diff --git a/homeassistant/helpers/service.py b/homeassistant/helpers/service.py
index f9c846c60faacb..586064c03a3957 100644
--- a/homeassistant/helpers/service.py
+++ b/homeassistant/helpers/service.py
@@ -332,15 +332,6 @@ def async_prepare_call_from_config(
                 target.update(conf.async_render(variables))
             else:
                 target.update(template.render_complex(conf, variables))
-
-            if CONF_ENTITY_ID in target:
-                registry = entity_registry.async_get(hass)
-                entity_ids = cv.comp_entity_ids_or_uuids(target[CONF_ENTITY_ID])
-                if entity_ids not in (ENTITY_MATCH_ALL, ENTITY_MATCH_NONE):
-                    entity_ids = entity_registry.async_validate_entity_ids(
-                        registry, entity_ids
-                    )
-                target[CONF_ENTITY_ID] = entity_ids
         except TemplateError as ex:
             raise HomeAssistantError(
                 f"Error rendering service target template: {ex}"
@@ -350,6 +341,30 @@ def async_prepare_call_from_config(
                 f"Template rendered invalid entity IDs: {target[CONF_ENTITY_ID]}"
             ) from ex
 
+    # All config entries but CONF_ENTITY_ID use ensure_list.
+    # Using ensure_list transforms a template value to a singleton list
+    # Since we expect a list of strings, a template that evaluates to
+    # a list will lead to a nested list.
+    # We cannot easily fix this in schema without breaking old configs.
+    # This block flattens nested lists but keeps non-list members as is.
+    for entry, value in target.items():
+        if entry == CONF_ENTITY_ID:
+            registry = entity_registry.async_get(hass)
+            entity_ids = cv.comp_entity_ids_or_uuids(value)
+            if entity_ids not in (ENTITY_MATCH_ALL, ENTITY_MATCH_NONE):
+                entity_ids = entity_registry.async_validate_entity_ids(
+                    registry, entity_ids
+                )
+            target[entry] = entity_ids
+        else:
+            ret = []
+            for elem in value:
+                if isinstance(elem, list):
+                    ret.extend(elem)
+                else:
+                    ret.append(elem)
+            target[entry] = ret
+
     service_data = {}
 
     for conf in (CONF_SERVICE_DATA, CONF_SERVICE_DATA_TEMPLATE):
diff --git a/tests/helpers/test_service.py b/tests/helpers/test_service.py
index 8f0945369882c4..196f847e53ae6a 100644
--- a/tests/helpers/test_service.py
+++ b/tests/helpers/test_service.py
@@ -496,6 +496,26 @@ async def test_service_call(hass: HomeAssistant) -> None:
         "entity_id": ["light.static"],
     }
 
+    config = {
+        "action": "{{ 'test_domain.test_service' }}",
+        "target": {
+            "area_id": ["area-42", "{{ 'area-51' }}"],
+            "device_id": "{{  ['abcdef', 'fedcba'] }}",
+            "entity_id": ["light.static", "{{ 'light.dynamic' }}"],
+            "floor_id": ["floor-first", "{{ 'floor-second' }}"],
+        },
+    }
+
+    await service.async_call_from_config(hass, config)
+    await hass.async_block_till_done()
+
+    assert dict(calls[3].data) == {
+        "area_id": ["area-42", "area-51"],
+        "device_id": ["abcdef", "fedcba"],
+        "entity_id": ["light.static", "light.dynamic"],
+        "floor_id": ["floor-first", "floor-second"],
+    }
+
 
 async def test_service_template_service_call(hass: HomeAssistant) -> None:
     """Test legacy service_template call with templating."""