diff --git a/homeassistant/components/template/config.py b/homeassistant/components/template/config.py
index 9d0cf148f3f..ca643653cec 100644
--- a/homeassistant/components/template/config.py
+++ b/homeassistant/components/template/config.py
@@ -9,7 +9,6 @@ import voluptuous as vol
 
 from homeassistant.components.binary_sensor import DOMAIN as BINARY_SENSOR_DOMAIN
 from homeassistant.components.blueprint import (
-    BLUEPRINT_INSTANCE_FIELDS,
     is_blueprint_instance_config,
     schemas as blueprint_schemas,
 )
@@ -141,13 +140,6 @@ TEMPLATE_BLUEPRINT_SCHEMA = vol.All(
     _backward_compat_schema, blueprint_schemas.BLUEPRINT_SCHEMA
 )
 
-TEMPLATE_BLUEPRINT_INSTANCE_SCHEMA = vol.Schema(
-    {
-        vol.Optional(CONF_NAME): cv.string,
-        vol.Optional(CONF_UNIQUE_ID): cv.string,
-    }
-).extend(BLUEPRINT_INSTANCE_FIELDS.schema)
-
 
 async def _async_resolve_blueprints(
     hass: HomeAssistant,
@@ -161,10 +153,11 @@ async def _async_resolve_blueprints(
         raw_config = dict(config)
 
     if is_blueprint_instance_config(config):
-        config = TEMPLATE_BLUEPRINT_INSTANCE_SCHEMA(config)
         blueprints = async_get_blueprints(hass)
 
-        blueprint_inputs = await blueprints.async_inputs_from_config(config)
+        blueprint_inputs = await blueprints.async_inputs_from_config(
+            _backward_compat_schema(config)
+        )
         raw_blueprint_inputs = blueprint_inputs.config_with_inputs
 
         config = blueprint_inputs.async_substitute()
diff --git a/tests/components/template/test_blueprint.py b/tests/components/template/test_blueprint.py
index 43f2c310289..312c04b670c 100644
--- a/tests/components/template/test_blueprint.py
+++ b/tests/components/template/test_blueprint.py
@@ -272,6 +272,101 @@ async def test_trigger_event_sensor(
         await template.async_get_blueprints(hass).async_remove_blueprint(blueprint)
 
 
+@pytest.mark.parametrize(
+    ("blueprint", "override"),
+    [
+        # Override a blueprint with modern schema with legacy schema
+        (
+            "test_event_sensor.yaml",
+            {"trigger": {"platform": "event", "event_type": "override"}},
+        ),
+        # Override a blueprint with modern schema with modern schema
+        (
+            "test_event_sensor.yaml",
+            {"triggers": {"platform": "event", "event_type": "override"}},
+        ),
+        # Override a blueprint with legacy schema with legacy schema
+        (
+            "test_event_sensor_legacy_schema.yaml",
+            {"trigger": {"platform": "event", "event_type": "override"}},
+        ),
+        # Override a blueprint with legacy schema with modern schema
+        (
+            "test_event_sensor_legacy_schema.yaml",
+            {"triggers": {"platform": "event", "event_type": "override"}},
+        ),
+    ],
+)
+async def test_blueprint_template_override(
+    hass: HomeAssistant, blueprint: str, override: dict
+) -> None:
+    """Test blueprint template where the template config overrides the blueprint."""
+    assert await async_setup_component(
+        hass,
+        "template",
+        {
+            "template": [
+                {
+                    "use_blueprint": {
+                        "path": blueprint,
+                        "input": {
+                            "event_type": "my_custom_event",
+                            "event_data": {"foo": "bar"},
+                        },
+                    },
+                    "name": "My Custom Event",
+                }
+                | override,
+            ]
+        },
+    )
+    await hass.async_block_till_done()
+
+    date_state = hass.states.get("sensor.my_custom_event")
+    assert date_state is not None
+    assert date_state.state == "unknown"
+
+    context = Context()
+    now = dt_util.utcnow()
+    with patch("homeassistant.util.dt.now", return_value=now):
+        hass.bus.async_fire(
+            "my_custom_event", {"foo": "bar", "beer": 2}, context=context
+        )
+        await hass.async_block_till_done()
+
+    date_state = hass.states.get("sensor.my_custom_event")
+    assert date_state is not None
+    assert date_state.state == "unknown"
+
+    context = Context()
+    now = dt_util.utcnow()
+    with patch("homeassistant.util.dt.now", return_value=now):
+        hass.bus.async_fire("override", {"foo": "bar", "beer": 2}, context=context)
+        await hass.async_block_till_done()
+
+    date_state = hass.states.get("sensor.my_custom_event")
+    assert date_state is not None
+    assert date_state.state == now.isoformat(timespec="seconds")
+    data = date_state.attributes.get("data")
+    assert data is not None
+    assert data != ""
+    assert data.get("foo") == "bar"
+    assert data.get("beer") == 2
+
+    inverted_foo_template = template.helpers.blueprint_in_template(
+        hass, "sensor.my_custom_event"
+    )
+    assert inverted_foo_template == blueprint
+
+    inverted_binary_sensor_blueprint_entity_ids = (
+        template.helpers.templates_with_blueprint(hass, blueprint)
+    )
+    assert len(inverted_binary_sensor_blueprint_entity_ids) == 1
+
+    with pytest.raises(BlueprintInUse):
+        await template.async_get_blueprints(hass).async_remove_blueprint(blueprint)
+
+
 async def test_domain_blueprint(hass: HomeAssistant) -> None:
     """Test DomainBlueprint services."""
     reload_handler_calls = async_mock_service(hass, DOMAIN, SERVICE_RELOAD)