diff --git a/packages/e2e-tests/plugins/block-hooks.php b/packages/e2e-tests/plugins/block-hooks.php
new file mode 100644
index 0000000000000..3490595477055
--- /dev/null
+++ b/packages/e2e-tests/plugins/block-hooks.php
@@ -0,0 +1,74 @@
+<?php
+/**
+ * Plugin Name: Gutenberg Test Block Hooks
+ * Plugin URI: https://github.com/WordPress/gutenberg
+ * Author: Gutenberg Team
+ *
+ * @package gutenberg-test-block-hooks
+ */
+
+defined( 'ABSPATH' ) || exit;
+
+function gutenberg_test_insert_hooked_blocks( $hooked_blocks, $position, $anchor_block, $context ) {
+	if ( ! $context instanceof WP_Post ) {
+		return $hooked_blocks;
+	}
+
+	if (
+		( 'core/heading' === $anchor_block && 'after' === $position ) ||
+		( 'core/post-content' === $anchor_block && 'last_child' === $position ) ||
+		( 'core/block' === $anchor_block && 'last_child' === $position )
+	) {
+		$hooked_blocks[] = 'core/paragraph';
+	}
+
+	if ( 'core/navigation' === $anchor_block && 'first_child' === $position ) {
+		$hooked_blocks[] = 'core/home-link';
+	}
+
+	if ( 'core/navigation-link' === $anchor_block && 'after' === $position ) {
+		$hooked_blocks[] = 'core/page-list';
+	}
+
+	return $hooked_blocks;
+}
+add_filter( 'hooked_block_types', 'gutenberg_test_insert_hooked_blocks', 10, 4 );
+
+function gutenberg_test_set_hooked_block_inner_html( $hooked_block, $hooked_block_type, $relative_position, $anchor_block ) {
+	if (
+		( 'core/heading' === $anchor_block['blockName'] && 'after' === $relative_position ) ||
+		( 'core/post-content' === $anchor_block['blockName'] && 'last_child' === $relative_position ) ||
+		( 'core/block' === $anchor_block['blockName'] && 'last_child' === $relative_position )
+	) {
+		$hooked_block['attrs']        = array(
+			'className' => "hooked-block-{$relative_position}-" . str_replace( 'core/', '', $anchor_block['blockName'] ),
+		);
+		$hooked_block['innerContent'] = array(
+			sprintf(
+				'<p class="%1$s">This block was inserted by the Block Hooks API in the <code>%2$s</code> position next to the <code>%3$s</code> anchor block.</p>',
+				$hooked_block['attrs']['className'],
+				$relative_position,
+				$anchor_block['blockName']
+			),
+		);
+	}
+
+	return $hooked_block;
+}
+add_filter( 'hooked_block_core/paragraph', 'gutenberg_test_set_hooked_block_inner_html', 10, 4 );
+
+function gutenberg_register_wp_ignored_hooked_blocks_meta() {
+	register_post_meta(
+		'post',
+		'_wp_ignored_hooked_blocks',
+		array(
+			'show_in_rest'  => true,
+			'single'        => true,
+			'type'          => 'string',
+			'auth_callback' => function () {
+				return current_user_can( 'edit_posts' );
+			},
+		)
+	);
+}
+add_action( 'rest_api_init', 'gutenberg_register_wp_ignored_hooked_blocks_meta' );
diff --git a/test/e2e/specs/editor/plugins/block-hooks.spec.js b/test/e2e/specs/editor/plugins/block-hooks.spec.js
new file mode 100644
index 0000000000000..5289f2a2d86bb
--- /dev/null
+++ b/test/e2e/specs/editor/plugins/block-hooks.spec.js
@@ -0,0 +1,292 @@
+/**
+ * WordPress dependencies
+ */
+const { test, expect } = require( '@wordpress/e2e-test-utils-playwright' );
+
+const dummyBlockContent = `<!-- wp:heading -->
+<h2 class="wp-block-heading">This is a dummy heading</h2>
+<!-- /wp:heading -->
+<!-- wp:paragraph {"className":"dummy-paragraph"} -->
+<p class="dummy-paragraph">This is a dummy paragraph.</p>
+<!-- /wp:paragraph -->`;
+
+const getHookedBlockClassName = ( relativePosition, anchorBlock ) =>
+	`hooked-block-${ relativePosition }-${ anchorBlock.replace(
+		'core/',
+		''
+	) }`;
+
+const getHookedBlockContent = ( relativePosition, anchorBlock ) =>
+	`This block was inserted by the Block Hooks API in the ${ relativePosition } position next to the ${ anchorBlock } anchor block.`;
+
+test.describe( 'Block Hooks API', () => {
+	[
+		{
+			name: 'Post Content',
+			postType: 'post',
+			blockType: 'core/post-content',
+			createMethod: 'createPost',
+		},
+		{
+			name: 'Synced Pattern',
+			postType: 'wp_block',
+			blockType: 'core/block',
+			createMethod: 'createBlock',
+		},
+	].forEach( ( { name, postType, blockType, createMethod } ) => {
+		test.describe( `Hooked blocks in ${ name }`, () => {
+			let postObject, containerPost;
+			test.beforeAll( async ( { requestUtils } ) => {
+				postObject = await requestUtils[ createMethod ]( {
+					title: name,
+					status: 'publish',
+					content: dummyBlockContent,
+				} );
+
+				await requestUtils.activatePlugin(
+					'gutenberg-test-block-hooks'
+				);
+
+				if ( postType !== 'post' ) {
+					// We need a container post to hold our block instance.
+					containerPost = await requestUtils.createPost( {
+						title: `Block Hooks in ${ name }`,
+						status: 'publish',
+						content: `<!-- wp:${ blockType } {"ref":${ postObject.id }} /-->`,
+						meta: {
+							// Prevent Block Hooks from injecting blocks into the container
+							// post content so they won't distract from the ones injected
+							// into the block instance.
+							_wp_ignored_hooked_blocks: '["core/paragraph"]',
+						},
+					} );
+				} else {
+					containerPost = postObject;
+				}
+			} );
+
+			test.afterAll( async ( { requestUtils } ) => {
+				await requestUtils.deactivatePlugin(
+					'gutenberg-test-block-hooks'
+				);
+
+				await requestUtils.deleteAllPosts();
+				await requestUtils.deleteAllBlocks();
+			} );
+
+			test( `should insert hooked blocks into ${ name } on frontend`, async ( {
+				page,
+			} ) => {
+				await page.goto( `/?p=${ containerPost.id }` );
+				await expect(
+					page.locator( '.entry-content > *' )
+				).toHaveClass( [
+					'wp-block-heading',
+					getHookedBlockClassName( 'after', 'core/heading' ),
+					'dummy-paragraph',
+					getHookedBlockClassName( 'last_child', blockType ),
+				] );
+			} );
+
+			test( `should insert hooked blocks into ${ name } in editor and respect changes made there`, async ( {
+				admin,
+				editor,
+				page,
+			} ) => {
+				const expectedHookedBlockAfterHeading = {
+					name: 'core/paragraph',
+					attributes: {
+						className: getHookedBlockClassName(
+							'after',
+							'core/heading'
+						),
+					},
+				};
+
+				const expectedHookedBlockLastChild = {
+					name: 'core/paragraph',
+					attributes: {
+						className: getHookedBlockClassName(
+							'last_child',
+							blockType
+						),
+					},
+				};
+
+				await admin.editPost( postObject.id );
+				await expect
+					.poll( editor.getBlocks )
+					.toMatchObject( [
+						{ name: 'core/heading' },
+						expectedHookedBlockAfterHeading,
+						{ name: 'core/paragraph' },
+						expectedHookedBlockLastChild,
+					] );
+
+				const hookedBlock = editor.canvas.getByText(
+					getHookedBlockContent( 'last_child', blockType )
+				);
+				await editor.selectBlocks( hookedBlock );
+				await editor.clickBlockToolbarButton( 'Move up' );
+
+				// Save updated post.
+				const saveButton = page
+					.getByRole( 'region', { name: 'Editor top bar' } )
+					.getByRole( 'button', { name: 'Save', exact: true } );
+				await saveButton.click();
+				await page
+					.getByRole( 'button', { name: 'Dismiss this notice' } )
+					.filter( { hasText: 'updated' } )
+					.waitFor();
+
+				// Reload and verify that the new position of the hooked block has been persisted.
+				await page.reload();
+				await expect
+					.poll( editor.getBlocks )
+					.toMatchObject( [
+						{ name: 'core/heading' },
+						expectedHookedBlockAfterHeading,
+						expectedHookedBlockLastChild,
+						{ name: 'core/paragraph' },
+					] );
+
+				// Verify that the frontend reflects the changes made in the editor.
+				await page.goto( `/?p=${ containerPost.id }` );
+				await expect(
+					page.locator( '.entry-content > *' )
+				).toHaveClass( [
+					'wp-block-heading',
+					getHookedBlockClassName( 'after', 'core/heading' ),
+					getHookedBlockClassName( 'last_child', blockType ),
+					'dummy-paragraph',
+				] );
+			} );
+		} );
+	} );
+
+	test.describe( `Hooked blocks in Navigation Menu`, () => {
+		let postObject, containerPost;
+		test.beforeAll( async ( { requestUtils } ) => {
+			postObject = await requestUtils.createNavigationMenu( {
+				title: 'Navigation Menu',
+				status: 'publish',
+				content:
+					'<!-- wp:navigation-link {"label":"wordpress.org","url":"https://wordpress.org","kind":"custom"} /-->',
+			} );
+
+			await requestUtils.activatePlugin( 'gutenberg-test-block-hooks' );
+
+			// We need a container post to hold our block instance.
+			containerPost = await requestUtils.createPost( {
+				title: `Block Hooks in Navigation Menu`,
+				status: 'publish',
+				content: `<!-- wp:navigation {"ref":${ postObject.id }} /-->`,
+				meta: {
+					// Prevent Block Hooks from injecting blocks into the container
+					// post content so they won't distract from the ones injected
+					// into the block instance.
+					_wp_ignored_hooked_blocks: '["core/paragraph"]',
+				},
+			} );
+		} );
+
+		test.afterAll( async ( { requestUtils } ) => {
+			await requestUtils.deactivatePlugin( 'gutenberg-test-block-hooks' );
+
+			await requestUtils.deleteAllPosts();
+			await requestUtils.deleteAllBlocks();
+		} );
+
+		test( `should insert hooked blocks into Navigation Menu on frontend`, async ( {
+			page,
+		} ) => {
+			await page.goto( `/?p=${ containerPost.id }` );
+			await expect(
+				page.locator( '.wp-block-navigation__container > *' )
+			).toHaveClass( [
+				'wp-block-navigation-item wp-block-home-link',
+				' wp-block-navigation-item wp-block-navigation-link',
+				'wp-block-page-list',
+			] );
+		} );
+
+		test( `should insert hooked blocks into Navigation Menu in editor and respect changes made there`, async ( {
+			admin,
+			editor,
+			page,
+		} ) => {
+			await admin.visitSiteEditor( {
+				postId: postObject.id,
+				postType: 'wp_navigation',
+				canvas: 'edit',
+			} );
+
+			// Since the Navigation block is a controlled block, we need
+			// to specify its client ID when calling `getBlocks`.
+			let navigationBlock = editor.canvas.getByRole( 'document', {
+				name: 'Block: Navigation',
+			} );
+			let navigationClientId =
+				await navigationBlock.getAttribute( 'data-block' );
+
+			await expect
+				.poll( () =>
+					editor.getBlocks( {
+						clientId: navigationClientId,
+					} )
+				)
+				.toMatchObject( [
+					{ name: 'core/home-link' },
+					{ name: 'core/navigation-link' },
+					{ name: 'core/page-list' },
+				] );
+
+			const hookedBlock = editor.canvas.getByRole( 'document', {
+				name: 'Block: Home Link',
+			} );
+			await editor.selectBlocks( hookedBlock );
+			await editor.clickBlockToolbarButton( 'Move right' );
+
+			// Save updated post.
+			const saveButton = page
+				.getByRole( 'region', { name: 'Editor top bar' } )
+				.getByRole( 'button', { name: 'Save', exact: true } );
+			await saveButton.click();
+			await page
+				.getByRole( 'button', { name: 'Dismiss this notice' } )
+				.filter( { hasText: 'updated' } )
+				.waitFor();
+
+			// Reload and verify that the new position of the hooked block has been persisted.
+			await page.reload();
+
+			navigationBlock = editor.canvas.getByRole( 'document', {
+				name: 'Block: Navigation',
+			} );
+			navigationClientId =
+				await navigationBlock.getAttribute( 'data-block' );
+
+			await expect
+				.poll( () =>
+					editor.getBlocks( {
+						clientId: navigationClientId,
+					} )
+				)
+				.toMatchObject( [
+					{ name: 'core/navigation-link' },
+					{ name: 'core/home-link' },
+					{ name: 'core/page-list' },
+				] );
+
+			// Verify that the frontend reflects the changes made in the editor.
+			await page.goto( `/?p=${ containerPost.id }` );
+			await expect(
+				page.locator( '.wp-block-navigation__container > *' )
+			).toHaveClass( [
+				' wp-block-navigation-item wp-block-navigation-link',
+				'wp-block-navigation-item wp-block-home-link',
+				'wp-block-page-list',
+			] );
+		} );
+	} );
+} );