diff --git a/homeassistant/helpers/config_validation.py b/homeassistant/helpers/config_validation.py
index 7f2f1550cfe..9b56bb06865 100644
--- a/homeassistant/helpers/config_validation.py
+++ b/homeassistant/helpers/config_validation.py
@@ -916,7 +916,7 @@ SERVICE_SCHEMA = vol.All(
             vol.Optional("data"): vol.All(dict, template_complex),
             vol.Optional("data_template"): vol.All(dict, template_complex),
             vol.Optional(CONF_ENTITY_ID): comp_entity_ids,
-            vol.Optional(CONF_TARGET): ENTITY_SERVICE_FIELDS,
+            vol.Optional(CONF_TARGET): vol.Any(ENTITY_SERVICE_FIELDS, dynamic_template),
         }
     ),
     has_at_least_one_key(CONF_SERVICE, CONF_SERVICE_TEMPLATE),
diff --git a/homeassistant/helpers/service.py b/homeassistant/helpers/service.py
index 01992d43221..4e484c6aaab 100644
--- a/homeassistant/helpers/service.py
+++ b/homeassistant/helpers/service.py
@@ -204,10 +204,15 @@ def async_prepare_call_from_config(
 
     target = {}
     if CONF_TARGET in config:
-        conf = config.get(CONF_TARGET)
+        conf = config[CONF_TARGET]
         try:
-            template.attach(hass, conf)
-            target.update(template.render_complex(conf, variables))
+            if isinstance(conf, template.Template):
+                conf.hass = hass
+                target.update(conf.async_render(variables))
+            else:
+                template.attach(hass, conf)
+                target.update(template.render_complex(conf, variables))
+
             if CONF_ENTITY_ID in target:
                 target[CONF_ENTITY_ID] = cv.comp_entity_ids(target[CONF_ENTITY_ID])
         except TemplateError as ex:
diff --git a/tests/helpers/test_service.py b/tests/helpers/test_service.py
index d168c8b9cfc..7538c0f6f2c 100644
--- a/tests/helpers/test_service.py
+++ b/tests/helpers/test_service.py
@@ -213,6 +213,30 @@ class TestServiceHelpers(unittest.TestCase):
             "entity_id": ["light.static", "light.dynamic"],
         }
 
+        config = {
+            "service": "{{ 'test_domain.test_service' }}",
+            "target": "{{ var_target }}",
+        }
+
+        service.call_from_config(
+            self.hass,
+            config,
+            variables={
+                "var_target": {
+                    "entity_id": "light.static",
+                    "area_id": ["area-42", "area-51"],
+                },
+            },
+        )
+
+        service.call_from_config(self.hass, config)
+        self.hass.block_till_done()
+
+        assert dict(self.calls[2].data) == {
+            "area_id": ["area-42", "area-51"],
+            "entity_id": ["light.static"],
+        }
+
     def test_service_template_service_call(self):
         """Test legacy service_template call with templating."""
         config = {