diff --git a/change/@microsoft-fast-element-ccc364c3-3d9a-4477-a877-812d7fc72bff.json b/change/@microsoft-fast-element-ccc364c3-3d9a-4477-a877-812d7fc72bff.json
new file mode 100644
index 00000000000..a5c35292f03
--- /dev/null
+++ b/change/@microsoft-fast-element-ccc364c3-3d9a-4477-a877-812d7fc72bff.json
@@ -0,0 +1,7 @@
+{
+  "type": "patch",
+  "comment": "Address hydration mismatches when a template is provided but no boundaries exist, this will skip creation of a new view.",
+  "packageName": "@microsoft/fast-element",
+  "email": "hello@mohamedmansour.com",
+  "dependentChangeType": "none"
+}
diff --git a/change/@microsoft-fast-html-1cbbfa63-0099-407f-9cd2-36fe3f44f3c3.json b/change/@microsoft-fast-html-1cbbfa63-0099-407f-9cd2-36fe3f44f3c3.json
new file mode 100644
index 00000000000..f49387e66c7
--- /dev/null
+++ b/change/@microsoft-fast-html-1cbbfa63-0099-407f-9cd2-36fe3f44f3c3.json
@@ -0,0 +1,7 @@
+{
+  "type": "prerelease",
+  "comment": "Address hydration mismatches when a template is provided but no boundaries exist, this will skip creation of a new view.",
+  "packageName": "@microsoft/fast-html",
+  "email": "hello@mohamedmansour.com",
+  "dependentChangeType": "none"
+}
diff --git a/packages/fast-element/src/templating/html-binding-directive.ts b/packages/fast-element/src/templating/html-binding-directive.ts
index 48d466624db..8120ebd1eb4 100644
--- a/packages/fast-element/src/templating/html-binding-directive.ts
+++ b/packages/fast-element/src/templating/html-binding-directive.ts
@@ -106,6 +106,18 @@ function updateContent(
 
     // If the value has a "create" method, then it's a ContentTemplate.
     if (isContentTemplate(value)) {
+        // During hydration, if a template is provided but no view boundaries
+        // exist and the target text node is empty, the server did not render
+        // this content. Skip creating a new view to avoid a hydration mismatch.
+        if (
+            isHydratable(controller) &&
+            controller.hydrationStage !== HydrationStage.hydrated &&
+            controller.bindingViewBoundaries[this.targetNodeId] === undefined &&
+            !target.nodeValue
+        ) {
+            return;
+        }
+
         target.textContent = "";
         let view = target.$fastView as ComposableView;
 
diff --git a/packages/fast-html/src/components/utilities.ts b/packages/fast-html/src/components/utilities.ts
index edadc85d941..d6caae89dbb 100644
--- a/packages/fast-html/src/components/utilities.ts
+++ b/packages/fast-html/src/components/utilities.ts
@@ -1033,7 +1033,43 @@ export function resolveWhen(
         level,
         schema
     );
-    return (x: boolean, c: any) => binding(x, c);
+
+    // Raw value resolver for the expression's primary property path.
+    // Used during hydration to distinguish "property doesn't exist on
+    // the client" (undefined, server-only) from "property is explicitly falsy."
+    const rawBinding = !expression.expression.leftIsValue
+        ? pathResolver(
+              expression.expression.left as string,
+              parentContext,
+              level,
+              schema.getSchema(rootPropertyName as string) as JSONSchema
+          )
+        : null;
+
+    let hydrationDone = false;
+    return (x: boolean, c: any) => {
+        const result = binding(x, c);
+        if (result) return result;
+
+        // During hydration, trust the server-rendered state only when the
+        // condition references a property not defined on the client element
+        // (raw value is undefined). Return true so the inner template is
+        // hydrated and its bindings (event listeners, etc.) are properly
+        // attached to the existing DOM.
+        // When the property IS defined but explicitly falsy (e.g. false, 0),
+        // respect the client value to avoid a hydration mismatch.
+        if (!hydrationDone) {
+            if (c?.hydrationStage === "hydrated") {
+                hydrationDone = true;
+            } else if (c?.hydrationStage && rawBinding) {
+                const rawValue = rawBinding(x, c);
+                if (rawValue === undefined) {
+                    return true;
+                }
+            }
+        }
+        return result;
+    };
 }
 
 type DataType = "array" | "object" | "primitive";
diff --git a/packages/fast-html/test/fixtures/when-event/index.html b/packages/fast-html/test/fixtures/when-event/index.html
new file mode 100644
index 00000000000..04f48a9d612
--- /dev/null
+++ b/packages/fast-html/test/fixtures/when-event/index.html
@@ -0,0 +1,34 @@
+<!DOCTYPE html>
+<html lang="en-US">
+    <head>
+        <meta charset="utf-8" />
+        <title></title>
+        <script type="module" src="./main.ts"></script>
+    </head>
+    <body>
+        <!-- Template uses "serverOnly" which is NOT a property on test-element.
+             This simulates <if condition="serverOnly"> where the server state has serverOnly=true
+             but the client class doesn't know about it. -->
+        <f-template name="test-element">
+            <template><f-when value="{{serverOnly}}"><button @click="{handleClick()}">Click me</button></f-when></template>
+        </f-template>
+        <!-- SSR: condition was true, so button is rendered with hydration markers -->
+        <test-element id="when-event-show">
+            <template shadowrootmode="open"><!--fe-b$$start$$0$$MRl5Rw6tl3$$fe-b--><button data-fe-b-0>Click me</button><!--fe-b$$end$$0$$MRl5Rw6tl3$$fe-b--></template>
+        </test-element>
+        <!-- SSR: condition was false, so no content between markers -->
+        <test-element id="when-event-hide">
+            <template shadowrootmode="open"><!--fe-b$$start$$0$$MRl5Rw6tl3$$fe-b--><!--fe-b$$end$$0$$MRl5Rw6tl3$$fe-b--></template>
+        </test-element>
+
+        <!-- test-element-false: someprop is explicitly false on the client,
+             but the server rendered with someprop=true, so SSR content is present.
+             After hydration the client value should win and content should be removed. -->
+        <f-template name="test-element-false">
+            <template><f-when value="{{someprop}}">anything, really</f-when></template>
+        </f-template>
+        <test-element-false id="false-prop">
+            <template shadowrootmode="open"><!--fe-b$$start$$0$$MRl5Rw6tl3$$fe-b-->anything, really<!--fe-b$$end$$0$$MRl5Rw6tl3$$fe-b--></template>
+        </test-element-false>
+    </body>
+</html>
diff --git a/packages/fast-html/test/fixtures/when-event/main.ts b/packages/fast-html/test/fixtures/when-event/main.ts
new file mode 100644
index 00000000000..3eef1eedc88
--- /dev/null
+++ b/packages/fast-html/test/fixtures/when-event/main.ts
@@ -0,0 +1,34 @@
+import { RenderableFASTElement, TemplateElement } from "@microsoft/fast-html";
+import { FASTElement, observable } from "@microsoft/fast-element";
+
+// This element intentionally does NOT define "serverOnly" as a property.
+// The f-when condition references "serverOnly" which only exists in server state,
+// simulating the real-world scenario where <if condition="..."> uses server-only data.
+class TestElement extends FASTElement {
+    public clickCount: number = 0;
+
+    public handleClick = (): void => {
+        this.clickCount++;
+        console.log("clicked:" + this.clickCount);
+    };
+}
+RenderableFASTElement(TestElement).defineAsync({
+    name: "test-element",
+    templateOptions: "defer-and-hydrate",
+});
+
+// This element explicitly defines "someprop" as false.
+// The server rendered with someprop=true (from JSON), so SSR content is present.
+// During hydration, the client value is false, which should be respected.
+class TestElementFalse extends FASTElement {
+    @observable
+    someprop: boolean = false;
+}
+RenderableFASTElement(TestElementFalse).defineAsync({
+    name: "test-element-false",
+    templateOptions: "defer-and-hydrate",
+});
+
+TemplateElement.define({
+    name: "f-template",
+});
diff --git a/packages/fast-html/test/fixtures/when-event/when-event.html b/packages/fast-html/test/fixtures/when-event/when-event.html
new file mode 100644
index 00000000000..60a51f65aa8
--- /dev/null
+++ b/packages/fast-html/test/fixtures/when-event/when-event.html
@@ -0,0 +1 @@
+<f-when value="{{serverOnly}}"><button @click="{handleClick()}">Click me</button></f-when>
diff --git a/packages/fast-html/test/fixtures/when-event/when-event.json b/packages/fast-html/test/fixtures/when-event/when-event.json
new file mode 100644
index 00000000000..c85a2e1c39d
--- /dev/null
+++ b/packages/fast-html/test/fixtures/when-event/when-event.json
@@ -0,0 +1,3 @@
+{
+    "serverOnly": true
+}
diff --git a/packages/fast-html/test/fixtures/when-event/when-event.spec.ts b/packages/fast-html/test/fixtures/when-event/when-event.spec.ts
new file mode 100644
index 00000000000..93c2e859e8b
--- /dev/null
+++ b/packages/fast-html/test/fixtures/when-event/when-event.spec.ts
@@ -0,0 +1,52 @@
+import { expect, test } from "@playwright/test";
+
+test.describe("f-when with event binding", async () => {
+    test("event binding inside f-when should fire after hydration", async ({ page }) => {
+        await page.goto("/fixtures/when-event/");
+
+        const customElement = page.locator("#when-event-show");
+
+        // Button should be visible (SSR rendered, condition true)
+        const button = customElement.locator("button");
+        await expect(button).toHaveText("Click me");
+
+        // Click the button - event binding should work
+        await button.click();
+
+        // Verify the click handler fired
+        await expect(customElement).toHaveJSProperty("clickCount", 1);
+
+        // Click again to confirm repeated clicks work
+        await button.click();
+        await expect(customElement).toHaveJSProperty("clickCount", 2);
+    });
+
+    test("f-when with false condition should not create content during hydration", async ({ page }) => {
+        await page.goto("/fixtures/when-event/");
+
+        const customElement = page.locator("#when-event-hide");
+
+        // No button should exist (SSR condition was false)
+        const button = customElement.locator("button");
+        await expect(button).toHaveCount(0);
+
+        // Element should hydrate without errors
+        await expect(customElement).toHaveJSProperty("clickCount", 0);
+    });
+
+    test("should respect client-side false value even when server rendered content", async ({
+        page,
+    }) => {
+        await page.goto("/fixtures/when-event/");
+
+        const element = page.locator("#false-prop");
+
+        // The property is explicitly false on the client element class
+        await expect(element).toHaveJSProperty("someprop", false);
+
+        // After hydration, content should NOT be visible because someprop is false.
+        // The server rendered "anything, really" because it had someprop=true,
+        // but the client value is false, so the content should be removed.
+        await expect(element).not.toHaveText("anything, really");
+    });
+});