diff --git a/hclsyntax/expression_template.go b/hclsyntax/expression_template.go
index 9d42511..ff9a6e5 100644
--- a/hclsyntax/expression_template.go
+++ b/hclsyntax/expression_template.go
@@ -26,6 +26,9 @@ func (e *TemplateExpr) Value(ctx *hcl.EvalContext) (cty.Value, hcl.Diagnostics)
 	var diags hcl.Diagnostics
 	isKnown := true
 
+	// Maintain a set of marks for values used in the template
+	marks := make(cty.ValueMarks)
+
 	for _, part := range e.Parts {
 		partVal, partDiags := part.Value(ctx)
 		diags = append(diags, partDiags...)
@@ -71,14 +74,24 @@ func (e *TemplateExpr) Value(ctx *hcl.EvalContext) (cty.Value, hcl.Diagnostics)
 			continue
 		}
 
-		buf.WriteString(strVal.AsString())
+		// Unmark the part and merge its marks into the set
+		unmarked, partMarks := strVal.Unmark()
+		for k, v := range partMarks {
+			marks[k] = v
+		}
+
+		buf.WriteString(unmarked.AsString())
 	}
 
+	var ret cty.Value
 	if !isKnown {
-		return cty.UnknownVal(cty.String), diags
+		ret = cty.UnknownVal(cty.String)
+	} else {
+		ret = cty.StringVal(buf.String())
 	}
 
-	return cty.StringVal(buf.String()), diags
+	// Apply the full set of marks to the returned value
+	return ret.WithMarks(marks), diags
 }
 
 func (e *TemplateExpr) Range() hcl.Range {
diff --git a/hclsyntax/expression_template_test.go b/hclsyntax/expression_template_test.go
index 81dda0b..90e0eb6 100644
--- a/hclsyntax/expression_template_test.go
+++ b/hclsyntax/expression_template_test.go
@@ -283,6 +283,27 @@ trim`,
 			cty.UnknownVal(cty.String),
 			1, // Unexpected endfor directive
 		},
+		{ // marks from uninterpolated values are ignored
+			`hello%{ if false } ${target}%{ endif }`,
+			&hcl.EvalContext{
+				Variables: map[string]cty.Value{
+					"target": cty.StringVal("world").WithMarks(cty.NewValueMarks("sensitive")),
+				},
+			},
+			cty.StringVal("hello"),
+			0,
+		},
+		{ // marks from interpolated values are passed through
+			`${greeting} ${target}`,
+			&hcl.EvalContext{
+				Variables: map[string]cty.Value{
+					"greeting": cty.StringVal("hello").WithMarks(cty.NewValueMarks("english")),
+					"target":   cty.StringVal("world").WithMarks(cty.NewValueMarks("sensitive")),
+				},
+			},
+			cty.StringVal("hello world").WithMarks(cty.NewValueMarks("english", "sensitive")),
+			0,
+		},
 	}
 
 	for _, test := range tests {