diff --git a/packages/block-library/src/image/edit.js b/packages/block-library/src/image/edit.js
index 660d99bc748ab0..16ec296554d743 100644
--- a/packages/block-library/src/image/edit.js
+++ b/packages/block-library/src/image/edit.js
@@ -23,7 +23,6 @@ import { useEffect, useRef, useState } from '@wordpress/element';
 import { __, sprintf } from '@wordpress/i18n';
 import { image as icon, plugins as pluginsIcon } from '@wordpress/icons';
 import { store as noticesStore } from '@wordpress/notices';
-import { useResizeObserver } from '@wordpress/compose';
 
 /**
  * Internal dependencies
@@ -32,6 +31,7 @@ import { unlock } from '../lock-unlock';
 import { useUploadMediaFromBlobURL } from '../utils/hooks';
 import Image from './image';
 import { isValidFileType } from './utils';
+import { useMaxWidthObserver } from './use-max-width-observer';
 
 /**
  * Module constants
@@ -111,10 +111,15 @@ export function ImageEdit( {
 	} = attributes;
 
 	const [ temporaryURL, setTemporaryURL ] = useState( attributes.blob );
-	const figureRef = useRef();
 
-	const [ contentResizeListener, { width: containerWidth } ] =
-		useResizeObserver();
+	const containerRef = useRef();
+	// Only observe the max width from the parent container when the parent layout is not flex nor grid.
+	// This won't work for them because the container width changes with the image.
+	// TODO: Find a way to observe the container width for flex and grid layouts.
+	const isMaxWidthContainerWidth =
+		! parentLayout ||
+		( parentLayout.type !== 'flex' && parentLayout.type !== 'grid' );
+	const [ maxWidthObserver, maxContentWidth ] = useMaxWidthObserver();
 
 	const [ placeholderResizeListener, { width: placeholderWidth } ] =
 		useResizeObserver();
@@ -166,7 +171,7 @@ export function ImageEdit( {
 	}
 
 	function onSelectImagesList( images ) {
-		const win = figureRef.current?.ownerDocument.defaultView;
+		const win = containerRef.current?.ownerDocument.defaultView;
 
 		if ( images.every( ( file ) => file instanceof win.File ) ) {
 			/** @type {File[]} */
@@ -354,7 +359,10 @@ export function ImageEdit( {
 				Object.keys( borderProps.style ).length > 0 ),
 	} );
 
-	const blockProps = useBlockProps( { ref: figureRef, className: classes } );
+	const blockProps = useBlockProps( {
+		ref: containerRef,
+		className: classes,
+	} );
 
 	// Much of this description is duplicated from MediaPlaceholder.
 	const { lockUrlControls = false, lockUrlControlsMessage } = useSelect(
@@ -445,7 +453,7 @@ export function ImageEdit( {
 					clientId={ clientId }
 					blockEditingMode={ blockEditingMode }
 					parentLayoutType={ parentLayout?.type }
-					containerWidth={ containerWidth }
+					maxContentWidth={ maxContentWidth }
 				/>
 				<MediaPlaceholder
 					icon={ <BlockIcon icon={ icon } /> }
@@ -464,7 +472,7 @@ export function ImageEdit( {
 			{
 				// The listener cannot be placed as the first element as it will break the in-between inserter.
 				// See https://github.com/WordPress/gutenberg/blob/71134165868298fc15e22896d0c28b41b3755ff7/packages/block-editor/src/components/block-list/use-in-between-inserter.js#L120
-				contentResizeListener
+				isSingleSelected && isMaxWidthContainerWidth && maxWidthObserver
 			}
 		</>
 	);
diff --git a/packages/block-library/src/image/editor.scss b/packages/block-library/src/image/editor.scss
index d143e6604d1e73..34f65d690d3d74 100644
--- a/packages/block-library/src/image/editor.scss
+++ b/packages/block-library/src/image/editor.scss
@@ -113,6 +113,11 @@ figure.wp-block-image:not(.wp-block) {
 	text-align: center;
 }
 
+// Relatively position the alignment container to support the content resizer.
+.wp-block[data-align]:has(> .wp-block-image) {
+	position: relative;
+}
+
 .wp-block-image__crop-area {
 	position: relative;
 	max-width: 100%;
diff --git a/packages/block-library/src/image/image.js b/packages/block-library/src/image/image.js
index f79f078b1eef82..60d83f89129070 100644
--- a/packages/block-library/src/image/image.js
+++ b/packages/block-library/src/image/image.js
@@ -108,7 +108,7 @@ export default function Image( {
 	clientId,
 	blockEditingMode,
 	parentLayoutType,
-	containerWidth,
+	maxContentWidth,
 } ) {
 	const {
 		url = '',
@@ -938,7 +938,7 @@ export default function Image( {
 		// @todo It would be good to revisit this once a content-width variable
 		// becomes available.
 		const maxWidthBuffer = maxWidth * 2.5;
-		const maxContentWidth = containerWidth || maxWidthBuffer;
+		const maxResizeWidth = maxContentWidth || maxWidthBuffer;
 
 		let showRightHandle = false;
 		let showLeftHandle = false;
@@ -984,9 +984,9 @@ export default function Image( {
 				} }
 				showHandle={ isSingleSelected }
 				minWidth={ minWidth }
-				maxWidth={ maxContentWidth }
+				maxWidth={ maxResizeWidth }
 				minHeight={ minHeight }
-				maxHeight={ maxContentWidth / ratio }
+				maxHeight={ maxResizeWidth / ratio }
 				lockAspectRatio={ ratio }
 				enable={ {
 					top: false,
@@ -1000,6 +1000,7 @@ export default function Image( {
 
 					// Clear hardcoded width if the resized width is close to the max-content width.
 					if (
+						maxContentWidth &&
 						// Only do this if the image is bigger than the container to prevent it from being squished.
 						// TODO: Remove this check if the image support setting 100% width.
 						naturalWidth >= maxContentWidth &&
diff --git a/packages/block-library/src/image/use-max-width-observer.js b/packages/block-library/src/image/use-max-width-observer.js
new file mode 100644
index 00000000000000..684392537fac7a
--- /dev/null
+++ b/packages/block-library/src/image/use-max-width-observer.js
@@ -0,0 +1,32 @@
+/**
+ * WordPress dependencies
+ */
+import { useRef } from '@wordpress/element';
+import { useResizeObserver } from '@wordpress/compose';
+
+function useMaxWidthObserver() {
+	const [ contentResizeListener, { width } ] = useResizeObserver();
+	const observerRef = useRef();
+
+	const maxWidthObserver = (
+		<div
+			// Some themes set max-width on blocks.
+			className="wp-block"
+			aria-hidden="true"
+			style={ {
+				position: 'absolute',
+				inset: 0,
+				width: '100%',
+				height: 0,
+				margin: 0,
+			} }
+			ref={ observerRef }
+		>
+			{ contentResizeListener }
+		</div>
+	);
+
+	return [ maxWidthObserver, width ];
+}
+
+export { useMaxWidthObserver };