diff --git a/releasenotes/notes/add-show_default-from-context-support-ab4aeffcc513502d.yaml b/releasenotes/notes/add-show_default-from-context-support-ab4aeffcc513502d.yaml
new file mode 100644
index 0000000..cc743cf
--- /dev/null
+++ b/releasenotes/notes/add-show_default-from-context-support-ab4aeffcc513502d.yaml
@@ -0,0 +1,7 @@
+---
+fixes:
+  - |
+    Added support for ``show_default`` as defined in click context settings.
+    This allows for option defaults to be rendered in the output. Consistent
+    with click version 8.1.x, ``show_default`` is overridden by
+    ``Command.show_default``.
diff --git a/sphinx_click/ext.py b/sphinx_click/ext.py
index 4454bc8..f398aad 100644
--- a/sphinx_click/ext.py
+++ b/sphinx_click/ext.py
@@ -63,7 +63,7 @@ def _get_usage(ctx: click.Context) -> str:
     return formatter.getvalue().rstrip('\n')  # type: ignore
 
 
-def _get_help_record(opt: click.Option) -> ty.Tuple[str, str]:
+def _get_help_record(ctx: click.Context, opt: click.Option) -> ty.Tuple[str, str]:
     """Re-implementation of click.Opt.get_help_record.
 
     The variant of 'get_help_record' found in Click makes uses of slashes to
@@ -99,12 +99,17 @@ def _write_opts(opts: ty.List[str]) -> str:
 
     extras = []
 
-    if isinstance(opt.show_default, str):
+    if opt.show_default is not None:
+        show_default = opt.show_default
+    else:
+        show_default = ctx.show_default
+
+    if isinstance(show_default, str):
         # Starting from Click 7.0 show_default can be a string. This is
         # mostly useful when the default is not a constant and
         # documentation thus needs a manually written string.
-        extras.append(':default: ``%s``' % opt.show_default)
-    elif opt.default is not None and opt.show_default:
+        extras.append(':default: ``%s``' % show_default)
+    elif opt.default is not None and show_default:
         extras.append(
             ':default: ``%s``'
             % (
@@ -165,9 +170,11 @@ def _format_usage(ctx: click.Context) -> ty.Generator[str, None, None]:
     yield ''
 
 
-def _format_option(opt: click.Option) -> ty.Generator[str, None, None]:
+def _format_option(
+    ctx: click.Context, opt: click.Option
+) -> ty.Generator[str, None, None]:
     """Format the output for a `click.Option`."""
-    opt_help = _get_help_record(opt)
+    opt_help = _get_help_record(ctx, opt)
 
     yield '.. option:: {}'.format(opt_help[0])
     if opt_help[1]:
@@ -196,7 +203,7 @@ def _format_options(ctx: click.Context) -> ty.Generator[str, None, None]:
     ]
 
     for param in params:
-        for line in _format_option(param):
+        for line in _format_option(ctx, param):
             yield line
         yield ''
 
diff --git a/tests/test_formatter.py b/tests/test_formatter.py
index 9b302c4..b55b9d9 100644
--- a/tests/test_formatter.py
+++ b/tests/test_formatter.py
@@ -282,6 +282,40 @@ def foobar(bar):
             '\n'.join(output),
         )
 
+    def test_show_default(self):
+        """Validate formatting of show_default via context_settings."""
+
+        @click.command(context_settings={"show_default": True})
+        @click.option('--no-set', default=0)
+        @click.option('--set-false', default=0, show_default=False)
+        def foobar():
+            """A sample command."""
+            pass
+
+        ctx = click.Context(foobar, info_name='foobar', show_default=True)
+        output = list(ext._format_command(ctx, nested='short'))
+        self.assertEqual(
+            textwrap.dedent(
+                """
+        A sample command.
+
+        .. program:: foobar
+        .. code-block:: shell
+
+            foobar [OPTIONS]
+
+        .. rubric:: Options
+
+        .. option:: --no-set <no_set>
+
+            :default: ``0``
+
+        .. option:: --set-false <set_false>
+        """
+            ).lstrip(),
+            '\n'.join(output),
+        )
+
     def test_hidden(self):
         """Validate a `click.Command` with the `hidden` flag."""