diff --git a/esphome/dashboard/settings.py b/esphome/dashboard/settings.py
index 76633e1bf2..61718298d2 100644
--- a/esphome/dashboard/settings.py
+++ b/esphome/dashboard/settings.py
@@ -3,6 +3,7 @@ from __future__ import annotations
 import hmac
 import os
 from pathlib import Path
+from typing import Any
 
 from esphome.core import CORE
 from esphome.helpers import get_bool_env
@@ -69,7 +70,8 @@ class DashboardSettings:
         # Compare password in constant running time (to prevent timing attacks)
         return hmac.compare_digest(self.password_hash, password_hash(password))
 
-    def rel_path(self, *args):
+    def rel_path(self, *args: Any) -> str:
+        """Return a path relative to the ESPHome config folder."""
         joined_path = os.path.join(self.config_dir, *args)
         # Raises ValueError if not relative to ESPHome config folder
         Path(joined_path).resolve().relative_to(self.absolute_config_dir)
diff --git a/esphome/dashboard/util/file.py b/esphome/dashboard/util/file.py
new file mode 100644
index 0000000000..5f3c5f5f1b
--- /dev/null
+++ b/esphome/dashboard/util/file.py
@@ -0,0 +1,55 @@
+import logging
+import os
+import tempfile
+from pathlib import Path
+
+_LOGGER = logging.getLogger(__name__)
+
+
+def write_utf8_file(
+    filename: Path,
+    utf8_str: str,
+    private: bool = False,
+) -> None:
+    """Write a file and rename it into place.
+
+    Writes all or nothing.
+    """
+    write_file(filename, utf8_str.encode("utf-8"), private)
+
+
+# from https://github.com/home-assistant/core/blob/dev/homeassistant/util/file.py
+def write_file(
+    filename: Path,
+    utf8_data: bytes,
+    private: bool = False,
+) -> None:
+    """Write a file and rename it into place.
+
+    Writes all or nothing.
+    """
+
+    tmp_filename = ""
+    try:
+        # Modern versions of Python tempfile create this file with mode 0o600
+        with tempfile.NamedTemporaryFile(
+            mode="wb", dir=os.path.dirname(filename), delete=False
+        ) as fdesc:
+            fdesc.write(utf8_data)
+            tmp_filename = fdesc.name
+            if not private:
+                os.fchmod(fdesc.fileno(), 0o644)
+        os.replace(tmp_filename, filename)
+    finally:
+        if os.path.exists(tmp_filename):
+            try:
+                os.remove(tmp_filename)
+            except OSError as err:
+                # If we are cleaning up then something else went wrong, so
+                # we should suppress likely follow-on errors in the cleanup
+                _LOGGER.error(
+                    "File replacement cleanup failed for %s while saving %s: %s",
+                    tmp_filename,
+                    filename,
+                    err,
+                )
diff --git a/esphome/dashboard/web_server.py b/esphome/dashboard/web_server.py
index 9972808948..8901da095f 100644
--- a/esphome/dashboard/web_server.py
+++ b/esphome/dashboard/web_server.py
@@ -38,6 +38,7 @@ from esphome.yaml_util import FastestAvailableSafeLoader
 
 from .core import DASHBOARD
 from .entries import EntryState, entry_state_to_bool
+from .util.file import write_file
 from .util.subprocess import async_run_system_command
 from .util.text import friendly_name_slugify
 
@@ -524,9 +525,19 @@ class DownloadListRequestHandler(BaseHandler):
 
 
 class DownloadBinaryRequestHandler(BaseHandler):
+    def _load_file(self, path: str, compressed: bool) -> bytes:
+        """Load a file from disk and compress it if requested."""
+        with open(path, "rb") as f:
+            data = f.read()
+            if compressed:
+                return gzip.compress(data, 9)
+            return data
+
     @authenticated
     @bind_config
-    async def get(self, configuration=None):
+    async def get(self, configuration: str | None = None):
+        """Download a binary file."""
+        loop = asyncio.get_running_loop()
         compressed = self.get_argument("compressed", "0") == "1"
 
         storage_path = ext_storage_path(configuration)
@@ -583,11 +594,8 @@ class DownloadBinaryRequestHandler(BaseHandler):
             self.send_error(404)
             return
 
-        with open(path, "rb") as f:
-            data = f.read()
-            if compressed:
-                data = gzip.compress(data, 9)
-            self.write(data)
+        data = await loop.run_in_executor(None, self._load_file, path, compressed)
+        self.write(data)
 
         self.finish()
 
@@ -746,19 +754,35 @@ class InfoRequestHandler(BaseHandler):
 class EditRequestHandler(BaseHandler):
     @authenticated
     @bind_config
-    def get(self, configuration=None):
+    async def get(self, configuration: str | None = None):
+        """Get the content of a file."""
+        loop = asyncio.get_running_loop()
         filename = settings.rel_path(configuration)
-        content = ""
-        if os.path.isfile(filename):
-            with open(file=filename, encoding="utf-8") as f:
-                content = f.read()
+        content = await loop.run_in_executor(None, self._read_file, filename)
         self.write(content)
 
+    def _read_file(self, filename: str) -> bytes:
+        """Read a file and return the content as bytes."""
+        with open(file=filename, encoding="utf-8") as f:
+            return f.read()
+
+    def _write_file(self, filename: str, content: bytes) -> None:
+        """Write a file with the given content."""
+        write_file(filename, content)
+
     @authenticated
     @bind_config
-    def post(self, configuration=None):
-        with open(file=settings.rel_path(configuration), mode="wb") as f:
-            f.write(self.request.body)
+    async def post(self, configuration: str | None = None):
+        """Write the content of a file."""
+        loop = asyncio.get_running_loop()
+        config_file = settings.rel_path(configuration)
+        await loop.run_in_executor(
+            None, self._write_file, config_file, self.request.body
+        )
+        # Ensure the StorageJSON is updated as well
+        await async_run_system_command(
+            [*DASHBOARD_COMMAND, "compile", "--only-generate", config_file]
+        )
         self.set_status(200)
 
 
diff --git a/tests/dashboard/__init__.py b/tests/dashboard/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/dashboard/util/__init__.py b/tests/dashboard/util/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/dashboard/util/test_file.py b/tests/dashboard/util/test_file.py
new file mode 100644
index 0000000000..89e6b97086
--- /dev/null
+++ b/tests/dashboard/util/test_file.py
@@ -0,0 +1,53 @@
+import os
+from pathlib import Path
+from unittest.mock import patch
+
+import py
+import pytest
+
+from esphome.dashboard.util.file import write_file, write_utf8_file
+
+
+def test_write_utf8_file(tmp_path: Path) -> None:
+    write_utf8_file(tmp_path.joinpath("foo.txt"), "foo")
+    assert tmp_path.joinpath("foo.txt").read_text() == "foo"
+
+    with pytest.raises(OSError):
+        write_utf8_file(Path("/not-writable"), "bar")
+
+
+def test_write_file(tmp_path: Path) -> None:
+    write_file(tmp_path.joinpath("foo.txt"), b"foo")
+    assert tmp_path.joinpath("foo.txt").read_text() == "foo"
+
+
+def test_write_utf8_file_fails_at_rename(
+    tmpdir: py.path.local, caplog: pytest.LogCaptureFixture
+) -> None:
+    """Test that if rename fails not not remove, we do not log the failed cleanup."""
+    test_dir = tmpdir.mkdir("files")
+    test_file = Path(test_dir / "test.json")
+
+    with pytest.raises(OSError), patch(
+        "esphome.dashboard.util.file.os.replace", side_effect=OSError
+    ):
+        write_utf8_file(test_file, '{"some":"data"}', False)
+
+    assert not os.path.exists(test_file)
+
+    assert "File replacement cleanup failed" not in caplog.text
+
+
+def test_write_utf8_file_fails_at_rename_and_remove(
+    tmpdir: py.path.local, caplog: pytest.LogCaptureFixture
+) -> None:
+    """Test that if rename and remove both fail, we log the failed cleanup."""
+    test_dir = tmpdir.mkdir("files")
+    test_file = Path(test_dir / "test.json")
+
+    with pytest.raises(OSError), patch(
+        "esphome.dashboard.util.file.os.remove", side_effect=OSError
+    ), patch("esphome.dashboard.util.file.os.replace", side_effect=OSError):
+        write_utf8_file(test_file, '{"some":"data"}', False)
+
+    assert "File replacement cleanup failed" in caplog.text