diff --git a/packages/runtime-core/__tests__/helpers/useTemplateRef.spec.ts b/packages/runtime-core/__tests__/helpers/useTemplateRef.spec.ts
index adc8ed66c77..047df6b492b 100644
--- a/packages/runtime-core/__tests__/helpers/useTemplateRef.spec.ts
+++ b/packages/runtime-core/__tests__/helpers/useTemplateRef.spec.ts
@@ -3,6 +3,7 @@ import {
   h,
   nextTick,
   nodeOps,
+  onMounted,
   ref,
   render,
   useTemplateRef,
@@ -125,4 +126,25 @@ describe('useTemplateRef', () => {
       __DEV__ = true
     }
   })
+
+  // #12749
+  test(`don't update setup ref for useTemplateRef key`, () => {
+    let foo: ShallowRef
+    const Comp = {
+      setup() {
+        foo = useTemplateRef('bar')
+        const bar = ref(null)
+        onMounted(() => {
+          expect(bar.value).toBe(null)
+        })
+        return { bar }
+      },
+      render() {
+        return h('div', { ref: 'bar' })
+      },
+    }
+    const root = nodeOps.createElement('div')
+    render(h(Comp), root)
+    expect(foo!.value).toBe(root.children[0])
+  })
 })
diff --git a/packages/runtime-core/src/helpers/useTemplateRef.ts b/packages/runtime-core/src/helpers/useTemplateRef.ts
index 4cb10ea8139..1a6c87ea816 100644
--- a/packages/runtime-core/src/helpers/useTemplateRef.ts
+++ b/packages/runtime-core/src/helpers/useTemplateRef.ts
@@ -1,5 +1,5 @@
 import { type ShallowRef, readonly, shallowRef } from '@vue/reactivity'
-import { getCurrentInstance } from '../component'
+import { type Data, getCurrentInstance } from '../component'
 import { warn } from '../warning'
 import { EMPTY_OBJ } from '@vue/shared'
 
@@ -12,12 +12,7 @@ export function useTemplateRef<T = unknown, Keys extends string = string>(
   const r = shallowRef(null)
   if (i) {
     const refs = i.refs === EMPTY_OBJ ? (i.refs = {}) : i.refs
-    let desc: PropertyDescriptor | undefined
-    if (
-      __DEV__ &&
-      (desc = Object.getOwnPropertyDescriptor(refs, key)) &&
-      !desc.configurable
-    ) {
+    if (__DEV__ && isUseTemplateRefKey(refs, key)) {
       warn(`useTemplateRef('${key}') already exists.`)
     } else {
       Object.defineProperty(refs, key, {
@@ -38,3 +33,10 @@ export function useTemplateRef<T = unknown, Keys extends string = string>(
   }
   return ret
 }
+
+export function isUseTemplateRefKey(refs: Data, key: string): boolean {
+  let desc: PropertyDescriptor | undefined
+  return !!(
+    (desc = Object.getOwnPropertyDescriptor(refs, key)) && !desc.configurable
+  )
+}
diff --git a/packages/runtime-core/src/rendererTemplateRef.ts b/packages/runtime-core/src/rendererTemplateRef.ts
index ca21030dc35..664cea6e687 100644
--- a/packages/runtime-core/src/rendererTemplateRef.ts
+++ b/packages/runtime-core/src/rendererTemplateRef.ts
@@ -16,7 +16,10 @@ import { ErrorCodes, callWithErrorHandling } from './errorHandling'
 import type { SchedulerJob } from './scheduler'
 import { queuePostRenderEffect } from './renderer'
 import { type ComponentOptions, getComponentPublicInstance } from './component'
-import { knownTemplateRefs } from './helpers/useTemplateRef'
+import {
+  isUseTemplateRefKey,
+  knownTemplateRefs,
+} from './helpers/useTemplateRef'
 
 /**
  * Function for handling a template ref
@@ -91,6 +94,12 @@ export function setRef(
               return false
             }
           }
+
+          // skip setting up ref if the key is from useTemplateRef
+          if (isUseTemplateRefKey(refs, key)) {
+            return false
+          }
+
           return hasOwn(rawSetupState, key)
         }