diff --git a/homeassistant/helpers/template.py b/homeassistant/helpers/template.py
index e090e0de2d1..0a980db30b4 100644
--- a/homeassistant/helpers/template.py
+++ b/homeassistant/helpers/template.py
@@ -149,6 +149,7 @@ CACHED_TEMPLATE_STATES = 512
 EVAL_CACHE_SIZE = 512
 
 MAX_CUSTOM_TEMPLATE_SIZE = 5 * 1024 * 1024
+MAX_TEMPLATE_OUTPUT = 256 * 1024  # 256KiB
 
 CACHED_TEMPLATE_LRU: LRU[State, TemplateState] = LRU(CACHED_TEMPLATE_STATES)
 CACHED_TEMPLATE_NO_COLLECT_LRU: LRU[State, TemplateState] = LRU(CACHED_TEMPLATE_STATES)
@@ -604,6 +605,11 @@ class Template:
         except Exception as err:
             raise TemplateError(err) from err
 
+        if len(render_result) > MAX_TEMPLATE_OUTPUT:
+            raise TemplateError(
+                f"Template output exceeded maximum size of {MAX_TEMPLATE_OUTPUT} characters"
+            )
+
         render_result = render_result.strip()
 
         if not parse_result or self.hass and self.hass.config.legacy_templates:
diff --git a/tests/helpers/test_template.py b/tests/helpers/test_template.py
index 0676ae21ab7..f585b5c3260 100644
--- a/tests/helpers/test_template.py
+++ b/tests/helpers/test_template.py
@@ -6281,3 +6281,10 @@ def test_unzip(hass: HomeAssistant, col, expected) -> None:
         ).async_render({"col": col})
         == expected
     )
+
+
+def test_template_output_exceeds_maximum_size(hass: HomeAssistant) -> None:
+    """Test template output exceeds maximum size."""
+    tpl = template.Template("{{ 'a' * 1024 * 257 }}", hass)
+    with pytest.raises(TemplateError):
+        tpl.async_render()