diff --git a/src/main/java/org/elasticsearch/cluster/metadata/IndexTemplateMetaData.java b/src/main/java/org/elasticsearch/cluster/metadata/IndexTemplateMetaData.java
index 6a15044657a..3ab16f53d2e 100644
--- a/src/main/java/org/elasticsearch/cluster/metadata/IndexTemplateMetaData.java
+++ b/src/main/java/org/elasticsearch/cluster/metadata/IndexTemplateMetaData.java
@@ -303,7 +303,15 @@ public class IndexTemplateMetaData {
                     currentFieldName = parser.currentName();
                 } else if (token == XContentParser.Token.START_OBJECT) {
                     if ("settings".equals(currentFieldName)) {
-                        builder.settings(ImmutableSettings.settingsBuilder().put(SettingsLoader.Helper.loadNestedFromMap(parser.mapOrdered())));
+                        ImmutableSettings.Builder templateSettingsBuilder = ImmutableSettings.settingsBuilder();
+                        for (Map.Entry<String, String> entry : SettingsLoader.Helper.loadNestedFromMap(parser.mapOrdered()).entrySet()) {
+                            if (!entry.getKey().startsWith("index.")) {
+                                templateSettingsBuilder.put("index." + entry.getKey(), entry.getValue());
+                            } else {
+                                templateSettingsBuilder.put(entry.getKey(), entry.getValue());
+                            }
+                        }
+                        builder.settings(templateSettingsBuilder.build());
                     } else if ("mappings".equals(currentFieldName)) {
                         while ((token = parser.nextToken()) != XContentParser.Token.END_OBJECT) {
                             if (token == XContentParser.Token.FIELD_NAME) {
diff --git a/src/test/java/org/elasticsearch/indices/template/IndexTemplateFileLoadingTests.java b/src/test/java/org/elasticsearch/indices/template/IndexTemplateFileLoadingTests.java
index 606d78d1666..de451120370 100644
--- a/src/test/java/org/elasticsearch/indices/template/IndexTemplateFileLoadingTests.java
+++ b/src/test/java/org/elasticsearch/indices/template/IndexTemplateFileLoadingTests.java
@@ -38,7 +38,7 @@ import static org.hamcrest.Matchers.is;
 /**
  *
  */
-@ClusterScope(scope= Scope.SUITE, numNodes=1)
+@ClusterScope(scope=Scope.SUITE, numNodes=1)
 public class IndexTemplateFileLoadingTests extends ElasticsearchIntegrationTest {
 
     @Rule
@@ -57,7 +57,8 @@ public class IndexTemplateFileLoadingTests extends ElasticsearchIntegrationTest
             templatesDir.mkdir();
 
             File dst = new File(templatesDir, "template.json");
-            String template = Streams.copyToStringFromClasspath("/org/elasticsearch/indices/template/template.json");
+            // random template, one uses the 'setting.index.number_of_shards', the other 'settings.number_of_shards'
+            String template = Streams.copyToStringFromClasspath("/org/elasticsearch/indices/template/template" + randomInt(1) + ".json");
             Files.write(template, dst, Charsets.UTF_8);
         } catch (Exception e) {
             throw new RuntimeException(e);
diff --git a/src/test/java/org/elasticsearch/indices/template/template.json b/src/test/java/org/elasticsearch/indices/template/template0.json
similarity index 100%
rename from src/test/java/org/elasticsearch/indices/template/template.json
rename to src/test/java/org/elasticsearch/indices/template/template0.json
diff --git a/src/test/java/org/elasticsearch/indices/template/template1.json b/src/test/java/org/elasticsearch/indices/template/template1.json
new file mode 100644
index 00000000000..f91866865e7
--- /dev/null
+++ b/src/test/java/org/elasticsearch/indices/template/template1.json
@@ -0,0 +1,7 @@
+{
+    "template" : "foo*",
+    "settings" : {
+        "number_of_shards": 10,
+        "number_of_replicas": 0
+    }
+}
\ No newline at end of file
diff --git a/src/test/java/org/elasticsearch/indices/template/template2.json b/src/test/java/org/elasticsearch/indices/template/template2.json
new file mode 100644
index 00000000000..c48169f15a5
--- /dev/null
+++ b/src/test/java/org/elasticsearch/indices/template/template2.json
@@ -0,0 +1,9 @@
+{
+    "template" : "foo*",
+    "settings" : {
+        "index" : {
+            "number_of_shards": 10,
+            "number_of_replicas": 0
+        }
+    }
+}
\ No newline at end of file