diff --git a/lib/ansible/modules/cloud/vmware/vmware_guest.py b/lib/ansible/modules/cloud/vmware/vmware_guest.py
index 6fd25b12d8..f7e99e42f3 100644
--- a/lib/ansible/modules/cloud/vmware/vmware_guest.py
+++ b/lib/ansible/modules/cloud/vmware/vmware_guest.py
@@ -1437,6 +1437,30 @@ class PyVmomiHelper(PyVmomi):
             self.current_vm_obj.MarkAsTemplate()
             change_applied = True
 
+        # Mark Template as VM
+        elif not self.params['is_template'] and self.current_vm_obj.config.template:
+            if self.params['resource_pool']:
+                resource_pool = self.select_resource_pool_by_name(self.params['resource_pool'])
+
+                if resource_pool is None:
+                    self.module.fail_json(msg='Unable to find resource pool "%(resource_pool)s"' % self.params)
+
+                self.current_vm_obj.MarkAsVirtualMachine(pool=resource_pool)
+
+                # Automatically update VMWare UUID when converting template to VM.
+                # This avoids an interactive prompt during VM startup.
+                uuid_action = [x for x in self.current_vm_obj.config.extraConfig if x.key == "uuid.action"]
+                if not uuid_action:
+                    uuid_action_opt = vim.option.OptionValue()
+                    uuid_action_opt.key = "uuid.action"
+                    uuid_action_opt.value = "create"
+                    self.configspec.extraConfig.append(uuid_action_opt)
+                    self.change_detected = True
+
+                change_applied = True
+            else:
+                self.module.fail_json(msg="Resource pool must be specified when converting template to VM!")
+
         vm_facts = self.gather_facts(self.current_vm_obj)
         return {'changed': change_applied, 'failed': False, 'instance': vm_facts}
 
diff --git a/test/integration/targets/vmware_guest/tasks/template_d1_c1_f0.yml b/test/integration/targets/vmware_guest/tasks/template_d1_c1_f0.yml
new file mode 100644
index 0000000000..8dd59f1e6d
--- /dev/null
+++ b/test/integration/targets/vmware_guest/tasks/template_d1_c1_f0.yml
@@ -0,0 +1,111 @@
+- name: Wait for Flask controller to come up online
+  wait_for:
+    host: "{{ vcsim }}"
+    port: 5000
+    state: started
+
+- name: kill vcsim
+  uri:
+    url: "http://{{ vcsim }}:5000/killall"
+- name: start vcsim with no folders
+  uri:
+    url: "http://{{ vcsim }}:5000/spawn?datacenter=1&cluster=1&folder=0"
+  register: vcsim_instance
+
+- name: Wait for Flask controller to come up online
+  wait_for:
+    host: "{{ vcsim }}"
+    port: 443
+    state: started
+
+- name: get a list of VMs from vcsim
+  uri:
+    url: "http://{{ vcsim }}:5000/govc_find?filter=VM"
+  register: vmlist
+
+- debug: var=vcsim_instance
+- debug: var=vmlist
+
+- name: ensure that VMs are not flagged as templates
+  vmware_guest:
+    validate_certs: False
+    hostname: "{{ vcsim }}"
+    username: "{{ vcsim_instance['json']['username'] }}"
+    password: "{{ vcsim_instance['json']['password'] }}"
+    datacenter: "{{ (item|basename).split('_')[0] }}"
+    folder: "{{ item|dirname }}"
+    name: "{{ item|basename }}"
+    state: present
+    is_template: False
+  with_items: "{{ vmlist['json'] }}"
+  register: no_template_initial
+
+- debug: var=no_template_initial
+
+- name: ensure no changes were made
+  assert:
+    that:
+        - "no_template_initial.results|map(attribute='changed')|unique|list == [False]"
+
+- name: convert all VMs to templates
+  vmware_guest:
+    validate_certs: False
+    hostname: "{{ vcsim }}"
+    username: "{{ vcsim_instance['json']['username'] }}"
+    password: "{{ vcsim_instance['json']['password'] }}"
+    datacenter: "{{ (item|basename).split('_')[0] }}"
+    folder: "{{ item|dirname }}"
+    name: "{{ item|basename }}"
+    state: present
+    is_template: True
+  with_items: "{{ vmlist['json'] }}"
+  register: convert_to_template
+
+- debug: var=convert_to_template
+
+- name: ensure that changes were made
+  assert:
+    that:
+        - "convert_to_template.results|map(attribute='changed')|unique|list == [True]"
+
+- name: make double sure that all VMs are templates
+  vmware_guest:
+    validate_certs: False
+    hostname: "{{ vcsim }}"
+    username: "{{ vcsim_instance['json']['username'] }}"
+    password: "{{ vcsim_instance['json']['password'] }}"
+    datacenter: "{{ (item|basename).split('_')[0] }}"
+    folder: "{{ item|dirname }}"
+    name: "{{ item|basename }}"
+    state: present
+    is_template: True
+  with_items: "{{ vmlist['json'] }}"
+  register: still_templates
+
+- debug: var=still_templates
+
+- name: ensure that no changes were made
+  assert:
+    that:
+        - "still_templates.results|map(attribute='changed')|unique|list == [False]"
+
+- name: convert all templates back to VMs
+  vmware_guest:
+    validate_certs: False
+    hostname: "{{ vcsim }}"
+    username: "{{ vcsim_instance['json']['username'] }}"
+    password: "{{ vcsim_instance['json']['password'] }}"
+    datacenter: "{{ (item|basename).split('_')[0] }}"
+    folder: "{{ item|dirname }}"
+    name: "{{ item|basename }}"
+    state: present
+    is_template: False
+  with_items: "{{ vmlist['json'] }}"
+  register: revert_to_vm
+
+- debug: var=revert_to_vm
+
+- name: ensure that changes were made
+  assert:
+    that:
+        - "revert_to_vm.results|map(attribute='changed')|unique|list == [True]"