diff --git a/extensions/qute/deployment/src/main/java/io/quarkus/qute/deployment/QuteProcessor.java b/extensions/qute/deployment/src/main/java/io/quarkus/qute/deployment/QuteProcessor.java
index 54a1022511e6b1..c0cf32ede02cd7 100644
--- a/extensions/qute/deployment/src/main/java/io/quarkus/qute/deployment/QuteProcessor.java
+++ b/extensions/qute/deployment/src/main/java/io/quarkus/qute/deployment/QuteProcessor.java
@@ -2091,6 +2091,14 @@ void collectTemplates(ApplicationArchivesBuildItem applicationArchives,
         List<ResolvedDependency> extensionArtifacts = curateOutcome.getApplicationModel().getDependencies().stream()
                 .filter(Dependency::isRuntimeExtensionArtifact).collect(Collectors.toList());
 
+        // Make sure the new templates are watched as well
+        watchedPaths.produce(HotDeploymentWatchedFileBuildItem.builder().setLocationPredicate(new Predicate<String>() {
+            @Override
+            public boolean test(String path) {
+                return path.startsWith(BASE_PATH);
+            }
+        }).build());
+
         for (ResolvedDependency artifact : extensionArtifacts) {
             if (isApplicationArchive(artifact, allApplicationArchives)) {
                 // Skip extension archives that are also application archives
diff --git a/integration-tests/devmode/src/test/java/io/quarkus/test/qute/HelloResource.java b/integration-tests/devmode/src/test/java/io/quarkus/test/qute/HelloResource.java
new file mode 100644
index 00000000000000..d0165af028e83e
--- /dev/null
+++ b/integration-tests/devmode/src/test/java/io/quarkus/test/qute/HelloResource.java
@@ -0,0 +1,32 @@
+package io.quarkus.test.qute;
+
+import jakarta.inject.Inject;
+import jakarta.ws.rs.GET;
+import jakarta.ws.rs.Path;
+
+import org.jboss.resteasy.reactive.RestQuery;
+
+import io.quarkus.qute.Engine;
+import io.quarkus.qute.Template;
+
+@Path("hello")
+public class HelloResource {
+
+    @Inject
+    Template hello;
+
+    @Inject
+    Engine engine;
+
+    @GET
+    public String get(@RestQuery String name) {
+        return hello.data("name", name).render();
+    }
+
+    @GET
+    @Path("ping")
+    public String ping() {
+        return engine.getTemplate("ping").render();
+    }
+
+}
diff --git a/integration-tests/devmode/src/test/java/io/quarkus/test/qute/QuteWatchedResourceTest.java b/integration-tests/devmode/src/test/java/io/quarkus/test/qute/QuteWatchedResourceTest.java
new file mode 100644
index 00000000000000..f61c8969fb8dc8
--- /dev/null
+++ b/integration-tests/devmode/src/test/java/io/quarkus/test/qute/QuteWatchedResourceTest.java
@@ -0,0 +1,51 @@
+package io.quarkus.test.qute;
+
+import static io.restassured.RestAssured.when;
+import static org.hamcrest.CoreMatchers.containsString;
+
+import org.jboss.shrinkwrap.api.asset.StringAsset;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.api.extension.RegisterExtension;
+
+import io.quarkus.test.QuarkusDevModeTest;
+
+public class QuteWatchedResourceTest {
+
+    @RegisterExtension
+    static final QuarkusDevModeTest config = new QuarkusDevModeTest()
+            .withApplicationRoot(
+                    root -> root.addClass(HelloResource.class)
+                            .addAsResource(new StringAsset("Hello {name}!"), "templates/hello.txt"));
+
+    @Test
+    public void testWatchedFiles() {
+        when().get("/hello?name=Martin").then()
+                .body(containsString("Hello Martin!"))
+                .statusCode(200);
+
+        config.modifyResourceFile("templates/hello.txt", file -> "Hi {name}!");
+
+        when().get("/hello?name=Martin").then()
+                .body(containsString("Hi Martin!"))
+                .statusCode(200);
+
+        config.modifyResourceFile("templates/hello.txt", file -> "Hello {name}!");
+
+        when().get("/hello?name=Martin").then()
+                .body(containsString("Hello Martin!"))
+                .statusCode(200);
+
+        config.addResourceFile("templates/ping.txt", "pong");
+
+        when().get("/hello/ping").then()
+                .body(containsString("pong"))
+                .statusCode(200);
+
+        config.modifyResourceFile("templates/ping.txt", file -> "pong!");
+
+        when().get("/hello/ping").then()
+                .body(containsString("pong!"))
+                .statusCode(200);
+    }
+
+}