diff --git a/icu4c/source/common/uloc_tag.cpp b/icu4c/source/common/uloc_tag.cpp
index 7f7fd9119e9..035e09257df 100644
--- a/icu4c/source/common/uloc_tag.cpp
+++ b/icu4c/source/common/uloc_tag.cpp
@@ -129,7 +129,6 @@ static const char* const LEGACY[] = {
     // Legacy tags with no preferred value in the IANA
     // registry. Kept for now for the backward compatibility
     // because ICU has mapped them this way.
-    "cel-gaulish",  "xtg-x-cel-gaulish",
     "i-default",    "en-x-i-default",
     "i-enochian",   "und-x-i-enochian",
     "i-mingo",      "see-x-i-mingo",
diff --git a/icu4c/source/test/intltest/loctest.cpp b/icu4c/source/test/intltest/loctest.cpp
index 7ce21c45b3a..d12336b74d7 100644
--- a/icu4c/source/test/intltest/loctest.cpp
+++ b/icu4c/source/test/intltest/loctest.cpp
@@ -4915,6 +4915,9 @@ void LocaleTest::TestCanonicalize(void)
 
         // ICU-21344
         { "ku-Arab-NT", "ku-Arab-IQ"},
+
+        // ICU-21401
+        { "cel-gaulish", "xtg"},
     };
     int32_t i;
     for (i=0; i < UPRV_LENGTHOF(testCases); i++) {
diff --git a/icu4j/main/tests/core/src/com/ibm/icu/dev/test/util/ULocaleTest.java b/icu4j/main/tests/core/src/com/ibm/icu/dev/test/util/ULocaleTest.java
index 40bcb0e4b26..2868ddd8cce 100644
--- a/icu4j/main/tests/core/src/com/ibm/icu/dev/test/util/ULocaleTest.java
+++ b/icu4j/main/tests/core/src/com/ibm/icu/dev/test/util/ULocaleTest.java
@@ -5215,6 +5215,9 @@ public class ULocaleTest extends TestFmwk {
 
         // ICU-21344
         Assert.assertEquals("ku-Arab-IQ", canonicalTag("ku-Arab-NT"));
+
+        // ICU-21401
+        Assert.assertEquals("xtg", canonicalTag("cel-gaulish"));
     }
 
     @Test