diff --git a/core/modules/field/src/Plugin/migrate/process/d7/FieldInstanceSettings.php b/core/modules/field/src/Plugin/migrate/process/d7/FieldInstanceSettings.php
index 991ce09c..cfd8eec 100644
--- a/core/modules/field/src/Plugin/migrate/process/d7/FieldInstanceSettings.php
+++ b/core/modules/field/src/Plugin/migrate/process/d7/FieldInstanceSettings.php
@@ -23,6 +23,22 @@ public function transform($value, MigrateExecutableInterface $migrate_executable
     $field_data = unserialize($field_definition['data']);
     $field_settings = $field_data['settings'];
 
+    if ($row->getSourceProperty('type') == 'taxonomy_term_reference') {
+      foreach ($field_settings['allowed_values'] as $allowed_value) {
+        if ($vocabulary = $allowed_value['vocabulary']) {
+          $instance_settings['handler_settings']['sort'] = [
+            'field' => '_none',
+          ];
+          // @todo Handle duplicate vocabulary machine names ($vocabulary). This
+          // current code works for migrations from Drupal 7 (because that uses
+          // proper machine names for vocabularies), but may have problems with
+          // custom migration scenarios if they include vocabulary names that
+          // require de-duping.
+          $instance_settings['handler_settings']['target_bundles'][$vocabulary] = $vocabulary;
+        }
+      }
+    }
+
     // Get entityreference handler settings from source field configuration.
     if ($row->getSourceProperty('type') == "entityreference") {
       $instance_settings['handler'] = 'default:' . $field_settings['target_type'];
diff --git a/core/modules/field/src/Plugin/migrate/source/d7/FieldInstance.php b/core/modules/field/src/Plugin/migrate/source/d7/FieldInstance.php
index a54b17d..d14a36f 100644
--- a/core/modules/field/src/Plugin/migrate/source/d7/FieldInstance.php
+++ b/core/modules/field/src/Plugin/migrate/source/d7/FieldInstance.php
@@ -119,6 +119,9 @@ public function prepareRow(Row $row) {
     }
     $row->setSourceProperty('translatable', $translatable);
 
+    $field_data = unserialize($row->getSourceProperty('field_data'));
+    $row->setSourceProperty('field_settings', $field_data['settings']);
+
     return parent::prepareRow($row);
   }
 
diff --git a/core/modules/field/tests/src/Kernel/Migrate/d7/MigrateFieldInstanceTest.php b/core/modules/field/tests/src/Kernel/Migrate/d7/MigrateFieldInstanceTest.php
index 7ec5bf4..e0c1fcf 100644
--- a/core/modules/field/tests/src/Kernel/Migrate/d7/MigrateFieldInstanceTest.php
+++ b/core/modules/field/tests/src/Kernel/Migrate/d7/MigrateFieldInstanceTest.php
@@ -93,6 +93,23 @@ protected function assertLinkFields($id, $title_setting) {
   }
 
   /**
+   * Asserts the settings of an entity reference field config entity.
+   *
+   * @param string $id
+   *   The entity ID in the form ENTITY_TYPE.BUNDLE.FIELD_NAME.
+   * @param string[] $target_bundles
+   *   An array of expected target bundles.
+   */
+  protected function assertEntityReferenceFields($id, array $target_bundles) {
+    $field = FieldConfig::load($id);
+    $handler_settings = $field->getSetting('handler_settings');
+    $this->assertArrayHasKey('target_bundles', $handler_settings);
+    foreach ($handler_settings['target_bundles'] as $target_bundle) {
+      $this->assertContains($target_bundle, $target_bundles);
+    }
+  }
+
+  /**
    * Tests migrating D7 field instances to field_config entities.
    */
   public function testFieldInstances() {
@@ -132,6 +149,10 @@ public function testFieldInstances() {
     $this->assertLinkFields('node.test_content_type.field_link', DRUPAL_OPTIONAL);
     $this->assertLinkFields('node.article.field_link', DRUPAL_DISABLED);
     $this->assertLinkFields('node.blog.field_link', DRUPAL_REQUIRED);
+
+    $this->assertEntityReferenceFields('node.article.field_tags', ['tags']);
+    $this->assertEntityReferenceFields('node.forum.taxonomy_forums', ['forums']);
+    $this->assertEntityReferenceFields('node.test_content_type.field_term_reference', ['tags', 'test_vocabulary']);
   }
 
   /**
diff --git a/core/modules/migrate_drupal/tests/fixtures/drupal7.php b/core/modules/migrate_drupal/tests/fixtures/drupal7.php
index e1481c2..f6151e7 100644
--- a/core/modules/migrate_drupal/tests/fixtures/drupal7.php
+++ b/core/modules/migrate_drupal/tests/fixtures/drupal7.php
@@ -3361,7 +3361,7 @@
   'storage_module' => 'field_sql_storage',
   'storage_active' => '1',
   'locked' => '0',
-  'data' => 'a:7:{s:12:"translatable";s:1:"0";s:12:"entity_types";a:0:{}s:8:"settings";a:1:{s:14:"allowed_values";a:1:{i:0;a:2:{s:10:"vocabulary";s:15:"test_vocabulary";s:6:"parent";s:1:"0";}}}s:7:"storage";a:5:{s:4:"type";s:17:"field_sql_storage";s:8:"settings";a:0:{}s:6:"module";s:17:"field_sql_storage";s:6:"active";s:1:"1";s:7:"details";a:1:{s:3:"sql";a:2:{s:18:"FIELD_LOAD_CURRENT";a:1:{s:31:"field_data_field_term_reference";a:1:{s:3:"tid";s:24:"field_term_reference_tid";}}s:19:"FIELD_LOAD_REVISION";a:1:{s:35:"field_revision_field_term_reference";a:1:{s:3:"tid";s:24:"field_term_reference_tid";}}}}}s:12:"foreign keys";a:1:{s:3:"tid";a:2:{s:5:"table";s:18:"taxonomy_term_data";s:7:"columns";a:1:{s:3:"tid";s:3:"tid";}}}s:7:"indexes";a:1:{s:3:"tid";a:1:{i:0;s:3:"tid";}}s:2:"id";s:2:"20";}',
+  'data' => 'a:7:{s:12:"translatable";s:1:"0";s:12:"entity_types";a:0:{}s:8:"settings";a:1:{s:14:"allowed_values";a:2:{i:0;a:2:{s:10:"vocabulary";s:15:"test_vocabulary";s:6:"parent";s:1:"0";}i:1;a:2:{s:10:"vocabulary";s:4:"tags";s:6:"parent";s:1:"0";}}}s:7:"storage";a:5:{s:4:"type";s:17:"field_sql_storage";s:8:"settings";a:0:{}s:6:"module";s:17:"field_sql_storage";s:6:"active";s:1:"1";s:7:"details";a:1:{s:3:"sql";a:2:{s:18:"FIELD_LOAD_CURRENT";a:1:{s:31:"field_data_field_term_reference";a:1:{s:3:"tid";s:24:"field_term_reference_tid";}}s:19:"FIELD_LOAD_REVISION";a:1:{s:35:"field_revision_field_term_reference";a:1:{s:3:"tid";s:24:"field_term_reference_tid";}}}}}s:12:"foreign keys";a:1:{s:3:"tid";a:2:{s:5:"table";s:18:"taxonomy_term_data";s:7:"columns";a:1:{s:3:"tid";s:3:"tid";}}}s:7:"indexes";a:1:{s:3:"tid";a:1:{i:0;s:3:"tid";}}s:2:"id";s:2:"20";}',
   'cardinality' => '1',
   'translatable' => '0',
   'deleted' => '0',