diff --git a/WordPress/WordPress.xcodeproj/project.pbxproj b/WordPress/WordPress.xcodeproj/project.pbxproj
index e66d539178a2..ff40b0463a9f 100644
--- a/WordPress/WordPress.xcodeproj/project.pbxproj
+++ b/WordPress/WordPress.xcodeproj/project.pbxproj
@@ -5489,6 +5489,7 @@
 		FE7FAABB299A36570032A6F2 /* WPComJetpackRemoteInstallViewModelTests.swift in Sources */ = {isa = PBXBuildFile; fileRef = FE7FAABA299A36570032A6F2 /* WPComJetpackRemoteInstallViewModelTests.swift */; };
 		FE7FAABE299A998E0032A6F2 /* EventTracker.swift in Sources */ = {isa = PBXBuildFile; fileRef = FE7FAABC299A98B90032A6F2 /* EventTracker.swift */; };
 		FE7FAABF299A998F0032A6F2 /* EventTracker.swift in Sources */ = {isa = PBXBuildFile; fileRef = FE7FAABC299A98B90032A6F2 /* EventTracker.swift */; };
+		FE9438B22A050251006C40EC /* BlockEditorSettings_GutenbergEditorSettingsTests.swift in Sources */ = {isa = PBXBuildFile; fileRef = FE9438B12A050251006C40EC /* BlockEditorSettings_GutenbergEditorSettingsTests.swift */; };
 		FE9CC71A26D7A2A40026AEF3 /* CommentDetailViewController.swift in Sources */ = {isa = PBXBuildFile; fileRef = FE9CC71926D7A2A40026AEF3 /* CommentDetailViewController.swift */; };
 		FE9CC71B26D7A2A40026AEF3 /* CommentDetailViewController.swift in Sources */ = {isa = PBXBuildFile; fileRef = FE9CC71926D7A2A40026AEF3 /* CommentDetailViewController.swift */; };
 		FEA088012696E7F600193358 /* ListTableHeaderView.swift in Sources */ = {isa = PBXBuildFile; fileRef = FEA088002696E7F600193358 /* ListTableHeaderView.swift */; };
@@ -9240,6 +9241,7 @@
 		FE6BB1452932289B001E5F7A /* ContentMigrationCoordinatorTests.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = ContentMigrationCoordinatorTests.swift; sourceTree = "<group>"; };
 		FE7FAABA299A36570032A6F2 /* WPComJetpackRemoteInstallViewModelTests.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = WPComJetpackRemoteInstallViewModelTests.swift; sourceTree = "<group>"; };
 		FE7FAABC299A98B90032A6F2 /* EventTracker.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = EventTracker.swift; sourceTree = "<group>"; };
+		FE9438B12A050251006C40EC /* BlockEditorSettings_GutenbergEditorSettingsTests.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = BlockEditorSettings_GutenbergEditorSettingsTests.swift; sourceTree = "<group>"; };
 		FE97BC13274FCE7A00CF08F9 /* WordPress 137.xcdatamodel */ = {isa = PBXFileReference; lastKnownFileType = wrapper.xcdatamodel; path = "WordPress 137.xcdatamodel"; sourceTree = "<group>"; };
 		FE9CC71926D7A2A40026AEF3 /* CommentDetailViewController.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = CommentDetailViewController.swift; sourceTree = "<group>"; };
 		FEA088002696E7F600193358 /* ListTableHeaderView.swift */ = {isa = PBXFileReference; lastKnownFileType = sourcecode.swift; path = ListTableHeaderView.swift; sourceTree = "<group>"; };
@@ -10351,7 +10353,7 @@
 			path = Classes;
 			sourceTree = "<group>";
 		};
-		29B97314FDCFA39411CA2CEA = {
+		29B97314FDCFA39411CA2CEA /* CustomTemplate */ = {
 			isa = PBXGroup;
 			children = (
 				3F20FDF3276BF21000DA3CAD /* Packages */,
@@ -18035,6 +18037,7 @@
 				FF0B2566237A023C004E255F /* GutenbergVideoUploadProcessorTests.swift */,
 				4629E4222440C8160002E15C /* GutenbergCoverUploadProcessorTests.swift */,
 				AEE082892681C23C00DCF54B /* GutenbergRefactoredGalleryUploadProcessorTests.swift */,
+				FE9438B12A050251006C40EC /* BlockEditorSettings_GutenbergEditorSettingsTests.swift */,
 			);
 			name = Gutenberg;
 			sourceTree = "<group>";
@@ -18634,14 +18637,14 @@
 				bg,
 				sk,
 			);
-			mainGroup = 29B97314FDCFA39411CA2CEA;
+			mainGroup = 29B97314FDCFA39411CA2CEA /* CustomTemplate */;
 			packageReferences = (
 				3FF1442E266F3C2400138163 /* XCRemoteSwiftPackageReference "ScreenObject" */,
 				3FC2C33B26C4CF0A00C6D98F /* XCRemoteSwiftPackageReference "XCUITestHelpers" */,
 				17A8858B2757B97F0071FCA3 /* XCRemoteSwiftPackageReference "AutomatticAbout-swift" */,
 				3F2B62DA284F4E0B0008CD59 /* XCRemoteSwiftPackageReference "Charts" */,
 				3F3B23C02858A1B300CACE60 /* XCRemoteSwiftPackageReference "test-collector-swift" */,
-				3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios.git" */,
+				3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios" */,
 				3F338B6F289BD3040014ADC5 /* XCRemoteSwiftPackageReference "Nimble" */,
 			);
 			productRefGroup = 19C28FACFE9D520D11CA2CBB /* Products */;
@@ -23125,6 +23128,7 @@
 				572FB401223A806000933C76 /* NoticeStoreTests.swift in Sources */,
 				F5CFB8F524216DFC00E58B69 /* CalendarHeaderViewTests.swift in Sources */,
 				748437EE1F1D4A7300E8DDAF /* RichContentFormatterTests.swift in Sources */,
+				FE9438B22A050251006C40EC /* BlockEditorSettings_GutenbergEditorSettingsTests.swift in Sources */,
 				C81CCD6A243AEE1100A83E27 /* TenorAPIResponseTests.swift in Sources */,
 				8BE7C84123466927006EDE70 /* I18n.swift in Sources */,
 				C396C80B280F2401006FE7AC /* SiteDesignTests.swift in Sources */,
@@ -30355,7 +30359,7 @@
 				minimumVersion = 0.3.0;
 			};
 		};
-		3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios.git" */ = {
+		3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios" */ = {
 			isa = XCRemoteSwiftPackageReference;
 			repositoryURL = "https://github.com/airbnb/lottie-ios.git";
 			requirement = {
@@ -30436,12 +30440,12 @@
 		};
 		3F411B6E28987E3F002513AE /* Lottie */ = {
 			isa = XCSwiftPackageProductDependency;
-			package = 3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios.git" */;
+			package = 3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios" */;
 			productName = Lottie;
 		};
 		3F44DD57289C379C006334CD /* Lottie */ = {
 			isa = XCSwiftPackageProductDependency;
-			package = 3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios.git" */;
+			package = 3F411B6D28987E3F002513AE /* XCRemoteSwiftPackageReference "lottie-ios" */;
 			productName = Lottie;
 		};
 		3FC2C33C26C4CF0A00C6D98F /* XCUITestHelpers */ = {
diff --git a/WordPress/WordPressTest/BlockEditorSettings_GutenbergEditorSettingsTests.swift b/WordPress/WordPressTest/BlockEditorSettings_GutenbergEditorSettingsTests.swift
new file mode 100644
index 000000000000..ffcaf918e3dd
--- /dev/null
+++ b/WordPress/WordPressTest/BlockEditorSettings_GutenbergEditorSettingsTests.swift
@@ -0,0 +1,49 @@
+import Foundation
+import XCTest
+
+@testable import WordPress
+
+class BlockEditorSettings_GutenbergEditorSettingsTests: CoreDataTestCase {
+
+    func test_initWithRemoteEditorTheme_correctlyDetectsFSE() {
+        let fseTheme = makeRemoteEditorTheme()
+        let settings = BlockEditorSettings(editorTheme: fseTheme!, context: mainContext)
+
+        XCTAssertNotNil(settings)
+        XCTAssertTrue(settings!.isFSETheme)
+
+        let nonFSETheme = makeRemoteEditorTheme(isFSETheme: false)
+        let settings2 = BlockEditorSettings(editorTheme: nonFSETheme!, context: mainContext)
+
+        XCTAssertNotNil(settings2)
+        XCTAssertFalse(settings2!.isFSETheme)
+    }
+
+}
+
+// MARK: - Helpers
+
+private extension BlockEditorSettings_GutenbergEditorSettingsTests {
+    func makeRemoteEditorTheme(isFSETheme: Bool = true) -> RemoteEditorTheme? {
+        guard var themeJson = mockedThemesResponse(filename: "get_wp_v2_themes_twentytwenty"),
+              var themeSupports = themeJson["theme_supports"] as? [String: AnyHashable] else {
+            return nil
+        }
+        themeSupports["block-templates"] = isFSETheme
+        themeJson["theme_supports"] = themeSupports
+
+        guard let data = try? JSONSerialization.data(withJSONObject: themeJson) else {
+            return nil
+        }
+        return try? JSONDecoder().decode(RemoteEditorTheme.self, from: data)
+    }
+
+    func mockedThemesResponse(filename: String) -> [String: AnyHashable]? {
+        guard let json = Bundle(for: BlockEditorSettingsServiceTests.self).url(forResource: filename, withExtension: "json"),
+              let data = try? Data(contentsOf: json),
+              let response = try? JSONSerialization.jsonObject(with: data, options: .allowFragments) as? [[String: AnyHashable]] else {
+            return nil
+        }
+        return response.first
+    }
+}