diff --git a/app/src/confgen/template.py b/app/src/confgen/template.py
new file mode 100644
index 0000000..0ad0731
--- /dev/null
+++ b/app/src/confgen/template.py
@@ -0,0 +1,52 @@
+"""Template engine for confgen using Jinja2."""
+
+import re
+from typing import Any
+
+
+class TemplateEngine:
+    """Jinja2-based template engine for configuration rendering."""
+
+    def __init__(self):
+        import jinja2
+
+        self.env = jinja2.Environment(
+            block_start_string="{%",
+            block_end_string="%}",
+            variable_start_string="{{",
+            variable_end_string="}}",
+            comment_start_string="{#",
+            comment_end_string="#}",
+            trim_blocks=True,
+            lstrip_blocks=True,
+        )
+
+    def render(self, template_content: str, variables: dict[str, Any]) -> str:
+        """Render a template with the given variables."""
+        template = self.env.from_string(template_content)
+        return template.render(**variables)
+
+    def render_file(self, template_path: str, variables: dict[str, Any]) -> str:
+        """Render a template file with the given variables."""
+        with open(template_path) as f:
+            template_content = f.read()
+        return self.render(template_content, variables)
+
+    def extract_variables(self, template_content: str) -> list[str]:
+        """Extract variable names from a template."""
+        pattern = r"\{\{([^}]+)\}\}"
+        matches = re.findall(pattern, template_content)
+        variables = []
+        for match in matches:
+            match = match.strip()
+            if not match.startswith("env.") and not match.startswith("vault."):
+                variables.append(match.split("|")[0].strip())
+        return list(set(variables))
+
+    def has_conditionals(self, template_content: str) -> bool:
+        """Check if template contains conditionals."""
+        return "{% if" in template_content or "{%- if" in template_content
+
+    def has_loops(self, template_content: str) -> bool:
+        """Check if template contains loops."""
+        return "{% for" in template_content or "{%- for" in template_content