diff --git a/etc/NEWS b/etc/NEWS
index 29559d143db..1d5d0d64584 100644
--- a/etc/NEWS
+++ b/etc/NEWS
@@ -155,6 +155,11 @@ These variables are for users who would like to avoid the small
 probability of data corruption due to techniques Emacs uses to recover
 in these situations.
 
++++
+** File local and directory local variables are now initialized each
+time the major mode is set, not just when the file is first visited.
+These local variables will thus not vanish on setting a major mode.
+
 +++
 ** A second dir-local file (.dir-locals-2.el) is now accepted.
 See the variable 'dir-locals-file-2' for more information.
diff --git a/lisp/files.el b/lisp/files.el
index d89b2f52582..21f7bdc7dcf 100644
--- a/lisp/files.el
+++ b/lisp/files.el
@@ -2316,7 +2316,10 @@ not set local variables (though we do notice a mode specified with -*-.)
 or from Lisp without specifying the optional argument FIND-FILE;
 in that case, this function acts as if `enable-local-variables' were t."
   (interactive)
-  (fundamental-mode)
+  (kill-all-local-variables)
+  (unless delay-mode-hooks
+    (run-hooks 'change-major-mode-after-body-hook
+               'after-change-major-mode-hook))
   (let ((enable-local-variables (or (not find-file) enable-local-variables)))
     ;; FIXME this is less efficient than it could be, since both
     ;; s-a-m and h-l-v may parse the same regions, looking for "mode:".