diff --git a/changelogs/fragments/77004-restore-missing-default.yml b/changelogs/fragments/77004-restore-missing-default.yml
new file mode 100644
index 00000000000..a55d7e56580
--- /dev/null
+++ b/changelogs/fragments/77004-restore-missing-default.yml
@@ -0,0 +1,3 @@
+bugfixes:
+- template lookup - restore inadvertently deleted default for ``convert_data``
+  (https://github.com/ansible/ansible/issues/77004)
diff --git a/lib/ansible/plugins/lookup/template.py b/lib/ansible/plugins/lookup/template.py
index c400a08fb51..6e98d282819 100644
--- a/lib/ansible/plugins/lookup/template.py
+++ b/lib/ansible/plugins/lookup/template.py
@@ -20,6 +20,7 @@ DOCUMENTATION = """
         description:
             - Whether to convert YAML into data. If False, strings that are YAML will be left untouched.
             - Mutually exclusive with the jinja2_native option.
+        default: true
       variable_start_string:
         description: The string marking the beginning of a print statement.
         default: '{{'
diff --git a/test/integration/targets/lookup_template/tasks/main.yml b/test/integration/targets/lookup_template/tasks/main.yml
index 36a8ee31325..9ebdf0c5ac9 100644
--- a/test/integration/targets/lookup_template/tasks/main.yml
+++ b/test/integration/targets/lookup_template/tasks/main.yml
@@ -25,3 +25,10 @@
 - assert:
     that:
       - "hello_world_comment|trim == 'Hello world!'"
+
+# 77004
+- assert:
+    that:
+      - lookup('template', 'dict.j2') is mapping
+      - lookup('template', 'dict.j2', convert_data=True) is mapping
+      - lookup('template', 'dict.j2', convert_data=False) is not mapping
diff --git a/test/integration/targets/lookup_template/templates/dict.j2 b/test/integration/targets/lookup_template/templates/dict.j2
new file mode 100644
index 00000000000..0439155b220
--- /dev/null
+++ b/test/integration/targets/lookup_template/templates/dict.j2
@@ -0,0 +1 @@
+{"foo": "{{ 'bar' }}"}