diff --git a/modules/data-streams/src/test/java/org/elasticsearch/datastreams/action/TransportGetDataStreamsActionTests.java b/modules/data-streams/src/test/java/org/elasticsearch/datastreams/action/TransportGetDataStreamsActionTests.java
index c6facb8a03f3d..41bd3c2ad1454 100644
--- a/modules/data-streams/src/test/java/org/elasticsearch/datastreams/action/TransportGetDataStreamsActionTests.java
+++ b/modules/data-streams/src/test/java/org/elasticsearch/datastreams/action/TransportGetDataStreamsActionTests.java
@@ -11,6 +11,7 @@
 import org.elasticsearch.action.datastreams.GetDataStreamAction;
 import org.elasticsearch.cluster.ClusterName;
 import org.elasticsearch.cluster.ClusterState;
+import org.elasticsearch.cluster.metadata.ComponentTemplate;
 import org.elasticsearch.cluster.metadata.ComposableIndexTemplate;
 import org.elasticsearch.cluster.metadata.DataStream;
 import org.elasticsearch.cluster.metadata.DataStreamFailureStoreSettings;
@@ -40,6 +41,7 @@
 import java.time.temporal.ChronoUnit;
 import java.util.ArrayList;
 import java.util.List;
+import java.util.Map;
 import java.util.Set;
 import java.util.stream.Collectors;
 
@@ -543,11 +545,44 @@ public void testGetEffectiveSettingsTemplateOnlySettings() {
         GetDataStreamAction.Request req = new GetDataStreamAction.Request(TEST_REQUEST_TIMEOUT, new String[] {});
         final String templatePolicy = "templatePolicy";
         final String templateIndexMode = IndexMode.LOOKUP.getName();
-        final String dataStreamPolicy = "dataStreamPolicy";
-        final String dataStreamIndexMode = IndexMode.LOGSDB.getName();
 
         ClusterState state = getClusterStateWithDataStreamWithSettings(
             projectId,
+            Settings.builder()
+                .put(IndexMetadata.LIFECYCLE_NAME, templatePolicy)
+                .put(IndexSettings.MODE.getKey(), templateIndexMode)
+                .build(),
+            Settings.EMPTY,
+            Settings.EMPTY
+        );
+
+        GetDataStreamAction.Response response = TransportGetDataStreamsAction.innerOperation(
+            state.projectState(projectId),
+            req,
+            resolver,
+            systemIndices,
+            ClusterSettings.createBuiltInClusterSettings(),
+            dataStreamGlobalRetentionSettings,
+            emptyDataStreamFailureStoreSettings,
+            new IndexSettingProviders(Set.of()),
+            null
+        );
+        assertNotNull(response.getDataStreams());
+        assertThat(response.getDataStreams().size(), equalTo(1));
+        assertThat(response.getDataStreams().get(0).getIlmPolicy(), equalTo(templatePolicy));
+        assertThat(response.getDataStreams().get(0).getIndexModeName(), equalTo(templateIndexMode));
+    }
+
+    public void testGetEffectiveSettingsComponentTemplateOnlySettings() {
+        // Set a lifecycle only in the template, and make sure that is in the response:
+        ProjectId projectId = randomProjectIdOrDefault();
+        GetDataStreamAction.Request req = new GetDataStreamAction.Request(TEST_REQUEST_TIMEOUT, new String[] {});
+        final String templatePolicy = "templatePolicy";
+        final String templateIndexMode = IndexMode.LOOKUP.getName();
+
+        ClusterState state = getClusterStateWithDataStreamWithSettings(
+            projectId,
+            Settings.EMPTY,
             Settings.builder()
                 .put(IndexMetadata.LIFECYCLE_NAME, templatePolicy)
                 .put(IndexSettings.MODE.getKey(), templateIndexMode)
@@ -582,6 +617,10 @@ public void testGetEffectiveSettings() {
         // Now set a lifecycle in both the template and the data stream, and make sure the response has the data stream one:
         ClusterState state = getClusterStateWithDataStreamWithSettings(
             projectId,
+            Settings.builder()
+                .put(IndexMetadata.LIFECYCLE_NAME, templatePolicy)
+                .put(IndexSettings.MODE.getKey(), templateIndexMode)
+                .build(),
             Settings.builder()
                 .put(IndexMetadata.LIFECYCLE_NAME, templatePolicy)
                 .put(IndexSettings.MODE.getKey(), templateIndexMode)
@@ -611,6 +650,7 @@ public void testGetEffectiveSettings() {
     private static ClusterState getClusterStateWithDataStreamWithSettings(
         ProjectId projectId,
         Settings templateSettings,
+        Settings componentTemplateSettings,
         Settings dataStreamSettings
     ) {
         String dataStreamName = "data-stream-1";
@@ -625,8 +665,16 @@ private static ClusterState getClusterStateWithDataStreamWithSettings(
                 .indexPatterns(List.of("*"))
                 .template(Template.builder().settings(templateSettings))
                 .dataStreamTemplate(new ComposableIndexTemplate.DataStreamTemplate())
+                .componentTemplates(List.of("component_template_1"))
                 .build()
         );
+        ComponentTemplate componentTemplate = new ComponentTemplate(
+            Template.builder().settings(componentTemplateSettings).build(),
+            null,
+            null,
+            null
+        );
+        builder.componentTemplates(Map.of("component_template_1", componentTemplate));
 
         List<IndexMetadata> backingIndices = new ArrayList<>();
         for (int backingIndexNumber = 1; backingIndexNumber <= numberOfBackingIndices; backingIndexNumber++) {
diff --git a/server/src/main/java/org/elasticsearch/cluster/metadata/DataStream.java b/server/src/main/java/org/elasticsearch/cluster/metadata/DataStream.java
index 72dcbd13e7e00..d6372a8e1b5c0 100644
--- a/server/src/main/java/org/elasticsearch/cluster/metadata/DataStream.java
+++ b/server/src/main/java/org/elasticsearch/cluster/metadata/DataStream.java
@@ -381,12 +381,7 @@ public ComposableIndexTemplate getEffectiveIndexTemplate(ProjectMetadata project
 
     public Settings getEffectiveSettings(ProjectMetadata projectMetadata) {
         ComposableIndexTemplate template = getMatchingIndexTemplate(projectMetadata);
-        final Settings templateSettings;
-        if (template.template() == null || template.template().settings() == null) {
-            templateSettings = Settings.EMPTY;
-        } else {
-            templateSettings = template.template().settings();
-        }
+        Settings templateSettings = MetadataIndexTemplateService.resolveSettings(template, projectMetadata.componentTemplates());
         return templateSettings.merge(settings);
     }
 
diff --git a/server/src/test/java/org/elasticsearch/cluster/metadata/DataStreamTests.java b/server/src/test/java/org/elasticsearch/cluster/metadata/DataStreamTests.java
index 6d665d7992fc8..07f6f2828f7a6 100644
--- a/server/src/test/java/org/elasticsearch/cluster/metadata/DataStreamTests.java
+++ b/server/src/test/java/org/elasticsearch/cluster/metadata/DataStreamTests.java
@@ -2654,6 +2654,26 @@ public void testGetEffectiveSettingsTemplateSettingsOnly() {
         assertThat(dataStream.getEffectiveSettings(projectMetadataBuilder.build()), equalTo(templateSettings));
     }
 
+    public void testGetEffectiveSettingsComponentTemplateSettingsOnly() {
+        // We only have settings from a component template, so we expect to get those back
+        DataStream dataStream = createDataStream(Settings.EMPTY);
+        Settings templateSettings = Settings.EMPTY;
+        Template.Builder indexTemplateBuilder = Template.builder().settings(templateSettings);
+        ComposableIndexTemplate indexTemplate = ComposableIndexTemplate.builder()
+            .indexPatterns(List.of(dataStream.getName()))
+            .dataStreamTemplate(new ComposableIndexTemplate.DataStreamTemplate())
+            .template(indexTemplateBuilder)
+            .componentTemplates(List.of("component-template-1"))
+            .build();
+        Settings componentSettings = randomSettings();
+        Template.Builder componentTemplateBuilder = Template.builder().settings(componentSettings);
+        ComponentTemplate componentTemplate1 = new ComponentTemplate(componentTemplateBuilder.build(), null, null, null);
+        ProjectMetadata.Builder projectMetadataBuilder = ProjectMetadata.builder(randomProjectIdOrDefault())
+            .indexTemplates(Map.of(dataStream.getName(), indexTemplate))
+            .componentTemplates(Map.of("component-template-1", componentTemplate1));
+        assertThat(dataStream.getEffectiveSettings(projectMetadataBuilder.build()), equalTo(componentSettings));
+    }
+
     public void testGetEffectiveSettingsDataStreamSettingsOnly() {
         // We only have settings from the data stream, so we expect to get those back
         Settings dataStreamSettings = randomSettings();