diff --git a/packages/block-library/src/image/edit.js b/packages/block-library/src/image/edit.js
index 56561ae4d4fa13..bc6ac27412bf6d 100644
--- a/packages/block-library/src/image/edit.js
+++ b/packages/block-library/src/image/edit.js
@@ -2,7 +2,7 @@
  * External dependencies
  */
 import classnames from 'classnames';
-import { get, omit, pick } from 'lodash';
+import { get, has, omit, pick } from 'lodash';
 
 /**
  * WordPress dependencies
@@ -71,6 +71,22 @@ const isTemporaryImage = ( id, url ) => ! id && isBlobURL( url );
  */
 export const isExternalImage = ( id, url ) => url && ! id && ! isBlobURL( url );
 
+/**
+ * Checks if WP generated default image size. Size generation is skipped
+ * when the image is smaller than the said size.
+ *
+ * @param {Object} image
+ * @param {string} defaultSize
+ *
+ * @return {boolean} Whether or not it has default image size.
+ */
+function hasDefaultSize( image, defaultSize ) {
+	return (
+		has( image, [ 'sizes', defaultSize, 'url' ] ) ||
+		has( image, [ 'media_details', 'sizes', defaultSize, 'source_url' ] )
+	);
+}
+
 export function ImageEdit( {
 	attributes,
 	setAttributes,
@@ -148,7 +164,11 @@ export function ImageEdit( {
 			additionalAttributes = {
 				width: undefined,
 				height: undefined,
-				sizeSlug: imageDefaultSize,
+				// Fallback to size "full" if there's no default image size.
+				// It means the image is smaller, and the block will use a full-size URL.
+				sizeSlug: hasDefaultSize( media, imageDefaultSize )
+					? imageDefaultSize
+					: 'full',
 			};
 		} else {
 			// Keep the same url when selecting the same file, so "Image Size"
diff --git a/packages/e2e-tests/specs/editor/blocks/image.test.js b/packages/e2e-tests/specs/editor/blocks/image.test.js
index 1acf1248f7182c..93dfd001e1030c 100644
--- a/packages/e2e-tests/specs/editor/blocks/image.test.js
+++ b/packages/e2e-tests/specs/editor/blocks/image.test.js
@@ -69,7 +69,7 @@ describe( 'Image', () => {
 		await waitForImage( filename );
 
 		const regex = new RegExp(
-			`<!-- wp:image {"id":\\d+,"sizeSlug":"large","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-large"><img src="[^"]+\\/${ filename }\\.png" alt="" class="wp-image-\\d+"/></figure>\\s*<!-- \\/wp:image -->`
+			`<!-- wp:image {"id":\\d+,"sizeSlug":"full","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-full"><img src="[^"]+\\/${ filename }\\.png" alt="" class="wp-image-\\d+"/></figure>\\s*<!-- \\/wp:image -->`
 		);
 		expect( await getEditedPostContent() ).toMatch( regex );
 	} );
@@ -80,7 +80,7 @@ describe( 'Image', () => {
 		await waitForImage( filename1 );
 
 		const regex1 = new RegExp(
-			`<!-- wp:image {"id":\\d+,"sizeSlug":"large","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-large"><img src="[^"]+\\/${ filename1 }\\.png" alt="" class="wp-image-\\d+"/></figure>\\s*<!-- \\/wp:image -->`
+			`<!-- wp:image {"id":\\d+,"sizeSlug":"full","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-full"><img src="[^"]+\\/${ filename1 }\\.png" alt="" class="wp-image-\\d+"/></figure>\\s*<!-- \\/wp:image -->`
 		);
 		expect( await getEditedPostContent() ).toMatch( regex1 );
 
@@ -88,7 +88,7 @@ describe( 'Image', () => {
 		await page.click( '[aria-label="Image size presets"] button' );
 
 		const regex2 = new RegExp(
-			`<!-- wp:image {"id":\\d+,"width":3,"height":3,"sizeSlug":"large","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-large is-resized"><img src="[^"]+\\/${ filename1 }\\.png" alt="" class="wp-image-\\d+" width="3" height="3"\\/><\\/figure>\\s*<!-- /wp:image -->`
+			`<!-- wp:image {"id":\\d+,"width":3,"height":3,"sizeSlug":"full","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-full is-resized"><img src="[^"]+\\/${ filename1 }\\.png" alt="" class="wp-image-\\d+" width="3" height="3"\\/><\\/figure>\\s*<!-- /wp:image -->`
 		);
 
 		expect( await getEditedPostContent() ).toMatch( regex2 );
@@ -100,7 +100,7 @@ describe( 'Image', () => {
 		await waitForImage( filename2 );
 
 		const regex3 = new RegExp(
-			`<!-- wp:image {"id":\\d+,"sizeSlug":"large","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-large"><img src="[^"]+\\/${ filename2 }\\.png" alt="" class="wp-image-\\d+"/></figure>\\s*<!-- \\/wp:image -->`
+			`<!-- wp:image {"id":\\d+,"sizeSlug":"full","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-full"><img src="[^"]+\\/${ filename2 }\\.png" alt="" class="wp-image-\\d+"/></figure>\\s*<!-- \\/wp:image -->`
 		);
 		expect( await getEditedPostContent() ).toMatch( regex3 );
 
@@ -322,7 +322,7 @@ describe( 'Image', () => {
 		);
 
 		const regexBefore = new RegExp(
-			`<!-- wp:image {"id":\\d+,"width":3,"height":3,"sizeSlug":"large","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-large is-resized"><img src="[^"]+\\/${ filename }\\.png" alt="" class="wp-image-\\d+" width="3" height="3"\\/><\\/figure>\\s*<!-- /wp:image -->`
+			`<!-- wp:image {"id":\\d+,"width":3,"height":3,"sizeSlug":"full","linkDestination":"none"} -->\\s*<figure class="wp-block-image size-full is-resized"><img src="[^"]+\\/${ filename }\\.png" alt="" class="wp-image-\\d+" width="3" height="3"\\/><\\/figure>\\s*<!-- /wp:image -->`
 		);
 
 		// Check if dimensions are changed.