diff --git a/packages/block-editor/src/components/list-view/index.js b/packages/block-editor/src/components/list-view/index.js
index 4f7c931334893..6ea58ca500443 100644
--- a/packages/block-editor/src/components/list-view/index.js
+++ b/packages/block-editor/src/components/list-view/index.js
@@ -26,19 +26,27 @@ import ListViewDropIndicator from './drop-indicator';
 import useBlockSelection from './use-block-selection';
 import useListViewClientIds from './use-list-view-client-ids';
 import useListViewDropZone from './use-list-view-drop-zone';
+import useListViewExpandSelectedItem from './use-list-view-expand-selected-item';
 import { store as blockEditorStore } from '../../store';
 
 const expanded = ( state, action ) => {
-	switch ( action.type ) {
-		case 'expand':
-			return { ...state, ...{ [ action.clientId ]: true } };
-		case 'collapse':
-			return { ...state, ...{ [ action.clientId ]: false } };
-		default:
-			return state;
+	if ( Array.isArray( action.clientIds ) ) {
+		return {
+			...state,
+			...action.clientIds.reduce(
+				( newState, id ) => ( {
+					...newState,
+					[ id ]: action.type === 'expand',
+				} ),
+				{}
+			),
+		};
 	}
+	return state;
 };
 
+export const BLOCK_LIST_ITEM_HEIGHT = 36;
+
 /**
  * Wrap `ListViewRows` with `TreeGrid`. ListViewRows is a
  * recursive component (it renders itself), so this ensures TreeGrid is only
@@ -96,6 +104,17 @@ function ListView(
 	const treeGridRef = useMergeRefs( [ elementRef, dropZoneRef, ref ] );
 
 	const isMounted = useRef( false );
+	const { setSelectedTreeId } = useListViewExpandSelectedItem( {
+		firstSelectedBlockClientId: selectedClientIds[ 0 ],
+		setExpandedState,
+	} );
+	const selectEditorBlock = useCallback(
+		( event, clientId ) => {
+			updateBlockSelection( event, clientId );
+			setSelectedTreeId( clientId );
+		},
+		[ setSelectedTreeId, updateBlockSelection ]
+	);
 	useEffect( () => {
 		isMounted.current = true;
 	}, [] );
@@ -105,7 +124,7 @@ function ListView(
 	// See: https://github.com/WordPress/gutenberg/pull/35230 for additional context.
 	const [ fixedListWindow ] = useFixedWindowList(
 		elementRef,
-		36,
+		BLOCK_LIST_ITEM_HEIGHT,
 		visibleBlockCount,
 		{
 			useWindowing: __experimentalPersistentListViewFeatures,
@@ -118,7 +137,7 @@ function ListView(
 			if ( ! clientId ) {
 				return;
 			}
-			setExpandedState( { type: 'expand', clientId } );
+			setExpandedState( { type: 'expand', clientIds: [ clientId ] } );
 		},
 		[ setExpandedState ]
 	);
@@ -127,7 +146,7 @@ function ListView(
 			if ( ! clientId ) {
 				return;
 			}
-			setExpandedState( { type: 'collapse', clientId } );
+			setExpandedState( { type: 'collapse', clientIds: [ clientId ] } );
 		},
 		[ setExpandedState ]
 	);
@@ -196,7 +215,7 @@ function ListView(
 				<ListViewContext.Provider value={ contextValue }>
 					<ListViewBranch
 						blocks={ clientIdsTree }
-						selectBlock={ updateBlockSelection }
+						selectBlock={ selectEditorBlock }
 						showNestedBlocks={ showNestedBlocks }
 						showBlockMovers={ showBlockMovers }
 						fixedListWindow={ fixedListWindow }
diff --git a/packages/block-editor/src/components/list-view/use-list-view-expand-selected-item.js b/packages/block-editor/src/components/list-view/use-list-view-expand-selected-item.js
new file mode 100644
index 0000000000000..09b5e09e4713a
--- /dev/null
+++ b/packages/block-editor/src/components/list-view/use-list-view-expand-selected-item.js
@@ -0,0 +1,58 @@
+/**
+ * WordPress dependencies
+ */
+import { useEffect, useState } from '@wordpress/element';
+import { useSelect } from '@wordpress/data';
+
+/**
+ * Internal dependencies
+ */
+import { store as blockEditorStore } from '../../store';
+
+export default function useListViewExpandSelectedItem( {
+	firstSelectedBlockClientId,
+	setExpandedState,
+} ) {
+	const [ selectedTreeId, setSelectedTreeId ] = useState( null );
+	const { selectedBlockParentClientIds } = useSelect(
+		( select ) => {
+			const { getBlockParents } = select( blockEditorStore );
+			return {
+				selectedBlockParentClientIds: getBlockParents(
+					firstSelectedBlockClientId,
+					false
+				),
+			};
+		},
+		[ firstSelectedBlockClientId ]
+	);
+
+	const parentClientIds =
+		Array.isArray( selectedBlockParentClientIds ) &&
+		selectedBlockParentClientIds.length
+			? selectedBlockParentClientIds
+			: null;
+
+	// Expand tree when a block is selected.
+	useEffect( () => {
+		// If the selectedTreeId is the same as the selected block,
+		// it means that the block was selected using the block list tree.
+		if ( selectedTreeId === firstSelectedBlockClientId ) {
+			return;
+		}
+
+		// If the selected block has parents, get the top-level parent.
+		if ( parentClientIds ) {
+			// If the selected block has parents,
+			// expand the tree branch.
+			setExpandedState( {
+				type: 'expand',
+				clientIds: selectedBlockParentClientIds,
+			} );
+		}
+	}, [ firstSelectedBlockClientId ] );
+
+	return {
+		setSelectedTreeId,
+	};
+}
diff --git a/packages/e2e-tests/specs/editor/various/list-view.test.js b/packages/e2e-tests/specs/editor/various/list-view.test.js
index aef74c82a2092..9c5ac2327631f 100644
--- a/packages/e2e-tests/specs/editor/various/list-view.test.js
+++ b/packages/e2e-tests/specs/editor/various/list-view.test.js
@@ -5,6 +5,7 @@ import {
 	createNewPost,
 	insertBlock,
 	getEditedPostContent,
+	openListView,
 	pressKeyWithModifier,
 	pressKeyTimes,
 } from '@wordpress/e2e-test-utils';
@@ -20,6 +21,10 @@ async function dragAndDrop( draggableElement, targetElement, offsetY ) {
 	return await page.mouse.dragAndDrop( draggablePoint, targetPoint );
 }
 
+async function getBlockListLeafNodes() {
+	return await page.$$( '.block-editor-list-view-leaf' );
+}
+
 describe( 'List view', () => {
 	beforeAll( async () => {
 		await page.setDragInterception( true );
@@ -97,4 +102,51 @@ describe( 'List view', () => {
 		// https://github.com/WordPress/gutenberg/issues/38763.
 		expect( console ).not.toHaveErrored();
 	} );
+
+	it( 'should expand nested list items', async () => {
+		// Insert some blocks of different types.
+		await insertBlock( 'Cover' );
+
+		// Click first color option from the block placeholder's color picker to make the inner blocks appear.
+		const colorPickerButton = await page.waitForSelector(
+			'.wp-block-cover__placeholder-background-options .components-circular-option-picker__option-wrapper:first-child button'
+		);
+		await colorPickerButton.click();
+
+		// Open list view.
+		await openListView();
+
+		// Things start off expanded.
+		expect( await getBlockListLeafNodes() ).toHaveLength( 2 );
+
+		const blockListExpanders = await page.$$(
+			'.block-editor-list-view__expander'
+		);
+
+		// Collapse the first block
+		await blockListExpanders[ 0 ].click();
+
+		// Check that we're collapsed
+		expect( await getBlockListLeafNodes() ).toHaveLength( 1 );
+
+		// Focus the cover block. The paragraph is not focussed by default.
+		const coverBlock = await page.waitForSelector( '.wp-block-cover' );
+
+		await coverBlock.focus();
+
+		// Click the cover title placeholder.
+		const coverTitle = await page.waitForSelector(
+			'.wp-block-cover .wp-block-paragraph'
+		);
+
+		await coverTitle.click();
+
+		// The block list should contain two leafs and the second should be selected (and be a paragraph).
+		const selectedElementText = await page.$eval(
+			'.block-editor-list-view-leaf.is-selected .block-editor-list-view-block-contents',
+			( element ) => element.innerText
+		);
+
+		expect( selectedElementText ).toContain( 'Paragraph' );
+	} );
 } );