diff --git a/CHANGELOG.md b/CHANGELOG.md
index 61dc143a..7b08f6ca 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,7 +7,9 @@ and this project adheres to [Semantic Versioning](http://semver.org/spec/v2.0.0.
 
 ## \[Unreleased\]
 
-- Nothing yet.
+### Fixed
+
+- `heredocs_to_strings` writes the heredoc's value rather than its own text. It was quoting the source -- markers and all -- so `<<EOT\nhello\nEOT` became `"<<EOT\nhello\nEOT"`, a quoted string spanning three physical lines. A quoted template cannot span lines, so OpenTofu rejects that with "Invalid multi-line string", and reading it back here gave the marker text rather than the value: neither a valid file nor the right content. It now reuses the flattening the reader already performs, so the two cannot drift. ([#337](https://github.com/amplify-education/python-hcl2/issues/337))
 
 ## \[8.1.3\] - 2026-08-26
 
diff --git a/hcl2/deserializer.py b/hcl2/deserializer.py
index 667e0b20..8d0b974b 100644
--- a/hcl2/deserializer.py
+++ b/hcl2/deserializer.py
@@ -61,7 +61,7 @@
     IntLiteral,
 )
 from hcl2.transformer import RuleTransformer
-from hcl2.utils import HEREDOC_PATTERN, HEREDOC_TRIM_PATTERN
+from hcl2.utils import HEREDOC_PATTERN, HEREDOC_TRIM_PATTERN, SerializationOptions
 
 
 @dataclass
@@ -168,15 +168,15 @@ def _deserialize_text(self, value: Any) -> LarkRule:
 
         if isinstance(value, str):
             if value.startswith('"') and value.endswith('"'):
-                if not self.options.heredocs_to_strings and value.startswith('"<<-'):
-                    match = HEREDOC_TRIM_PATTERN.match(value[1:-1])
-                    if match:
+                if value.startswith('"<<-') and HEREDOC_TRIM_PATTERN.match(value[1:-1]):
+                    if not self.options.heredocs_to_strings:
                         return self._deserialize_heredoc(value[1:-1], True)
+                    return self._deserialize_string(self._heredoc_as_quoted(value[1:-1], True))
 
-                if not self.options.heredocs_to_strings and value.startswith('"<<'):
-                    match = HEREDOC_PATTERN.match(value[1:-1])
-                    if match:
+                if value.startswith('"<<') and HEREDOC_PATTERN.match(value[1:-1]):
+                    if not self.options.heredocs_to_strings:
                         return self._deserialize_heredoc(value[1:-1], False)
+                    return self._deserialize_string(self._heredoc_as_quoted(value[1:-1], False))
 
                 if self.options.strings_to_heredocs:
                     inner = value[1:-1]
@@ -252,6 +252,24 @@ def _deserialize_string_part(self, value: str) -> StringPartRule:
 
         return StringPartRule([STRING_CHARS(value)])
 
+    def _heredoc_as_quoted(self, heredoc: str, trim: bool) -> str:
+        """Return the quoted-string source for *heredoc*'s value.
+
+        Not by quoting the heredoc's own text: that is what this option used to
+        do, and it produced `"<<EOT\nhello\nEOT"` -- a quoted string spanning
+        three physical lines, markers and all. A quoted template cannot span
+        lines, so OpenTofu rejects it with "Invalid multi-line string", and
+        reading it back here gave the marker text rather than the value.
+
+        The flattening the reader already performs is reused rather than
+        written a second time, so the two cannot drift: serializing the rule
+        with `preserve_heredocs=False` is exactly the quoted form
+        `preserve_heredocs=False` produces on the way in.
+        """
+        rule = self._deserialize_heredoc(heredoc, trim)
+        quoted: str = rule.serialize(SerializationOptions(preserve_heredocs=False))
+        return quoted
+
     def _deserialize_heredoc(
         self, value: str, trim: bool
     ) -> Union[HeredocTemplateRule, HeredocTrimTemplateRule]:
diff --git a/test/unit/test_heredocs_to_strings.py b/test/unit/test_heredocs_to_strings.py
new file mode 100644
index 00000000..0b7ce646
--- /dev/null
+++ b/test/unit/test_heredocs_to_strings.py
@@ -0,0 +1,71 @@
+# pylint: disable=C0103,C0114,C0115,C0116
+r"""`heredocs_to_strings` writes a value, not the heredoc's own text (GH #337).
+
+The option converts a heredoc into a quoted string. It was quoting the
+heredoc's *source* -- markers and all -- across as many physical lines as the
+original occupied:
+
+    a = "<<EOT
+    hello
+    EOT"
+
+A quoted template cannot span lines, so OpenTofu rejects that with "Invalid
+multi-line string", and reading it back here gave the marker text rather than
+the value. Neither a valid file nor the right content.
+
+The flattening the reader already performs is reused rather than written a
+second time, so the two cannot drift.
+"""
+
+from unittest import TestCase
+
+from hcl2.api import dumps, loads
+from hcl2.deserializer import DeserializerOptions
+
+STRINGS = DeserializerOptions(heredocs_to_strings=True)
+
+
+class TestTheOutputIsAQuotedValue(TestCase):
+    def _convert(self, source: str) -> str:
+        return dumps(loads(source), deserializer_options=STRINGS)
+
+    def test_a_plain_heredoc(self):
+        self.assertEqual(self._convert("a = <<EOT\nhello\nEOT\n"), 'a = "hello"\n')
+
+    def test_a_trimmed_heredoc(self):
+        self.assertEqual(self._convert("a = <<-EOT\n  indented\n  EOT\n"), 'a = "indented"\n')
+
+    def test_quotes_in_the_body_are_escaped(self):
+        self.assertEqual(self._convert('a = <<EOT\nsay "hi"\nEOT\n'), 'a = "say \\"hi\\""\n')
+
+    def test_the_result_is_one_line(self):
+        for source in ("a = <<EOT\nhello\nEOT\n", "a = <<EOT\none\ntwo\nEOT\n"):
+            with self.subTest(source=source):
+                written = self._convert(source)
+                self.assertEqual(written.count("\n"), 1, written)
+
+    def test_the_result_parses_again(self):
+        for source in (
+            "a = <<EOT\nhello\nEOT\n",
+            'a = <<EOT\nsay "hi"\nEOT\n',
+            "a = <<EOT\none\ntwo\nEOT\n",
+            "a = <<-EOT\n  indented\n  EOT\n",
+        ):
+            with self.subTest(source=source):
+                loads(self._convert(source))
+
+    def test_no_marker_survives_into_the_output(self):
+        written = self._convert("a = <<EOT\nhello\nEOT\n")
+        self.assertNotIn("EOT", written)
+        self.assertNotIn("<<", written)
+
+
+class TestTheOptionOffIsUnchanged(TestCase):
+    def test_a_heredoc_stays_a_heredoc(self):
+        source = "a = <<EOT\nhello\nEOT\n"
+        self.assertEqual(dumps(loads(source)), source)
+
+    def test_a_plain_string_is_unaffected_either_way(self):
+        source = 'a = "hello"\n'
+        self.assertEqual(dumps(loads(source), deserializer_options=STRINGS), source)
+        self.assertEqual(dumps(loads(source)), source)