_id = NGHTTP2_SETTINGS_MAX_CONCURRENT_STREAMS;
   iv[0].value = 50;
@@ -1778,9 +1778,12 @@ void test_nghttp2_submit_settings(void)
   iv[1].settings_id = NGHTTP2_SETTINGS_INITIAL_WINDOW_SIZE;
   iv[1].value = 16*1024;
 
+  iv[2].settings_id = NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS;
+  iv[2].value = 1;
+
   /* This is duplicate entry */
-  iv[2].settings_id = NGHTTP2_SETTINGS_MAX_CONCURRENT_STREAMS;
-  iv[2].value = 150;
+  iv[3].settings_id = NGHTTP2_SETTINGS_MAX_CONCURRENT_STREAMS;
+  iv[3].value = 150;
 
   memset(&callbacks, 0, sizeof(nghttp2_session_callbacks));
   callbacks.send_callback = null_send_callback;
@@ -1788,29 +1791,34 @@ void test_nghttp2_submit_settings(void)
   nghttp2_session_server_new(&session, &callbacks, &ud);
 
   CU_ASSERT(NGHTTP2_ERR_INVALID_ARGUMENT ==
-            nghttp2_submit_settings(session, iv, 3));
+            nghttp2_submit_settings(session, iv, 4));
 
   /* Make sure that local settings are not changed */
   CU_ASSERT(NGHTTP2_INITIAL_MAX_CONCURRENT_STREAMS ==
             session->local_settings[NGHTTP2_SETTINGS_MAX_CONCURRENT_STREAMS]);
   CU_ASSERT(NGHTTP2_INITIAL_WINDOW_SIZE ==
             session->local_settings[NGHTTP2_SETTINGS_INITIAL_WINDOW_SIZE]);
+  CU_ASSERT(0 ==
+            session->local_settings[NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS]);
 
-  /* Now sends without 3rd one */
-  CU_ASSERT(0 == nghttp2_submit_settings(session, iv, 2));
+  /* Now sends without 4th one */
+  CU_ASSERT(0 == nghttp2_submit_settings(session, iv, 3));
 
   /* Make sure that local settings are changed */
   CU_ASSERT(50 ==
             session->local_settings[NGHTTP2_SETTINGS_MAX_CONCURRENT_STREAMS]);
   CU_ASSERT(16*1024 ==
             session->local_settings[NGHTTP2_SETTINGS_INITIAL_WINDOW_SIZE]);
+  CU_ASSERT(1 ==
+            session->local_settings[NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS]);
+  CU_ASSERT(0 == session->local_flow_control);
 
   item = nghttp2_session_get_next_ob_item(session);
 
   CU_ASSERT(NGHTTP2_SETTINGS == OB_CTRL_TYPE(item));
 
   frame = item->frame;
-  CU_ASSERT(2 == frame->settings.niv);
+  CU_ASSERT(3 == frame->settings.niv);
   CU_ASSERT(50 == frame->settings.iv[0].value);
   CU_ASSERT(NGHTTP2_SETTINGS_MAX_CONCURRENT_STREAMS ==
             frame->settings.iv[0].settings_id);
@@ -2433,7 +2441,7 @@ void test_nghttp2_session_flow_control(void)
   nghttp2_session_del(session);
 }
 
-void test_nghttp2_session_flow_control_disable(void)
+void test_nghttp2_session_flow_control_disable_remote(void)
 {
   nghttp2_session *session;
   nghttp2_session_callbacks callbacks;
@@ -2487,6 +2495,33 @@ void test_nghttp2_session_flow_control_disable(void)
   nghttp2_session_del(session);
 }
 
+void test_nghttp2_session_flow_control_disable_local(void)
+{
+  nghttp2_session *session;
+  nghttp2_session_callbacks callbacks;
+  nghttp2_stream *stream;
+  nghttp2_settings_entry iv[1];
+
+  memset(&callbacks, 0, sizeof(nghttp2_session_callbacks));
+  callbacks.send_callback = null_send_callback;
+
+  nghttp2_session_client_new(&session, &callbacks, NULL);
+
+  stream = nghttp2_session_open_stream(session, 1, NGHTTP2_FLAG_NONE,
+                                       NGHTTP2_PRI_DEFAULT,
+                                       NGHTTP2_STREAM_OPENING, NULL);
+
+  iv[0].settings_id = NGHTTP2_SETTINGS_FLOW_CONTROL_OPTIONS;
+  iv[0].value = 1;
+
+  CU_ASSERT(0 == nghttp2_submit_settings(session, iv,
+                                         sizeof(iv)/sizeof(iv[0])));
+  CU_ASSERT(0 == stream->local_flow_control);
+  CU_ASSERT(0 == session->local_flow_control);
+
+  nghttp2_session_del(session);
+}
+
 void test_nghttp2_session_data_read_temporal_failure(void)
 {
   nghttp2_session *session;
diff --git a/tests/nghttp2_session_test.h b/tests/nghttp2_session_test.h
index ed3a6843..deb9dccb 100644
--- a/tests/nghttp2_session_test.h
+++ b/tests/nghttp2_session_test.h
@@ -73,7 +73,8 @@ void test_nghttp2_session_stream_close_on_headers_push(void);
 void test_nghttp2_session_stop_data_with_rst_stream(void);
 void test_nghttp2_session_defer_data(void);
 void test_nghttp2_session_flow_control(void);
-void test_nghttp2_session_flow_control_disable(void);
+void test_nghttp2_session_flow_control_disable_remote(void);
+void test_nghttp2_session_flow_control_disable_local(void);
 void test_nghttp2_session_data_read_temporal_failure(void);
 void test_nghttp2_session_on_request_recv_callback(void);
 void test_nghttp2_session_on_stream_close(void);