diff --git a/django/contrib/auth/handlers/modpython.py b/django/contrib/auth/handlers/modpython.py
index b1d7680a33..e6719794a1 100644
--- a/django/contrib/auth/handlers/modpython.py
+++ b/django/contrib/auth/handlers/modpython.py
@@ -10,8 +10,6 @@ def authenhandler(req, **kwargs):
     # that so that the following import works
     os.environ.update(req.subprocess_env)
 
-    from django.contrib.auth.models import User
-
     # check for PythonOptions
     _str_to_bool = lambda s: s.lower() in ('1', 'true', 'on', 'yes')
 
@@ -19,6 +17,11 @@ def authenhandler(req, **kwargs):
     permission_name = options.get('DjangoPermissionName', None)
     staff_only = _str_to_bool(options.get('DjangoRequireStaffStatus', "on"))
     superuser_only = _str_to_bool(options.get('DjangoRequireSuperuserStatus', "off"))
+    settings_module = options.get('DJANGO_SETTINGS_MODULE', None)
+    if settings_module:
+        os.environ['DJANGO_SETTINGS_MODULE'] = settings_module
+
+    from django.contrib.auth.models import User
 
     # check that the username is valid
     kwargs = {'username': req.user, 'is_active': True}
diff --git a/docs/apache_auth.txt b/docs/apache_auth.txt
index 0dd5d00cbe..72e0841305 100644
--- a/docs/apache_auth.txt
+++ b/docs/apache_auth.txt
@@ -56,6 +56,15 @@ location to users marked as staff members.  You can use a set of
                                       required.
     ================================  =========================================
 
+Note that sometimes ``SetEnv`` doesn't play well in this mod_python
+configuration, for reasons unknown. If you're having problems getting
+mod_python to recognize your ``DJANGO_SETTINGS_MODULE``, you can set it using
+``PythonOption`` instead of ``SetEnv``. Therefore, these two Apache directives
+are equivalent::
+
+    SetEnv DJANGO_SETTINGS_MODULE mysite.settings
+    PythonOption DJANGO_SETTINGS_MODULE mysite.settings
+
 .. _authentication system: http://www.djangoproject.com/documentation/authentication/
 .. _Subversion: http://subversion.tigris.org/
 .. _mod_dav: http://httpd.apache.org/docs/2.0/mod/mod_dav.html