diff --git a/mercurial/templater.py b/mercurial/templater.py
--- a/mercurial/templater.py
+++ b/mercurial/templater.py
@@ -466,7 +466,7 @@ def ifcontains(context, mapping, args):
         raise error.ParseError(_("ifcontains expects three or four arguments"))
 
     item = stringify(args[0][0](context, mapping, args[0][1]))
-    items = args[1][0](context, mapping, args[1][1])
+    items = evalfuncarg(context, mapping, args[1])
 
     if item in items:
         yield args[2][0](context, mapping, args[2][1])
diff --git a/tests/test-command-template.t b/tests/test-command-template.t
--- a/tests/test-command-template.t
+++ b/tests/test-command-template.t
@@ -3248,6 +3248,11 @@ Test ifcontains function
   1 is not
   0 is in the string
 
+  $ hg log -T '{rev} {ifcontains(rev, "2 two{" 0"}", "is in the string", "is not")}\n'
+  2 is in the string
+  1 is not
+  0 is in the string
+
   $ hg log --template '{rev} {ifcontains("a", file_adds, "added a", "did not add a")}\n'
   2 did not add a
   1 did not add a