diff --git a/src/Azure.Functions.Cli/Actions/LocalActions/InitAction.cs b/src/Azure.Functions.Cli/Actions/LocalActions/InitAction.cs
index 3b5e619c8..2860e29ac 100644
--- a/src/Azure.Functions.Cli/Actions/LocalActions/InitAction.cs
+++ b/src/Azure.Functions.Cli/Actions/LocalActions/InitAction.cs
@@ -51,7 +51,7 @@ class InitAction : BaseAction
 "},
             { new Lazy<string>(() => ScriptConstants.HostMetadataFileName), "{ }" },
             { new Lazy<string>(() => SecretsManager.AppSettingsFileName), @"{
-  ""IsEncrypted"": true,
+  ""IsEncrypted"": false,
   ""Values"": {
     ""AzureWebJobsStorage"": """"
   }
diff --git a/test/Azure.Functions.Cli.Tests/ActionsTests/SettingsActionsTests.cs b/test/Azure.Functions.Cli.Tests/ActionsTests/SettingsActionsTests.cs
index edffccea1..3392e65c1 100644
--- a/test/Azure.Functions.Cli.Tests/ActionsTests/SettingsActionsTests.cs
+++ b/test/Azure.Functions.Cli.Tests/ActionsTests/SettingsActionsTests.cs
@@ -33,7 +33,7 @@ public void AddSettingsActionTest(string name, string value)
             // Assert
             content.Should().Contain(name);
             content.Should().Contain("IsEncrypted");
-            content.Should().Contain("true");
+            content.Should().Contain("false");
         }
 
         [Theory]
@@ -63,13 +63,6 @@ public void DecryptAndEncryptSettingsActionTest(string name, string value)
 
             var content = File.ReadAllText(settingsPath);
             content.Should().Contain(name);
-            content.Should().NotContain(value);
-            content.Should().Contain("true");
-
-            Program.Main(new[] { "settings", "decrypt" });
-
-            content = File.ReadAllText(settingsPath);
-            content.Should().Contain(name);
             content.Should().Contain(value);
             content.Should().Contain("false");
 
@@ -79,6 +72,13 @@ public void DecryptAndEncryptSettingsActionTest(string name, string value)
             content.Should().Contain(name);
             content.Should().NotContain(value);
             content.Should().Contain("true");
+
+            Program.Main(new[] { "settings", "decrypt" });
+
+            content = File.ReadAllText(settingsPath);
+            content.Should().Contain(name);
+            content.Should().Contain(value);
+            content.Should().Contain("false");
         }
 
         [Theory]