diff --git a/executor.go b/executor.go
index c567519..fbf6e60 100644
--- a/executor.go
+++ b/executor.go
@@ -3612,6 +3612,10 @@ func (e *Executor) lookupValue(expr string, host string, task *Task) (any, bool)
 		if data, err := coreio.Local.Read(e.resolveLocalPath(arg)); err == nil {
 			return data, true
 		}
+	case "template":
+		if data, err := e.TemplateFile(arg, host, task); err == nil {
+			return data, true
+		}
 	case "fileglob":
 		if matches, err := e.resolveFileGlob(arg); err == nil && len(matches) > 0 {
 			return matches, true
diff --git a/executor_extra_test.go b/executor_extra_test.go
index 18bd6aa..f6c35af 100644
--- a/executor_extra_test.go
+++ b/executor_extra_test.go
@@ -879,6 +879,18 @@ func TestExecutorExtra_HandleLookup_Good_FileLookupResolvesBasePath(t *testing.T
 	assert.Equal(t, "from base path", result)
 }
 
+func TestExecutorExtra_HandleLookup_Good_TemplateLookupResolvesBasePathAndVars(t *testing.T) {
+	dir := t.TempDir()
+	require.NoError(t, writeTestFile(joinPath(dir, "templates", "message.j2"), []byte("Hello {{ name }}"), 0644))
+
+	e := NewExecutor(dir)
+	e.SetVar("name", "world")
+
+	result := e.handleLookup("lookup('template', 'templates/message.j2')", "host1", nil)
+
+	assert.Equal(t, "Hello world", result)
+}
+
 func TestExecutorExtra_HandleLookup_Good_VarsLookup(t *testing.T) {
 	e := NewExecutor("/tmp")
 	e.SetVar("lookup_value", "resolved from vars")