diff --git a/packages/block-library/src/categories/block.json b/packages/block-library/src/categories/block.json
index bfd8461f8eda43..842a33c17bb808 100644
--- a/packages/block-library/src/categories/block.json
+++ b/packages/block-library/src/categories/block.json
@@ -5,7 +5,6 @@
 	"title": "Terms List",
 	"category": "widgets",
 	"description": "Display a list of all terms of a given taxonomy.",
-	"keywords": [ "categories" ],
 	"textdomain": "default",
 	"attributes": {
 		"taxonomy": {
diff --git a/packages/block-library/src/categories/edit.js b/packages/block-library/src/categories/edit.js
index ccbf9194339408..ee1b9d3adab918 100644
--- a/packages/block-library/src/categories/edit.js
+++ b/packages/block-library/src/categories/edit.js
@@ -9,7 +9,6 @@ import clsx from 'clsx';
 import {
 	PanelBody,
 	Placeholder,
-	SelectControl,
 	Spinner,
 	ToggleControl,
 	VisuallyHidden,
@@ -23,7 +22,7 @@ import {
 import { decodeEntities } from '@wordpress/html-entities';
 import { __, sprintf } from '@wordpress/i18n';
 import { pin } from '@wordpress/icons';
-import { useEntityRecords } from '@wordpress/core-data';
+import { useEntityRecord, useEntityRecords } from '@wordpress/core-data';
 
 export default function CategoriesEdit( {
 	attributes: {
@@ -41,17 +40,14 @@ export default function CategoriesEdit( {
 } ) {
 	const selectId = useInstanceId( CategoriesEdit, 'blocks-category-select' );
 
-	const { records: allTaxonomies, isResolvingTaxonomies } = useEntityRecords(
+	const { record: taxonomy, isResolvingTaxonomy } = useEntityRecord(
 		'root',
-		'taxonomy'
+		'taxonomy',
+		taxonomySlug
 	);
 
-	const taxonomies = allTaxonomies?.filter( ( t ) => t.visibility.public );
-
-	const taxonomy = taxonomies?.find( ( t ) => t.slug === taxonomySlug );
-
 	const isHierarchicalTaxonomy =
-		! isResolvingTaxonomies && taxonomy?.hierarchical;
+		! isResolvingTaxonomy && taxonomy?.hierarchical;
 
 	const query = { per_page: -1, hide_empty: ! showEmpty, context: 'view' };
 	if ( isHierarchicalTaxonomy && showOnlyTopLevel ) {
@@ -185,21 +181,6 @@ export default function CategoriesEdit( {
 		<TagName { ...blockProps }>
 			<InspectorControls>
 				<PanelBody title={ __( 'Settings' ) }>
-					{ Array.isArray( taxonomies ) && (
-						<SelectControl
-							__nextHasNoMarginBottom
-							__next40pxDefaultSize
-							label={ __( 'Taxonomy' ) }
-							options={ taxonomies.map( ( t ) => ( {
-								label: t.name,
-								value: t.slug,
-							} ) ) }
-							value={ taxonomySlug }
-							onChange={ ( selectedTaxonomy ) =>
-								setAttributes( { taxonomy: selectedTaxonomy } )
-							}
-						/>
-					) }
 					<ToggleControl
 						__nextHasNoMarginBottom
 						label={ __( 'Display as dropdown' ) }
diff --git a/packages/block-library/src/categories/index.php b/packages/block-library/src/categories/index.php
index e15f662bdfbb9b..4ac94395d49758 100644
--- a/packages/block-library/src/categories/index.php
+++ b/packages/block-library/src/categories/index.php
@@ -115,16 +115,74 @@ function onCatChange() {
 	return wp_get_inline_script_tag( str_replace( array( '<script>', '</script>' ), '', ob_get_clean() ) );
 }
 
+/**
+ * Returns the available variations for the `core/categories` block.
+ *
+ * @since 6.7.0
+ *
+ * @return array The available variations for the block.
+ */
+function block_core_categories_build_variations() {
+	$taxonomies = get_taxonomies(
+		array(
+			'publicly_queryable' => true,
+			'show_in_rest'       => true,
+		),
+		'objects'
+	);
+
+	// Split the available taxonomies to `built_in` and custom ones,
+	// in order to prioritize the `built_in` taxonomies at the
+	// search results.
+	$built_ins         = array();
+	$custom_variations = array();
+
+	// Create and register the eligible taxonomies variations.
+	foreach ( $taxonomies as $taxonomy ) {
+		$variation = array(
+			'name'        => $taxonomy->name,
+			'title'       => sprintf(
+				/* translators: %s: taxonomy's label */
+				__( '%s List' ),
+				$taxonomy->label
+			),
+			'description' => sprintf(
+				/* translators: %s: taxonomy's label */
+				__( 'Display a list of all terms for the taxonomy: %s' ),
+				$taxonomy->label
+			),
+			'attributes'  => array(
+				'taxonomy' => $taxonomy->name,
+			),
+			'isActive'    => array( 'taxonomy' ),
+			'scope'       => array( 'inserter', 'transform' ),
+		);
+		// Set the category variation as the default one.
+		if ( 'category' === $taxonomy->name ) {
+			$variation['isDefault'] = true;
+		}
+		if ( $taxonomy->_builtin ) {
+			$built_ins[] = $variation;
+		} else {
+			$custom_variations[] = $variation;
+		}
+	}
+
+	return array_merge( $built_ins, $custom_variations );
+}
+
 /**
  * Registers the `core/categories` block on server.
  *
  * @since 5.0.0
+ * @since 6.7.0 Added the `variation_callback` argument.
  */
 function register_block_core_categories() {
 	register_block_type_from_metadata(
 		__DIR__ . '/categories',
 		array(
-			'render_callback' => 'render_block_core_categories',
+			'render_callback'    => 'render_block_core_categories',
+			'variation_callback' => 'block_core_categories_build_variations',
 		)
 	);
 }