diff --git a/packages/editor/src/hooks/custom-class-name.js b/packages/editor/src/hooks/custom-class-name.js
index 8cde23572ea7a1..c69143fda71936 100644
--- a/packages/editor/src/hooks/custom-class-name.js
+++ b/packages/editor/src/hooks/custom-class-name.js
@@ -136,15 +136,21 @@ export function addParsedDifference( blockAttributes, blockType, innerHTML ) {
 		// To determine difference, serialize block given the known set of
 		// attributes. If there are classes which are mismatched with the
 		// incoming HTML of the block, add to filtered result.
+		// If existing classes have been removed then ensure they don't appear in the output
 		const serialized = getSaveContent( blockType, blockAttributes );
+		const blockClasses = blockAttributes.className ? blockAttributes.className.split( ' ' ) : [];
 		const classes = getHTMLRootElementClasses( serialized );
 		const parsedClasses = getHTMLRootElementClasses( innerHTML );
 		const customClasses = difference( parsedClasses, classes );
 
-		const filteredClassName = compact( [
-			blockAttributes.className,
+		// The remaining classes consist of the block's current classes (with default classes removed if they don't already exist in the block)
+		// along with any custom classes, removing any class that doesn't appear in the innerHTML
+		const remaining = [
+			...classes.filter( ( item ) => blockClasses.indexOf( item ) !== -1 ),
 			...customClasses,
-		] ).join( ' ' );
+		].filter( ( item ) => parsedClasses.indexOf( item ) !== -1 );
+
+		const filteredClassName = compact( remaining ).join( ' ' );
 
 		if ( filteredClassName ) {
 			blockAttributes.className = filteredClassName;
diff --git a/packages/editor/src/hooks/test/custom-class-name.js b/packages/editor/src/hooks/test/custom-class-name.js
index 3414889aff7c5e..c7f1b3e1c1c5c5 100644
--- a/packages/editor/src/hooks/test/custom-class-name.js
+++ b/packages/editor/src/hooks/test/custom-class-name.js
@@ -110,5 +110,45 @@ describe( 'custom className', () => {
 
 			expect( attributes.className ).toBeUndefined();
 		} );
+
+		it( 'should add a custom class name to an element without a class', () => {
+			const attributes = addParsedDifference(
+				{},
+				blockSettings,
+				'<div class="foo"></div>'
+			);
+
+			expect( attributes.className ).toBe( 'foo' );
+		} );
+
+		it( 'should remove the custom class and retain default class', () => {
+			const attributes = addParsedDifference(
+				{ className: 'default custom' },
+				blockSettings,
+				'<div class="default"></div>'
+			);
+
+			expect( attributes.className ).toBe( 'default' );
+		} );
+
+		it( 'should remove the custom class from an element originally without a class', () => {
+			const attributes = addParsedDifference(
+				{ className: 'foo' },
+				blockSettings,
+				'<div></div>'
+			);
+
+			expect( attributes.className ).toBeUndefined();
+		} );
+
+		it( 'should remove the custom classes and retain default and other custom class', () => {
+			const attributes = addParsedDifference(
+				{ className: 'default custom1 custom2 custom3' },
+				blockSettings,
+				'<div class="default custom1 custom3"></div>'
+			);
+
+			expect( attributes.className ).toBe( 'default custom1 custom3' );
+		} );
 	} );
 } );