diff --git a/packages/angular_devkit/schematics/src/rules/template.ts b/packages/angular_devkit/schematics/src/rules/template.ts
index c01249cc235d..1c8417a336b2 100644
--- a/packages/angular_devkit/schematics/src/rules/template.ts
+++ b/packages/angular_devkit/schematics/src/rules/template.ts
@@ -54,13 +54,9 @@ export function applyContentTemplate<T>(options: T): FileOperator {
   return (entry: FileEntry) => {
     const { path, content } = entry;
 
+    let decodedContent: string;
     try {
-      const decodedContent = decoder.decode(content).replace(/\r?\n/g, EOL);
-
-      return {
-        path,
-        content: Buffer.from(templateImpl(decodedContent, {})(options)),
-      };
+      decodedContent = decoder.decode(content);
     } catch (e) {
       // The second part should not be needed. But Jest does not support instanceof correctly.
       // See: https://github.com/jestjs/jest/issues/2549
@@ -73,6 +69,18 @@ export function applyContentTemplate<T>(options: T): FileOperator {
 
       throw e;
     }
+    decodedContent = decodedContent.replace(/\r?\n/g, EOL);
+
+    try {
+      return {
+        path,
+        content: Buffer.from(templateImpl(decodedContent, {})(options)),
+      };
+    } catch (e) {
+      const message = e instanceof Error ? e.message : String(e);
+
+      throw new Error(`Failed to apply content template to "${path}": ${message}`, { cause: e });
+    }
   };
 }
 
diff --git a/packages/angular_devkit/schematics/src/rules/template_spec.ts b/packages/angular_devkit/schematics/src/rules/template_spec.ts
index 1833d8e7f37c..e46d523ea032 100644
--- a/packages/angular_devkit/schematics/src/rules/template_spec.ts
+++ b/packages/angular_devkit/schematics/src/rules/template_spec.ts
@@ -8,7 +8,7 @@
 
 /* eslint-disable import/no-extraneous-dependencies */
 import { normalize } from '@angular-devkit/core';
-import { of as observableOf } from 'rxjs';
+import { lastValueFrom, of as observableOf } from 'rxjs';
 import { UnitTestTree } from '../../testing';
 import { SchematicContext } from '../engine/interface';
 import { HostTree } from '../tree/host-tree';
@@ -171,6 +171,35 @@ describe('contentTemplate', () => {
     expect(_applyContentTemplate('a<%= \'a\' + "b" %>b', {})).toBe('aabb');
     expect(_applyContentTemplate('a<%= "\\n" + "b" %>b', {})).toBe('a\nbb');
   });
+
+  it('does not ignore type errors thrown by a template', () => {
+    expect(() => _applyContentTemplate('a<%= value.length %>b', { value: undefined })).toThrowError(
+      /Cannot read properties of undefined/,
+    );
+  });
+
+  it('leaves content that is not valid UTF-8 unchanged', () => {
+    const entry = { path: normalize('/a/b/image.png'), content: Buffer.from([0xff, 0xfe, 0xfd]) };
+
+    expect(applyContentTemplate({})(entry)).toBe(entry);
+  });
+
+  it('names the template in errors thrown while applying it', () => {
+    const operator = applyContentTemplate({ foobar: 1 });
+
+    expect(() => operator(_entry('/a/b/file.ts', 'a<%= foobat %>b'))).toThrowError(
+      'Failed to apply content template to "/a/b/file.ts": foobat is not defined',
+    );
+    expect(() => operator(_entry('/a/b/file.ts', 'a<%= foobar unintended %>b'))).toThrowError(
+      /^Failed to apply content template to "\/a\/b\/file\.ts": Unexpected identifier/,
+    );
+  });
+
+  it('keeps the original template error as the cause', () => {
+    expect(() =>
+      applyContentTemplate({})(_entry('/a/b/file.ts', 'a<%= foobat %>b')),
+    ).toThrowMatching((e) => e.cause instanceof ReferenceError);
+  });
 });
 
 describe('applyTemplateFiles', () => {
@@ -200,4 +229,19 @@ describe('applyTemplateFiles', () => {
     ]);
     expect(tree.readContent('/a/b/file3')).toBe('hello 1 world');
   });
+
+  it('names the template file in errors', async () => {
+    const tree = new UnitTestTree(new HostTree());
+    tree.create('a/b/file__a__.template', 'hello <%= a.missing.length %> world');
+
+    const context: SchematicContext = {
+      strategy: MergeStrategy.Default,
+    } as SchematicContext;
+
+    await expectAsync(
+      lastValueFrom(callRule(applyTemplates({ a: 'foo' }), observableOf(tree), context)),
+    ).toBeRejectedWithError(
+      /^Failed to apply content template to "\/a\/b\/file__a__\.template": Cannot read /,
+    );
+  });
 });