diff --git a/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditor.tsx b/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditor.tsx
index 4e1b26441b..f6b936e8af 100644
--- a/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditor.tsx
+++ b/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditor.tsx
@@ -13,33 +13,21 @@
  * See the License for the specific language governing permissions and
  * limitations under the License.
  */
-import { useApiHolder } from '@backstage/core-plugin-api';
-import { JsonObject, JsonValue } from '@backstage/types';
 import { Divider, IconButton, makeStyles, Tooltip } from '@material-ui/core';
 import CloseIcon from '@material-ui/icons/Close';
 import RefreshIcon from '@material-ui/icons/Refresh';
 import SaveIcon from '@material-ui/icons/Save';
-import React, {
-  Component,
-  ReactNode,
-  useMemo,
-  useReducer,
-  useState,
-} from 'react';
-import useDebounce from 'react-use/lib/useDebounce';
-import yaml from 'yaml';
+import React, { useState } from 'react';
 import { FieldExtensionOptions } from '../../../extensions';
 import { TemplateDirectoryAccess } from '../../../lib/filesystem';
-import { TemplateParameterSchema } from '../../../types';
 import { FileBrowser } from '../../FileBrowser';
-import { MultistepJsonForm } from '../../MultistepJsonForm';
-import { createValidator } from '../../TemplatePage';
 import {
   DirectoryEditorProvider,
   useDirectoryEditor,
 } from './DirectoryEditorContext';
-import { DryRunProvider, useDryRun } from './DryRunContext';
+import { DryRunProvider } from './DryRunContext';
 import { DryRunResults } from './DryRunResults';
+import { TemplateEditorForm } from './TemplateEditorForm';
 import { TemplateEditorTextArea } from './TemplateEditorTextArea';
 
 const useStyles = makeStyles(theme => ({
@@ -117,7 +105,7 @@ export const TemplateEditor = (props: {
               <TemplateEditorTextArea.DirectoryEditor errorText={errorText} />
             </section>
             <section className={classes.preview}>
-              <TemplateEditorForm
+              <TemplateEditorForm.DirectoryEditorDryRun
                 setErrorText={setErrorText}
                 fieldExtensions={props.fieldExtensions}
               />
@@ -188,212 +176,3 @@ function TemplateEditorBrowser(props: { onClose?: () => void }) {
     </>
   );
 }
-
-interface ErrorBoundaryProps {
-  generation: number;
-  setErrorText(errorText: string | undefined): void;
-  children: ReactNode;
-}
-
-interface ErrorBoundaryState {
-  shouldRender: boolean;
-}
-
-class ErrorBoundary extends Component<ErrorBoundaryProps, ErrorBoundaryState> {
-  state = {
-    shouldRender: true,
-  };
-
-  componentDidUpdate(prevProps: { generation: number }) {
-    if (prevProps.generation !== this.props.generation) {
-      this.setState({ shouldRender: true });
-    }
-  }
-
-  componentDidCatch(error: Error) {
-    this.props.setErrorText(error.message);
-    this.setState({ shouldRender: false });
-  }
-
-  render() {
-    return this.state.shouldRender ? this.props.children : null;
-  }
-}
-
-interface TemplateFormState {
-  filePath?: string;
-  content?: string;
-  steps?: TemplateParameterSchema['steps'];
-  formData: JsonObject;
-  schemaGeneration: number;
-}
-
-type TemplateFormAction =
-  | {
-      type: 'reset';
-    }
-  | {
-      type: 'updateData';
-      formData: JsonObject;
-    }
-  | {
-      type: 'updateSchema';
-      steps: TemplateParameterSchema['steps'];
-      filePath: string;
-    };
-
-const initialTemplateFormState: TemplateFormState = {
-  steps: undefined,
-  filePath: undefined,
-  formData: {},
-  // Used to reset the error boundary in edit
-  schemaGeneration: 0,
-};
-
-function templateFormReducer(
-  state: TemplateFormState,
-  action: TemplateFormAction,
-): TemplateFormState {
-  switch (action.type) {
-    case 'reset': {
-      return initialTemplateFormState;
-    }
-    case 'updateData': {
-      return {
-        ...state,
-        formData: action.formData,
-      };
-    }
-    case 'updateSchema': {
-      const { filePath, steps } = action;
-
-      return {
-        steps,
-        filePath,
-        formData: state.filePath === filePath ? state.formData : {},
-        schemaGeneration: state.schemaGeneration + 1,
-      };
-    }
-    default:
-      return state;
-  }
-}
-
-interface TemplateEditorFormProps {
-  setErrorText: (errorText?: string) => void;
-  fieldExtensions?: FieldExtensionOptions<any, any>[];
-}
-
-function isJsonObject(value: JsonValue | undefined): value is JsonObject {
-  return typeof value === 'object' && value !== null && !Array.isArray(value);
-}
-
-function TemplateEditorForm(props: TemplateEditorFormProps) {
-  const { setErrorText, fieldExtensions = [] } = props;
-  const dryRun = useDryRun();
-
-  const apiHolder = useApiHolder();
-  const directoryEditor = useDirectoryEditor();
-  const { selectedFile } = directoryEditor;
-  const [state, dispatch] = useReducer(
-    templateFormReducer,
-    initialTemplateFormState,
-  );
-
-  useDebounce(
-    () => {
-      try {
-        if (!selectedFile || !selectedFile.path.match(/\.ya?ml$/)) {
-          dispatch({ type: 'reset' });
-          return;
-        }
-        const parsed: JsonValue = yaml.parse(selectedFile.content);
-        const isTemplate =
-          typeof parsed === 'object' &&
-          parsed !== null &&
-          'kind' in parsed &&
-          typeof parsed.kind === 'string' &&
-          parsed.kind.toLocaleLowerCase('en-US') === 'template';
-
-        if (!isTemplate) {
-          dispatch({ type: 'reset' });
-          return;
-        }
-
-        const spec = parsed.spec;
-        const parameters = isJsonObject(spec) && spec.parameters;
-        if (!Array.isArray(parameters)) {
-          setErrorText('Template parameters must be an array');
-          return;
-        }
-
-        const fieldValidators = Object.fromEntries(
-          fieldExtensions.map(({ name, validation }) => [name, validation]),
-        );
-
-        setErrorText();
-
-        dispatch({
-          type: 'updateSchema',
-          filePath: selectedFile.path,
-          steps: parameters.flatMap(param =>
-            isJsonObject(param)
-              ? [
-                  {
-                    title: String(param.title),
-                    schema: param,
-                    validate: createValidator(param, fieldValidators, {
-                      apiHolder,
-                    }),
-                  },
-                ]
-              : [],
-          ),
-        });
-      } catch (e) {
-        setErrorText(e.message);
-      }
-    },
-    250,
-    [selectedFile?.path, selectedFile?.content, apiHolder],
-  );
-
-  const fields = useMemo(() => {
-    return Object.fromEntries(
-      fieldExtensions.map(({ name, component }) => [name, component]),
-    );
-  }, [fieldExtensions]);
-
-  if (!state.steps) {
-    return null;
-  }
-
-  const handleDryRun = async () => {
-    if (!selectedFile) {
-      return;
-    }
-
-    await dryRun.execute({
-      templateContent: selectedFile.content,
-      values: state.formData,
-      files: directoryEditor.files,
-    });
-  };
-
-  return (
-    <ErrorBoundary
-      generation={state.schemaGeneration}
-      setErrorText={setErrorText}
-    >
-      <MultistepJsonForm
-        steps={state.steps}
-        fields={fields}
-        formData={state.formData}
-        onChange={e => dispatch({ type: 'updateData', formData: e.formData })}
-        onReset={() => dispatch({ type: 'updateData', formData: {} })}
-        finishButtonLabel="Try It"
-        onFinish={handleDryRun}
-      />
-    </ErrorBoundary>
-  );
-}
diff --git a/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditorForm.tsx b/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditorForm.tsx
new file mode 100644
index 0000000000..a9e0182317
--- /dev/null
+++ b/plugins/scaffolder/src/components/TemplateEditorPage/TemplateEditor/TemplateEditorForm.tsx
@@ -0,0 +1,218 @@
+/*
+ * Copyright 2022 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+import { useApiHolder } from '@backstage/core-plugin-api';
+import { JsonObject, JsonValue } from '@backstage/types';
+import React, { Component, ReactNode, useMemo, useState } from 'react';
+import useDebounce from 'react-use/lib/useDebounce';
+import yaml from 'yaml';
+import { FieldExtensionOptions } from '../../../extensions';
+import { TemplateParameterSchema } from '../../../types';
+import { MultistepJsonForm } from '../../MultistepJsonForm';
+import { createValidator } from '../../TemplatePage';
+import { useDirectoryEditor } from './DirectoryEditorContext';
+import { useDryRun } from './DryRunContext';
+
+interface ErrorBoundaryProps {
+  invalidator: unknown;
+  setErrorText(errorText: string | undefined): void;
+  children: ReactNode;
+}
+
+interface ErrorBoundaryState {
+  shouldRender: boolean;
+}
+
+class ErrorBoundary extends Component<ErrorBoundaryProps, ErrorBoundaryState> {
+  state = {
+    shouldRender: true,
+  };
+
+  componentDidUpdate(prevProps: { invalidator: unknown }) {
+    if (prevProps.invalidator !== this.props.invalidator) {
+      this.setState({ shouldRender: true });
+    }
+  }
+
+  componentDidCatch(error: Error) {
+    this.props.setErrorText(error.message);
+    this.setState({ shouldRender: false });
+  }
+
+  render() {
+    return this.state.shouldRender ? this.props.children : null;
+  }
+}
+
+interface TemplateEditorFormProps {
+  content?: string;
+  /** Setting this to true will cause the content to be parsed as if it is the template entity spec */
+  contentIsSpec?: boolean;
+  data: JsonObject;
+  onUpdate: (data: JsonObject) => void;
+  setErrorText: (errorText?: string) => void;
+
+  onDryRun?: (data: JsonObject) => Promise<void>;
+  fieldExtensions?: FieldExtensionOptions<any, any>[];
+}
+
+function isJsonObject(value: JsonValue | undefined): value is JsonObject {
+  return typeof value === 'object' && value !== null && !Array.isArray(value);
+}
+
+/** Shows the a template form that is parsed from the provided content */
+export function TemplateEditorForm(props: TemplateEditorFormProps) {
+  const {
+    content,
+    contentIsSpec,
+    data,
+    onUpdate,
+    onDryRun,
+    setErrorText,
+    fieldExtensions = [],
+  } = props;
+  const apiHolder = useApiHolder();
+
+  const [steps, setSteps] = useState<TemplateParameterSchema['steps']>();
+
+  const fields = useMemo(() => {
+    return Object.fromEntries(
+      fieldExtensions.map(({ name, component }) => [name, component]),
+    );
+  }, [fieldExtensions]);
+
+  useDebounce(
+    () => {
+      try {
+        if (!content) {
+          setSteps(undefined);
+          return;
+        }
+        const parsed: JsonValue = yaml.parse(content);
+
+        if (!isJsonObject(parsed)) {
+          setSteps(undefined);
+          return;
+        }
+
+        let rootObj = parsed;
+        if (!contentIsSpec) {
+          const isTemplate =
+            String(parsed.kind).toLocaleLowerCase('en-US') === 'template';
+          if (!isTemplate) {
+            setSteps(undefined);
+            return;
+          }
+
+          rootObj = isJsonObject(parsed.spec) ? parsed.spec : {};
+        }
+
+        const { parameters } = rootObj;
+        if (!Array.isArray(parameters)) {
+          setErrorText('Template parameters must be an array');
+          setSteps(undefined);
+          return;
+        }
+
+        const fieldValidators = Object.fromEntries(
+          fieldExtensions.map(({ name, validation }) => [name, validation]),
+        );
+
+        setErrorText();
+        setSteps(
+          parameters.flatMap(param =>
+            isJsonObject(param)
+              ? [
+                  {
+                    title: String(param.title),
+                    schema: param,
+                    validate: createValidator(param, fieldValidators, {
+                      apiHolder,
+                    }),
+                  },
+                ]
+              : [],
+          ),
+        );
+      } catch (e) {
+        setErrorText(e.message);
+      }
+    },
+    250,
+    [contentIsSpec, content, apiHolder],
+  );
+
+  if (!steps) {
+    return null;
+  }
+
+  return (
+    <ErrorBoundary invalidator={steps} setErrorText={setErrorText}>
+      <MultistepJsonForm
+        steps={steps}
+        fields={fields}
+        formData={data}
+        onChange={e => onUpdate(e.formData)}
+        onReset={() => onUpdate({})}
+        finishButtonLabel={onDryRun && 'Try It'}
+        onFinish={onDryRun && (() => onDryRun(data))}
+      />
+    </ErrorBoundary>
+  );
+}
+
+/** A version of the TemplateEditorForm that is connected to the DirectoryEditor and DryRun contexts */
+export function TemplateEditorFormDirectoryEditorDryRun(
+  props: Pick<TemplateEditorFormProps, 'setErrorText' | 'fieldExtensions'>,
+) {
+  const { setErrorText, fieldExtensions = [] } = props;
+  const dryRun = useDryRun();
+
+  const directoryEditor = useDirectoryEditor();
+  const { selectedFile } = directoryEditor;
+
+  const [data, setData] = useState<JsonObject>({});
+
+  const handleDryRun = async () => {
+    if (!selectedFile) {
+      return;
+    }
+
+    await dryRun.execute({
+      templateContent: selectedFile.content,
+      values: data,
+      files: directoryEditor.files,
+    });
+  };
+
+  const content =
+    selectedFile && selectedFile.path.match(/\.ya?ml$/)
+      ? selectedFile.content
+      : undefined;
+
+  return (
+    <TemplateEditorForm
+      onDryRun={handleDryRun}
+      fieldExtensions={fieldExtensions}
+      setErrorText={setErrorText}
+      content={content}
+      data={data}
+      onUpdate={setData}
+    />
+  );
+}
+
+TemplateEditorForm.DirectoryEditorDryRun =
+  TemplateEditorFormDirectoryEditorDryRun;