diff --git a/packages/compiler-sfc/__tests__/parse.spec.ts b/packages/compiler-sfc/__tests__/parse.spec.ts
index ddd6570de9a..d7d8ca6b2e8 100644
--- a/packages/compiler-sfc/__tests__/parse.spec.ts
+++ b/packages/compiler-sfc/__tests__/parse.spec.ts
@@ -106,6 +106,16 @@ h1 { color: red }
     expect(descriptor.template!.content).toBe(content)
   })
 
+  // #1120
+  test('alternative template lang should be treated as plain text', () => {
+    const content = `p(v-if="1 < 2") test`
+    const { descriptor, errors } = parse(
+      `<template lang="pug">` + content + `</template>`
+    )
+    expect(errors.length).toBe(0)
+    expect(descriptor.template!.content).toBe(content)
+  })
+
   test('error tolerance', () => {
     const { errors } = parse(`<template>`)
     expect(errors.length).toBe(1)
diff --git a/packages/compiler-sfc/src/parse.ts b/packages/compiler-sfc/src/parse.ts
index ce466ba6728..2e8bd719eb6 100644
--- a/packages/compiler-sfc/src/parse.ts
+++ b/packages/compiler-sfc/src/parse.ts
@@ -96,10 +96,20 @@ export function parse(
     isNativeTag: () => true,
     // preserve all whitespaces
     isPreTag: () => true,
-    getTextMode: ({ tag }, parent) => {
+    getTextMode: ({ tag, props }, parent) => {
       // all top level elements except <template> are parsed as raw text
       // containers
-      if (!parent && tag !== 'template') {
+      if (
+        (!parent && tag !== 'template') ||
+        // <template lang="xxx"> should also be treated as raw text
+        props.some(
+          p =>
+            p.type === NodeTypes.ATTRIBUTE &&
+            p.name === 'lang' &&
+            p.value &&
+            p.value.content !== 'html'
+        )
+      ) {
         return TextModes.RAWTEXT
       } else {
         return TextModes.DATA