diff --git a/esphome/components/template/text/__init__.py b/esphome/components/template/text/__init__.py
index 0f228a3c6b..f73b240197 100644
--- a/esphome/components/template/text/__init__.py
+++ b/esphome/components/template/text/__init__.py
@@ -28,7 +28,7 @@ def validate(config):
             raise cv.Invalid("optimistic cannot be used with lambda")
         if CONF_INITIAL_VALUE in config:
             raise cv.Invalid("initial_value cannot be used with lambda")
-        if CONF_RESTORE_VALUE in config:
+        if config[CONF_RESTORE_VALUE]:
             raise cv.Invalid("restore_value cannot be used with lambda")
     elif CONF_INITIAL_VALUE not in config:
         config[CONF_INITIAL_VALUE] = ""
diff --git a/tests/component_tests/text/test_text.py b/tests/component_tests/text/test_text.py
index 43f4ef2592..51fcb3d382 100644
--- a/tests/component_tests/text/test_text.py
+++ b/tests/component_tests/text/test_text.py
@@ -54,3 +54,17 @@ def test_text_config_value_mode_set(generate_main):
     # Then
     assert "it_1->traits.set_mode(text::TEXT_MODE_TEXT);" in main_cpp
     assert "it_3->traits.set_mode(text::TEXT_MODE_PASSWORD);" in main_cpp
+
+
+def test_text_config_lamda_is_set(generate_main):
+    """
+    Test if lambda is set for lambda mode
+    """
+    # Given
+
+    # When
+    main_cpp = generate_main("tests/component_tests/text/test_text.yaml")
+
+    # Then
+    assert "it_4->set_template([=]() -> optional<std::string> {" in main_cpp
+    assert 'return std::string{"Hello"};' in main_cpp
diff --git a/tests/component_tests/text/test_text.yaml b/tests/component_tests/text/test_text.yaml
index d0fdf5303f..d81c909f9d 100644
--- a/tests/component_tests/text/test_text.yaml
+++ b/tests/component_tests/text/test_text.yaml
@@ -31,3 +31,15 @@ text:
     optimistic: true
     internal: true
     max_length: 255
+
+  - platform: template
+    name: "test 4 key"
+    id: "it_4"
+    mode: text
+    set_action:
+      - then:
+          - logger.log:
+              format: Template text set to %s
+              args: ["x.c_str()"]
+    lambda: |
+      return std::string{"Hello"};
diff --git a/tests/components/template/common.yaml b/tests/components/template/common.yaml
index ba7167157b..2b91225b5a 100644
--- a/tests/components/template/common.yaml
+++ b/tests/components/template/common.yaml
@@ -149,6 +149,17 @@ text:
     min_length: 0
     max_length: 100
     mode: text
+  - platform: template
+    name: "Template text lambda"
+    mode: text
+    update_interval: 1s
+    lambda: |
+      return std::string{"Hello!"};
+    set_action:
+      then:
+        - logger.log:
+            format: Template Text set to %s
+            args: ["x.c_str()"]
 
 alarm_control_panel:
   - platform: template