diff --git a/app/controllers/miq_policy_controller/miq_actions.rb b/app/controllers/miq_policy_controller/miq_actions.rb
index d8e58d0865a3..5540cec938ea 100644
--- a/app/controllers/miq_policy_controller/miq_actions.rb
+++ b/app/controllers/miq_policy_controller/miq_actions.rb
@@ -289,6 +289,7 @@ def action_build_edit_screen
     @edit[:cats] = MiqAction.inheritable_cats.sort_by { |c| c.description.downcase }.collect { |c| [c.name, c.description] }
 
     @edit[:ansible_playbooks] = ServiceTemplateAnsiblePlaybook.order(:name).pluck(:name, :id) || {}
+    @edit[:new][:inventory_type] = 'localhost'
     action_build_playbook_variables if @action.action_type == "run_ansible_playbook"
 
     @edit[:current] = copy_hash(@edit[:new])
@@ -345,7 +346,10 @@ def action_set_record_vars(action)
   def action_build_playbook_variables
     @edit[:new][:inventory_type] = 'manual' if @edit[:new][:options][:hosts]
     @edit[:new][:inventory_type] = 'event_target' if @edit[:new][:options][:use_event_target]
-    @edit[:new][:inventory_type] ||= 'localhost'
+    if @edit[:new][:inventory_type].nil? ||  @edit[:new][:inventory_type].empty?
+      @edit[:new][:inventory_type] = 'localhost'
+      @edit[:new][:options][:localhost] = true
+    end
   end
 
   # Check action record variables