diff --git a/python/ray/node.py b/python/ray/node.py
index 2668d9aa0..a63a0a8a8 100644
--- a/python/ray/node.py
+++ b/python/ray/node.py
@@ -167,6 +167,11 @@ class Node:
 
         self._init_temp(redis_client)
 
+        # If it is a head node, try validating if
+        # external storage is configurable.
+        if head:
+            self.validate_external_storage()
+
         if connect_only:
             # Get socket names from the configuration.
             self._plasma_store_socket_name = (
@@ -1164,3 +1169,44 @@ class Node:
             storage = external_storage.setup_external_storage(
                 object_spilling_config)
             storage.destroy_external_storage()
+
+    def validate_external_storage(self):
+        """Make sure we can setup the object spilling external storage.
+        This will also fill up the default setting for object spilling
+        if not specified.
+        """
+        object_spilling_config = self._config.get("object_spilling_config", {})
+        automatic_spilling_enabled = self._config.get(
+            "automatic_object_spilling_enabled", True)
+        if not automatic_spilling_enabled:
+            return
+
+        # If the config is not specified, we fill up the default.
+        if not object_spilling_config:
+            object_spilling_config = json.dumps({
+                "type": "filesystem",
+                "params": {
+                    "directory_path": self._session_dir
+                }
+            })
+
+        # Try setting up the storage.
+        # Configure the proper system config.
+        # We need to set both ray param's system config and self._config
+        # because they could've been diverged at this point.
+        deserialized_config = json.loads(object_spilling_config)
+        self._ray_params._system_config["object_spilling_config"] = (
+            object_spilling_config)
+        self._config["object_spilling_config"] = object_spilling_config
+
+        is_external_storage_type_fs = (
+            deserialized_config["type"] == "filesystem")
+        self._ray_params._system_config["is_external_storage_type_fs"] = (
+            is_external_storage_type_fs)
+        self._config["is_external_storage_type_fs"] = (
+            is_external_storage_type_fs)
+
+        # Validate external storage usage.
+        from ray import external_storage
+        external_storage.setup_external_storage(deserialized_config)
+        external_storage.reset_external_storage()
diff --git a/python/ray/parameter.py b/python/ray/parameter.py
index 666b82905..af7bdf475 100644
--- a/python/ray/parameter.py
+++ b/python/ray/parameter.py
@@ -1,4 +1,3 @@
-import json
 import logging
 import os
 
@@ -320,16 +319,3 @@ class RayParams:
         if numpy_major <= 1 and numpy_minor < 16:
             logger.warning("Using ray with numpy < 1.16.0 will result in slow "
                            "serialization. Upgrade numpy if using with ray.")
-
-        # Make sure object spilling configuration is applicable.
-        object_spilling_config = self._system_config.get(
-            "object_spilling_config", {})
-        if object_spilling_config:
-            object_spilling_config = json.loads(object_spilling_config)
-            from ray import external_storage
-            # Validate external storage usage.
-            external_storage.setup_external_storage(object_spilling_config)
-            external_storage.reset_external_storage()
-            # Configure the proper system config.
-            self._system_config["is_external_storage_type_fs"] = (
-                object_spilling_config["type"] == "filesystem")
diff --git a/python/ray/tests/test_basic.py b/python/ray/tests/test_basic.py
index e33af42de..4c80aea70 100644
--- a/python/ray/tests/test_basic.py
+++ b/python/ray/tests/test_basic.py
@@ -261,6 +261,9 @@ def test_ray_options(shutdown_only):
     "ray_start_cluster_head", [{
         "num_cpus": 0,
         "object_store_memory": 75 * 1024 * 1024,
+        "_system_config": {
+            "automatic_object_spilling_enabled": False
+        }
     }],
     indirect=True)
 def test_fetch_local(ray_start_cluster_head):
diff --git a/python/ray/tests/test_failure.py b/python/ray/tests/test_failure.py
index f45aea9b4..abd82011d 100644
--- a/python/ray/tests/test_failure.py
+++ b/python/ray/tests/test_failure.py
@@ -1039,7 +1039,10 @@ def test_parallel_actor_fill_plasma_retry(ray_start_cluster_head):
 
 
 def test_fill_object_store_exception(shutdown_only):
-    ray.init(num_cpus=2, object_store_memory=10**8)
+    ray.init(
+        num_cpus=2,
+        object_store_memory=10**8,
+        _system_config={"automatic_object_spilling_enabled": False})
 
     @ray.remote
     def expensive_task():
diff --git a/python/ray/tests/test_object_spilling.py b/python/ray/tests/test_object_spilling.py
index 242799dc9..159e0aaf7 100644
--- a/python/ray/tests/test_object_spilling.py
+++ b/python/ray/tests/test_object_spilling.py
@@ -69,6 +69,14 @@ def multi_node_object_spilling_config(request, tmp_path):
     yield create_object_spilling_config(request, tmp_path)
 
 
+def run_basic_workload():
+    """Run the workload that requires spilling."""
+    arr = np.random.rand(5 * 1024 * 1024)  # 40 MB
+    refs = []
+    refs.append([ray.put(arr) for _ in range(2)])
+    ray.get(ray.put(arr))
+
+
 def is_dir_empty(temp_folder,
                  append_path=ray.ray_constants.DEFAULT_OBJECT_PREFIX):
     # append_path is used because the file based spilling will append
@@ -111,6 +119,68 @@ def test_url_generation_and_parse():
     assert parsed_result.size == size
 
 
+@pytest.mark.skipif(
+    platform.system() == "Windows", reason="Failing on Windows.")
+def test_default_config(shutdown_only):
+    ray.init(num_cpus=0, object_store_memory=75 * 1024 * 1024)
+    # Make sure the object spilling configuration is properly set.
+    config = json.loads(
+        ray.worker._global_node._config["object_spilling_config"])
+    assert config["type"] == "filesystem"
+    assert (config["params"]["directory_path"] ==
+            ray.worker._global_node._session_dir)
+    # Make sure the basic workload can succeed.
+    run_basic_workload()
+    ray.shutdown()
+
+    # Make sure config is not initalized if spilling is not enabled..
+    ray.init(
+        num_cpus=0,
+        object_store_memory=75 * 1024 * 1024,
+        _system_config={
+            "automatic_object_spilling_enabled": False,
+            "object_store_full_delay_ms": 100
+        })
+    assert "object_spilling_config" not in ray.worker._global_node._config
+    with pytest.raises(ray.exceptions.ObjectStoreFullError):
+        run_basic_workload()
+    ray.shutdown()
+
+    # Make sure when we use a different config, it is reflected.
+    ray.init(
+        num_cpus=0,
+        _system_config={
+            "object_spilling_config": (
+                json.dumps(mock_distributed_fs_object_spilling_config))
+        })
+    config = json.loads(
+        ray.worker._global_node._config["object_spilling_config"])
+    assert config["type"] == "mock_distributed_fs"
+
+
+@pytest.mark.skipif(
+    platform.system() == "Windows", reason="Failing on Windows.")
+def test_default_config_cluster(ray_start_cluster):
+    cluster = ray_start_cluster
+    cluster.add_node(num_cpus=0)
+    ray.init(cluster.address)
+    worker_nodes = []
+    worker_nodes.append(
+        cluster.add_node(num_cpus=1, object_store_memory=75 * 1024 * 1024))
+    cluster.wait_for_nodes()
+
+    # Run the basic spilling workload on both
+    # worker nodes and make sure they are working.
+    @ray.remote
+    def task():
+        arr = np.random.rand(5 * 1024 * 1024)  # 40 MB
+        refs = []
+        refs.append([ray.put(arr) for _ in range(2)])
+        ray.get(ray.put(arr))
+
+    ray.get([task.remote() for _ in range(2)])
+
+
 @pytest.mark.skipif(
     platform.system() == "Windows", reason="Failing on Windows.")
 def test_spilling_not_done_for_pinned_object(object_spilling_config,
@@ -690,9 +760,7 @@ import json
 import os
 import signal
 import numpy as np
-
 import ray
-
 ray.init(
     object_store_memory=75 * 1024 * 1024,
     _system_config={{
@@ -709,7 +777,6 @@ ray.init(
     }})
 arr = np.random.rand(1024 * 1024)  # 8 MB data
 replay_buffer = []
-
 # Spill lots of objects
 for _ in range(30):
     ref = None
diff --git a/python/ray/tests/test_reference_counting.py b/python/ray/tests/test_reference_counting.py
index a47a9a828..02638ed3d 100644
--- a/python/ray/tests/test_reference_counting.py
+++ b/python/ray/tests/test_reference_counting.py
@@ -18,8 +18,10 @@ logger = logging.getLogger(__name__)
 
 @pytest.fixture
 def one_worker_100MiB(request):
+    # It has lots of tests that don't require object spilling.
     config = {
         "task_retry_delay_ms": 0,
+        "automatic_object_spilling_enabled": False
     }
     yield ray.init(
         num_cpus=1,
diff --git a/python/ray/tests/test_reference_counting_2.py b/python/ray/tests/test_reference_counting_2.py
index 8cc7576aa..416afcec0 100644
--- a/python/ray/tests/test_reference_counting_2.py
+++ b/python/ray/tests/test_reference_counting_2.py
@@ -22,6 +22,7 @@ def one_worker_100MiB(request):
     config = {
         "task_retry_delay_ms": 0,
         "object_timeout_milliseconds": 1000,
+        "automatic_object_spilling_enabled": False
     }
     yield ray.init(
         num_cpus=1,