diff --git a/x-pack/plugins/fleet/server/services/package_policy.test.ts b/x-pack/plugins/fleet/server/services/package_policy.test.ts
index ac88204f082b7..78a4d3d1a778d 100644
--- a/x-pack/plugins/fleet/server/services/package_policy.test.ts
+++ b/x-pack/plugins/fleet/server/services/package_policy.test.ts
@@ -2713,6 +2713,107 @@ describe('Package policy service', () => {
         expect(result.inputs[0]?.vars?.path.value).toEqual(['/var/log/logfile.log']);
       });
     });
+
+    describe('when policy_template is defined on update, but undefined on existing input with matching type', () => {
+      it('generates the proper inputs, and adds a policy_template field', () => {
+        const basePackagePolicy: NewPackagePolicy = {
+          name: 'base-package-policy',
+          description: 'Base Package Policy',
+          namespace: 'default',
+          enabled: true,
+          policy_id: 'xxxx',
+          output_id: 'xxxx',
+          package: {
+            name: 'test-package',
+            title: 'Test Package',
+            version: '0.0.1',
+          },
+          inputs: [
+            {
+              type: 'logs',
+              enabled: true,
+              vars: {
+                path: {
+                  type: 'text',
+                  value: ['/var/log/logfile.log'],
+                },
+              },
+              streams: [],
+            },
+          ],
+        };
+
+        const packageInfo: PackageInfo = {
+          name: 'test-package',
+          description: 'Test Package',
+          title: 'Test Package',
+          version: '0.0.1',
+          latestVersion: '0.0.1',
+          release: 'experimental',
+          format_version: '1.0.0',
+          owner: { github: 'elastic/fleet' },
+          policy_templates: [
+            {
+              name: 'template_1',
+              title: 'Template 1',
+              description: 'Template 1',
+              inputs: [
+                {
+                  type: 'logs',
+                  title: 'Log',
+                  description: 'Log Input',
+                  vars: [
+                    {
+                      name: 'path',
+                      type: 'text',
+                    },
+                    {
+                      name: 'path_2',
+                      type: 'text',
+                    },
+                  ],
+                },
+              ],
+            },
+          ],
+          // @ts-ignore
+          assets: {},
+        };
+
+        const inputsOverride: NewPackagePolicyInput[] = [
+          {
+            type: 'logs',
+            enabled: true,
+            streams: [],
+            policy_template: 'template_1',
+            vars: {
+              path: {
+                type: 'text',
+                value: '/var/log/new-logfile.log',
+              },
+              path_2: {
+                type: 'text',
+                value: '/var/log/custom.log',
+              },
+            },
+          },
+        ];
+
+        const result = updatePackageInputs(
+          basePackagePolicy,
+          packageInfo,
+          // TODO: Update this type assertion when the `InputsOverride` type is updated such
+          // that it no longer causes unresolvable type errors when used directly
+          inputsOverride as InputsOverride[],
+          false
+        );
+
+        expect(result.inputs.length).toBe(1);
+        expect(result.inputs[0]?.vars?.path.value).toEqual(['/var/log/logfile.log']);
+        expect(result.inputs[0]?.vars?.path_2.value).toBe('/var/log/custom.log');
+        expect(result.inputs[0]?.policy_template).toBe('template_1');
+      });
+    });
   });
 });
 
diff --git a/x-pack/plugins/fleet/server/services/package_policy.ts b/x-pack/plugins/fleet/server/services/package_policy.ts
index 5ac348ad7c8a2..cef27d79a184a 100644
--- a/x-pack/plugins/fleet/server/services/package_policy.ts
+++ b/x-pack/plugins/fleet/server/services/package_policy.ts
@@ -1066,11 +1066,26 @@ export function updatePackageInputs(
   ];
 
   for (const update of inputsUpdated) {
-    // If update have an undefined policy template
-    // we only match on `type` .
-    let originalInput = update.policy_template
-      ? inputs.find((i) => i.type === update.type && i.policy_template === update.policy_template)
-      : inputs.find((i) => i.type === update.type);
+    let originalInput: NewPackagePolicyInput | undefined;
+
+    if (update.policy_template) {
+      // If the updated value defines a policy template, try to find an original input
+      // with the same policy template value
+      const matchingInput = inputs.find(
+        (i) => i.type === update.type && i.policy_template === update.policy_template
+      );
+
+      // If we didn't find an input with the same policy template, try to look for one
+      // with the same type, but with an undefined policy template. This ensures we catch
+      // cases where we're upgrading an older policy from before policy template was
+      // reliably define on package policy inputs.
+      originalInput =
+        matchingInput || inputs.find((i) => i.type === update.type && !i.policy_template);
+    } else {
+      // For inputs that don't specify a policy template, just grab the first input
+      // that matches its `type`
+      originalInput = inputs.find((i) => i.type === update.type);
+    }
 
     // If there's no corresponding input on the original package policy, just
     // take the override value from the new package as-is. This case typically
@@ -1091,6 +1106,12 @@ export function updatePackageInputs(
       originalInput.keep_enabled = update.keep_enabled;
     }
 
+    // `policy_template` should always be defined, so if we have an older policy here we need
+    // to ensure we set it
+    if (originalInput.policy_template === undefined && update.policy_template !== undefined) {
+      originalInput.policy_template = update.policy_template;
+    }
+
     if (update.vars) {
       const indexOfInput = inputs.indexOf(originalInput);
       inputs[indexOfInput] = deepMergeVars(originalInput, update, true) as NewPackagePolicyInput;