diff --git a/client/package.json b/client/package.json
index 7ca7ea224..b58e2acd0 100644
--- a/client/package.json
+++ b/client/package.json
@@ -118,6 +118,17 @@
                         "trace"
                     ]
                 },
+                "python.analysis.typeCheckingMode": {
+                    "type": "string",
+                    "default": "basic",
+                    "enum": [
+                        "off",
+                        "basic",
+                        "strict"
+                    ],
+                    "description": "Defines the default rule set for type checking.",
+                    "scope": "resource"
+                },
                 "python.analysis.typeshedPaths": {
                     "type": "array",
                     "default": [],
@@ -145,17 +156,6 @@
                     "description": "Path to Python, you can use a custom version of Python.",
                     "scope": "resource"
                 },
-                "pyright.typeCheckingMode": {
-                    "type": "string",
-                    "default": "basic",
-                    "enum": [
-                        "off",
-                        "basic",
-                        "strict"
-                    ],
-                    "description": "Defines the default rule set for type checking.",
-                    "scope": "resource"
-                },
                 "pyright.useLibraryCodeForTypes": {
                     "type": "boolean",
                     "default": false,
diff --git a/docs/settings.md b/docs/settings.md
index 71d00e9e8..deecfc159 100644
--- a/docs/settings.md
+++ b/docs/settings.md
@@ -8,8 +8,6 @@ The Pyright VS Code extension honors the following settings.
 
 **pyright.openFilesOnly** [boolean]: Determines whether pyright analyzes (and reports errors for) all files in the workspace, as indicated by the config file. If this option is set to true, pyright analyzes only open files. This setting is deprecated in favor of python.analysis.diagnosticMode. It will be removed at a future time.
 
-**pyright.typeCheckingMode** ["off", "basic", "strict"]: Determines the default type-checking level used by pyright. This can be overridden in the configuration file.
-
 **pyright.useLibraryCodeForTypes** [boolean]: Determines whether pyright reads, parses and analyzes library code to extract type information in the absence of type stub files. This can add significant overhead and may result in poor-quality type information. The default value for this option is false.
 
 **python.analysis.typeshedPaths** [array of paths]: Paths to look for typeshed modules. Pyright currently honors only the first path in the array.
@@ -22,6 +20,8 @@ The Pyright VS Code extension honors the following settings.
 
 **python.analysis.stubPath** [path]: Path to directory containing custom type stub files.
 
+**python.analysis.typeCheckingMode** ["off", "basic", "strict"]: Determines the default type-checking level used by pyright. This can be overridden in the configuration file. (Note: This setting used to be called "pyright.typeCheckingMode". The old name is deprecated but is still currently honored.)
+
 **python.analysis.diagnosticMode** ["openFilesOnly", "workspace"]: Determines whether pyright analyzes (and reports errors for) all files in the workspace, as indicated by the config file. If this option is set to "openFilesOnly", pyright analyzes only open files.
 
 **python.analysis.diagnosticSeverityOverrides** [map]: Allows a user to override the severity levels for individual diagnostic rules. "reportXXX" rules in the type check diagnostics settings in [configuration](https://github.com/microsoft/pyright/blob/master/docs/configuration.md#type-check-diagnostics-settings) are supported. Use the rule name as a key and one of "error," "warning," "information," "true," "false," or "none" as value.
diff --git a/server/src/server.ts b/server/src/server.ts
index 52a4bb342..614660b0f 100644
--- a/server/src/server.ts
+++ b/server/src/server.ts
@@ -49,6 +49,11 @@ class PyrightServer extends LanguageServerBase {
     async getSettings(workspace: WorkspaceServiceInstance): Promise<ServerSettings> {
         const serverSettings: ServerSettings = {
             watchForSourceChanges: true,
+            openFilesOnly: true,
+            useLibraryCodeForTypes: false,
+            disableLanguageServices: false,
+            disableOrganizeImports: false,
+            typeCheckingMode: 'basic',
             diagnosticSeverityOverrides: {},
             logLevel: LogLevel.Info,
         };
@@ -96,6 +101,10 @@ class PyrightServer extends LanguageServerBase {
                 if (extraPaths && isArray(extraPaths) && extraPaths.length > 0) {
                     serverSettings.extraPaths = extraPaths.map((p) => normalizeSlashes(p));
                 }
+
+                if (pythonAnalysisSection.typeCheckingMode !== undefined) {
+                    serverSettings.typeCheckingMode = pythonAnalysisSection.typeCheckingMode;
+                }
             } else {
                 serverSettings.autoSearchPaths = true;
             }
@@ -109,14 +118,9 @@ class PyrightServer extends LanguageServerBase {
                 serverSettings.useLibraryCodeForTypes = !!pyrightSection.useLibraryCodeForTypes;
                 serverSettings.disableLanguageServices = !!pyrightSection.disableLanguageServices;
                 serverSettings.disableOrganizeImports = !!pyrightSection.disableOrganizeImports;
-                serverSettings.typeCheckingMode = pyrightSection.typeCheckingMode;
-            } else {
-                // Unless openFilesOnly is set explicitly, set it to true by default.
-                serverSettings.openFilesOnly = serverSettings.openFilesOnly ?? true;
-                serverSettings.useLibraryCodeForTypes = false;
-                serverSettings.disableLanguageServices = false;
-                serverSettings.disableOrganizeImports = false;
-                serverSettings.typeCheckingMode = undefined;
+                if (pyrightSection.typeCheckingMode !== undefined) {
+                    serverSettings.typeCheckingMode = pyrightSection.typeCheckingMode;
+                }
             }
         } catch (error) {
             this.console.error(`Error reading settings: ${error}`);