diff --git a/homeassistant/components/websocket_api/commands.py b/homeassistant/components/websocket_api/commands.py
index f84edb1f204..b44ca45ce03 100644
--- a/homeassistant/components/websocket_api/commands.py
+++ b/homeassistant/components/websocket_api/commands.py
@@ -1,5 +1,6 @@
 """Commands part of Websocket API."""
 import asyncio
+import logging
 
 import voluptuous as vol
 
@@ -7,14 +8,21 @@ from homeassistant.auth.permissions.const import CAT_ENTITIES, POLICY_READ
 from homeassistant.components.websocket_api.const import ERR_NOT_FOUND
 from homeassistant.const import EVENT_STATE_CHANGED, EVENT_TIME_CHANGED, MATCH_ALL
 from homeassistant.core import DOMAIN as HASS_DOMAIN, callback
-from homeassistant.exceptions import HomeAssistantError, ServiceNotFound, Unauthorized
+from homeassistant.exceptions import (
+    HomeAssistantError,
+    ServiceNotFound,
+    TemplateError,
+    Unauthorized,
+)
 from homeassistant.helpers import config_validation as cv, entity
-from homeassistant.helpers.event import async_track_state_change_event
+from homeassistant.helpers.event import async_track_template_result
 from homeassistant.helpers.service import async_get_all_descriptions
 from homeassistant.loader import IntegrationNotFound, async_get_integration
 
 from . import const, decorators, messages
 
+_LOGGER = logging.getLogger(__name__)
+
 # mypy: allow-untyped-calls, allow-untyped-defs
 
 
@@ -244,27 +252,26 @@ def handle_render_template(hass, connection, msg):
 
     variables = msg.get("variables")
 
-    entity_ids = msg.get("entity_ids")
-    if entity_ids is None:
-        entity_ids = template.extract_entities(variables)
-
     @callback
-    def state_listener(*_):
-        connection.send_message(
-            messages.event_message(
-                msg["id"], {"result": template.async_render(variables)}
+    def _template_listener(event, template, last_result, result):
+        if isinstance(result, TemplateError):
+            _LOGGER.error(
+                "TemplateError('%s') " "while processing template '%s'",
+                result,
+                template,
             )
-        )
 
-    if entity_ids and entity_ids != MATCH_ALL:
-        connection.subscriptions[msg["id"]] = async_track_state_change_event(
-            hass, entity_ids, state_listener
-        )
-    else:
-        connection.subscriptions[msg["id"]] = lambda: None
+            result = None
+
+        connection.send_message(messages.event_message(msg["id"], {"result": result}))
+
+    info = async_track_template_result(hass, template, _template_listener, variables)
+
+    connection.subscriptions[msg["id"]] = info.async_remove
 
     connection.send_result(msg["id"])
-    state_listener()
+
+    hass.loop.call_soon_threadsafe(info.async_refresh)
 
 
 @callback
diff --git a/tests/components/websocket_api/test_commands.py b/tests/components/websocket_api/test_commands.py
index c3d4c12eec6..5e35f2de04f 100644
--- a/tests/components/websocket_api/test_commands.py
+++ b/tests/components/websocket_api/test_commands.py
@@ -430,19 +430,17 @@ async def test_render_template_renders_template(
     assert event == {"result": "State is: off"}
 
 
-async def test_render_template_with_manual_entity_ids(
+async def test_render_template_manual_entity_ids_no_longer_needed(
     hass, websocket_client, hass_admin_user
 ):
     """Test that updates to specified entity ids cause a template rerender."""
     hass.states.async_set("light.test", "on")
-    hass.states.async_set("light.test2", "on")
 
     await websocket_client.send_json(
         {
             "id": 5,
             "type": "render_template",
             "template": "State is: {{ states('light.test') }}",
-            "entity_ids": ["light.test2"],
         }
     )
 
@@ -457,12 +455,35 @@ async def test_render_template_with_manual_entity_ids(
     event = msg["event"]
     assert event == {"result": "State is: on"}
 
-    hass.states.async_set("light.test2", "off")
+    hass.states.async_set("light.test", "off")
     msg = await websocket_client.receive_json()
     assert msg["id"] == 5
     assert msg["type"] == "event"
     event = msg["event"]
-    assert event == {"result": "State is: on"}
+    assert event == {"result": "State is: off"}
+
+
+async def test_render_template_with_error(
+    hass, websocket_client, hass_admin_user, caplog
+):
+    """Test a template with an error."""
+    await websocket_client.send_json(
+        {"id": 5, "type": "render_template", "template": "{{ my_unknown_var() + 1 }}"}
+    )
+
+    msg = await websocket_client.receive_json()
+    assert msg["id"] == 5
+    assert msg["type"] == const.TYPE_RESULT
+    assert msg["success"]
+
+    msg = await websocket_client.receive_json()
+    assert msg["id"] == 5
+    assert msg["type"] == "event"
+    event = msg["event"]
+    assert event == {"result": None}
+
+    assert "my_unknown_var" in caplog.text
+    assert "TemplateError" in caplog.text
 
 
 async def test_render_template_returns_with_match_all(