diff --git a/python/ray/__init__.py b/python/ray/__init__.py
index df1a496ea..b49384944 100644
--- a/python/ray/__init__.py
+++ b/python/ray/__init__.py
@@ -150,5 +150,23 @@ __all__ += [
     "PlacementGroupID",
 ]
 
+
 # Remove modules from top-level ray
+def _ray_user_setup_function():
+    import os
+    user_setup_fn = os.environ.get("RAY_USER_SETUP_FUNCTION")
+    if user_setup_fn is not None:
+        try:
+            module_name, fn_name = user_setup_fn.rsplit(".", 1)
+            m = __import__(module_name, globals(), locals(), [fn_name])
+            getattr(m, fn_name)()
+        except Exception as e:
+            logger.exception(
+                f"Failed to run user setup function: {user_setup_fn}. "
+                f"Error message {e}")
+
+
+_ray_user_setup_function()
+
 del logging
+del _ray_user_setup_function
diff --git a/python/ray/test_utils.py b/python/ray/test_utils.py
index c3761038b..f097aaeab 100644
--- a/python/ray/test_utils.py
+++ b/python/ray/test_utils.py
@@ -537,3 +537,8 @@ def load_test_config(config_file_name):
                                config_file_name)
     config = yaml.safe_load(open(config_path).read())
     return config
+
+
+def set_setup_func():
+    import ray._private.runtime_env as runtime_env
+    runtime_env.VAR = "hello world"
diff --git a/python/ray/tests/test_basic.py b/python/ray/tests/test_basic.py
index 3da0a3083..75eb9593a 100644
--- a/python/ray/tests/test_basic.py
+++ b/python/ray/tests/test_basic.py
@@ -9,7 +9,8 @@ import numpy as np
 import pytest
 
 import ray.cluster_utils
-from ray.test_utils import (client_test_enabled, get_error_message)
+from ray.test_utils import (client_test_enabled, get_error_message,
+                            run_string_as_driver)
 
 import ray
 
@@ -165,6 +166,28 @@ def test_invalid_arguments(shutdown_only):
                 x = 1
 
 
+@pytest.mark.skipif(sys.platform == "win32", reason="Failing on Windows")
+def test_user_setup_function():
+    script = """
+import ray
+ray.init()
+@ray.remote
+def get_pkg_dir():
+    return ray._private.runtime_env.VAR
+
+print("remote", ray.get(get_pkg_dir.remote()))
+print("local", ray._private.runtime_env.VAR)
+
+
+"""
+
+    out = run_string_as_driver(
+        script, {"RAY_USER_SETUP_FUNCTION": "ray.test_utils.set_setup_func"})
+    (remote_out, local_out) = out.strip().split("\n")[-2:]
+    assert remote_out == "remote hello world"
+    assert local_out == "local hello world"
+
+
 def test_put_get(shutdown_only):
     ray.init(num_cpus=0)