diff --git a/CHANGES b/CHANGES
index 7eae4be41d0..d0b6bc4f499 100644
--- a/CHANGES
+++ b/CHANGES
@@ -80,6 +80,8 @@ Bugs fixed
   bulding texinfo document
 * #10000: LaTeX: glossary terms with common definition are rendered with
   too much vertical whitespace
+* #10318: ``:prepend:`` option of :rst:dir:`literalinclude` directive does not
+  work with ``:dedent:`` option
 
 Testing
 --------
diff --git a/sphinx/directives/code.py b/sphinx/directives/code.py
index dc44ed31485..9437fe9a5e5 100644
--- a/sphinx/directives/code.py
+++ b/sphinx/directives/code.py
@@ -224,9 +224,9 @@ def read(self, location: Tuple[str, int] = None) -> Tuple[str, int]:
                        self.start_filter,
                        self.end_filter,
                        self.lines_filter,
+                       self.dedent_filter,
                        self.prepend_filter,
-                       self.append_filter,
-                       self.dedent_filter]
+                       self.append_filter]
             lines = self.read_file(self.filename, location=location)
             for func in filters:
                 lines = func(lines, location=location)
diff --git a/tests/test_directive_code.py b/tests/test_directive_code.py
index 98a9aa89940..cc73c426ce2 100644
--- a/tests/test_directive_code.py
+++ b/tests/test_directive_code.py
@@ -251,6 +251,19 @@ def test_LiteralIncludeReader_dedent(literal_inc_path):
                        "\n")
 
 
+@pytest.mark.xfail(os.name != 'posix', reason="Not working on windows")
+def test_LiteralIncludeReader_dedent_and_append_and_prepend(literal_inc_path):
+    # dedent: 2
+    options = {'lines': '9-11', 'dedent': 2, 'prepend': 'class Foo:', 'append': '# comment'}
+    reader = LiteralIncludeReader(literal_inc_path, options, DUMMY_CONFIG)
+    content, lines = reader.read()
+    assert content == ("class Foo:\n"
+                       "  def baz():\n"
+                       "      pass\n"
+                       "\n"
+                       "# comment\n")
+
+
 @pytest.mark.xfail(os.name != 'posix', reason="Not working on windows")
 def test_LiteralIncludeReader_tabwidth(testroot):
     # tab-width: 4