diff --git a/homeassistant/components/template/__init__.py b/homeassistant/components/template/__init__.py
index 04808970af2..de9d60feceb 100644
--- a/homeassistant/components/template/__init__.py
+++ b/homeassistant/components/template/__init__.py
@@ -40,8 +40,11 @@ def extract_entities(
             else:
                 invalid_templates.append(template_name.replace("_template", ""))
 
+        entity_ids = list(entity_ids)
+
         if invalid_templates:
-            entity_ids = MATCH_ALL
+            if not entity_ids:
+                entity_ids = MATCH_ALL
             _LOGGER.warning(
                 "Template %s '%s' has no entity ids configured to track nor"
                 " were we able to extract the entities to track from the %s "
@@ -51,8 +54,6 @@ def extract_entities(
                 device_name,
                 ", ".join(invalid_templates),
             )
-        else:
-            entity_ids = list(entity_ids)
     else:
         entity_ids = manual_entity_ids
 
diff --git a/homeassistant/components/template/alarm_control_panel.py b/homeassistant/components/template/alarm_control_panel.py
index 3d6ac1dbe0e..b7ad219eff7 100644
--- a/homeassistant/components/template/alarm_control_panel.py
+++ b/homeassistant/components/template/alarm_control_panel.py
@@ -32,7 +32,7 @@ from homeassistant.core import callback
 from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.entity import async_generate_entity_id
-from homeassistant.helpers.event import async_track_state_change
+from homeassistant.helpers.event import async_track_state_change_event
 from homeassistant.helpers.script import Script
 
 _LOGGER = logging.getLogger(__name__)
@@ -204,15 +204,16 @@ class AlarmControlPanelTemplate(AlarmControlPanelEntity):
         """Register callbacks."""
 
         @callback
-        def template_alarm_state_listener(entity, old_state, new_state):
+        def template_alarm_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
         @callback
         def template_alarm_control_panel_startup(event):
             """Update template on startup."""
-            if self._template is not None:
-                async_track_state_change(
+            if self._template is not None and self._entities != MATCH_ALL:
+                # Track state change only for valid templates
+                async_track_state_change_event(
                     self.hass, self._entities, template_alarm_state_listener
                 )
 
diff --git a/homeassistant/components/template/binary_sensor.py b/homeassistant/components/template/binary_sensor.py
index 91ffba6dd25..101651fabd5 100644
--- a/homeassistant/components/template/binary_sensor.py
+++ b/homeassistant/components/template/binary_sensor.py
@@ -24,7 +24,10 @@ from homeassistant.core import callback
 from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.entity import async_generate_entity_id
-from homeassistant.helpers.event import async_track_same_state, async_track_state_change
+from homeassistant.helpers.event import (
+    async_track_same_state,
+    async_track_state_change_event,
+)
 
 from . import extract_entities, initialise_templates
 from .const import CONF_AVAILABILITY_TEMPLATE
@@ -148,7 +151,7 @@ class BinarySensorTemplate(BinarySensorEntity):
         """Register callbacks."""
 
         @callback
-        def template_bsensor_state_listener(entity, old_state, new_state):
+        def template_bsensor_state_listener(event):
             """Handle the target device state changes."""
             self.async_check_state()
 
@@ -157,7 +160,7 @@ class BinarySensorTemplate(BinarySensorEntity):
             """Update template on startup."""
             if self._entities != MATCH_ALL:
                 # Track state change only for valid templates
-                async_track_state_change(
+                async_track_state_change_event(
                     self.hass, self._entities, template_bsensor_state_listener
                 )
 
diff --git a/homeassistant/components/template/cover.py b/homeassistant/components/template/cover.py
index 16140de67d8..e2f67acf2bd 100644
--- a/homeassistant/components/template/cover.py
+++ b/homeassistant/components/template/cover.py
@@ -28,6 +28,7 @@ from homeassistant.const import (
     CONF_OPTIMISTIC,
     CONF_VALUE_TEMPLATE,
     EVENT_HOMEASSISTANT_START,
+    MATCH_ALL,
     STATE_CLOSED,
     STATE_OPEN,
 )
@@ -35,7 +36,7 @@ from homeassistant.core import callback
 from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.entity import async_generate_entity_id
-from homeassistant.helpers.event import async_track_state_change
+from homeassistant.helpers.event import async_track_state_change_event
 from homeassistant.helpers.script import Script
 
 from . import extract_entities, initialise_templates
@@ -226,16 +227,18 @@ class CoverTemplate(CoverEntity):
         """Register callbacks."""
 
         @callback
-        def template_cover_state_listener(entity, old_state, new_state):
+        def template_cover_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
         @callback
         def template_cover_startup(event):
             """Update template on startup."""
-            async_track_state_change(
-                self.hass, self._entities, template_cover_state_listener
-            )
+            if self._entities != MATCH_ALL:
+                # Track state change only for valid templates
+                async_track_state_change_event(
+                    self.hass, self._entities, template_cover_state_listener
+                )
 
             self.async_schedule_update_ha_state(True)
 
diff --git a/homeassistant/components/template/fan.py b/homeassistant/components/template/fan.py
index ecdb4ec7eec..037cc6c40e1 100644
--- a/homeassistant/components/template/fan.py
+++ b/homeassistant/components/template/fan.py
@@ -23,6 +23,7 @@ from homeassistant.const import (
     CONF_FRIENDLY_NAME,
     CONF_VALUE_TEMPLATE,
     EVENT_HOMEASSISTANT_START,
+    MATCH_ALL,
     STATE_OFF,
     STATE_ON,
     STATE_UNKNOWN,
@@ -313,16 +314,18 @@ class TemplateFan(FanEntity):
         """Register callbacks."""
 
         @callback
-        def template_fan_state_listener(entity, old_state, new_state):
+        def template_fan_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
         @callback
         def template_fan_startup(event):
             """Update template on startup."""
-            self.hass.helpers.event.async_track_state_change(
-                self._entities, template_fan_state_listener
-            )
+            if self._entities != MATCH_ALL:
+                # Track state change only for valid templates
+                self.hass.helpers.event.async_track_state_change_event(
+                    self._entities, template_fan_state_listener
+                )
 
             self.async_schedule_update_ha_state(True)
 
diff --git a/homeassistant/components/template/light.py b/homeassistant/components/template/light.py
index d96c6f62dce..6832ca04017 100644
--- a/homeassistant/components/template/light.py
+++ b/homeassistant/components/template/light.py
@@ -23,6 +23,7 @@ from homeassistant.const import (
     CONF_LIGHTS,
     CONF_VALUE_TEMPLATE,
     EVENT_HOMEASSISTANT_START,
+    MATCH_ALL,
     STATE_OFF,
     STATE_ON,
 )
@@ -31,7 +32,7 @@ from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.config_validation import PLATFORM_SCHEMA
 from homeassistant.helpers.entity import async_generate_entity_id
-from homeassistant.helpers.event import async_track_state_change
+from homeassistant.helpers.event import async_track_state_change_event
 from homeassistant.helpers.script import Script
 
 from . import extract_entities, initialise_templates
@@ -277,7 +278,7 @@ class LightTemplate(LightEntity):
         """Register callbacks."""
 
         @callback
-        def template_light_state_listener(entity, old_state, new_state):
+        def template_light_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
@@ -292,9 +293,11 @@ class LightTemplate(LightEntity):
                 or self._white_value_template is not None
                 or self._availability_template is not None
             ):
-                async_track_state_change(
-                    self.hass, self._entities, template_light_state_listener
-                )
+                if self._entities != MATCH_ALL:
+                    # Track state change only for valid templates
+                    async_track_state_change_event(
+                        self.hass, self._entities, template_light_state_listener
+                    )
 
             self.async_schedule_update_ha_state(True)
 
diff --git a/homeassistant/components/template/lock.py b/homeassistant/components/template/lock.py
index 7a50e34f8cb..0d8cdd7d290 100644
--- a/homeassistant/components/template/lock.py
+++ b/homeassistant/components/template/lock.py
@@ -16,7 +16,7 @@ from homeassistant.const import (
 from homeassistant.core import callback
 from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
-from homeassistant.helpers.event import async_track_state_change
+from homeassistant.helpers.event import async_track_state_change_event
 from homeassistant.helpers.script import Script
 
 from . import extract_entities, initialise_templates
@@ -102,7 +102,7 @@ class TemplateLock(LockEntity):
         """Register callbacks."""
 
         @callback
-        def template_lock_state_listener(entity, old_state, new_state):
+        def template_lock_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
@@ -111,7 +111,7 @@ class TemplateLock(LockEntity):
             """Update template on startup."""
             if self._state_entities != MATCH_ALL:
                 # Track state change only for valid templates
-                async_track_state_change(
+                async_track_state_change_event(
                     self._hass, self._state_entities, template_lock_state_listener
                 )
             self.async_schedule_update_ha_state(True)
diff --git a/homeassistant/components/template/sensor.py b/homeassistant/components/template/sensor.py
index 44f83699097..d4977d626ca 100644
--- a/homeassistant/components/template/sensor.py
+++ b/homeassistant/components/template/sensor.py
@@ -26,7 +26,7 @@ from homeassistant.core import callback
 from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.entity import Entity, async_generate_entity_id
-from homeassistant.helpers.event import async_track_state_change
+from homeassistant.helpers.event import async_track_state_change_event
 
 from . import extract_entities, initialise_templates
 from .const import CONF_AVAILABILITY_TEMPLATE
@@ -154,7 +154,7 @@ class SensorTemplate(Entity):
         """Register callbacks."""
 
         @callback
-        def template_sensor_state_listener(entity, old_state, new_state):
+        def template_sensor_state_listener(event):
             """Handle device state changes."""
             self.async_schedule_update_ha_state(True)
 
@@ -163,7 +163,7 @@ class SensorTemplate(Entity):
             """Update template on startup."""
             if self._entities != MATCH_ALL:
                 # Track state change only for valid templates
-                async_track_state_change(
+                async_track_state_change_event(
                     self.hass, self._entities, template_sensor_state_listener
                 )
 
diff --git a/homeassistant/components/template/switch.py b/homeassistant/components/template/switch.py
index abc9a432529..124d12d194f 100644
--- a/homeassistant/components/template/switch.py
+++ b/homeassistant/components/template/switch.py
@@ -16,6 +16,7 @@ from homeassistant.const import (
     CONF_SWITCHES,
     CONF_VALUE_TEMPLATE,
     EVENT_HOMEASSISTANT_START,
+    MATCH_ALL,
     STATE_OFF,
     STATE_ON,
 )
@@ -23,7 +24,7 @@ from homeassistant.core import callback
 from homeassistant.exceptions import TemplateError
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.entity import async_generate_entity_id
-from homeassistant.helpers.event import async_track_state_change
+from homeassistant.helpers.event import async_track_state_change_event
 from homeassistant.helpers.restore_state import RestoreEntity
 from homeassistant.helpers.script import Script
 
@@ -147,16 +148,18 @@ class SwitchTemplate(SwitchEntity, RestoreEntity):
 
         # set up event listening
         @callback
-        def template_switch_state_listener(entity, old_state, new_state):
+        def template_switch_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
         @callback
         def template_switch_startup(event):
             """Update template on startup."""
-            async_track_state_change(
-                self.hass, self._entities, template_switch_state_listener
-            )
+            if self._entities != MATCH_ALL:
+                # Track state change only for valid templates
+                async_track_state_change_event(
+                    self.hass, self._entities, template_switch_state_listener
+                )
 
             self.async_schedule_update_ha_state(True)
 
diff --git a/homeassistant/components/template/vacuum.py b/homeassistant/components/template/vacuum.py
index 040b4324b05..1209e617a7e 100644
--- a/homeassistant/components/template/vacuum.py
+++ b/homeassistant/components/template/vacuum.py
@@ -341,7 +341,7 @@ class TemplateVacuum(StateVacuumEntity):
         """Register callbacks."""
 
         @callback
-        def template_vacuum_state_listener(entity, old_state, new_state):
+        def template_vacuum_state_listener(event):
             """Handle target device state changes."""
             self.async_schedule_update_ha_state(True)
 
@@ -350,7 +350,7 @@ class TemplateVacuum(StateVacuumEntity):
             """Update template on startup."""
             if self._entities != MATCH_ALL:
                 # Track state changes only for valid templates
-                self.hass.helpers.event.async_track_state_change(
+                self.hass.helpers.event.async_track_state_change_event(
                     self._entities, template_vacuum_state_listener
                 )
 
diff --git a/tests/components/template/test_binary_sensor.py b/tests/components/template/test_binary_sensor.py
index 698d1c2ca80..482a72082cd 100644
--- a/tests/components/template/test_binary_sensor.py
+++ b/tests/components/template/test_binary_sensor.py
@@ -622,9 +622,10 @@ async def test_no_update_template_match_all(hass, caplog):
     await hass.async_block_till_done()
 
     assert hass.states.get("binary_sensor.all_state").state == "on"
-    assert hass.states.get("binary_sensor.all_icon").state == "on"
-    assert hass.states.get("binary_sensor.all_entity_picture").state == "on"
-    assert hass.states.get("binary_sensor.all_attribute").state == "on"
+    # Will now process because we have one valid template
+    assert hass.states.get("binary_sensor.all_icon").state == "off"
+    assert hass.states.get("binary_sensor.all_entity_picture").state == "off"
+    assert hass.states.get("binary_sensor.all_attribute").state == "off"
 
     await hass.helpers.entity_component.async_update_entity("binary_sensor.all_state")
     await hass.helpers.entity_component.async_update_entity("binary_sensor.all_icon")
diff --git a/tests/components/template/test_sensor.py b/tests/components/template/test_sensor.py
index 0fbce50f2a3..d61b1be4a7f 100644
--- a/tests/components/template/test_sensor.py
+++ b/tests/components/template/test_sensor.py
@@ -618,10 +618,11 @@ async def test_no_template_match_all(hass, caplog):
     await hass.async_block_till_done()
 
     assert hass.states.get("sensor.invalid_state").state == "2"
-    assert hass.states.get("sensor.invalid_icon").state == "startup"
-    assert hass.states.get("sensor.invalid_entity_picture").state == "startup"
-    assert hass.states.get("sensor.invalid_friendly_name").state == "startup"
-    assert hass.states.get("sensor.invalid_attribute").state == "startup"
+    # Will now process because we have at least one valid template
+    assert hass.states.get("sensor.invalid_icon").state == "hello"
+    assert hass.states.get("sensor.invalid_entity_picture").state == "hello"
+    assert hass.states.get("sensor.invalid_friendly_name").state == "hello"
+    assert hass.states.get("sensor.invalid_attribute").state == "hello"
 
     await hass.helpers.entity_component.async_update_entity("sensor.invalid_state")
     await hass.helpers.entity_component.async_update_entity("sensor.invalid_icon")