diff --git a/lib/puppet/parser/functions/loadyaml.rb b/lib/puppet/parser/functions/loadyaml.rb
index bb2a7b00a..22bceb72b 100644
--- a/lib/puppet/parser/functions/loadyaml.rb
+++ b/lib/puppet/parser/functions/loadyaml.rb
@@ -49,9 +49,12 @@ module Puppet::Parser::Functions
           warning("Can't load '#{url}' HTTP Error Code: '#{res.status[0]}'")
           args[1]
         end
-        YAML.safe_load(contents) || args[1]
+        YAML.safe_load(contents, aliases: true) || args[1]
       elsif File.exist?(args[0])
-        YAML.load_file(args[0]) || args[1]
+        # Read the file first rather than calling YAML.load_file as ruby2.7
+        # doesn't support the aliases option on YAML.load_file
+        contents = File.read(args[0])
+        YAML.safe_load(contents, aliases: true) || args[1]
       else
         warning("Can't load '#{args[0]}' File does not exist!")
         args[1]
diff --git a/spec/functions/loadyaml_spec.rb b/spec/functions/loadyaml_spec.rb
index 99e87d8a9..0eff7100e 100644
--- a/spec/functions/loadyaml_spec.rb
+++ b/spec/functions/loadyaml_spec.rb
@@ -12,30 +12,48 @@
     it "'default' => 'value'" do
       allow(File).to receive(:exist?).and_call_original
       expect(File).to receive(:exist?).with(filename).and_return(false).once
-      expect(YAML).not_to receive(:load_file)
+      expect(YAML).not_to receive(:safe_load)
       expect(subject).to run.with_params(filename, 'default' => 'value').and_return('default' => 'value')
     end
   end
 
   context 'when an existing file is specified' do
-    let(:filename) { '/tmp/doesexist' }
+    let(:tempfile) { Tempfile.new }
+    let(:filename) { tempfile.path }
     let(:data) { { 'key' => 'value', 'ķęŷ' => 'νậŀųề', 'キー' => '値' } }
+    let(:yaml) do
+      <<~YAML
+        key: 'value'
+        ķęŷ: 'νậŀųề'
+        キー: '値'
+      YAML
+    end
 
     it "returns 'key' => 'value', 'ķęŷ' => 'νậŀųề', 'キー' => '値'" do
+      tempfile.write(yaml)
+      tempfile.rewind
       allow(File).to receive(:exist?).and_call_original
       expect(File).to receive(:exist?).with(filename).and_return(true).once
-      expect(YAML).to receive(:load_file).with(filename).and_return(data).once
+      expect(YAML).to receive(:safe_load).and_call_original
       expect(subject).to run.with_params(filename).and_return(data)
     end
   end
 
-  context 'when the file could not be parsed' do
-    let(:filename) { '/tmp/doesexist' }
+  context 'when the file could not be parsed, with default specified' do
+    let(:tempfile) { Tempfile.new }
+    let(:filename) { tempfile.path }
+    let(:yaml) do
+      <<~YAML
+        ,,,,
+      YAML
+    end
 
-    it 'filename /tmp/doesexist' do
+    it 'is expected to return the default value' do
+      tempfile.write(yaml)
+      tempfile.rewind
       allow(File).to receive(:exist?).and_call_original
       expect(File).to receive(:exist?).with(filename).and_return(true).once
-      allow(YAML).to receive(:load_file).with(filename).once.and_raise(StandardError, 'Something terrible have happened!')
+      allow(YAML).to receive(:safe_load).with(yaml, aliases: true).once.and_raise(StandardError, 'Something terrible have happened!')
       expect(subject).to run.with_params(filename, 'default' => 'value').and_return('default' => 'value')
     end
   end
@@ -48,7 +66,7 @@
 
     it {
       expect(OpenURI).to receive(:open_uri).with(filename, basic_auth).and_return(yaml)
-      expect(YAML).to receive(:safe_load).with(yaml).and_return(data).once
+      expect(YAML).to receive(:safe_load).with(yaml, aliases: true).and_return(data).once
       expect(subject).to run.with_params(filename).and_return(data)
     }
   end
@@ -62,7 +80,7 @@
 
     it {
       expect(OpenURI).to receive(:open_uri).with(url_no_auth, basic_auth).and_return(yaml)
-      expect(YAML).to receive(:safe_load).with(yaml).and_return(data).once
+      expect(YAML).to receive(:safe_load).with(yaml, aliases: true).and_return(data).once
       expect(subject).to run.with_params(filename).and_return(data)
     }
   end
@@ -76,7 +94,7 @@
 
     it {
       expect(OpenURI).to receive(:open_uri).with(url_no_auth, basic_auth).and_return(yaml)
-      expect(YAML).to receive(:safe_load).with(yaml).and_return(data).once
+      expect(YAML).to receive(:safe_load).with(yaml, aliases: true).and_return(data).once
       expect(subject).to run.with_params(filename).and_return(data)
     }
   end
@@ -88,7 +106,7 @@
 
     it {
       expect(OpenURI).to receive(:open_uri).with(filename, basic_auth).and_return(yaml)
-      expect(YAML).to receive(:safe_load).with(yaml).and_raise StandardError, 'Cannot parse data'
+      expect(YAML).to receive(:safe_load).with(yaml, aliases: true).and_raise StandardError, 'Cannot parse data'
       expect(subject).to run.with_params(filename, 'default' => 'value').and_return('default' => 'value')
     }
   end
@@ -103,4 +121,43 @@
       expect(subject).to run.with_params(filename, 'default' => 'value').and_return('default' => 'value')
     }
   end
+
+  context 'when the file contains aliases' do
+    let(:tempfile) { Tempfile.new }
+    let(:filename) { tempfile.path }
+    let(:yaml) do
+      <<~YAML
+        some_numbers: &nums
+          - one
+          - two
+        more_numbers: *nums
+      YAML
+    end
+    let(:data) { { 'some_numbers' => ['one', 'two'], 'more_numbers' => ['one', 'two'] } }
+
+    it 'parses the aliases' do
+      tempfile.write(yaml)
+      tempfile.rewind
+      expect(subject).to run.with_params(filename).and_return(data)
+    end
+  end
+
+  context 'when a URL returns yaml with aliases' do
+    let(:filename) { 'https://example.local/myhash.yaml' }
+    let(:basic_auth) { { http_basic_authentication: ['', ''] } }
+    let(:yaml) do
+      <<~YAML
+        some_numbers: &nums
+          - one
+          - two
+        more_numbers: *nums
+      YAML
+    end
+    let(:data) { { 'some_numbers' => ['one', 'two'], 'more_numbers' => ['one', 'two'] } }
+
+    it {
+      expect(OpenURI).to receive(:open_uri).with(filename, basic_auth).and_return(yaml)
+      expect(subject).to run.with_params(filename).and_return(data)
+    }
+  end
 end