Template matching is a fundamental building block for image search operations. In this paper, we present a scheme that allows privacy-preserving template matching operations on images that are stored on clouds. Our scheme uses “ambient image data” (images that are found in social media sites such as Flickr) as well as a privacy-preserving encoding technique to encode a given image before it is stored in a cloud. We show a particular encoding strategy that allows template matching to take place in the cloud while not revealing any information about the image or queried template to the cloud. A simplified prototype of the image processing system was implemented and the experimental results are presented in this paper. Our prototype shows the feasibility of performing privacy-aware template matching on encoded images.