diff --git a/changelogs/fragments/348-helm_template-fix-precedence-of-release-values-over-values-files.yaml b/changelogs/fragments/348-helm_template-fix-precedence-of-release-values-over-values-files.yaml
new file mode 100644
index 0000000000..b392c93d2f
--- /dev/null
+++ b/changelogs/fragments/348-helm_template-fix-precedence-of-release-values-over-values-files.yaml
@@ -0,0 +1,3 @@
+---
+bugfixes:
+  - helm_template - evaluate release_values after values_files, insuring highest precedence (now same behavior as in helm module). (https://github.com/ansible-collections/kubernetes.core/pull/348)
diff --git a/plugins/modules/helm_template.py b/plugins/modules/helm_template.py
index d0df4252d5..8279e48f8b 100644
--- a/plugins/modules/helm_template.py
+++ b/plugins/modules/helm_template.py
@@ -152,16 +152,16 @@ def template(
     if output_dir:
         cmd += " --output-dir=" + output_dir
 
+    if values_files:
+        for values_file in values_files:
+            cmd += " -f=" + values_file
+
     if release_values:
         fd, path = tempfile.mkstemp(suffix=".yml")
         with open(path, "w") as yaml_file:
             yaml.dump(release_values, yaml_file, default_flow_style=False)
         cmd += " -f=" + path
 
-    if values_files:
-        for values_file in values_files:
-            cmd += " -f=" + values_file
-
     if include_crds:
         cmd += " --include-crds"
 
diff --git a/tests/unit/modules/test_helm_template.py b/tests/unit/modules/test_helm_template.py
new file mode 100644
index 0000000000..98bef9ee20
--- /dev/null
+++ b/tests/unit/modules/test_helm_template.py
@@ -0,0 +1,42 @@
+# -*- coding: utf-8 -*-
+# Copyright: (c) 2020, Ansible Project
+# GNU General Public License v3.0+ (see COPYING or https://www.gnu.org/licenses/gpl-3.0.txt)
+
+from __future__ import absolute_import, division, print_function
+
+__metaclass__ = type
+
+import argparse
+
+from ansible_collections.kubernetes.core.plugins.modules.helm_template import template
+
+
+def test_template_with_release_values_and_values_files():
+    my_chart_ref = "testref"
+    helm_cmd = "helm"
+    parser = argparse.ArgumentParser()
+
+    parser.add_argument("cmd")
+    parser.add_argument("template")
+    # to "simulate" helm template options, include two optional parameters NAME and CHART.
+    # if parsed string contains only one parameter, the value will be passed
+    # to CHART and NAME will be set to default value "release-name" as in helm template
+    parser.add_argument("NAME", nargs="?", default="release-name")
+    parser.add_argument("CHART", nargs="+")
+    parser.add_argument("-f", action="append")
+
+    rv = {"v1": {"enabled": True}}
+    vf = ["values1.yml", "values2.yml"]
+    mytemplate = template(
+        cmd=helm_cmd, chart_ref=my_chart_ref, release_values=rv, values_files=vf
+    )
+
+    args, unknown = parser.parse_known_args(mytemplate.split())
+
+    # helm_template writes release_values to temporary file with changing name
+    # these tests should insure
+    # - correct order values_files
+    # - unknown being included as last
+    assert args.f[0] == "values1.yml"
+    assert args.f[1] == "values2.yml"
+    assert len(args.f) == 3