diff --git a/clang/docs/ReleaseNotes.rst b/clang/docs/ReleaseNotes.rst
index 0bd4857077879..35406bc274873 100644
--- a/clang/docs/ReleaseNotes.rst
+++ b/clang/docs/ReleaseNotes.rst
@@ -126,6 +126,8 @@ Improvements to Clang's diagnostics
 - Fixed fix-it hint for fold expressions. Clang now correctly places the suggested right 
   parenthesis when diagnosing malformed fold expressions. (#GH151787)
 
+- Improved diagnostic location for templates declared inside local classes.
+
 Improvements to Clang's time-trace
 ----------------------------------
 
diff --git a/clang/lib/Sema/SemaTemplate.cpp b/clang/lib/Sema/SemaTemplate.cpp
index 21fed2e8f6ca7..c39acc073fa11 100644
--- a/clang/lib/Sema/SemaTemplate.cpp
+++ b/clang/lib/Sema/SemaTemplate.cpp
@@ -8229,24 +8229,37 @@ Sema::CheckTemplateDeclScope(Scope *S, TemplateParameterList *TemplateParams) {
   // C++ [temp.class.spec]p6: [P2096]
   //   A partial specialization may be declared in any scope in which the
   //   corresponding primary template may be defined.
+  auto FindTemplateParamsLoc = [](TemplateParameterList *TemplateParams,
+                                  SourceLocation Fallback) {
+    SourceLocation DiagLoc = TemplateParams->getTemplateLoc();
+    if (DiagLoc.isValid())
+      return DiagLoc;
+
+    for (const NamedDecl *Param : *TemplateParams)
+      if (Param && Param->getLocation().isValid())
+        return Param->getLocation();
+
+    return Fallback;
+  };
+
   if (Ctx) {
     if (Ctx->isFileContext())
       return false;
     if (CXXRecordDecl *RD = dyn_cast<CXXRecordDecl>(Ctx)) {
       // C++ [temp.mem]p2:
       //   A local class shall not have member templates.
-      if (RD->isLocalClass())
-        return Diag(TemplateParams->getTemplateLoc(),
+      if (RD->isLocalClass()) {
+        return Diag(FindTemplateParamsLoc(TemplateParams, RD->getLocation()),
                     diag::err_template_inside_local_class)
-          << TemplateParams->getSourceRange();
-      else
-        return false;
+               << TemplateParams->getSourceRange();
+      }
+      return false;
     }
   }
 
-  return Diag(TemplateParams->getTemplateLoc(),
+  return Diag(FindTemplateParamsLoc(TemplateParams, SourceLocation()),
               diag::err_template_outside_namespace_or_class_scope)
-    << TemplateParams->getSourceRange();
+         << TemplateParams->getSourceRange();
 }
 
 /// Determine what kind of template specialization the given declaration
diff --git a/clang/test/SemaCXX/template-local-class.cpp b/clang/test/SemaCXX/template-local-class.cpp
new file mode 100644
index 0000000000000..10f819f4d0ea0
--- /dev/null
+++ b/clang/test/SemaCXX/template-local-class.cpp
@@ -0,0 +1,9 @@
+// RUN: %clang_cc1 -fsyntax-only -verify %s
+
+void foo() {
+  struct Local {
+    template <typename T> // expected-error {{member templates are not allowed inside local classes}}
+    void bar();
+  };
+}
+