diff --git a/HISTORY.md b/HISTORY.md
index ff29acc..4fc26c5 100644
--- a/HISTORY.md
+++ b/HISTORY.md
@@ -1,6 +1,7 @@
 unreleased
 ==========
 
+  * Accept `function` value for `template` option
   * Send non-chunked response for `OPTIONS`
   * Stat parent directory when necessary
   * Use `Date.prototype.toLocaleDateString` to format date
diff --git a/README.md b/README.md
index 80dfb0d..5dde837 100644
--- a/README.md
+++ b/README.md
@@ -56,15 +56,31 @@ Optional path to a CSS stylesheet. Defaults to a built-in stylesheet.
 
 ##### template
 
-Optional path to an HTML template. Defaults to a built-in template.
+Optional path to an HTML template or a function that will render a HTML
+string. Defaults to a built-in template.
 
-The following tokens are replaced in templates:
+When given a string, the string is used as a file path to load and then the
+following tokens are replaced in templates:
 
   * `{directory}` with the name of the directory.
   * `{files}` with the HTML of an unordered list of file links.
   * `{linked-path}` with the HTML of a link to the directory.
   * `{style}` with the specified stylesheet and embedded images.
 
+When given as a function, the function is called as `template(locals, callback)`
+and it needs to invoke `callback(error, htmlString)`. The following are the
+provided locals:
+
+  * `directory` is the directory being displayed (where `/` is the root).
+  * `displayIcons` is a Boolean for if icons should be rendered or not.
+  * `fileList` is a sorted array of files in the directory. The array contains
+    objects with the following properties:
+    - `name` is the relative name for the file.
+    - `stat` is a `fs.Stats` object for the file.
+  * `path` is the full filesystem path to `directory`.
+  * `style` is the default stylesheet or the contents of the `stylesheet` option.
+  * `viewName` is the view name provided by the `view` option.
+
 ##### view
 
 Display mode. `tiles` and `details` are available. Defaults to `tiles`.
diff --git a/index.js b/index.js
index 1c01f1f..7b9d856 100644
--- a/index.js
+++ b/index.js
@@ -171,27 +171,44 @@ function serveIndex(root, options) {
  */
 
 serveIndex.html = function _html(req, res, files, next, dir, showUp, icons, path, view, template, stylesheet) {
+  var render = typeof template !== 'function'
+    ? createHtmlRender(template)
+    : template
+
   if (showUp) {
     files.unshift('..');
   }
 
+  // stat all files
   stat(path, files, function (err, stats) {
     if (err) return next(err);
-    fs.readFile(template, 'utf8', function(err, str){
+
+    // combine the stats into the file list
+    var fileList = files.map(function (file, i) {
+      return { name: file, stat: stats[i] };
+    });
+
+    // sort file list
+    fileList.sort(fileSort);
+
+    // read stylesheet
+    fs.readFile(stylesheet, 'utf8', function (err, style) {
       if (err) return next(err);
-      fs.readFile(stylesheet, 'utf8', function(err, style){
+
+      // create locals for rendering
+      var locals = {
+        directory: dir,
+        displayIcons: Boolean(icons),
+        fileList: fileList,
+        path: path,
+        style: style,
+        viewName: view
+      };
+
+      // render html
+      render(locals, function (err, body) {
         if (err) return next(err);
 
-        var fileData = files.map(function (file, i) {
-          return { name: file, stat: stats[i] };
-        }).sort(fileSort);
-
-        var body = str
-          .replace(/\{style\}/g, style.concat(iconStyle(fileData, icons)))
-          .replace(/\{files\}/g, createHtmlFileList(fileData, dir, icons, view))
-          .replace(/\{directory\}/g, escapeHtml(dir))
-          .replace(/\{linked-path\}/g, htmlPath(dir));
-
         var buf = new Buffer(body, 'utf8');
         res.setHeader('Content-Type', 'text/html; charset=utf-8');
         res.setHeader('Content-Length', buf.length);
@@ -288,6 +305,27 @@ function createHtmlFileList(files, dir, useIcons, view) {
   return html;
 }
 
+/**
+ * Create function to render html.
+ */
+
+function createHtmlRender(template) {
+  return function render(locals, callback) {
+    // read template
+    fs.readFile(template, 'utf8', function (err, str) {
+      if (err) return callback(err);
+
+      var body = str
+        .replace(/\{style\}/g, locals.style.concat(iconStyle(locals.fileList, locals.displayIcons)))
+        .replace(/\{files\}/g, createHtmlFileList(locals.fileList, locals.directory, locals.displayIcons, locals.viewName))
+        .replace(/\{directory\}/g, escapeHtml(locals.directory))
+        .replace(/\{linked-path\}/g, htmlPath(locals.directory));
+
+      callback(null, body);
+    });
+  };
+}
+
 /**
  * Sort function for with directories first.
  */
@@ -385,7 +423,7 @@ function iconLookup(filename) {
  * Load icon images, return css string.
  */
 
-function iconStyle (files, useIcons) {
+function iconStyle(files, useIcons) {
   if (!useIcons) return '';
   var className;
   var i;
diff --git a/test/test.js b/test/test.js
index 19697d9..408ba92 100644
--- a/test/test.js
+++ b/test/test.js
@@ -304,6 +304,146 @@ describe('serveIndex(root)', function () {
     });
   });
 
+  describe('with "template" option', function () {
+    describe('when setting a custom template file', function () {
+      var server;
+      before(function () {
+        server = createServer(fixtures, {'template': __dirname + '/shared/template.html'});
+      });
+
+      it('should respond with file list', function (done) {
+        request(server)
+        .get('/')
+        .set('Accept', 'text/html')
+        .expect(/<a href="\/g%23%20%253%20o%20%26%20%252525%20%2537%20dir"/)
+        .expect(/<a href="\/users"/)
+        .expect(/<a href="\/file%20%231.txt"/)
+        .expect(/<a href="\/todo.txt"/)
+        .expect(200, done)
+      });
+
+      it('should respond with testing template sentence', function (done) {
+        request(server)
+        .get('/')
+        .set('Accept', 'text/html')
+        .expect(200, /This is the test template/, done)
+      });
+
+      it('should have default styles', function (done) {
+        request(server)
+        .get('/')
+        .set('Accept', 'text/html')
+        .expect(200, /ul#files/, done)
+      });
+
+      it('should list directory twice', function (done) {
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect(function (res) {
+          var occurances = res.text.match(/directory \/users\//g)
+          if (occurances && occurances.length === 2) return
+          throw new Error('directory not listed twice')
+        })
+        .expect(200, done)
+      });
+    });
+
+    describe('when setting a custom template function', function () {
+      it('should invoke function to render', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, 'This is a template.');
+        }});
+
+        request(server)
+        .get('/')
+        .set('Accept', 'text/html')
+        .expect(200, 'This is a template.', done);
+      });
+
+      it('should handle render errors', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(new Error('boom!'));
+        }});
+
+        request(server)
+        .get('/')
+        .set('Accept', 'text/html')
+        .expect(500, 'boom!', done);
+      });
+
+      it('should provide "directory" local', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, JSON.stringify(locals.directory));
+        }});
+
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect(200, '"/users/"', done);
+      });
+
+      it('should provide "displayIcons" local', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, JSON.stringify(locals.displayIcons));
+        }});
+
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect(200, 'false', done);
+      });
+
+      it('should provide "fileList" local', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, JSON.stringify(locals.fileList.map(function (file) {
+            file.stat = file.stat instanceof fs.Stats;
+            return file;
+          })));
+        }});
+
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect('[{"name":"..","stat":true},{"name":"#dir","stat":true},{"name":"index.html","stat":true},{"name":"tobi.txt","stat":true}]')
+        .expect(200, done);
+      });
+
+      it('should provide "path" local', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, JSON.stringify(locals.path));
+        }});
+
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect(200, JSON.stringify(path.join(fixtures, 'users/')), done);
+      });
+
+      it('should provide "style" local', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, JSON.stringify(locals.style));
+        }});
+
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect(200, /#files \.icon \.name/, done);
+      });
+
+      it('should provide "viewName" local', function (done) {
+        var server = createServer(fixtures, {'template': function (locals, callback) {
+          callback(null, JSON.stringify(locals.viewName));
+        }});
+
+        request(server)
+        .get('/users/')
+        .set('Accept', 'text/html')
+        .expect(200, '"tiles"', done);
+      });
+    });
+  });
+
   describe('when using custom handler', function () {
     describe('exports.html', function () {
       alterProperty(serveIndex, 'html', serveIndex.html)
@@ -520,50 +660,6 @@ describe('serveIndex(root)', function () {
     });
   });
 
-  describe('when setting a custom template', function () {
-    var server;
-    before(function () {
-      server = createServer(fixtures, {'template': __dirname + '/shared/template.html'});
-    });
-
-    it('should respond with file list', function (done) {
-      request(server)
-      .get('/')
-      .set('Accept', 'text/html')
-      .expect(/<a href="\/g%23%20%253%20o%20%26%20%252525%20%2537%20dir"/)
-      .expect(/<a href="\/users"/)
-      .expect(/<a href="\/file%20%231.txt"/)
-      .expect(/<a href="\/todo.txt"/)
-      .expect(200, done)
-    });
-
-    it('should respond with testing template sentence', function (done) {
-      request(server)
-      .get('/')
-      .set('Accept', 'text/html')
-      .expect(200, /This is the test template/, done)
-    });
-
-    it('should have default styles', function (done) {
-      request(server)
-      .get('/')
-      .set('Accept', 'text/html')
-      .expect(200, /ul#files/, done)
-    });
-
-    it('should list directory twice', function (done) {
-      request(server)
-      .get('/users/')
-      .set('Accept', 'text/html')
-      .expect(function (res) {
-        var occurances = res.text.match(/directory \/users\//g)
-        if (occurances && occurances.length === 2) return
-        throw new Error('directory not listed twice')
-      })
-      .expect(200, done)
-    });
-  });
-
   describe('when setting a custom stylesheet', function () {
     var server;
     before(function () {