diff --git a/api/pipeline.go b/api/pipeline.go
index 98b495ba9..575ca9968 100644
--- a/api/pipeline.go
+++ b/api/pipeline.go
@@ -265,7 +265,7 @@ func ExpandPipeline(ctx *gin.Context) {
 		return
 	}
 
-	pipeline, err := comp.CompileLite(config, true, false)
+	pipeline, err := comp.CompileLite(config, true, false, nil)
 	if err != nil {
 		retErr := fmt.Errorf("unable to validate pipeline configuration for %s: %w", repoName(ctx), err)
 		util.HandleError(ctx, http.StatusBadRequest, retErr)
@@ -349,7 +349,7 @@ func ValidatePipeline(ctx *gin.Context) {
 		template = true
 	}
 
-	pipeline, err := comp.CompileLite(config, template, false)
+	pipeline, err := comp.CompileLite(config, template, false, nil)
 	if err != nil {
 		retErr := fmt.Errorf("unable to validate pipeline configuration for %s: %w", repoName(ctx), err)
 		util.HandleError(ctx, http.StatusBadRequest, retErr)
@@ -428,7 +428,7 @@ func CompilePipeline(ctx *gin.Context) {
 		return
 	}
 
-	pipeline, err := comp.CompileLite(config, true, true)
+	pipeline, err := comp.CompileLite(config, true, true, nil)
 	if err != nil {
 		retErr := fmt.Errorf("unable to validate pipeline configuration for %s: %w", repoName(ctx), err)
 		util.HandleError(ctx, http.StatusBadRequest, retErr)
diff --git a/compiler/engine.go b/compiler/engine.go
index f8795dd50..fa1778fba 100644
--- a/compiler/engine.go
+++ b/compiler/engine.go
@@ -25,7 +25,7 @@ type Engine interface {
 	// CompileLite defines a function that produces an light executable
 	// representation of a pipeline from an object. This calls
 	// Parse internally to convert the object to a yaml configuration.
-	CompileLite(interface{}, bool, bool) (*yaml.Build, error)
+	CompileLite(interface{}, bool, bool, []string) (*yaml.Build, error)
 
 	// Duplicate defines a function that
 	// creates a clone of the Engine.
diff --git a/compiler/native/compile.go b/compiler/native/compile.go
index 7d8e41d51..96ec2f0cf 100644
--- a/compiler/native/compile.go
+++ b/compiler/native/compile.go
@@ -69,7 +69,7 @@ func (c *client) Compile(v interface{}) (*pipeline.Build, error) {
 
 	switch {
 	case p.Metadata.RenderInline:
-		newPipeline, err := c.compileInline(p)
+		newPipeline, err := c.compileInline(p, nil)
 		if err != nil {
 			return nil, err
 		}
@@ -92,14 +92,14 @@ func (c *client) Compile(v interface{}) (*pipeline.Build, error) {
 }
 
 // CompileLite produces a partial of an executable pipeline from a yaml configuration.
-func (c *client) CompileLite(v interface{}, template, substitute bool) (*yaml.Build, error) {
+func (c *client) CompileLite(v interface{}, template, substitute bool, localTemplates []string) (*yaml.Build, error) {
 	p, err := c.Parse(v, c.repo.GetPipelineType(), map[string]interface{}{})
 	if err != nil {
 		return nil, err
 	}
 
 	if p.Metadata.RenderInline {
-		newPipeline, err := c.compileInline(p)
+		newPipeline, err := c.compileInline(p, localTemplates)
 		if err != nil {
 			return nil, err
 		}
@@ -116,6 +116,24 @@ func (c *client) CompileLite(v interface{}, template, substitute bool) (*yaml.Bu
 		// create map of templates for easy lookup
 		templates := mapFromTemplates(p.Templates)
 
+		if c.local {
+			for _, file := range localTemplates {
+				// local templates override format is <name>:<source>
+				//
+				// example: example:/path/to/template.yml
+				parts := strings.Split(file, ":")
+
+				// make sure the template was configured
+				_, ok := templates[parts[0]]
+				if !ok {
+					return nil, fmt.Errorf("template with name %s is not configured", parts[0])
+				}
+
+				// override the source for the given template
+				templates[parts[0]].Source = parts[1]
+			}
+		}
+
 		switch {
 		case len(p.Stages) > 0:
 			// inject the templates into the steps
@@ -158,17 +176,33 @@ func (c *client) CompileLite(v interface{}, template, substitute bool) (*yaml.Bu
 }
 
 // compileInline parses and expands out inline pipelines.
-func (c *client) compileInline(p *yaml.Build) (*yaml.Build, error) {
+func (c *client) compileInline(p *yaml.Build, localTemplates []string) (*yaml.Build, error) {
 	newPipeline := *p
 	newPipeline.Templates = yaml.TemplateSlice{}
 
 	for _, template := range p.Templates {
+		if c.local {
+			for _, file := range localTemplates {
+				// local templates override format is <name>:<source>
+				//
+				// example: example:/path/to/template.yml
+				parts := strings.Split(file, ":")
+
+				// make sure we're referencing the proper template
+				if parts[0] == template.Name {
+					// override the source for the given template
+					template.Source = parts[1]
+				}
+			}
+		}
+
 		bytes, err := c.getTemplate(template, template.Name)
 		if err != nil {
 			return nil, err
 		}
 
 		format := template.Format
+
 		// set the default format to golang if the user did not define anything
 		if template.Format == "" {
 			format = constants.PipelineTypeGo
diff --git a/compiler/native/compile_test.go b/compiler/native/compile_test.go
index b6befc253..2f213fbff 100644
--- a/compiler/native/compile_test.go
+++ b/compiler/native/compile_test.go
@@ -2977,7 +2977,7 @@ func Test_CompileLite(t *testing.T) {
 				t.Errorf("Reading yaml file return err: %v", err)
 			}
 
-			got, err := compiler.CompileLite(yaml, tt.args.template, tt.args.substitute)
+			got, err := compiler.CompileLite(yaml, tt.args.template, tt.args.substitute, nil)
 			if (err != nil) != tt.wantErr {
 				t.Errorf("CompileLite() error = %v, wantErr %v", err, tt.wantErr)
 				return