diff --git a/assets/chezmoi.io/docs/reference/target-types.md b/assets/chezmoi.io/docs/reference/target-types.md
index 88aa24b7287..a2489373da2 100644
--- a/assets/chezmoi.io/docs/reference/target-types.md
+++ b/assets/chezmoi.io/docs/reference/target-types.md
@@ -30,9 +30,16 @@ unchanged.
 ### Modify file
 
 Files with the `modify_` prefix are treated as scripts that modify an existing
-file. The contents of the existing file (which maybe empty if the existing file
-does not exist or is empty) are passed to the script's standard input, and the
-new contents are read from the script's standard output.
+file.
+
+If the file contains a line with the text `chezmoi:modify-template` then that
+line is removed and the rest of the script is executed template with the
+existing file's contents passed as a string in `.chezmoi.stdin`. The result of
+executing the template are the new contents of the file.
+
+Otherwise, the contents of the existing file (which maybe empty if the existing
+file does not exist or is empty) are passed to the script's standard input, and
+the new contents are read from the script's standard output.
 
 ### Remove entry
 
diff --git a/assets/chezmoi.io/docs/user-guide/manage-different-types-of-file.md b/assets/chezmoi.io/docs/user-guide/manage-different-types-of-file.md
index 6b8f4169571..cb444550d01 100644
--- a/assets/chezmoi.io/docs/user-guide/manage-different-types-of-file.md
+++ b/assets/chezmoi.io/docs/user-guide/manage-different-types-of-file.md
@@ -71,6 +71,21 @@ example using `sed`.
     will be empty and it is the script's responsibility to write a complete
     file to the standard output.
 
+`modify_` scripts that contain the string `chezmoi:modify-template` are
+executed as templates with the current contents of the file passed as
+`.chezmoi.stdin` and the result of the template execution used as the new
+contents of the file.
+
+!!! example
+
+    To replace the string `old` with `new` in a file while leaving the rest of
+    the file unchanged, use the modify script:
+
+    ```
+    {{- /* chezmoi:modify-template */ -}}
+    {{- .chezmoi.stdin | replaceAllRegex "old" "new" }}
+    ```
+
 Secondly, if only a small part of the file changes then consider using a
 template to re-generate the full contents of the file from the current state.
 For example, Kubernetes configurations include a current context that can be
diff --git a/pkg/chezmoi/sourcestate.go b/pkg/chezmoi/sourcestate.go
index 95bd4c4529f..a631c93aee6 100644
--- a/pkg/chezmoi/sourcestate.go
+++ b/pkg/chezmoi/sourcestate.go
@@ -47,6 +47,7 @@ const (
 )
 
 var (
+	modifyTemplateRx                = regexp.MustCompile(`(?m)^.*chezmoi:modify-template.*$(?:\r?\n)?`)
 	templateDirectiveRx             = regexp.MustCompile(`(?m)^.*?chezmoi:template:(.*)$(?:\r?\n)?`)
 	templateDirectiveKeyValuePairRx = regexp.MustCompile(`\s*(\S+)=("(?:[^"]|\\")*"|\S+)`)
 )
@@ -1254,12 +1255,9 @@ func (s *SourceState) addTemplatesDir(ctx context.Context, templatesDirAbsPath A
 			templateRelPath := templateAbsPath.MustTrimDirPrefix(templatesDirAbsPath)
 			name := templateRelPath.String()
 
-			tmpl, err := ParseTemplate(
-				name,
-				contents,
-				s.templateFuncs,
-				TemplateOptions{Options: append([]string(nil), s.templateOptions...)},
-			)
+			tmpl, err := ParseTemplate(name, contents, s.templateFuncs, TemplateOptions{
+				Options: append([]string(nil), s.templateOptions...),
+			})
 			if err != nil {
 				return err
 			}
@@ -1537,6 +1535,39 @@ func (s *SourceState) newModifyTargetStateEntryFunc(
 				return
 			}
 
+			// If the modifier contains chezmoi:modify-template then execute it
+			// as a template.
+			if matches := modifyTemplateRx.FindAllSubmatchIndex(modifierContents, -1); matches != nil {
+				sourceFile := sourceRelPath.String()
+				templateContents := removeMatches(modifierContents, matches)
+				var tmpl *template.Template
+				tmpl, err = ParseTemplate(sourceFile, templateContents, s.templateFuncs, TemplateOptions{
+					Options: append([]string(nil), s.templateOptions...),
+				})
+				if err != nil {
+					return
+				}
+
+				// Temporarily set .chezmoi.stdin to the current contents and
+				// .chezmoi.sourceFile to the name of the template.
+				templateData := s.TemplateData()
+				if chezmoiTemplateData, ok := templateData["chezmoi"].(map[string]any); ok {
+					chezmoiTemplateData["stdin"] = string(currentContents)
+					chezmoiTemplateData["sourceFile"] = sourceFile
+					defer func() {
+						delete(chezmoiTemplateData, "stdin")
+						delete(chezmoiTemplateData, "sourceFile")
+					}()
+				}
+
+				var builder strings.Builder
+				if err = tmpl.Execute(&builder, templateData); err != nil {
+					return
+				}
+				contents = []byte(builder.String())
+				return
+			}
+
 			// Write the modifier to a temporary file.
 			var tempFile *os.File
 			if tempFile, err = os.CreateTemp("", "*."+fileAttr.TargetName); err != nil {
@@ -2215,15 +2246,7 @@ func (o *TemplateOptions) parseDirectives(data []byte) []byte {
 		}
 	}
 
-	// Remove lines containing directives.
-	slices := make([][]byte, 0, len(directiveMatches)+1)
-	slices = append(slices, data[:directiveMatches[0][0]])
-	for i, directiveMatch := range directiveMatches[1:] {
-		slices = append(slices, data[directiveMatches[i][1]:directiveMatch[0]])
-	}
-	slices = append(slices, data[directiveMatches[len(directiveMatches)-1][1]:])
-
-	return bytes.Join(slices, nil)
+	return removeMatches(data, directiveMatches)
 }
 
 // allEquivalentDirs returns if sourceStateEntries are all equivalent
@@ -2244,3 +2267,14 @@ func allEquivalentDirs(sourceStateEntries []SourceStateEntry) bool {
 	}
 	return true
 }
+
+// removeMatches returns data with matchesIndexes removed.
+func removeMatches(data []byte, matchesIndexes [][]int) []byte {
+	slices := make([][]byte, 0, len(matchesIndexes)+1)
+	slices = append(slices, data[:matchesIndexes[0][0]])
+	for i, matchIndexes := range matchesIndexes[1:] {
+		slices = append(slices, data[matchesIndexes[i][1]:matchIndexes[0]])
+	}
+	slices = append(slices, data[matchesIndexes[len(matchesIndexes)-1][1]:])
+	return bytes.Join(slices, nil)
+}
diff --git a/pkg/cmd/testdata/scripts/modify_unix.txtar b/pkg/cmd/testdata/scripts/modify_unix.txtar
index b99cc3a6fc1..d100deca2e8 100644
--- a/pkg/cmd/testdata/scripts/modify_unix.txtar
+++ b/pkg/cmd/testdata/scripts/modify_unix.txtar
@@ -56,6 +56,12 @@ chhome home4/user
 exec chezmoi cat $HOME${/}.modify
 cmp stdout golden/.modified
 
+chhome home5/user
+
+# test that modify scripts can be modify-templates
+exec chezmoi cat $HOME${/}.modify
+cmp stdout golden/.modified
+
 -- golden/.edited-and-modified --
 beginning
 modified-middle
@@ -110,3 +116,10 @@ end
 beginning
 middle
 end
+-- home5/user/.local/share/chezmoi/modify_dot_modify --
+{{- /* chezmoi:modify-template */ -}}
+{{- .chezmoi.stdin | replaceAllRegex "middle" "modified-middle" -}}
+-- home5/user/.modify --
+beginning
+middle
+end