diff --git a/packages/block-editor/src/components/block-list/block-list-compact.native.js b/packages/block-editor/src/components/block-list/block-list-compact.native.js
index 832ea2a81bb45..ad9d0c7301eed 100644
--- a/packages/block-editor/src/components/block-list/block-list-compact.native.js
+++ b/packages/block-editor/src/components/block-list/block-list-compact.native.js
@@ -50,6 +50,7 @@ function BlockListCompact( props ) {
 			{ blockClientIds.map( ( currentClientId ) => (
 				<BlockListBlock
 					clientId={ currentClientId }
+					rootClientId={ rootClientId }
 					key={ currentClientId }
 					marginHorizontal={ marginHorizontal }
 					marginVertical={ marginVertical }
diff --git a/packages/block-editor/src/components/block-list/block.native.js b/packages/block-editor/src/components/block-list/block.native.js
index 30f7beadb34b8..bf62fe9c24e13 100644
--- a/packages/block-editor/src/components/block-list/block.native.js
+++ b/packages/block-editor/src/components/block-list/block.native.js
@@ -20,6 +20,7 @@ import { compose, withPreferredColorScheme } from '@wordpress/compose';
 import {
 	getBlockType,
 	__experimentalGetAccessibleBlockLabel as getAccessibleBlockLabel,
+	switchToBlockType,
 } from '@wordpress/blocks';
 import { useSetting } from '@wordpress/block-editor';
 
@@ -41,7 +42,7 @@ function BlockForType( {
 	getBlockWidth,
 	insertBlocksAfter,
 	isSelected,
-	mergeBlocks,
+	onMerge,
 	name,
 	onBlockFocus,
 	onChange,
@@ -87,7 +88,7 @@ function BlockForType( {
 				onFocus={ onBlockFocus }
 				onReplace={ onReplace }
 				insertBlocksAfter={ insertBlocksAfter }
-				mergeBlocks={ mergeBlocks }
+				mergeBlocks={ onMerge }
 				// Block level styles.
 				wrapperProps={ wrapperProps }
 				// Inherited styles merged with block level styles.
@@ -407,31 +408,144 @@ export default compose( [
 			),
 		};
 	} ),
-	withDispatch( ( dispatch, ownProps, { select } ) => {
+	withDispatch( ( dispatch, ownProps, registry ) => {
 		const {
 			insertBlocks,
 			mergeBlocks,
 			replaceBlocks,
 			selectBlock,
 			updateBlockAttributes,
+			moveBlocksToPosition,
+			removeBlock,
 		} = dispatch( blockEditorStore );
 
 		return {
-			mergeBlocks( forward ) {
-				const { clientId } = ownProps;
-				const { getPreviousBlockClientId, getNextBlockClientId } =
-					select( blockEditorStore );
-
+			onMerge( forward ) {
+				const { clientId, rootClientId } = ownProps;
+				const {
+					getPreviousBlockClientId,
+					getNextBlockClientId,
+					getBlock,
+					getBlockAttributes,
+					getBlockName,
+					getBlockOrder,
+				} = registry.select( blockEditorStore );
+
+				// For `Delete` or forward merge, we should do the exact same thing
+				// as `Backspace`, but from the other block.
 				if ( forward ) {
+					if ( rootClientId ) {
+						const nextRootClientId =
+							getNextBlockClientId( rootClientId );
+
+						if ( nextRootClientId ) {
+							// If there is a block that follows with the same parent
+							// block name and the same attributes, merge the inner
+							// blocks.
+							if (
+								getBlockName( rootClientId ) ===
+								getBlockName( nextRootClientId )
+							) {
+								const rootAttributes =
+									getBlockAttributes( rootClientId );
+								const previousRootAttributes =
+									getBlockAttributes( nextRootClientId );
+
+								if (
+									Object.keys( rootAttributes ).every(
+										( key ) =>
+											rootAttributes[ key ] ===
+											previousRootAttributes[ key ]
+									)
+								) {
+									registry.batch( () => {
+										moveBlocksToPosition(
+											getBlockOrder( nextRootClientId ),
+											nextRootClientId,
+											rootClientId
+										);
+										removeBlock( nextRootClientId, false );
+									} );
+									return;
+								}
+							} else {
+								mergeBlocks( rootClientId, nextRootClientId );
+								return;
+							}
+						}
+					}
+
 					const nextBlockClientId = getNextBlockClientId( clientId );
-					if ( nextBlockClientId ) {
+
+					if ( ! nextBlockClientId ) {
+						return;
+					}
+
+					// Check if it's possibile to "unwrap" the following block
+					// before trying to merge.
+					const replacement = switchToBlockType(
+						getBlock( nextBlockClientId ),
+						'*'
+					);
+
+					if ( replacement && replacement.length ) {
+						replaceBlocks( nextBlockClientId, replacement );
+					} else {
 						mergeBlocks( clientId, nextBlockClientId );
 					}
 				} else {
 					const previousBlockClientId =
 						getPreviousBlockClientId( clientId );
+
 					if ( previousBlockClientId ) {
 						mergeBlocks( previousBlockClientId, clientId );
+					} else if ( rootClientId ) {
+						const previousRootClientId =
+							getPreviousBlockClientId( rootClientId );
+
+						// If there is a preceding block with the same parent block
+						// name and the same attributes, merge the inner blocks.
+						if (
+							previousRootClientId &&
+							getBlockName( rootClientId ) ===
+								getBlockName( previousRootClientId )
+						) {
+							const rootAttributes =
+								getBlockAttributes( rootClientId );
+							const previousRootAttributes =
+								getBlockAttributes( previousRootClientId );
+
+							if (
+								Object.keys( rootAttributes ).every(
+									( key ) =>
+										rootAttributes[ key ] ===
+										previousRootAttributes[ key ]
+								)
+							) {
+								registry.batch( () => {
+									moveBlocksToPosition(
+										getBlockOrder( rootClientId ),
+										rootClientId,
+										previousRootClientId
+									);
+									removeBlock( rootClientId, false );
+								} );
+								return;
+							}
+						}
+
+						// Attempt to "unwrap" the block contents when there's no
+						// preceding block to merge with.
+						const replacement = switchToBlockType(
+							getBlock( rootClientId ),
+							'*'
+						);
+						if ( replacement && replacement.length ) {
+							registry.batch( () => {
+								replaceBlocks( rootClientId, replacement );
+								selectBlock( replacement[ 0 ].clientId, 0 );
+							} );
+						}
 					}
 				}
 			},
diff --git a/packages/block-library/src/list-item/edit.native.js b/packages/block-library/src/list-item/edit.native.js
index dcd20f11c9d5e..5f365dd9a5816 100644
--- a/packages/block-library/src/list-item/edit.native.js
+++ b/packages/block-library/src/list-item/edit.native.js
@@ -35,6 +35,7 @@ export default function ListItemEdit( {
 	onReplace,
 	clientId,
 	style,
+	mergeBlocks,
 } ) {
 	const [ contentWidth, setContentWidth ] = useState();
 	const { placeholder, content } = attributes;
@@ -119,7 +120,7 @@ export default function ListItemEdit( {
 	const preventDefault = useRef( false );
 	const { onEnter } = useEnter( { content, clientId }, preventDefault );
 	const onSplit = useSplit( clientId );
-	const onMerge = useMerge( clientId );
+	const onMerge = useMerge( clientId, mergeBlocks );
 	const onSplitList = useCallback(
 		( value ) => {
 			if ( ! preventDefault.current ) {
diff --git a/packages/block-library/src/list/test/edit.native.js b/packages/block-library/src/list/test/edit.native.js
index eab2ac4690694..3ce4c8e549449 100644
--- a/packages/block-library/src/list/test/edit.native.js
+++ b/packages/block-library/src/list/test/edit.native.js
@@ -3,6 +3,7 @@
  */
 import {
 	changeTextOfRichText,
+	changeAndSelectTextOfRichText,
 	fireEvent,
 	getEditorHtml,
 	initializeEditor,
@@ -18,6 +19,7 @@ import {
  */
 import { getBlockTypes, unregisterBlockType } from '@wordpress/blocks';
 import { registerCoreBlocks } from '@wordpress/block-library';
+import { BACKSPACE } from '@wordpress/keycodes';
 
 describe( 'List block', () => {
 	beforeAll( () => {
@@ -210,7 +212,7 @@ describe( 'List block', () => {
 		<!-- /wp:list-item -->
 		<!-- wp:list-item -->
 		<li>Item 2</li>
-		<!-- /wp:list-item -->	
+		<!-- /wp:list-item -->
 		<!-- wp:list-item -->
 		<li>Item 3</li>
 		<!-- /wp:list-item --></ul>
@@ -238,7 +240,7 @@ describe( 'List block', () => {
 		<!-- /wp:list-item -->
 		<!-- wp:list-item -->
 		<li>Item 2</li>
-		<!-- /wp:list-item -->	
+		<!-- /wp:list-item -->
 		<!-- wp:list-item -->
 		<li>Item 3</li>
 		<!-- /wp:list-item --></ul>
@@ -277,7 +279,7 @@ describe( 'List block', () => {
 		<!-- /wp:list-item -->
 		<!-- wp:list-item -->
 		<li>Item 2</li>
-		<!-- /wp:list-item -->	
+		<!-- /wp:list-item -->
 		<!-- wp:list-item -->
 		<li>Item 3</li>
 		<!-- /wp:list-item --></ul>
@@ -311,4 +313,101 @@ describe( 'List block', () => {
 
 		expect( getEditorHtml() ).toMatchSnapshot();
 	} );
+
+	it( 'merges with other lists', async () => {
+		const initialHtml = `<!-- wp:list -->
+		<ul><!-- wp:list-item -->
+		<li>One</li><!-- /wp:list-item --></ul>
+		<!-- /wp:list --><!-- wp:list -->
+		<ul><!-- wp:list-item -->
+		<li>Two</li><!-- /wp:list-item --></ul>
+		<!-- /wp:list -->`;
+
+		const screen = await initializeEditor( {
+			initialHtml,
+		} );
+
+		// Select List block
+		const listBlock = screen.getByA11yLabel( /List Block\. Row 2/ );
+		fireEvent.press( listBlock );
+
+		// Select List Item block
+		const listItemBlock = within( listBlock ).getByA11yLabel(
+			/List item Block\. Row 1/
+		);
+		fireEvent.press( listItemBlock );
+
+		// With cursor positioned at the beginning of the first List Item, press
+		// backward delete
+		const listItemField =
+			within( listItemBlock ).getByA11yLabel( /Text input. .*Two.*/ );
+		changeAndSelectTextOfRichText( listItemField, 'Two' );
+		fireEvent( listItemField, 'onKeyDown', {
+			nativeEvent: {},
+			preventDefault() {},
+			keyCode: BACKSPACE,
+		} );
+
+		expect( getEditorHtml() ).toMatchInlineSnapshot( `
+			"<!-- wp:list -->
+			<ul><!-- wp:list-item -->
+			<li>One</li>
+			<!-- /wp:list-item -->
+
+			<!-- wp:list-item -->
+			<li>Two</li>
+			<!-- /wp:list-item --></ul>
+			<!-- /wp:list -->"
+		` );
+	} );
+
+	it( 'unwraps list items when attempting to merge with non-list block', async () => {
+		const initialHtml = `<!-- wp:paragraph -->
+		<p>A quick brown fox.</p>
+		<!-- /wp:paragraph -->
+		<!-- wp:list -->
+		<ul><!-- wp:list-item -->
+		<li>One</li><!-- /wp:list-item --><!-- wp:list-item -->
+		<li>Two</li><!-- /wp:list-item --></ul>
+		<!-- /wp:list -->`;
+
+		const screen = await initializeEditor( {
+			initialHtml,
+		} );
+
+		// Select List block
+		const listBlock = screen.getByA11yLabel( /List Block\. Row 2/ );
+		fireEvent.press( listBlock );
+
+		// Select List Item block
+		const listItemBlock = within( listBlock ).getByA11yLabel(
+			/List item Block\. Row 1/
+		);
+		fireEvent.press( listItemBlock );
+
+		// With cursor positioned at the beginning of the first List Item, press
+		// backward delete
+		const listItemField =
+			within( listItemBlock ).getByA11yLabel( /Text input. .*One.*/ );
+		changeAndSelectTextOfRichText( listItemField, 'One' );
+		fireEvent( listItemField, 'onKeyDown', {
+			nativeEvent: {},
+			preventDefault() {},
+			keyCode: BACKSPACE,
+		} );
+
+		expect( getEditorHtml() ).toMatchInlineSnapshot( `
+		"<!-- wp:paragraph -->
+		<p>A quick brown fox.</p>
+		<!-- /wp:paragraph -->
+
+		<!-- wp:paragraph -->
+		<p>One</p>
+		<!-- /wp:paragraph -->
+
+		<!-- wp:paragraph -->
+		<p>Two</p>
+		<!-- /wp:paragraph -->"
+	` );
+	} );
 } );