diff --git a/fuelclient/client.py b/fuelclient/client.py
index 7c14b5c..533d8b4 100644
--- a/fuelclient/client.py
+++ b/fuelclient/client.py
@@ -14,14 +14,14 @@
 
 import json
 import logging
-import os
 import requests
 
+from keystoneclient.v2_0 import client as auth_client
+from six.moves.urllib import parse as urlparse
 import yaml
 
-from keystoneclient.v2_0 import client as auth_client
-
 from fuelclient.cli.error import exceptions_decorator
+from fuelclient import fuelclient_settings
 from fuelclient.logs import NullHandler
 
 
@@ -36,28 +36,17 @@ class Client(object):
     """
 
     def __init__(self):
+        conf = fuelclient_settings.get_settings()
+
         self.debug = False
-        path_to_config = "/etc/fuel/client/config.yaml"
-        defaults = {
-            "SERVER_ADDRESS": "127.0.0.1",
-            "LISTEN_PORT": "8000",
-            "KEYSTONE_USER": "admin",
-            "KEYSTONE_PASS": "admin",
-        }
-        if os.access(path_to_config, os.R_OK):
-            with open(path_to_config, "r") as fh:
-                config = yaml.load(fh.read())
-            defaults.update(config)
-        defaults.update(os.environ)
-        self.root = "http://{SERVER_ADDRESS}:{LISTEN_PORT}".format(**defaults)
-        self.keystone_base = (
-            "http://{SERVER_ADDRESS}:{LISTEN_PORT}/keystone/v2.0"
-            .format(**defaults)
-        )
-        self.api_root = self.root + "/api/v1/"
-        self.ostf_root = self.root + "/ostf/"
-        self.user = defaults["KEYSTONE_USER"]
-        self.password = defaults["KEYSTONE_PASS"]
+        self.root = "http://{server}:{port}".format(server=conf.SERVER_ADDRESS,
+                                                    port=conf.LISTEN_PORT)
+
+        self.keystone_base = urlparse.urljoin(self.root, "/keystone/v2.0")
+        self.api_root = urlparse.urljoin(self.root, "/api/v1/")
+        self.ostf_root = urlparse.urljoin(self.root, "/ostf/")
+        self.user = conf.KEYSTONE_USER
+        self.password = conf.KEYSTONE_PASS
         self._keystone_client = None
         self._auth_required = None
 
diff --git a/fuelclient/fuelclient_settings.py b/fuelclient/fuelclient_settings.py
index 56aecdf..5cb10dc 100644
--- a/fuelclient/fuelclient_settings.py
+++ b/fuelclient/fuelclient_settings.py
@@ -15,7 +15,9 @@
 #    under the License.
 
 import os
+import sys
 
+import six
 import yaml
 
 from fuelclient.cli import error
@@ -28,14 +30,15 @@ class FuelClientSettings(object):
     """Represents a model of Fuel Clients settings
 
     Default settigs file are distributed with the source code in
-    the <DIST_DIR>/fuelclient_settings.yaml.
+    the <DIST_DIR>/fuelclient_settings.yaml. Those settings can be
+    overriden by /etc/fuel/client/config.yaml file.
 
     User-specific settings may be stored in any YAML-formatted file
     the path to which should be supplied via the FUELCLIENT_CUSTOM_SETTINGS
     environment variable. Custom settins override the default ones.
 
-    NOTE: This is not to be confused with the API client settings which
-          requires a different configuration file.
+    Top level values may also be set as environment variables, e.g.
+    export SERVER_PORT=8080.
 
     """
     def __init__(self):
@@ -45,12 +48,24 @@ class FuelClientSettings(object):
         project_path = os.path.dirname(__file__)
         project_settings_file = os.path.join(project_path,
                                              'fuelclient_settings.yaml')
-        settings_files.append(project_settings_file)
+        external_default_settings = '/etc/fuel/client/config.yaml'
 
-        # Check whether a user specified a custom settings file
-        test_config = os.environ.get('FUELCLIENT_CUSTOM_SETTINGS')
-        if test_config:
-            settings_files.append(test_config)
+        # NOTE(romcheg): when external default settings file is removed
+        # this deprecation warning should be removed as well.
+        if os.path.exists(external_default_settings):
+            six.print_('DEPRECATION WARNING: file {0} is found and will be '
+                       'used as a source for settings. However, it deprecated '
+                       'and will not be used by default in the ongoing '
+                       'version of '
+                       'python-fuelclient.'.format(external_default_settings),
+                       file=sys.stderr)
+
+        self._add_file_if_exists(project_settings_file, settings_files)
+        self._add_file_if_exists(external_default_settings, settings_files)
+
+        # Add a custom settings file specified by user
+        self._add_file_if_exists(os.environ.get('FUELCLIENT_CUSTOM_SETTINGS'),
+                                 settings_files)
 
         self.config = {}
         for sf in settings_files:
@@ -62,12 +77,23 @@ class FuelClientSettings(object):
 
                 raise error.SettingsException(msg)
 
+        self._update_from_env()
+
+    def _add_file_if_exists(self, path_to_file, file_list):
+        if path_to_file and os.access(path_to_file, os.R_OK):
+            file_list.append(path_to_file)
+
     def _update_from_file(self, path):
         with open(path, 'r') as custom_config:
             self.config.update(
                 yaml.load(custom_config.read())
             )
 
+    def _update_from_env(self):
+        for k in six.iterkeys(self.config):
+            if k in os.environ:
+                self.config[k] = os.environ[k]
+
     def dump(self):
         return yaml.dump(self.config)
 
diff --git a/fuelclient/fuelclient_settings.yaml b/fuelclient/fuelclient_settings.yaml
index 59ab6db..e019188 100644
--- a/fuelclient/fuelclient_settings.yaml
+++ b/fuelclient/fuelclient_settings.yaml
@@ -1,4 +1,10 @@
-# performance tests settings
+# Connection settings
+SERVER_ADDRESS: "127.0.0.1"
+LISTEN_PORT: "8000"
+KEYSTONE_USER: "admin"
+KEYSTONE_PASS: "admin"
+
+# Performance tests settings
 PERFORMANCE_PROFILING_TESTS: 0
 PERF_TESTS_PATHS:
     perf_tests_base: "/tmp/fuelclient_performance_tests/tests/"