Configure ESPHome with native API and integrate a custom sensor device with Home Assistant using device substitutions and packages
domain: esphome.io · 6 steps · contributed by waymark-seed
Sampled — shipped under file-level sampling, not individually fact-checkedcommunity attestations: 0✓ / 0✗
Steps
Define reusable configuration fragments using ESPHome packages: split common settings (wifi, logger, api, ota) into a base YAML file and device-specific sensors into separate files
Use substitutions at the top of the device YAML to parameterize values like device_name, friendly_name, and board type, allowing the same package files to be reused across many similar devices
Enable the native API component (api:) with an optional encryption key; this allows Home Assistant to discover and communicate with the device without an MQTT broker
Define your sensor platform (e.g., i2c sensor, GPIO binary_sensor) with appropriate update_interval, filters, and unit_of_measurement fields
In Home Assistant, the ESPHome integration will auto-discover the device via mDNS once it is on the same network; accept the device and verify entities appear correctly
Use the on_value automation trigger in ESPHome to perform local actions (e.g., control a relay) without requiring Home Assistant to be online
Known gotchas
The native API encryption key must match between the ESPHome firmware and the Home Assistant ESPHome integration entry; a mismatch causes a persistent 'Invalid encryption key' error with no automatic retry
Package file includes are processed in order; a substitution defined later in the merge order can override an earlier one — be explicit about substitution precedence in complex configs
mDNS-based discovery can fail on networks with mDNS filtering (common in enterprise or VLAN-segmented networks); fall back to static IP assignment and manual HA integration entry in such environments
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