diff --git a/tests/functional/relation_quoting/test_relation_quoting.py b/tests/functional/relation_quoting/test_relation_quoting.py
new file mode 100644
index 00000000000..55f492cc080
--- /dev/null
+++ b/tests/functional/relation_quoting/test_relation_quoting.py
@@ -0,0 +1,64 @@
+import pytest
+
+from dbt.tests.util import read_file, run_dbt
+
+_SOURCES_YML = """
+sources:
+  - name: source_name
+    database: source_database
+    schema: source_schema
+    tables:
+      - name: customers
+"""
+
+
+class TestSourceQuotingGlobalConfigs:
+    @pytest.fixture(scope="class")
+    def project_config_update(self):
+        # Postgres quoting configs are True by default -- turn them all to False to show they are not respected during source rendering
+        return {
+            "quoting": {
+                "database": False,
+                "schema": False,
+                "identifier": False,
+            },
+        }
+
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {
+            "sources.yml": _SOURCES_YML,
+            "model.sql": "select * from {{ source('source_name', 'customers') }}",
+        }
+
+    def test_sources_ignore_global_quoting_configs(self, project):
+        run_dbt(["compile"])
+
+        generated_sql = read_file("target", "compiled", "test", "models", "model.sql")
+        assert generated_sql == 'select * from "source_database"."source_schema"."customers"'
+
+
+class TestModelQuoting:
+    @pytest.fixture(scope="class")
+    def project_config_update(self):
+        # Postgres quoting configs are True by default -- turn them all to False to show they are respected during model rendering
+        return {
+            "quoting": {
+                "database": False,
+                "schema": False,
+                "identifier": False,
+            },
+        }
+
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {
+            "model.sql": "select 1 as id",
+            "model_downstream.sql": "select * from {{ ref('model') }}",
+        }
+
+    def test_models_respect_global_quoting_configs(self, project):
+        run_dbt(["compile"])
+
+        generated_sql = read_file("target", "compiled", "test", "models", "model_downstream.sql")
+        assert generated_sql == f"select * from dbt.{project.test_schema}.model"