diff --git a/changelog/dmd.template-value-param-init.dd b/changelog/dmd.template-value-param-init.dd
new file mode 100644
index 000000000000..7e3953be2de6
--- /dev/null
+++ b/changelog/dmd.template-value-param-init.dd
@@ -0,0 +1,32 @@
+Template value parameters now support the same initialization semantics as local variable declarations
+
+Default values for template value parameters now undergo the same initialization
+semantics as regular variable declarations, allowing implicit construction via
+constructors and `static opCall`.
+
+Previously, the following would fail to compile even though equivalent variable
+and function parameter declarations work fine:
+
+---
+struct Color
+{
+    ubyte r, g, b;
+    this(uint hex) { r = (hex >> 16) & 0xFF; g = (hex >> 8) & 0xFF; b = hex & 0xFF; }
+}
+
+template fill(Color c = 0xFF0000) // red by default
+{
+}
+
+alias redFill = fill!(); // now compiles
+---
+
+This also applies to static arrays initialized from a scalar:
+
+---
+template withPadding(byte[4] padding = 0)
+{
+}
+
+alias noPadding = withPadding!(); // now compiles
+---
diff --git a/compiler/src/dmd/templatesem.d b/compiler/src/dmd/templatesem.d
index 351a622227d0..bf6d7bfd030a 100644
--- a/compiler/src/dmd/templatesem.d
+++ b/compiler/src/dmd/templatesem.d
@@ -4108,7 +4108,15 @@ private RootObject defaultArg(TemplateParameter tp, Loc instLoc, Scope* sc)
         }
         if ((e = resolveProperties(sc, e)) is null)
             return null;
-        e = e.optimize(WANTvalue);
+
+        // Apply the same initialization semantics as for variable declarations
+        // to handle e.g. implicit constructor calls for struct types
+        // https://github.com/dlang/dmd/issues/20994
+        Type vt = tvp.valType.typeSemantic(tvp.loc, sc);
+        Initializer init = new ExpInitializer(tvp.loc, e);
+        init = init.initializerSemantic(sc, vt, INITinterpret);
+        if (auto ei2 = init.isExpInitializer())
+            e = ei2.exp;
 
         return e;
     }
diff --git a/compiler/test/compilable/test20994.d b/compiler/test/compilable/test20994.d
new file mode 100644
index 000000000000..5a5556f753c3
--- /dev/null
+++ b/compiler/test/compilable/test20994.d
@@ -0,0 +1,30 @@
+// https://github.com/dlang/dmd/issues/20994
+
+// Struct with constructor
+struct S { this(int x) {} }
+
+void foo(S a = 0) {}    // ok
+
+template Foo(S a = 0) {}
+
+void main()
+{
+    S a = 0;          // ok
+    foo();            // ok
+    alias F = Foo!(); // should compile
+}
+
+// Struct with opCall
+struct T
+{
+    static T opCall(int x) { T t; return t; }
+}
+
+template Bar(T a = 0) {}
+alias G = Bar!();
+
+// Array initializer
+alias g = f!();
+template f(byte[3] a = -1)
+{
+}