diff --git a/esphome/components/template/water_heater/template_water_heater.cpp b/esphome/components/template/water_heater/template_water_heater.cpp
index 73081d204b4..092df6fdca3 100644
--- a/esphome/components/template/water_heater/template_water_heater.cpp
+++ b/esphome/components/template/water_heater/template_water_heater.cpp
@@ -26,6 +26,7 @@ water_heater::WaterHeaterTraits TemplateWaterHeater::traits() {
 
   if (!this->supported_modes_.empty()) {
     traits.set_supported_modes(this->supported_modes_);
+    traits.add_feature_flags(water_heater::WATER_HEATER_SUPPORTS_OPERATION_MODE);
   }
 
   traits.set_supports_current_temperature(true);