diff --git a/src/PkgTemplates.jl b/src/PkgTemplates.jl
index d6769d0e..d8a0312d 100644
--- a/src/PkgTemplates.jl
+++ b/src/PkgTemplates.jl
@@ -40,4 +40,15 @@ include("generate.jl")
 include("plugin.jl")
 include("interactive.jl")
 
+# Run some function with a project activated at the given path.
+function with_project(f::Function, path::AbstractString)
+    proj = current_project()
+    try
+        Pkg.activate(path)
+        f()
+    finally
+        proj === nothing ? Pkg.activate() : Pkg.activate(proj)
+    end
+end
+
 end
diff --git a/src/generate.jl b/src/generate.jl
index 7a1716d5..0c240e81 100644
--- a/src/generate.jl
+++ b/src/generate.jl
@@ -57,6 +57,13 @@ function (t::Template)(pkg::AbstractString)
             Pkg.develop(PackageSpec(; path=pkg_dir))
         end
 
+        manifest = joinpath(pkg_dir, "Manifest.toml")
+        if t.manifest && !isfile(manifest)
+            # If the manifest is going to be committed, make sure it's generated.
+            touch(manifest)
+            with_project(Pkg.update, pkg_dir)
+        end
+
         @info "New package is at $pkg_dir"
     catch
         rm(pkg_dir; recursive=true, force=true)
diff --git a/src/plugins/defaults.jl b/src/plugins/defaults.jl
index fdc14191..e69ecf9c 100644
--- a/src/plugins/defaults.jl
+++ b/src/plugins/defaults.jl
@@ -1,4 +1,5 @@
 const TEST_UUID = "8dfed614-e22c-5e08-85e1-65c5234f0b40"
+const TEST_DEP = PackageSpec(; name="Test", uuid=TEST_UUID)
 const LICENSE_DIR = normpath(joinpath(@__DIR__, "..", "..", "licenses"))
 const LICENSES = Dict(
     "MIT" => "MIT \"Expat\" License",
@@ -143,15 +144,21 @@ function gen_plugin(p::Gitignore, t::Template, pkg_dir::AbstractString)
 end
 
 """
-    Tests(; file="$(contractuser(default_file("runtests.jl")))" -> Tests
+    Tests(; file="$(contractuser(default_file("runtests.jl")))", project=false)
 
 Sets up testing for packages.
 
 ## Keyword Arguments
 - `file::AbstractString`: Template file for the `runtests.jl`.
+- `project::Bool`: Whether or not to create a new project for tests (`test/Project.toml`).
+  See [here](https://julialang.github.io/Pkg.jl/v1/creating-packages/#Test-specific-dependencies-in-Julia-1.2-and-above-1) for more details.
+
+!!! note
+    Managing test dependencies with `test/Project.toml` is only supported in Julia 1.2 and later.
 """
 @with_kw_noshow struct Tests <: BasicPlugin
     file::String = default_file("runtests.jl")
+    project::Bool = false
 end
 
 source(p::Tests) = p.file
@@ -162,21 +169,27 @@ function gen_plugin(p::Tests, t::Template, pkg_dir::AbstractString)
     # Do the normal BasicPlugin behaviour to create the test script.
     invoke(gen_plugin, Tuple{BasicPlugin, Template, AbstractString}, p, t, pkg_dir)
 
-    # Add Test as a test-only dependency.
+    # Then set up the test depdendency in the chosen way.
+    f = p.project ? make_test_project : add_test_dependency
+    f(pkg_dir)
+end
+
+# Create a new test project.
+function make_test_project(pkg_dir::AbstractString)
+    with_project(() -> Pkg.add(TEST_DEP), joinpath(pkg_dir, "test"))
+end
+
+# Add Test as a test-only dependency.
+function add_test_dependency(pkg_dir::AbstractString)
+    # Add the dependency manually since there's no programmatic way to add to [extras].
     path = joinpath(pkg_dir, "Project.toml")
     toml = TOML.parsefile(path)
     get!(toml, "extras", Dict())["Test"] = TEST_UUID
     get!(toml, "targets", Dict())["test"] = ["Test"]
     open(io -> TOML.print(io, toml), path, "w")
 
-    # Generate the manifest.
+    # Generate the manifest by updating the project.
     # This also ensures that keys in Project.toml are sorted properly.
     touch(joinpath(pkg_dir, "Manifest.toml"))  # File must exist to be modified by Pkg.
-    proj = current_project()
-    try
-        Pkg.activate(pkg_dir)
-        Pkg.update()
-    finally
-        proj === nothing ? Pkg.activate() : Pkg.activate(proj)
-    end
+    with_project(Pkg.update, pkg_dir)
 end
diff --git a/src/plugins/documenter.jl b/src/plugins/documenter.jl
index dc61dd01..3ff2ac18 100644
--- a/src/plugins/documenter.jl
+++ b/src/plugins/documenter.jl
@@ -1,4 +1,7 @@
-const DOCUMENTER_UUID = "e30172f5-a6a5-5a46-863b-614d45cd2de4"
+const DOCUMENTER_DEP = PackageSpec(;
+    name="Documenter",
+    uuid="e30172f5-a6a5-5a46-863b-614d45cd2de4",
+)
 
 """
     Documenter{T<:Union{TravisCI, GitLabCI, Nothing}}(;
@@ -98,13 +101,7 @@ function gen_plugin(p::Documenter, t::Template, pkg_dir::AbstractString)
     foreach(a -> cp(a, joinpath(assets_dir, basename(a))), p.assets)
 
     # Create the documentation project.
-    proj = current_project()
-    try
-        Pkg.activate(docs_dir)
-        Pkg.add(PackageSpec(; name="Documenter", uuid=DOCUMENTER_UUID))
-    finally
-        proj === nothing ? Pkg.activate() : Pkg.activate(proj)
-    end
+    with_project(() -> Pkg.add(DOCUMENTER_DEP), docs_dir)
 end
 
 github_pages_url(t::Template, pkg::AbstractString) = "https://$(t.user).github.io/$pkg.jl"
diff --git a/src/template.jl b/src/template.jl
index 8ef31542..da175bf2 100644
--- a/src/template.jl
+++ b/src/template.jl
@@ -89,13 +89,21 @@ function Template(::Val{false}; kwargs...)
     # which means that default plugins get replaced by user values.
     plugins = Dict(typeof(p) => p for p in enabled)
 
+    # TODO: It might be nice to offer some kind of warn_incompatible function
+    # to be optionally implented by plugins instead of hardcoding this case here.
+    julia = getkw(kwargs, :julia_version)
+    julia < v"1.2" && haskey(plugins, Tests) && plugins[Tests].project && @warn string(
+        "The Tests plugin is set to create a project (supported in Julia 1.2 and later)",
+        "but a Julia version older than 1.2 is supported.",
+    )
+
     return Template(
         authors,
         getkw(kwargs, :develop),
         dir,
         getkw(kwargs, :git),
         host,
-        getkw(kwargs, :julia_version),
+        julia,
         getkw(kwargs, :manifest),
         plugins,
         getkw(kwargs, :ssh),
diff --git a/test/fixtures/AllPlugins/README.md.txt b/test/fixtures/AllPlugins/README.md.txt
index 35d94a0f..44735f9f 100644
--- a/test/fixtures/AllPlugins/README.md.txt
+++ b/test/fixtures/AllPlugins/README.md.txt
@@ -7,7 +7,3 @@
 [![Build Status](https://api.cirrus-ci.com/github/tester/.jl.svg)](https://cirrus-ci.com/github/tester/AllPlugins.jl)
 [![Coverage](https://codecov.io/gh//.jl/branch/master/graph/badge.svg)](https://codecov.io/gh//.jl)
 [![Coverage](https://coveralls.io/repos/github//.jl/badge.svg?branch=master)](https://coveralls.io/github//.jl?branch=master)
-
-## Citing
-
-See [`CITATION.bib`](CITATION.bib) for the relevant reference(s).
diff --git a/test/show.jl b/test/show.jl
index b51aba8f..b48fe7ff 100644
--- a/test/show.jl
+++ b/test/show.jl
@@ -37,6 +37,7 @@ const LICENSE_DIR = contractuser(PT.LICENSE_DIR)
                   inline_badges: false
                 Tests:
                   file: "$DEFAULTS_DIR/runtests.jl"
+                  project: false
             """
         @test sprint(show, MIME("text/plain"), tpl(; authors=USER)) == rstrip(expected)
     end