diff --git a/spring-web/src/main/java/org/springframework/web/util/DefaultUriBuilderFactory.java b/spring-web/src/main/java/org/springframework/web/util/DefaultUriBuilderFactory.java
index 2a2a36c65d..b44df39fae 100644
--- a/spring-web/src/main/java/org/springframework/web/util/DefaultUriBuilderFactory.java
+++ b/spring-web/src/main/java/org/springframework/web/util/DefaultUriBuilderFactory.java
@@ -228,16 +228,14 @@ public class DefaultUriBuilderFactory implements UriBuilderFactory {
 		}
 
 		private UriComponentsBuilder initUriComponentsBuilder(String uriTemplate) {
-
+			UriComponentsBuilder result;
 			if (StringUtils.isEmpty(uriTemplate)) {
-				return baseUri != null ? baseUri.cloneBuilder() : UriComponentsBuilder.newInstance();
+				result = baseUri != null ? baseUri.cloneBuilder() : UriComponentsBuilder.newInstance();
 			}
-
-			UriComponentsBuilder result;
-			if (baseUri != null) {
-				UriComponentsBuilder uricBuilder = UriComponentsBuilder.fromUriString(uriTemplate);
-				UriComponents uric = uricBuilder.build();
-				result = uric.getHost() == null ? baseUri.cloneBuilder().uriComponents(uric) : uricBuilder;
+			else if (baseUri != null) {
+				UriComponentsBuilder builder = UriComponentsBuilder.fromUriString(uriTemplate);
+				UriComponents uri = builder.build();
+				result = uri.getHost() == null ? baseUri.cloneBuilder().uriComponents(uri) : builder;
 			}
 			else {
 				result = UriComponentsBuilder.fromUriString(uriTemplate);
diff --git a/spring-web/src/test/java/org/springframework/web/util/DefaultUriBuilderFactoryTests.java b/spring-web/src/test/java/org/springframework/web/util/DefaultUriBuilderFactoryTests.java
index 1f42b32f34..050176ea76 100644
--- a/spring-web/src/test/java/org/springframework/web/util/DefaultUriBuilderFactoryTests.java
+++ b/spring-web/src/test/java/org/springframework/web/util/DefaultUriBuilderFactoryTests.java
@@ -35,7 +35,7 @@ public class DefaultUriBuilderFactoryTests {
 	@Test
 	public void defaultSettings() {
 		DefaultUriBuilderFactory factory = new DefaultUriBuilderFactory();
-		URI uri = factory.uriString("/foo").pathSegment("{id}").build("a/b");
+		URI uri = factory.uriString("/foo/{id}").build("a/b");
 		assertEquals("/foo/a%2Fb", uri.toString());
 	}
 
@@ -126,6 +126,14 @@ public class DefaultUriBuilderFactoryTests {
 		assertEquals(expected, uriBuilder.build(singletonMap("id", id)).toString());
 	}
 
+	@Test
+	public void encodingTemplateAndValuesSpr17465() {
+		DefaultUriBuilderFactory factory = new DefaultUriBuilderFactory();
+		factory.setEncodingMode(EncodingMode.TEMPLATE_AND_VALUES);
+		URI uri = factory.builder().path("/foo/{id}").build("a/b");
+		assertEquals("/foo/a%2Fb", uri.toString());
+	}
+
 	@Test
 	public void encodingValuesOnlySpr14147() {
 		DefaultUriBuilderFactory factory = new DefaultUriBuilderFactory();