diff --git a/changelog/43287.added b/changelog/43287.added
new file mode 100644
index 00000000000..90b47e65d44
--- /dev/null
+++ b/changelog/43287.added
@@ -0,0 +1 @@
+Added pillar templating to vault policies
diff --git a/salt/modules/vault.py b/salt/modules/vault.py
index 3e7168b0f87..2519fdd9221 100644
--- a/salt/modules/vault.py
+++ b/salt/modules/vault.py
@@ -130,6 +130,12 @@ Functions to interact with Hashicorp Vault.
         values, eg ``my-policies/{grains[os]}``. ``{minion}`` is shorthand for
         ``grains[id]``, eg ``saltstack/minion/{minion}``.
 
+        .. versionadded:: 3006
+
+            Policies can be templated with pillar values as well: ``salt_role_{pillar[roles]}``
+            Make sure to only reference pillars that are not sourced from Vault since the latter
+            ones might be unavailable during policy rendering.
+
         .. important::
 
             See :ref:`Is Targeting using Grain Data Secure?
@@ -160,6 +166,29 @@ Functions to interact with Hashicorp Vault.
         Optional. If policies is not configured, ``saltstack/minions`` and
         ``saltstack/{minion}`` are used as defaults.
 
+    policies_refresh_pillar
+        Whether to refresh the pillar data when rendering templated policies.
+        When unset (=null/None), will only refresh when the cached data
+        is unavailable, boolean values force one behavior always.
+
+        .. note::
+
+            Using cached pillar data only (policies_refresh_pillar=False)
+            might cause the policies to be out of sync. If there is no cached pillar
+            data available for the minion, pillar templates will fail to render at all.
+
+            If you use pillar values for templating policies and do not disable
+            refreshing pillar data, make sure the relevant values are not sourced
+            from Vault (ext_pillar, sdb) or from a pillar sls file that uses the vault
+            execution module. Although this will often work when cached pillar data is
+            available, if the master needs to compile the pillar data during policy rendering,
+            all Vault modules will be broken to prevent an infinite loop.
+
+    policies_cache_time
+        Policy computation can be heavy in case pillar data is used in templated policies and
+        it has not been cached. Therefore, a short-lived cache specifically for rendered policies
+        is used. This specifies the expiration timeout in seconds. Defaults to 60.
+
     keys
         List of keys to use to unseal vault server with the vault.unseal runner.
 
diff --git a/salt/pillar/vault.py b/salt/pillar/vault.py
index d4e02748db8..f632c74a519 100644
--- a/salt/pillar/vault.py
+++ b/salt/pillar/vault.py
@@ -170,10 +170,16 @@ def ext_pillar(
     nesting_key=None,
     merge_strategy=None,
     merge_lists=None,
+    extra_minion_data=None,
 ):
     """
     Get pillar data from Vault for the configuration ``conf``.
     """
+    extra_minion_data = extra_minion_data or {}
+    if extra_minion_data.get("_vault_runner_is_compiling_pillar_templates"):
+        # Disable vault ext_pillar while compiling pillar for vault policy templates
+        return {}
+
     comps = conf.split()
 
     paths = [comp for comp in comps if comp.startswith("path=")]
diff --git a/salt/runners/vault.py b/salt/runners/vault.py
index fa88b69f7b7..aed276b42ce 100644
--- a/salt/runners/vault.py
+++ b/salt/runners/vault.py
@@ -8,14 +8,20 @@ documented in the execution module docs.
 """
 
 import base64
+import copy
 import json
 import logging
 import time
+from collections.abc import Mapping
 
 import requests
 
+import salt.cache
 import salt.crypt
 import salt.exceptions
+import salt.pillar
+from salt.defaults import NOT_SET
+from salt.exceptions import SaltRunnerError
 
 log = logging.getLogger(__name__)
 
@@ -62,6 +68,8 @@ def generate_token(
         if not allow_minion_override or ttl is None:
             ttl = config["auth"].get("ttl", None)
         storage_type = config["auth"].get("token_backend", "session")
+        policies_refresh_pillar = config.get("policies_refresh_pillar", None)
+        policies_cache_time = config.get("policies_cache_time", 60)
 
         if config["auth"]["method"] == "approle":
             if _selftoken_expired():
@@ -92,7 +100,12 @@ def generate_token(
             "saltstack-user": globals().get("__user__", "<no user set>"),
         }
         payload = {
-            "policies": _get_policies(minion_id, config),
+            "policies": _get_policies_cached(
+                minion_id,
+                config,
+                refresh_pillar=policies_refresh_pillar,
+                expire=policies_cache_time,
+            ),
             "num_uses": uses,
             "meta": audit_data,
         }
@@ -160,12 +173,24 @@ def unseal():
     return False
 
 
-def show_policies(minion_id):
+def show_policies(minion_id, refresh_pillar=NOT_SET, expire=None):
     """
-    Show the Vault policies that are applied to tokens for the given minion
+    Show the Vault policies that are applied to tokens for the given minion.
 
     minion_id
-        The minions id
+        The minion's id.
+
+    refresh_pillar
+        Whether to refresh the pillar data when rendering templated policies.
+        None will only refresh when the cached data is unavailable, boolean values
+        force one behavior always.
+        Defaults to config value ``policies_refresh_pillar`` or None.
+
+    expire
+        Policy computation can be heavy in case pillar data is used in templated policies and
+        it has not been cached. Therefore, a short-lived cache specifically for rendered policies
+        is used. This specifies the expiration timeout in seconds.
+        Defaults to config value ``policies_cache_time`` or 60.
 
     CLI Example:
 
@@ -173,8 +198,13 @@ def show_policies(minion_id):
 
         salt-run vault.show_policies myminion
     """
-    config = __opts__["vault"]
-    return _get_policies(minion_id, config)
+    config = __opts__.get("vault", {})
+    if refresh_pillar == NOT_SET:
+        refresh_pillar = config.get("policies_refresh_pillar")
+    expire = expire if expire is not None else config.get("policies_cache_time", 60)
+    return _get_policies_cached(
+        minion_id, config, refresh_pillar=refresh_pillar, expire=expire
+    )
 
 
 def _validate_signature(minion_id, signature, impersonated_by_master):
@@ -197,15 +227,18 @@ def _validate_signature(minion_id, signature, impersonated_by_master):
     log.trace("Signature ok")
 
 
-def _get_policies(minion_id, config):
+# **kwargs because salt.cache.Cache does not pop "expire" from kwargs
+def _get_policies(
+    minion_id, config, refresh_pillar=None, **kwargs
+):  # pylint: disable=unused-argument
     """
     Get the policies that should be applied to a token for minion_id
     """
-    _, grains, _ = salt.utils.minions.get_minion_data(minion_id, __opts__)
+    grains, pillar = _get_minion_data(minion_id, refresh_pillar)
     policy_patterns = config.get(
         "policies", ["saltstack/minion/{minion}", "saltstack/minions"]
     )
-    mappings = {"minion": minion_id, "grains": grains or {}}
+    mappings = {"minion": minion_id, "grains": grains, "pillar": pillar}
 
     policies = []
     for pattern in policy_patterns:
@@ -217,12 +250,84 @@ def _get_policies(minion_id, config):
                     expanded_pattern.format(**mappings).lower()  # Vault requirement
                 )
         except KeyError:
-            log.warning("Could not resolve policy pattern %s", pattern)
+            log.warning(
+                "Could not resolve policy pattern %s for minion %s", pattern, minion_id
+            )
 
     log.debug("%s policies: %s", minion_id, policies)
     return policies
 
 
+def _get_policies_cached(minion_id, config, refresh_pillar=None, expire=60):
+    # expiration of 0 disables cache
+    if not expire:
+        return _get_policies(minion_id, config, refresh_pillar=refresh_pillar)
+    cbank = f"minions/{minion_id}/vault"
+    ckey = "policies"
+    cache = salt.cache.factory(__opts__)
+    policies = cache.cache(
+        cbank,
+        ckey,
+        _get_policies,
+        expire=expire,
+        minion_id=minion_id,
+        config=config,
+        refresh_pillar=refresh_pillar,
+    )
+    if not isinstance(policies, list):
+        log.warning("Cached vault policies were not formed as a list. Refreshing.")
+        cache.flush(cbank, ckey)
+        policies = cache.cache(
+            cbank,
+            ckey,
+            _get_policies,
+            expire=expire,
+            minion_id=minion_id,
+            config=config,
+            refresh_pillar=refresh_pillar,
+        )
+    return policies
+
+
+def _get_minion_data(minion_id, refresh_pillar=None):
+    _, grains, pillar = salt.utils.minions.get_minion_data(minion_id, __opts__)
+
+    if grains is None:
+        grains = {}
+        # To properly refresh minion grains, something like this could be used:
+        # __salt__["salt.execute"](minion_id, "saltutil.refresh_grains", refresh_pillar=False)
+        # This is deliberately not done since grains should not be used to target
+        # secrets anyways.
+
+    # salt.utils.minions.get_minion_data only returns data from cache or None.
+    # To make sure the correct policies are available, the pillar needs to be
+    # refreshed. This can cause an infinite loop if the pillar data itself
+    # depends on the vault execution module, which relies on this function.
+    # By default, only refresh when necessary. Boolean values force one way.
+    if refresh_pillar is True or (refresh_pillar is None and pillar is None):
+        if __opts__.get("_vault_runner_is_compiling_pillar_templates"):
+            raise SaltRunnerError(
+                "Cyclic dependency detected while refreshing pillar for vault policy templating. "
+                "This is caused by some pillar value relying on the vault execution module. "
+                "Either remove the dependency from your pillar, disable refreshing pillar data "
+                "for policy templating or do not use pillar values in policy templates."
+            )
+        local_opts = copy.deepcopy(__opts__)
+        # Relying on opts for ext_pillars does not work properly (only the first one runs
+        # correctly).
+        extra_minion_data = {"_vault_runner_is_compiling_pillar_templates": True}
+        local_opts.update(extra_minion_data)
+        pillar = LazyPillar(
+            local_opts, grains, minion_id, extra_minion_data=extra_minion_data
+        )
+    elif pillar is None:
+        # Make sure pillar is a dict. Necessary because a check on LazyPillar would
+        # refresh it unconditionally (even when no pillar values are used)
+        pillar = {}
+
+    return grains, pillar
+
+
 def _selftoken_expired():
     """
     Validate the current token exists and is still valid
@@ -256,3 +361,41 @@ def _get_token_create_url(config):
     auth_path = "/v1/auth/token/create"
     base_url = config["url"]
     return "/".join(x.strip("/") for x in (base_url, auth_path, role_name) if x)
+
+
+class LazyPillar(Mapping):
+    """
+    Simulates a pillar dictionary. Only compiles the pillar
+    once an item is requested.
+    """
+
+    def __init__(self, opts, grains, minion_id, extra_minion_data=None):
+        self.opts = opts
+        self.grains = grains
+        self.minion_id = minion_id
+        self.extra_minion_data = extra_minion_data or {}
+        self._pillar = None
+
+    def _load(self):
+        log.info("Refreshing pillar for vault templating.")
+        self._pillar = salt.pillar.get_pillar(
+            self.opts,
+            self.grains,
+            self.minion_id,
+            extra_minion_data=self.extra_minion_data,
+        ).compile_pillar()
+
+    def __getitem__(self, key):
+        if self._pillar is None:
+            self._load()
+        return self._pillar[key]
+
+    def __iter__(self):
+        if self._pillar is None:
+            self._load()
+        yield from self._pillar
+
+    def __len__(self):
+        if self._pillar is None:
+            self._load()
+        return len(self._pillar)
diff --git a/salt/sdb/vault.py b/salt/sdb/vault.py
index 08360e2d84f..60d594fd9c8 100644
--- a/salt/sdb/vault.py
+++ b/salt/sdb/vault.py
@@ -80,6 +80,8 @@ def get(key, profile=None):
     """
     Get a value from the vault service
     """
+    if __opts__.get("_vault_runner_is_compiling_pillar_templates"):
+        return None
     if "?" in key:
         path, key = key.split("?")
     else:
diff --git a/tests/pytests/integration/runners/test_vault.py b/tests/pytests/integration/runners/test_vault.py
new file mode 100644
index 00000000000..311c51ac9d2
--- /dev/null
+++ b/tests/pytests/integration/runners/test_vault.py
@@ -0,0 +1,285 @@
+"""
+Tests for the Vault runner
+"""
+
+import logging
+import shutil
+
+import pytest
+
+log = logging.getLogger(__name__)
+
+
+pytestmark = [
+    pytest.mark.slow_test,
+]
+
+
+@pytest.fixture(scope="module")
+def pillar_state_tree(tmp_path_factory):
+    _pillar_state_tree = tmp_path_factory.mktemp("pillar")
+    try:
+        yield _pillar_state_tree
+    finally:
+        shutil.rmtree(str(_pillar_state_tree), ignore_errors=True)
+
+
+@pytest.fixture(scope="module")
+def pillar_salt_master(salt_factories, pillar_state_tree):
+    config_defaults = {
+        "pillar_roots": {"base": [str(pillar_state_tree)]},
+        "open_mode": True,
+        "ext_pillar": [{"vault": "path=does/not/matter"}],
+        "sdbvault": {
+            "driver": "vault",
+        },
+        "vault": {
+            "auth": {"token": "testsecret"},
+            "policies": [
+                "salt_minion",
+                "salt_minion_{minion}",
+                "salt_role_{pillar[roles]}",
+                "salt_unsafe_{grains[foo]}",
+            ],
+        },
+    }
+    factory = salt_factories.salt_master_daemon(
+        "vault-pillarpolicy-functional-master", defaults=config_defaults
+    )
+    with factory.started():
+        yield factory
+
+
+@pytest.fixture(scope="module")
+def pillar_salt_minion(pillar_salt_master):
+    assert pillar_salt_master.is_running()
+    factory = pillar_salt_master.salt_minion_daemon(
+        "vault-pillarpolicy-functional-minion-1",
+        defaults={"open_mode": True, "grains": {"foo": "bar"}},
+    )
+    with factory.started():
+        # Sync All
+        salt_call_cli = factory.salt_call_cli()
+        ret = salt_call_cli.run("saltutil.sync_all", _timeout=120)
+        assert ret.returncode == 0, ret
+        yield factory
+
+
+@pytest.fixture(scope="module")
+def pillar_salt_run_cli(pillar_salt_master):
+    return pillar_salt_master.salt_run_cli()
+
+
+@pytest.fixture(scope="module")
+def pillar_salt_call_cli(pillar_salt_minion):
+    return pillar_salt_minion.salt_call_cli()
+
+
+@pytest.fixture()
+def pillar_policy_tree(pillar_state_tree, pillar_salt_minion, pillar_salt_call_cli):
+    top_file = """
+    base:
+      '{}':
+        - roles
+        - sdb_loop
+    """.format(
+        pillar_salt_minion.id
+    )
+    roles_pillar = """
+    roles:
+      - minion
+      - web
+    """
+    sdb_loop_pillar = """
+    foo: {{ salt["sdb.get"]("sdb://sdbvault/does/not/matter/val") }}
+    """
+    top_tempfile = pytest.helpers.temp_file("top.sls", top_file, pillar_state_tree)
+    roles_tempfile = pytest.helpers.temp_file(
+        "roles.sls", roles_pillar, pillar_state_tree
+    )
+    sdb_loop_tempfile = pytest.helpers.temp_file(
+        "sdb_loop.sls", sdb_loop_pillar, pillar_state_tree
+    )
+
+    with top_tempfile, roles_tempfile, sdb_loop_tempfile:
+        yield
+
+
+@pytest.fixture()
+def pillar_loop(
+    pillar_state_tree, pillar_policy_tree, pillar_salt_minion, pillar_salt_call_cli
+):
+    top_file = """
+    base:
+      '{}':
+        - roles
+        - sdb_loop
+        - exe_loop
+    """.format(
+        pillar_salt_minion.id
+    )
+    exe_loop_pillar = r"""
+    bar: {{ salt["vault.read_secret"]("does/not/matter") }}
+    """
+    top_tempfile = pytest.helpers.temp_file("top.sls", top_file, pillar_state_tree)
+    exe_loop_tempfile = pytest.helpers.temp_file(
+        "exe_loop.sls", exe_loop_pillar, pillar_state_tree
+    )
+
+    with top_tempfile, exe_loop_tempfile:
+        yield
+
+
+class TestVaultPillarPolicyTemplatesWithoutCache:
+    @pytest.fixture()
+    def minion_data_cache_absent(
+        self, pillar_salt_run_cli, pillar_salt_minion, pillar_policy_tree
+    ):
+        ret = pillar_salt_run_cli.run(
+            "cache.flush", f"minions/{pillar_salt_minion.id}", "data"
+        )
+        assert ret.returncode == 0
+        cached = pillar_salt_run_cli.run(
+            "cache.fetch", f"minions/{pillar_salt_minion.id}", "data"
+        )
+        assert cached.returncode == 0
+        assert not cached.data
+        yield
+
+    def test_show_policies(
+        self, pillar_salt_run_cli, pillar_salt_minion, minion_data_cache_absent
+    ):
+        """
+        Test that pillar data is refreshed correctly before rendering policies when necessary.
+        This test includes the prevention of loop exceptions by sdb/ext_pillar modules
+        This refresh does not include grains and pillar data targeted by these grains (unsafe anyways!).
+        """
+        ret = pillar_salt_run_cli.run(
+            "vault.show_policies", pillar_salt_minion.id, expire=0
+        )
+        assert ret.data == [
+            "salt_minion",
+            f"salt_minion_{pillar_salt_minion.id}",
+            "salt_role_minion",
+            "salt_role_web",
+        ]
+        assert "Pillar render error: Failed to load ext_pillar vault" not in ret.stderr
+        assert "Pillar render error: Rendering SLS 'sdb_loop' failed" not in ret.stderr
+
+    def test_show_policies_uncached_data_no_pillar_refresh(
+        self, pillar_salt_run_cli, pillar_salt_minion, minion_data_cache_absent
+    ):
+        """
+        Test that pillar is not refreshed when explicitly disabled
+        """
+        ret = pillar_salt_run_cli.run(
+            "vault.show_policies", pillar_salt_minion.id, refresh_pillar=False, expire=0
+        )
+        assert ret.data == ["salt_minion", f"salt_minion_{pillar_salt_minion.id}"]
+
+    def test_policy_compilation_prevents_loop(
+        self,
+        pillar_salt_run_cli,
+        pillar_salt_minion,
+        pillar_loop,
+        minion_data_cache_absent,
+    ):
+        """
+        Test that the runner prevents a recursive cycle from happening
+        """
+        ret = pillar_salt_run_cli.run(
+            "vault.show_policies", pillar_salt_minion.id, refresh_pillar=True, expire=0
+        )
+        assert ret.data == [
+            "salt_minion",
+            f"salt_minion_{pillar_salt_minion.id}",
+            "salt_role_minion",
+            "salt_role_web",
+        ]
+        assert "Pillar render error: Rendering SLS 'exe_loop' failed" in ret.stderr
+
+
+class TestVaultPillarPolicyTemplatesWithCache:
+    @pytest.fixture()
+    def minion_data_cache_present(
+        self,
+        pillar_salt_call_cli,
+        pillar_salt_run_cli,
+        pillar_salt_minion,
+        pillar_policy_tree,
+    ):
+        ret = pillar_salt_call_cli.run("saltutil.refresh_pillar", wait=True)
+        assert ret.returncode == 0
+        assert ret.data is True
+        yield
+
+    @pytest.fixture()
+    def minion_data_cache_outdated(
+        self,
+        minion_data_cache_present,
+        pillar_salt_run_cli,
+        pillar_salt_call_cli,
+        pillar_policy_tree,
+        pillar_state_tree,
+        pillar_salt_minion,
+    ):
+        roles_pillar = """
+        roles:
+          - minion
+          - web
+          - fresh
+        """
+        roles_tempfile = pytest.helpers.temp_file(
+            "roles.sls", roles_pillar, pillar_state_tree
+        )
+        cached = pillar_salt_run_cli.run(
+            "cache.fetch", f"minions/{pillar_salt_minion.id}", "data"
+        )
+        assert cached.returncode == 0
+        assert cached.data
+        assert "pillar" in cached.data
+        assert "grains" in cached.data
+        assert "foo" in cached.data["grains"]
+        assert "roles" in cached.data["pillar"]
+        assert ["minion", "web"] == cached.data["pillar"]["roles"]
+        with roles_tempfile:
+            yield
+
+    def test_show_policies_cached_data_no_pillar_refresh(
+        self, pillar_salt_run_cli, pillar_salt_minion, minion_data_cache_outdated
+    ):
+        """
+        Test that pillar data from cache is used when it is available
+        """
+        ret = pillar_salt_run_cli.run(
+            "vault.show_policies", pillar_salt_minion.id, expire=0
+        )
+        assert ret.data == [
+            "salt_minion",
+            f"salt_minion_{pillar_salt_minion.id}",
+            "salt_role_minion",
+            "salt_role_web",
+            "salt_unsafe_bar",
+        ]
+
+    def test_show_policies_refresh_pillar(
+        self, pillar_salt_run_cli, pillar_salt_minion, minion_data_cache_outdated
+    ):
+        """
+        Test that pillar data is always refreshed when requested.
+        This test includes the prevention of loops by sdb/ext_pillar modules
+        This refresh does not include grains and pillar data targeted by these grains (unsafe anyways!).
+        """
+        ret = pillar_salt_run_cli.run(
+            "vault.show_policies", pillar_salt_minion.id, refresh_pillar=True, expire=0
+        )
+        assert ret.data == [
+            "salt_minion",
+            f"salt_minion_{pillar_salt_minion.id}",
+            "salt_role_minion",
+            "salt_role_web",
+            "salt_role_fresh",
+            "salt_unsafe_bar",
+        ]
+        assert "Pillar render error: Failed to load ext_pillar vault" not in ret.stderr
+        assert "Pillar render error: Rendering SLS 'sdb_loop' failed" not in ret.stderr
diff --git a/tests/pytests/unit/pillar/test_vault.py b/tests/pytests/unit/pillar/test_vault.py
index 23c43f5b5a9..92b4bcd8a6a 100644
--- a/tests/pytests/unit/pillar/test_vault.py
+++ b/tests/pytests/unit/pillar/test_vault.py
@@ -182,3 +182,18 @@ def test_ext_pillar_merging(is_v2_false):
                 merge_lists=False,
             )
             assert ext_pillar == expected
+
+
+def text_ext_pillar_disabled_during_policy_pillar_rendering():
+    mock_version = Mock()
+    mock_vault = Mock()
+    extra = {"_vault_runner_is_compiling_pillar_templates": True}
+
+    with patch.dict(
+        vault.__utils__, {"vault.make_request": mock_vault, "vault.is_v2": mock_version}
+    ):
+        assert {} == vault.ext_pillar(
+            "test-minion", {}, conf="path=secret/path", extra_minion_data=extra
+        )
+        assert mock_version.call_count == 0
+        assert mock_vault.call_count == 0
diff --git a/tests/unit/runners/test_vault.py b/tests/unit/runners/test_vault.py
index 8dc7734dbe8..e34445f4636 100644
--- a/tests/unit/runners/test_vault.py
+++ b/tests/unit/runners/test_vault.py
@@ -30,8 +30,13 @@ class VaultTest(TestCase, LoaderModuleMockMixin):
             "mixedcase": "UP-low-UP",
         }
 
+        self.pillar = {
+            "role": "test",
+        }
+
     def tearDown(self):
         del self.grains
+        del self.pillar
 
     def test_get_policies_for_nonexisting_minions(self):
         minion_id = "salt_master"
@@ -45,15 +50,15 @@ class VaultTest(TestCase, LoaderModuleMockMixin):
             "salt.utils.minions.get_minion_data",
             MagicMock(return_value=(None, None, None)),
         ):
-            for case, correct_output in cases.items():
-                with patch.dict(
-                    vault.__utils__,
-                    {
-                        "vault.expand_pattern_lists": Mock(
-                            side_effect=lambda x, *args, **kwargs: [x]
-                        )
-                    },
-                ):
+            with patch.dict(
+                vault.__utils__,
+                {
+                    "vault.expand_pattern_lists": Mock(
+                        side_effect=lambda x, *args, **kwargs: [x]
+                    )
+                },
+            ):
+                for case, correct_output in cases.items():
                     test_config = {"policies": [case]}
                     output = vault._get_policies(
                         minion_id, test_config
@@ -77,21 +82,22 @@ class VaultTest(TestCase, LoaderModuleMockMixin):
             "Case-Should-Be-Lowered:{grains[mixedcase]}": [
                 "case-should-be-lowered:up-low-up"
             ],
+            "pillar-rendering:{pillar[role]}": ["pillar-rendering:test"],
         }
 
         with patch(
             "salt.utils.minions.get_minion_data",
-            MagicMock(return_value=(None, self.grains, None)),
+            MagicMock(return_value=(None, self.grains, self.pillar)),
         ):
-            for case, correct_output in cases.items():
-                with patch.dict(
-                    vault.__utils__,
-                    {
-                        "vault.expand_pattern_lists": Mock(
-                            side_effect=lambda x, *args, **kwargs: [x]
-                        )
-                    },
-                ):
+            with patch.dict(
+                vault.__utils__,
+                {
+                    "vault.expand_pattern_lists": Mock(
+                        side_effect=lambda x, *args, **kwargs: [x]
+                    )
+                },
+            ):
+                for case, correct_output in cases.items():
                     test_config = {"policies": [case]}
                     output = vault._get_policies(
                         "test-minion", test_config
@@ -103,6 +109,39 @@ class VaultTest(TestCase, LoaderModuleMockMixin):
                         log.debug("Difference:\n\t%s", diff)
                     self.assertEqual(output, correct_output)
 
+    def test_get_policies_does_not_render_pillar_unnecessarily(self):
+        """
+        The pillar data should only be refreshed in case items are accessed.
+        """
+        get_pillar = Mock(name="g")
+        get_pillar.return_value.compile_pillar.return_value = self.pillar
+
+        cases = [
+            ("salt_minion_{minion}", 0),
+            ("salt_grain_{grains[id]}", 0),
+            ("unset_{foo}", 0),
+            ("salt_pillar_{pillar[role]}", 1),
+        ]
+
+        with patch(
+            "salt.utils.minions.get_minion_data",
+            Mock(return_value=(None, self.grains, None)),
+        ), patch("salt.pillar.get_pillar", get_pillar):
+            with patch.dict(
+                vault.__utils__,
+                {
+                    "vault.expand_pattern_lists": Mock(
+                        side_effect=lambda x, *args, **kwargs: [x]
+                    )
+                },
+            ):
+                for case, expected in cases:
+                    test_config = {"policies": [case]}
+                    vault._get_policies(
+                        "test-minion", test_config, refresh_pillar=True
+                    )  # pylint: disable=protected-access
+                    assert get_pillar.call_count == expected
+
     def test_get_token_create_url(self):
         """
         Ensure _get_token_create_url parses config correctly
@@ -170,6 +209,10 @@ class VaultTokenAuthTest(TestCase, LoaderModuleMockMixin):
         "salt.runners.vault._get_token_create_url",
         MagicMock(return_value="http://fake_url"),
     )
+    @patch(
+        "salt.runners.vault._get_policies_cached",
+        Mock(return_value=["saltstack/minion/test-minion", "saltstack/minions"]),
+    )
     def test_generate_token(self):
         """
         Basic tests for test_generate_token: all exits
@@ -231,7 +274,7 @@ class VaultTokenAuthTest(TestCase, LoaderModuleMockMixin):
             self.assertTrue("error" in result)
             self.assertEqual(result["error"], "no reason")
 
-        with patch("salt.runners.vault._get_policies", MagicMock(return_value=[])):
+        with patch("salt.runners.vault._get_policies_cached", Mock(return_value=[])):
             result = vault.generate_token("test-minion", "signature")
             self.assertTrue(isinstance(result, dict))
             self.assertTrue("error" in result)
@@ -250,6 +293,10 @@ class VaultTokenAuthTest(TestCase, LoaderModuleMockMixin):
         "salt.runners.vault._get_token_create_url",
         MagicMock(return_value="http://fake_url"),
     )
+    @patch(
+        "salt.runners.vault._get_policies_cached",
+        Mock(return_value=["saltstack/minion/test-minion", "saltstack/minions"]),
+    )
     def test_generate_token_with_namespace(self):
         """
         Basic tests for test_generate_token: all exits
@@ -303,6 +350,10 @@ class VaultAppRoleAuthTest(TestCase, LoaderModuleMockMixin):
         "salt.runners.vault._get_token_create_url",
         MagicMock(return_value="http://fake_url"),
     )
+    @patch(
+        "salt.runners.vault._get_policies_cached",
+        Mock(return_value=["saltstack/minion/test-minion", "saltstack/minions"]),
+    )
     def test_generate_token(self):
         """
         Basic test for test_generate_token with approle (two vault calls)
diff --git a/tests/unit/sdb/test_vault.py b/tests/unit/sdb/test_vault.py
index 7f033597daa..bba49dd975c 100644
--- a/tests/unit/sdb/test_vault.py
+++ b/tests/unit/sdb/test_vault.py
@@ -5,7 +5,7 @@ Test case for the vault SDB module
 
 import salt.sdb.vault as vault
 from tests.support.mixins import LoaderModuleMockMixin
-from tests.support.mock import MagicMock, call, patch
+from tests.support.mock import MagicMock, Mock, call, patch
 from tests.support.unit import TestCase
 
 
@@ -201,3 +201,22 @@ class TestVaultSDB(LoaderModuleMockMixin, TestCase):
         assert mock_vault.call_args_list == [
             call("GET", "v1/sdb://myvault/path/to/foo")
         ]
+
+    def test_get_disabled_during_policy_pillar_rendering(self):
+        """
+        Ensure that during pillar rendering for templated policies,
+        salt.sdb.vault.get function does not query vault to prevent
+        a cyclic dependency.
+        """
+        mock_version = Mock()
+        mock_vault = Mock()
+        with patch.dict(
+            vault.__utils__,
+            {"vault.make_request": mock_vault, "vault.is_v2": mock_version},
+        ):
+            with patch.dict(
+                vault.__opts__, {"_vault_runner_is_compiling_pillar_templates": True}
+            ):
+                self.assertIsNone(vault.get("sdb://myvault/path/to/foo/foo"))
+                assert mock_version.call_count == 0
+                assert mock_vault.call_count == 0