diff --git a/Changelog.md b/Changelog.md
index 9ba5538c..799bf474 100644
--- a/Changelog.md
+++ b/Changelog.md
@@ -6,6 +6,7 @@ All notable changes to this project will be documented here.
 ## [v2.4.1]
 - Fix bug that prevented copies of instructor directories from being deleted (#483)
 - Add STACK_ROOT to containers as well as notes in readme (#484)
+- Ensure _env_status is updated to "setup" earlier when a request to update test settings is made (#499)
 
 ## [v2.4.0]
 - Fix bug that prevented test results from being returned when a feedback file could not be found (#458)
diff --git a/client/autotest_client/__init__.py b/client/autotest_client/__init__.py
index dc2ea3a8..87455aae 100644
--- a/client/autotest_client/__init__.py
+++ b/client/autotest_client/__init__.py
@@ -2,6 +2,7 @@
 from werkzeug.exceptions import HTTPException
 import os
 import sys
+import time
 import rq
 import json
 import io
@@ -108,6 +109,11 @@ def _update_settings(settings_id, user):
     if error:
         abort(make_response(jsonify(message=error), 422))
 
+    test_settings["_user"] = user
+    test_settings["_last_access"] = int(time.time())
+    test_settings["_env_status"] = "setup"
+    REDIS_CONNECTION.hset("autotest:settings", key=settings_id, value=json.dumps(test_settings))
+
     queue = rq.Queue("settings", connection=REDIS_CONNECTION)
     data = {"user": user, "settings_id": settings_id, "test_settings": test_settings, "file_url": file_url}
     queue.enqueue_call(
@@ -198,7 +204,9 @@ def settings(settings_id, **_kw):
 @authorize
 def create_settings(user):
     settings_id = REDIS_CONNECTION.incr("autotest:settings_id")
-    REDIS_CONNECTION.hset("autotest:settings", key=settings_id, value=json.dumps({"_user": user}))
+    REDIS_CONNECTION.hset(
+        "autotest:settings", key=settings_id, value=json.dumps({"_user": user, "_env_status": "setup"})
+    )
     _update_settings(settings_id, user)
     return {"settings_id": settings_id}
 
diff --git a/server/autotest_server/__init__.py b/server/autotest_server/__init__.py
index 046b565a..88524c26 100644
--- a/server/autotest_server/__init__.py
+++ b/server/autotest_server/__init__.py
@@ -370,11 +370,6 @@ def ignore_missing_dir_error(
 
 
 def update_test_settings(user, settings_id, test_settings, file_url):
-    test_settings["_user"] = user
-    test_settings["_last_access"] = int(time.time())
-    test_settings["_env_status"] = "setup"
-    redis_connection().hset("autotest:settings", key=settings_id, value=json.dumps(test_settings))
-
     try:
         settings_dir = os.path.join(TEST_SCRIPT_DIR, str(settings_id))