diff --git a/python/ray/tests/test_ray_init.py b/python/ray/tests/test_ray_init.py
index 95bdd5c79..b28b521fe 100644
--- a/python/ray/tests/test_ray_init.py
+++ b/python/ray/tests/test_ray_init.py
@@ -75,6 +75,20 @@ class TestRedisPassword:
         ray.get(object_ref)
 
 
+def test_shutdown_and_reset_global_worker(shutdown_only):
+    ray.init(job_config=ray.job_config.JobConfig(code_search_path=["a"]))
+    ray.shutdown()
+    ray.init()
+
+    @ray.remote
+    class A:
+        def f(self):
+            return 100
+
+    a = A.remote()
+    ray.get(a.f.remote())
+
+
 if __name__ == "__main__":
     import pytest
     import sys
diff --git a/python/ray/worker.py b/python/ray/worker.py
index 7239b80a9..b57febc84 100644
--- a/python/ray/worker.py
+++ b/python/ray/worker.py
@@ -772,6 +772,17 @@ def init(
         job_config=job_config)
     if job_config and job_config.code_search_path:
         global_worker.set_load_code_from_local(True)
+    else:
+        # Because `ray.shutdown()` doesn't reset this flag, for multiple
+        # sessions in one process, the 2nd `ray.init()` will reuse the
+        # flag of last session. For example:
+        #     ray.init(load_code_from_local=True)
+        #     ray.shutdown()
+        #     ray.init()
+        #     # Here the flag `load_code_from_local` is still True if we
+        #     # doesn't have this `else` branch.
+        #     ray.shutdown()
+        global_worker.set_load_code_from_local(False)
 
     for hook in _post_init_hooks:
         hook()