diff --git a/homeassistant/components/binary_sensor/bayesian.py b/homeassistant/components/binary_sensor/bayesian.py
index f7802f0f29d..97889ea7497 100644
--- a/homeassistant/components/binary_sensor/bayesian.py
+++ b/homeassistant/components/binary_sensor/bayesian.py
@@ -4,29 +4,27 @@ Use Bayesian Inference to trigger a binary sensor.
 For more details about this platform, please refer to the documentation at
 https://home-assistant.io/components/binary_sensor.bayesian/
 """
-import logging
 from collections import OrderedDict
 
 import voluptuous as vol
 
-import homeassistant.helpers.config_validation as cv
 from homeassistant.components.binary_sensor import (
-    BinarySensorDevice, PLATFORM_SCHEMA)
+    PLATFORM_SCHEMA, BinarySensorDevice)
 from homeassistant.const import (
     CONF_ABOVE, CONF_BELOW, CONF_DEVICE_CLASS, CONF_ENTITY_ID, CONF_NAME,
-    CONF_PLATFORM, CONF_STATE, STATE_UNKNOWN)
+    CONF_PLATFORM, CONF_STATE, CONF_VALUE_TEMPLATE, STATE_UNKNOWN)
 from homeassistant.core import callback
 from homeassistant.helpers import condition
+import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.event import async_track_state_change
 
-_LOGGER = logging.getLogger(__name__)
-
 ATTR_OBSERVATIONS = 'observations'
 ATTR_PROBABILITY = 'probability'
 ATTR_PROBABILITY_THRESHOLD = 'probability_threshold'
 
 CONF_OBSERVATIONS = 'observations'
 CONF_PRIOR = 'prior'
+CONF_TEMPLATE = "template"
 CONF_PROBABILITY_THRESHOLD = 'probability_threshold'
 CONF_P_GIVEN_F = 'prob_given_false'
 CONF_P_GIVEN_T = 'prob_given_true'
@@ -52,12 +50,20 @@ STATE_SCHEMA = vol.Schema({
     vol.Optional(CONF_P_GIVEN_F): vol.Coerce(float)
 }, required=True)
 
+TEMPLATE_SCHEMA = vol.Schema({
+    CONF_PLATFORM: CONF_TEMPLATE,
+    vol.Required(CONF_VALUE_TEMPLATE): cv.template,
+    vol.Required(CONF_P_GIVEN_T): vol.Coerce(float),
+    vol.Optional(CONF_P_GIVEN_F): vol.Coerce(float)
+}, required=True)
+
 PLATFORM_SCHEMA = PLATFORM_SCHEMA.extend({
     vol.Optional(CONF_NAME, default=DEFAULT_NAME): cv.string,
     vol.Optional(CONF_DEVICE_CLASS): cv.string,
     vol.Required(CONF_OBSERVATIONS):
         vol.Schema(vol.All(cv.ensure_list,
-                           [vol.Any(NUMERIC_STATE_SCHEMA, STATE_SCHEMA)])),
+                           [vol.Any(NUMERIC_STATE_SCHEMA, STATE_SCHEMA,
+                                    TEMPLATE_SCHEMA)])),
     vol.Required(CONF_PRIOR): vol.Coerce(float),
     vol.Optional(CONF_PROBABILITY_THRESHOLD,
                  default=DEFAULT_PROBABILITY_THRESHOLD): vol.Coerce(float),
@@ -68,7 +74,6 @@ def update_probability(prior, prob_true, prob_false):
     """Update probability using Bayes' rule."""
     numerator = prob_true * prior
     denominator = numerator + prob_false * (1 - prior)
-
     probability = numerator / denominator
     return probability
 
@@ -104,17 +109,27 @@ class BayesianBinarySensor(BinarySensorDevice):
 
         self.current_obs = OrderedDict({})
 
-        to_observe = set(obs['entity_id'] for obs in self._observations)
-
+        to_observe = set()
+        for obs in self._observations:
+            if 'entity_id' in obs:
+                to_observe.update(set([obs.get('entity_id')]))
+            if 'value_template' in obs:
+                to_observe.update(
+                    set(obs.get(CONF_VALUE_TEMPLATE).extract_entities()))
         self.entity_obs = dict.fromkeys(to_observe, [])
 
         for ind, obs in enumerate(self._observations):
             obs['id'] = ind
-            self.entity_obs[obs['entity_id']].append(obs)
+            if 'entity_id' in obs:
+                self.entity_obs[obs['entity_id']].append(obs)
+            if 'value_template' in obs:
+                for ent in obs.get(CONF_VALUE_TEMPLATE).extract_entities():
+                    self.entity_obs[ent].append(obs)
 
         self.watchers = {
             'numeric_state': self._process_numeric_state,
-            'state': self._process_state
+            'state': self._process_state,
+            'template': self._process_template
         }
 
     async def async_added_to_hass(self):
@@ -141,9 +156,8 @@ class BayesianBinarySensor(BinarySensorDevice):
 
             self.hass.async_add_job(self.async_update_ha_state, True)
 
-        entities = [obs['entity_id'] for obs in self._observations]
         async_track_state_change(
-            self.hass, entities, async_threshold_sensor_state_listener)
+            self.hass, self.entity_obs, async_threshold_sensor_state_listener)
 
     def _update_current_obs(self, entity_observation, should_trigger):
         """Update current observation."""
@@ -182,6 +196,14 @@ class BayesianBinarySensor(BinarySensorDevice):
 
         self._update_current_obs(entity_observation, should_trigger)
 
+    def _process_template(self, entity_observation):
+        """Add entity to current_obs if template is true."""
+        template = entity_observation.get(CONF_VALUE_TEMPLATE)
+        template.hass = self.hass
+        should_trigger = condition.async_template(
+            self.hass, template, entity_observation)
+        self._update_current_obs(entity_observation, should_trigger)
+
     @property
     def name(self):
         """Return the name of the sensor."""