diff --git a/public/app/plugins/datasource/parca/datasource.test.ts b/public/app/plugins/datasource/parca/datasource.test.ts
new file mode 100644
index 00000000000..1a0a216273f
--- /dev/null
+++ b/public/app/plugins/datasource/parca/datasource.test.ts
@@ -0,0 +1,71 @@
+import { DataSourceInstanceSettings, PluginMetaInfo, PluginType } from '@grafana/data';
+import { getTemplateSrv } from '@grafana/runtime';
+
+import { defaultParcaQueryType } from './dataquery.gen';
+import { ParcaDataSource } from './datasource';
+import { Query } from './types';
+
+jest.mock('@grafana/runtime', () => {
+  const actual = jest.requireActual('@grafana/runtime');
+  return {
+    ...actual,
+    getTemplateSrv: () => {
+      return {
+        replace: (query: string): string => {
+          return query.replace(/\$var/g, 'interpolated');
+        },
+      };
+    },
+  };
+});
+
+describe('Parca data source', () => {
+  let ds: ParcaDataSource;
+  beforeEach(() => {
+    ds = new ParcaDataSource(defaultSettings);
+  });
+
+  describe('applyTemplateVariables', () => {
+    const templateSrv = getTemplateSrv();
+
+    it('should not update labelSelector if there are no template variables', () => {
+      ds = new ParcaDataSource(defaultSettings, templateSrv);
+      const query = ds.applyTemplateVariables(defaultQuery({ labelSelector: `no var` }), {});
+      expect(query).toMatchObject({ labelSelector: `no var` });
+    });
+
+    it('should update labelSelector if there are template variables', () => {
+      ds = new ParcaDataSource(defaultSettings, templateSrv);
+      const query = ds.applyTemplateVariables(defaultQuery({ labelSelector: `{$var="$var"}` }), {});
+      expect(query).toMatchObject({ labelSelector: `{interpolated="interpolated"}` });
+    });
+  });
+});
+
+const defaultSettings: DataSourceInstanceSettings = {
+  id: 0,
+  uid: 'parca',
+  type: 'profiling',
+  name: 'parca',
+  access: 'proxy',
+  meta: {
+    id: 'parca',
+    name: 'parca',
+    type: PluginType.datasource,
+    info: {} as PluginMetaInfo,
+    module: '',
+    baseUrl: '',
+  },
+  jsonData: {},
+  readOnly: false,
+};
+
+const defaultQuery = (query: Partial<Query>): Query => {
+  return {
+    refId: 'x',
+    labelSelector: '',
+    profileTypeId: '',
+    queryType: defaultParcaQueryType,
+    ...query,
+  };
+};
diff --git a/public/app/plugins/datasource/parca/datasource.ts b/public/app/plugins/datasource/parca/datasource.ts
index 6418e15d6d3..128e7c91d9f 100644
--- a/public/app/plugins/datasource/parca/datasource.ts
+++ b/public/app/plugins/datasource/parca/datasource.ts
@@ -1,12 +1,15 @@
 import { Observable, of } from 'rxjs';
 
-import { DataQueryRequest, DataQueryResponse, DataSourceInstanceSettings } from '@grafana/data';
-import { DataSourceWithBackend } from '@grafana/runtime';
+import { DataQueryRequest, DataQueryResponse, DataSourceInstanceSettings, ScopedVars } from '@grafana/data';
+import { DataSourceWithBackend, getTemplateSrv, TemplateSrv } from '@grafana/runtime';
 
 import { ParcaDataSourceOptions, Query, ProfileTypeMessage } from './types';
 
 export class ParcaDataSource extends DataSourceWithBackend<Query, ParcaDataSourceOptions> {
-  constructor(instanceSettings: DataSourceInstanceSettings<ParcaDataSourceOptions>) {
+  constructor(
+    instanceSettings: DataSourceInstanceSettings<ParcaDataSourceOptions>,
+    private readonly templateSrv: TemplateSrv = getTemplateSrv()
+  ) {
     super(instanceSettings);
   }
 
@@ -19,6 +22,13 @@ export class ParcaDataSource extends DataSourceWithBackend<Query, ParcaDataSourc
     return super.query(request);
   }
 
+  applyTemplateVariables(query: Query, scopedVars: ScopedVars): Query {
+    return {
+      ...query,
+      labelSelector: this.templateSrv.replace(query.labelSelector ?? '', scopedVars),
+    };
+  }
+
   async getProfileTypes(): Promise<ProfileTypeMessage[]> {
     return await super.getResource('profileTypes');
   }