diff --git a/homeassistant/helpers/template.py b/homeassistant/helpers/template.py
index 618bc6ea4f7..ef0b578811e 100644
--- a/homeassistant/helpers/template.py
+++ b/homeassistant/helpers/template.py
@@ -10,6 +10,7 @@ import random
 import re
 from typing import Any, Dict, Iterable, List, Optional, Union
 from urllib.parse import urlencode as urllib_urlencode
+import weakref
 
 import jinja2
 from jinja2 import contextfilter, contextfunction
@@ -958,6 +959,7 @@ class TemplateEnvironment(ImmutableSandboxedEnvironment):
         """Initialise template environment."""
         super().__init__()
         self.hass = hass
+        self.template_cache = weakref.WeakValueDictionary()
         self.filters["round"] = forgiving_round
         self.filters["multiply"] = multiply
         self.filters["log"] = logarithm
@@ -1042,5 +1044,25 @@ class TemplateEnvironment(ImmutableSandboxedEnvironment):
         """Test if attribute is safe."""
         return isinstance(obj, Namespace) or super().is_safe_attribute(obj, attr, value)
 
+    def compile(self, source, name=None, filename=None, raw=False, defer_init=False):
+        """Compile the template."""
+        if (
+            name is not None
+            or filename is not None
+            or raw is not False
+            or defer_init is not False
+        ):
+            # If there are any non-default keywords args, we do
+            # not cache.  In prodution we currently do not have
+            # any instance of this.
+            return super().compile(source, name, filename, raw, defer_init)
+
+        cached = self.template_cache.get(source)
+
+        if cached is None:
+            cached = self.template_cache[source] = super().compile(source)
+
+        return cached
+
 
 _NO_HASS_ENV = TemplateEnvironment(None)
diff --git a/tests/helpers/test_template.py b/tests/helpers/test_template.py
index f755e4e1084..89486129760 100644
--- a/tests/helpers/test_template.py
+++ b/tests/helpers/test_template.py
@@ -1885,3 +1885,30 @@ def test_urlencode(hass):
         hass,
     )
     assert tpl.async_render() == "the%20quick%20brown%20fox%20%3D%20true"
+
+
+async def test_cache_garbage_collection():
+    """Test caching a template."""
+    template_string = (
+        "{% set dict = {'foo': 'x&y', 'bar': 42} %} {{ dict | urlencode }}"
+    )
+    tpl = template.Template((template_string),)
+    tpl.ensure_valid()
+    assert template._NO_HASS_ENV.template_cache.get(
+        template_string
+    )  # pylint: disable=protected-access
+
+    tpl2 = template.Template((template_string),)
+    tpl2.ensure_valid()
+    assert template._NO_HASS_ENV.template_cache.get(
+        template_string
+    )  # pylint: disable=protected-access
+
+    del tpl
+    assert template._NO_HASS_ENV.template_cache.get(
+        template_string
+    )  # pylint: disable=protected-access
+    del tpl2
+    assert not template._NO_HASS_ENV.template_cache.get(
+        template_string
+    )  # pylint: disable=protected-access