diff --git a/pkg/services/ngalert/prom/convert.go b/pkg/services/ngalert/prom/convert.go
index f64b17bfc5e..6aa6514e979 100644
--- a/pkg/services/ngalert/prom/convert.go
+++ b/pkg/services/ngalert/prom/convert.go
@@ -21,7 +21,9 @@ const (
 )
 
 const (
-	queryRefID          = "query"
+	// QueryRefID is the ID used for the main query in converted Prometheus rules.
+	// It is exported to be used in template rendering for Prometheus compatibility mode.
+	QueryRefID          = "query"
 	prometheusMathRefID = "prometheus_math"
 	thresholdRefID      = "threshold"
 )
@@ -198,7 +200,7 @@ func (p *Converter) convertRule(orgID int64, namespaceUID string, promGroup Prom
 
 	if isRecordingRule {
 		record = &models.Record{
-			From:                queryRefID,
+			From:                QueryRefID,
 			Metric:              rule.Record,
 			TargetDatasourceUID: p.cfg.DatasourceUID,
 		}
@@ -220,6 +222,17 @@ func (p *Converter) convertRule(orgID int64, namespaceUID string, promGroup Prom
 	labels := make(map[string]string, len(rule.Labels)+len(promGroup.Labels))
 	maps.Copy(labels, promGroup.Labels)
 	maps.Copy(labels, rule.Labels)
+	err = convertTemplates(labels)
+	if err != nil {
+		return models.AlertRule{}, fmt.Errorf("failed to convert labels: %w", err)
+	}
+
+	annotations := make(map[string]string, len(rule.Annotations))
+	maps.Copy(annotations, rule.Annotations)
+	err = convertTemplates(annotations)
+	if err != nil {
+		return models.AlertRule{}, fmt.Errorf("failed to convert annotations: %w", err)
+	}
 
 	originalRuleDefinition, err := yaml.Marshal(rule)
 	if err != nil {
@@ -234,7 +247,7 @@ func (p *Converter) convertRule(orgID int64, namespaceUID string, promGroup Prom
 		Condition:    query[len(query)-1].RefID,
 		NoDataState:  p.cfg.NoDataState,
 		ExecErrState: p.cfg.ExecErrState,
-		Annotations:  rule.Annotations,
+		Annotations:  annotations,
 		Labels:       labels,
 		For:          forInterval,
 		RuleGroup:    promGroup.Name,
diff --git a/pkg/services/ngalert/prom/convert_test.go b/pkg/services/ngalert/prom/convert_test.go
index 2281a9da1c0..23a0a524a2a 100644
--- a/pkg/services/ngalert/prom/convert_test.go
+++ b/pkg/services/ngalert/prom/convert_test.go
@@ -196,7 +196,7 @@ func TestPrometheusRulesToGrafana(t *testing.T) {
 				if promRule.Record != "" {
 					require.Equal(t, fmt.Sprintf("[%s] %s", tc.promGroup.Name, promRule.Record), grafanaRule.Title)
 					require.NotNil(t, grafanaRule.Record)
-					require.Equal(t, grafanaRule.Record.From, queryRefID)
+					require.Equal(t, grafanaRule.Record.From, QueryRefID)
 					require.Equal(t, promRule.Record, grafanaRule.Record.Metric)
 					require.Equal(t, tc.config.DatasourceUID, grafanaRule.Record.TargetDatasourceUID)
 				} else {
@@ -209,16 +209,23 @@ func TestPrometheusRulesToGrafana(t *testing.T) {
 				}
 				require.Equal(t, expectedFor, grafanaRule.For, tc.name)
 
-				expectedLabels := make(map[string]string, len(promRule.Labels)+len(tc.promGroup.Labels))
-				maps.Copy(expectedLabels, tc.promGroup.Labels)
-				maps.Copy(expectedLabels, promRule.Labels)
-
 				uidData := fmt.Sprintf("%d|%s|%s|%d", tc.orgID, tc.namespace, tc.promGroup.Name, j)
 				u := uuid.NewSHA1(uuid.NameSpaceOID, []byte(uidData))
 				require.Equal(t, u.String(), grafanaRule.UID, tc.name)
 
+				expectedLabels := make(map[string]string, len(promRule.Labels)+len(tc.promGroup.Labels))
+				maps.Copy(expectedLabels, tc.promGroup.Labels)
+				maps.Copy(expectedLabels, promRule.Labels)
 				require.Equal(t, expectedLabels, grafanaRule.Labels, tc.name)
-				require.Equal(t, promRule.Annotations, grafanaRule.Annotations, tc.name)
+
+				var expectedAnnotations map[string]string
+				if promRule.Annotations == nil {
+					expectedAnnotations = map[string]string{}
+				} else {
+					expectedAnnotations = promRule.Annotations
+				}
+				require.Equal(t, expectedAnnotations, grafanaRule.Annotations, tc.name)
+
 				require.Equal(t, models.Duration(0*time.Minute), grafanaRule.Data[0].RelativeTimeRange.To)
 				require.Equal(t, models.Duration(10*time.Minute), grafanaRule.Data[0].RelativeTimeRange.From)
 
diff --git a/pkg/services/ngalert/prom/query.go b/pkg/services/ngalert/prom/query.go
index 74aed34f83f..cb9ce2f4f8d 100644
--- a/pkg/services/ngalert/prom/query.go
+++ b/pkg/services/ngalert/prom/query.go
@@ -25,7 +25,7 @@ func createQueryNode(datasourceUID, datasourceType, expr string, fromTimeRange,
 		"expr":    expr,
 		"instant": true,
 		"range":   false,
-		"refId":   queryRefID,
+		"refId":   QueryRefID,
 	}
 
 	if datasourceType == datasources.DS_LOKI {
@@ -40,7 +40,7 @@ func createQueryNode(datasourceUID, datasourceType, expr string, fromTimeRange,
 	return models.AlertQuery{
 		DatasourceUID: datasourceUID,
 		Model:         modelJSON,
-		RefID:         queryRefID,
+		RefID:         QueryRefID,
 		RelativeTimeRange: models.RelativeTimeRange{
 			From: models.Duration(fromTimeRange + evaluationOffset),
 			To:   models.Duration(0 + evaluationOffset),
@@ -66,7 +66,7 @@ func createMathNode() (models.AlertQuery, error) {
 			Type:       expr.QueryTypeMath,
 		},
 		MathQuery: expr.MathQuery{
-			Expression: fmt.Sprintf("is_number($%[1]s) || is_nan($%[1]s) || is_inf($%[1]s)", queryRefID),
+			Expression: fmt.Sprintf("is_number($%[1]s) || is_nan($%[1]s) || is_inf($%[1]s)", QueryRefID),
 		},
 	}
 
diff --git a/pkg/services/ngalert/prom/template.go b/pkg/services/ngalert/prom/template.go
new file mode 100644
index 00000000000..f2c04300246
--- /dev/null
+++ b/pkg/services/ngalert/prom/template.go
@@ -0,0 +1,132 @@
+package prom
+
+import (
+	"reflect"
+	"strings"
+	"text/template/parse"
+)
+
+const (
+	PrometheusModeTemplateCall = "{{- _prometheusMode -}}"
+)
+
+func convertTemplates(m map[string]string) error {
+	for k, v := range m {
+		nv, err := convertTemplate(v)
+		if err != nil {
+			return err
+		}
+		m[k] = nv
+	}
+
+	return nil
+}
+
+// convertTemplate analyzes a template string to determine if it uses Prometheus-style
+// value references ($value or .Value). If it does, it adds a _prometheusMode function call
+// to the beginning of the template to switch the template rendering to Prometheus compatibility mode.
+// This allows templates converted from Prometheus alerting rules to continue working without modification.
+func convertTemplate(tmpl string) (string, error) {
+	searchFor := map[string]struct{}{
+		"$value":  {},
+		".Value":  {},
+		"$.Value": {},
+	}
+
+	// Create a parser with SkipFuncCheck to avoid errors with unknown functions
+	p := parse.New("tmpl")
+	p.Mode = parse.ParseComments | parse.SkipFuncCheck
+
+	// Add temporary prefix with the variables that are expected by the template,
+	// otherwise the parsing fails.
+	tmpPrefix := `{{$value := ""}}{{$labels := ""}}`
+
+	tree, err := p.Parse(tmpPrefix+tmpl, "{{", "}}", map[string]*parse.Tree{})
+	if err != nil {
+		return "", err
+	}
+
+	// Search for the variables in the template
+	found := walkNodes(tree.Root, searchFor)
+	if found {
+		return PrometheusModeTemplateCall + tmpl, nil
+	}
+
+	return tmpl, nil
+}
+
+// walkNodes recursively traverses the AST to find all variable nodes with certain names
+// and returns the boolean indicating whether they are present in the template.
+func walkNodes(node parse.Node, searchFor map[string]struct{}) bool {
+	var found bool
+
+	var walk func(node parse.Node)
+	walk = func(node parse.Node) {
+		if node == nil || reflect.ValueOf(node).IsNil() {
+			return
+		}
+
+		switch n := node.(type) {
+		case *parse.VariableNode:
+			if _, ok := searchFor[strings.Join(n.Ident, ".")]; ok {
+				found = true
+			}
+
+		case *parse.FieldNode:
+			if _, ok := searchFor["."+strings.Join(n.Ident, ".")]; ok {
+				found = true
+			}
+
+		case *parse.ActionNode:
+			walk(n.Pipe)
+
+		case *parse.ChainNode:
+			walk(n.Node)
+
+		case *parse.CommandNode:
+			for _, arg := range n.Args {
+				walk(arg)
+			}
+
+		case *parse.ListNode:
+			for _, child := range n.Nodes {
+				walk(child)
+			}
+
+		case *parse.PipeNode:
+			for _, cmd := range n.Cmds {
+				walk(cmd)
+			}
+
+		case *parse.IfNode:
+			walk(n.Pipe)
+			walk(n.List)
+			if n.ElseList != nil {
+				walk(n.ElseList)
+			}
+
+		case *parse.RangeNode:
+			walk(n.Pipe)
+			walk(n.List)
+			if n.ElseList != nil {
+				walk(n.ElseList)
+			}
+
+		case *parse.WithNode:
+			walk(n.Pipe)
+			walk(n.List)
+			if n.ElseList != nil {
+				walk(n.ElseList)
+			}
+
+		case *parse.TemplateNode:
+			if n.Pipe != nil {
+				walk(n.Pipe)
+			}
+		}
+	}
+
+	walk(node)
+
+	return found
+}
diff --git a/pkg/services/ngalert/prom/template_test.go b/pkg/services/ngalert/prom/template_test.go
new file mode 100644
index 00000000000..1b6dda97c6f
--- /dev/null
+++ b/pkg/services/ngalert/prom/template_test.go
@@ -0,0 +1,180 @@
+package prom
+
+import (
+	"testing"
+
+	"github.com/stretchr/testify/require"
+)
+
+func TestConvertTemplates(t *testing.T) {
+	testCases := []struct {
+		name       string
+		templates  map[string]string
+		expected   map[string]string
+		shouldFail bool
+	}{
+		{
+			name: "simple template with $value",
+			templates: map[string]string{
+				"template": "Value is {{$value}}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}Value is {{$value}}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "simple template with .Value",
+			templates: map[string]string{
+				"template": "Value is {{.Value}}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}Value is {{.Value}}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "template with $.Value",
+			templates: map[string]string{
+				"template": `
+					{{- range .Items}}
+					Value: {{.Value}}
+					Global Value: {{$.Value}}
+					{{- end}}
+				`,
+			},
+			expected: map[string]string{
+				"template": `{{- _prometheusMode -}}
+					{{- range .Items}}
+					Value: {{.Value}}
+					Global Value: {{$.Value}}
+					{{- end}}
+				`,
+			},
+			shouldFail: false,
+		},
+		{
+			name: "complex template with $value in if statement",
+			templates: map[string]string{
+				"template": "{{if gt $value 100.0}}Too high{{else}}Good{{end}}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}{{if gt $value 100.0}}Too high{{else}}Good{{end}}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "complex template with .Value in if statement",
+			templates: map[string]string{
+				"template": "{{if gt .Value 100.0}}Too high{{else}}Good{{end}}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}{{if gt .Value 100.0}}Too high{{else}}Good{{end}}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "template with $value in nested structures",
+			templates: map[string]string{
+				"template": "{{range .Values}}{{if eq . $value}}Match{{end}}{{end}}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}{{range .Values}}{{if eq . $value}}Match{{end}}{{end}}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "template without $value or .Value",
+			templates: map[string]string{
+				"template": "This template does not use the values",
+			},
+			expected: map[string]string{
+				"template": "This template does not use the values",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "template with $labels",
+			templates: map[string]string{
+				"template": "Instance: {{ $labels.instance }}",
+			},
+			expected: map[string]string{
+				"template": "Instance: {{ $labels.instance }}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "template with both $value and $labels",
+			templates: map[string]string{
+				"template": "{{ $labels.instance }} has value {{ $value }}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}{{ $labels.instance }} has value {{ $value }}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "template with multiple $value occurrences",
+			templates: map[string]string{
+				"template": "First: {{ $value }}, Second: {{ $value }}",
+			},
+			expected: map[string]string{
+				"template": "{{- _prometheusMode -}}First: {{ $value }}, Second: {{ $value }}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "multiple templates with mixed patterns",
+			templates: map[string]string{
+				"summary":     "Instance {{ $labels.instance }} has high CPU usage",
+				"description": "{{ $labels.instance }} has value {{ $value }}",
+			},
+			expected: map[string]string{
+				"summary":     "Instance {{ $labels.instance }} has high CPU usage",
+				"description": "{{- _prometheusMode -}}{{ $labels.instance }} has value {{ $value }}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "all templates with values",
+			templates: map[string]string{
+				"summary":     "Value is {{ $value }}",
+				"description": "Detailed value is {{ .Value }}",
+			},
+			expected: map[string]string{
+				"summary":     "{{- _prometheusMode -}}Value is {{ $value }}",
+				"description": "{{- _prometheusMode -}}Detailed value is {{ .Value }}",
+			},
+			shouldFail: false,
+		},
+		{
+			name: "no templates with values",
+			templates: map[string]string{
+				"summary":     "Instance {{ $labels.instance }} is down",
+				"description": "Instance {{ $labels.instance }} has been down for more than 5 minutes",
+			},
+			expected: map[string]string{
+				"summary":     "Instance {{ $labels.instance }} is down",
+				"description": "Instance {{ $labels.instance }} has been down for more than 5 minutes",
+			},
+			shouldFail: false,
+		},
+	}
+
+	for _, tc := range testCases {
+		t.Run(tc.name, func(t *testing.T) {
+			input := make(map[string]string)
+			for k, v := range tc.templates {
+				input[k] = v
+			}
+
+			err := convertTemplates(input)
+			if tc.shouldFail {
+				require.Error(t, err)
+			} else {
+				require.NoError(t, err)
+				require.Equal(t, tc.expected, input)
+			}
+		})
+	}
+}
diff --git a/pkg/services/ngalert/state/template/template.go b/pkg/services/ngalert/state/template/template.go
index ebd541d527d..da7891ea7c0 100644
--- a/pkg/services/ngalert/state/template/template.go
+++ b/pkg/services/ngalert/state/template/template.go
@@ -8,14 +8,16 @@ import (
 	"sort"
 	"strconv"
 	"strings"
+	"text/template"
 	"time"
 
 	"github.com/prometheus/common/model"
 	"github.com/prometheus/prometheus/model/timestamp"
 	"github.com/prometheus/prometheus/promql"
-	"github.com/prometheus/prometheus/template"
+	promTemplate "github.com/prometheus/prometheus/template"
 
 	"github.com/grafana/grafana/pkg/services/ngalert/eval"
+	"github.com/grafana/grafana/pkg/services/ngalert/prom"
 )
 
 type Labels map[string]string
@@ -71,16 +73,53 @@ func NewValues(captures map[string]eval.NumberValueCapture) map[string]Value {
 }
 
 type Data struct {
-	Labels Labels
-	Values map[string]Value
-	Value  string
+	Labels           Labels
+	Values           map[string]Value
+	evaluationString string
+
+	prometheusMode       bool
+	prometheusQueryValue string
 }
 
 func NewData(labels map[string]string, res eval.Result) Data {
+	values := NewValues(res.Values)
+
+	value := res.EvaluationString
+	if v, ok := values[prom.QueryRefID]; ok {
+		value = fmt.Sprintf("%g", v.Value)
+	}
+
 	return Data{
-		Labels: labels,
-		Values: NewValues(res.Values),
-		Value:  res.EvaluationString,
+		Labels:               labels,
+		Values:               values,
+		evaluationString:     res.EvaluationString,
+		prometheusQueryValue: value,
+	}
+}
+
+// Value returns the value to be used in templates.
+// In standard mode, it returns the full evaluation string.
+// In Prometheus compatibility mode (when _prometheusMode function is called),
+// it returns only the numeric value of the query result.
+func (d Data) Value() string {
+	if d.prometheusMode {
+		return d.prometheusQueryValue
+	} else {
+		return d.evaluationString
+	}
+}
+
+// makePrometheusModeFunc returns a template function that when called, switches the template
+// rendering to Prometheus compatibility mode. In this mode, $value and .Value will return
+// the numeric value of the query result instead of the full evaluation string.
+//
+// This function is primarily used when converting Prometheus alert rules to Grafana
+// to maintain compatibility with existing Prometheus templates that expect
+// $value and .Value to behave like in Prometheus.
+func makePrometheusModeFunc(d *Data) func() string {
+	return func() string {
+		d.prometheusMode = true
+		return ""
 	}
 }
 
@@ -103,7 +142,14 @@ func Expand(ctx context.Context, name, tmpl string, data Data, externalURL *url.
 	// add __alert_ to avoid possible conflicts with other templates
 	name = "__alert_" + name
 	// add variables for the labels and values to the beginning of the template
-	tmpl = "{{- $labels := .Labels -}}{{- $values := .Values -}}{{- $value := .Value -}}" + tmpl
+
+	// if the template starts with {{ _prometheusMode }}, we need to add the variables after that
+	// to override the $value.
+	if strings.HasPrefix(tmpl, prom.PrometheusModeTemplateCall) {
+		tmpl = prom.PrometheusModeTemplateCall + "{{- $labels := .Labels -}}{{- $values := .Values -}}{{- $value := .Value -}}" + tmpl[len(prom.PrometheusModeTemplateCall):]
+	} else {
+		tmpl = "{{- $labels := .Labels -}}{{- $values := .Values -}}{{- $value := .Value -}}" + tmpl
+	}
 	// ctx and queryFunc are no-ops as `query()` is not supported in Grafana
 	queryFunc := func(context.Context, string, time.Time) (promql.Vector, error) {
 		return nil, nil
@@ -112,8 +158,11 @@ func Expand(ctx context.Context, name, tmpl string, data Data, externalURL *url.
 	// Use missingkey=invalid so missing data shows <no value> instead of the type's default value
 	options := []string{"missingkey=invalid"}
 
-	expander := template.NewTemplateExpander(ctx, tmpl, name, data, tm, queryFunc, externalURL, options)
+	expander := promTemplate.NewTemplateExpander(ctx, tmpl, name, &data, tm, queryFunc, externalURL, options)
 	expander.Funcs(defaultFuncs)
+	expander.Funcs(template.FuncMap{
+		"_prometheusMode": makePrometheusModeFunc(&data),
+	})
 
 	result, err := expander.Expand()
 	if err != nil {
diff --git a/pkg/services/ngalert/state/template/template_test.go b/pkg/services/ngalert/state/template/template_test.go
index 11982b45505..99d28df0c17 100644
--- a/pkg/services/ngalert/state/template/template_test.go
+++ b/pkg/services/ngalert/state/template/template_test.go
@@ -3,6 +3,7 @@ package template
 import (
 	"context"
 	"errors"
+	"fmt"
 	"net/url"
 	"testing"
 
@@ -447,3 +448,72 @@ func TestExpandTemplate(t *testing.T) {
 		})
 	}
 }
+
+func TestPrometheusModeTemplate(t *testing.T) {
+	ctx := context.Background()
+
+	values := map[string]eval.NumberValueCapture{
+		"A": {
+			Var:    "A",
+			Labels: map[string]string{"instance": "server1"},
+			Value:  util.Pointer(42.5),
+		},
+		"query": {
+			Var:    "query",
+			Labels: map[string]string{"instance": "server1"},
+			Value:  util.Pointer(100.0),
+		},
+	}
+
+	result := eval.Result{
+		Values:           values,
+		EvaluationString: "[ var='A' labels={instance=server1} value=12.3 ], [ var='query' labels={instance=server1} value=100 ]",
+	}
+
+	testCases := []struct {
+		name     string
+		template string
+		expected string
+	}{
+		{
+			name:     "Standard template with $labels",
+			template: "Instance {{ $labels.instance }} has high CPU",
+			expected: "Instance server1 has high CPU",
+		},
+		{
+			name:     "Standard template with $value",
+			template: "Value is {{ $value }}",
+			expected: fmt.Sprintf("Value is %s", result.EvaluationString),
+		},
+		{
+			name:     "Standard template with .Value",
+			template: "Value is {{ $.Value }}",
+			expected: fmt.Sprintf("Value is %s", result.EvaluationString),
+		},
+		{
+			name:     "Template with prometheus mode and $value",
+			template: "{{- _prometheusMode -}}Value is {{ $value }}",
+			expected: "Value is 100",
+		},
+		{
+			name:     "Template with prometheus mode and .Value",
+			template: "{{- _prometheusMode -}}Value is {{ .Value }}",
+			expected: "Value is 100",
+		},
+		{
+			name:     "Template with prometheus mode and $.Value",
+			template: "{{- _prometheusMode -}}Value is {{ $.Value }}",
+			expected: "Value is 100",
+		},
+	}
+
+	for _, tc := range testCases {
+		t.Run(tc.name, func(t *testing.T) {
+			labels := map[string]string{"alertname": "HighCPU", "severity": "critical", "instance": "server1"}
+			data := NewData(labels, result)
+			result, err := Expand(ctx, "test", tc.template, data, nil, result.EvaluatedAt)
+			require.NoError(t, err)
+			require.Equal(t, tc.expected, result)
+		})
+	}
+}