diff --git a/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/analysis/Analyzer.scala b/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/analysis/Analyzer.scala
index 3a3997ff9c722..ad40f924ef89d 100644
--- a/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/analysis/Analyzer.scala
+++ b/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/analysis/Analyzer.scala
@@ -2826,7 +2826,7 @@ class Analyzer(override val catalogManager: CatalogManager)
                   generatorOutput = ResolveGenerate.makeGeneratorOutput(generator, names),
                   child)
 
-                (Some(g), res._2 ++ g.generatorOutput)
+                (Some(g), res._2 ++ g.nullableOutput)
               case other =>
                 (res._1, res._2 :+ other)
             }
diff --git a/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/plans/logical/basicLogicalOperators.scala b/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/plans/logical/basicLogicalOperators.scala
index b52ce468390e9..bdc6e48d08a48 100644
--- a/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/plans/logical/basicLogicalOperators.scala
+++ b/sql/catalyst/src/main/scala/org/apache/spark/sql/catalyst/plans/logical/basicLogicalOperators.scala
@@ -143,16 +143,17 @@ case class Generate(
 
   override def producedAttributes: AttributeSet = AttributeSet(generatorOutput)
 
+  def nullableOutput: Seq[Attribute] = {
+    generatorOutput.map { a =>
+      a.withNullability(outer || a.nullable)
+    }
+  }
+
   def qualifiedGeneratorOutput: Seq[Attribute] = {
-    val qualifiedOutput = qualifier.map { q =>
+    qualifier.map { q =>
       // prepend the new qualifier to the existed one
-      generatorOutput.map(a => a.withQualifier(Seq(q)))
-    }.getOrElse(generatorOutput)
-    val nullableOutput = qualifiedOutput.map {
-      // if outer, make all attributes nullable, otherwise keep existing nullability
-      a => a.withNullability(outer || a.nullable)
-    }
-    nullableOutput
+      nullableOutput.map(a => a.withQualifier(Seq(q)))
+    }.getOrElse(nullableOutput)
   }
 
   def output: Seq[Attribute] = requiredChildOutput ++ qualifiedGeneratorOutput
diff --git a/sql/core/src/test/scala/org/apache/spark/sql/GeneratorFunctionSuite.scala b/sql/core/src/test/scala/org/apache/spark/sql/GeneratorFunctionSuite.scala
index 08280c08cd2e6..49cdc8024107f 100644
--- a/sql/core/src/test/scala/org/apache/spark/sql/GeneratorFunctionSuite.scala
+++ b/sql/core/src/test/scala/org/apache/spark/sql/GeneratorFunctionSuite.scala
@@ -425,6 +425,25 @@ class GeneratorFunctionSuite extends QueryTest with SharedSparkSession {
       testNullStruct
     }
   }
+
+  test("SPARK-40963: generator output has correct nullability") {
+    // This test does not check nullability directly. Before SPARK-40963,
+    // the below query got wrong results due to incorrect nullability.
+    val df = sql(
+      """select c1, explode(c4) as c5 from (
+        |  select c1, array(c3) as c4 from (
+        |    select c1, explode_outer(c2) as c3
+        |    from values
+        |    (1, array(1, 2)),
+        |    (2, array(2, 3)),
+        |    (3, null)
+        |    as data(c1, c2)
+        |  )
+        |)
+        |""".stripMargin)
+    checkAnswer(df,
+      Row(1, 1) :: Row(1, 2) :: Row(2, 2) :: Row(2, 3) :: Row(3, null) :: Nil)
+  }
 }
 
 case class EmptyGenerator() extends Generator with LeafLike[Expression] {