diff --git a/components/email/email-composer.tsx b/components/email/email-composer.tsx
index 60077f6e6..e2aaabb1b 100644
--- a/components/email/email-composer.tsx
+++ b/components/email/email-composer.tsx
@@ -2165,7 +2165,7 @@ export function EmailComposer({
       ? substitutePlaceholders(template.subject, filledValues)
       : template.subject;
     const filledBody = Object.keys(filledValues).length > 0
-      ? substitutePlaceholders(template.body, filledValues)
+      ? substitutePlaceholders(template.body, filledValues, { html: !!template.isHTML })
       : template.body;
 
     // Match the template to the draft's format: an HTML template goes into a
diff --git a/components/templates/placeholder-fill-modal.tsx b/components/templates/placeholder-fill-modal.tsx
index 3dd5e8d2e..8cae3b2b8 100644
--- a/components/templates/placeholder-fill-modal.tsx
+++ b/components/templates/placeholder-fill-modal.tsx
@@ -42,8 +42,8 @@ export function PlaceholderFillModal({
   const dirty = placeholders.some((p) => values[p] !== initialValues[p]);
 
   const preview = useMemo(() => {
-    return substitutePlaceholders(template.body, values);
-  }, [template.body, values]);
+    return substitutePlaceholders(template.body, values, { html: !!template.isHTML });
+  }, [template.body, template.isHTML, values]);
 
   const requestClose = async () => {
     if (await confirmDiscard(dirty)) onClose();
diff --git a/lib/__tests__/template-utils.test.ts b/lib/__tests__/template-utils.test.ts
index 05e677966..94149da89 100644
--- a/lib/__tests__/template-utils.test.ts
+++ b/lib/__tests__/template-utils.test.ts
@@ -10,6 +10,7 @@ import {
   filterTemplates,
   exportTemplates,
   importTemplates,
+  parseSyncedTemplates,
   spliceTemplateAboveSignature,
   composeBodyHasUserContent,
   embedTemplateImages,
@@ -79,9 +80,18 @@ describe('substitutePlaceholders', () => {
     expect(substitutePlaceholders('{{known}} {{unknown}}', { known: 'yes' })).toBe('yes {{unknown}}');
   });
 
-  it('sanitizes XSS in values', () => {
-    const result = substitutePlaceholders('{{name}}', { name: '<script>alert(1)</script>' });
-    expect(result).not.toContain('<script>');
+  it('escapes values going into an HTML template', () => {
+    const result = substitutePlaceholders('<p>{{name}}</p>', { name: '<script>alert(1)</script>' }, { html: true });
+    expect(result).toBe('<p>&lt;script&gt;alert(1)&lt;/script&gt;</p>');
+  });
+
+  // Values are text: an address in angle brackets or an ampersand is kept.
+  it('keeps values as typed in a plain template', () => {
+    expect(substitutePlaceholders('To {{name}}', { name: 'Smith & Co <j@x.com>' })).toBe('To Smith & Co <j@x.com>');
+  });
+
+  it('keeps the address in an HTML template visible', () => {
+    expect(substitutePlaceholders('<p>{{name}}</p>', { name: 'Smith <j@x.com>' }, { html: true })).toBe('<p>Smith &lt;j@x.com&gt;</p>');
   });
 
   it('handles empty values', () => {
@@ -284,15 +294,33 @@ describe('importTemplates', () => {
     expect(result.errors).toContain('missing_template_name');
   });
 
-  it('sanitizes imported values against XSS', () => {
+  // Name, subject, category and a plain body are text, shown as text: markup
+  // in them is harmless and is kept as typed, not cut out or entity-encoded.
+  it('keeps angle brackets and ampersands in plain-text fields', () => {
     const json = JSON.stringify({
       type: 'webmail-templates',
       version: 1,
-      templates: [{ name: '<img onerror=alert(1) src=x>', subject: '<script>alert(1)</script>' }],
+      templates: [{
+        name: 'Sales <EU>',
+        subject: 'Re: {{recipient_name}} <{{recipient_email}}>',
+        category: 'R&D',
+        body: 'Please reply to <sales@example.com> if a<b & c',
+        isHTML: false,
+      }],
     });
-    const result = importTemplates(json);
-    expect(result.templates[0].name).not.toContain('onerror');
-    expect(result.templates[0].subject).not.toContain('<script>');
+    const [tpl] = importTemplates(json).templates;
+    expect(tpl.name).toBe('Sales <EU>');
+    expect(tpl.subject).toBe('Re: {{recipient_name}} <{{recipient_email}}>');
+    expect(tpl.category).toBe('R&D');
+    expect(tpl.body).toBe('Please reply to <sales@example.com> if a<b & c');
+  });
+
+  it('keeps plain-text fields of synced templates as typed', () => {
+    const [tpl] = parseSyncedTemplates([
+      { id: 't1', name: 'Sales', subject: 'a <= b', body: 'Write to <sales@example.com> & us', isHTML: false },
+    ])!;
+    expect(tpl.subject).toBe('a <= b');
+    expect(tpl.body).toBe('Write to <sales@example.com> & us');
   });
 
   it('handles missing templates array', () => {
diff --git a/lib/template-utils.ts b/lib/template-utils.ts
index edfb03588..877b2fbd9 100644
--- a/lib/template-utils.ts
+++ b/lib/template-utils.ts
@@ -1,12 +1,10 @@
-import DOMPurify from 'dompurify';
-import { sanitizeEmailHtml } from './email-sanitization';
+import { escapeHtml, sanitizeEmailHtml } from './email-sanitization';
 import type { EmailTemplate } from './template-types';
 import { BUILT_IN_PLACEHOLDERS } from './template-types';
 import { generateUUID } from './utils';
 
 const PLACEHOLDER_REGEX = /\{\{(\w+)\}\}/g;
 const MAX_TEMPLATE_NAME_LENGTH = 200;
-const STRIP_HTML_CONFIG = { ALLOWED_TAGS: [] as string[], ALLOWED_ATTR: [] as string[] };
 
 export function extractPlaceholders(text: string): string[] {
   const matches = new Set<string>();
@@ -18,13 +16,18 @@ export function extractPlaceholders(text: string): string[] {
   return Array.from(matches);
 }
 
+/**
+ * Fill in {{placeholders}}. Values are text: escaped for an HTML template,
+ * kept as typed for a plain one, so "Smith <j@x.com>" survives either way.
+ */
 export function substitutePlaceholders(
   text: string,
-  values: Record<string, string>
+  values: Record<string, string>,
+  options: { html?: boolean } = {},
 ): string {
   return text.replace(PLACEHOLDER_REGEX, (full, name) => {
     if (values[name] === undefined) return full;
-    return DOMPurify.sanitize(values[name], STRIP_HTML_CONFIG);
+    return options.html ? escapeHtml(values[name]) : values[name];
   });
 }
 
@@ -189,8 +192,11 @@ export async function embedTemplateImages(
   return changed ? doc.body.innerHTML : html;
 }
 
+// Names, subjects, categories and plain bodies are text, shown as text and
+// escaped wherever they go into HTML. Running them through an HTML sanitizer
+// cut "<sales@example.com>" out and turned "&" into "&amp;".
 function sanitizeText(value: unknown): string {
-  return DOMPurify.sanitize(String(value || ''), STRIP_HTML_CONFIG);
+  return String(value || '');
 }
 
 /**