diff --git a/packages/block-library/src/template-part/edit/index.js b/packages/block-library/src/template-part/edit/index.js
index ca7ff8aded12a7..a4b6a62767cff2 100644
--- a/packages/block-library/src/template-part/edit/index.js
+++ b/packages/block-library/src/template-part/edit/index.js
@@ -26,6 +26,7 @@ import TemplatePartPlaceholder from './placeholder';
 import TemplatePartSelection from './selection';
 import { TemplatePartAdvancedControls } from './advanced-controls';
 import TemplatePartInnerBlocks from './inner-blocks';
+import { createTemplatePartId } from './utils/create-template-part-id';
 
 export default function TemplatePartEdit( {
 	attributes,
@@ -33,7 +34,7 @@ export default function TemplatePartEdit( {
 	clientId,
 } ) {
 	const { slug, theme, tagName, layout = {} } = attributes;
-	const templatePartId = theme && slug ? theme + '//' + slug : null;
+	const templatePartId = createTemplatePartId( theme, slug );
 
 	const [ hasAlreadyRendered, RecursionProvider ] = useNoRecursiveRenders(
 		templatePartId
@@ -48,11 +49,14 @@ export default function TemplatePartEdit( {
 		isMissing,
 		defaultWrapper,
 		area,
+		enableSelection,
 	} = useSelect(
 		( select ) => {
-			const { getEditedEntityRecord, hasFinishedResolution } = select(
-				coreStore
-			);
+			const {
+				getEditedEntityRecord,
+				getEntityRecords,
+				hasFinishedResolution,
+			} = select( coreStore );
 			const { getBlocks } = select( blockEditorStore );
 
 			const getEntityArgs = [
@@ -65,6 +69,19 @@ export default function TemplatePartEdit( {
 				: null;
 			const _area = entityRecord?.area || attributes.area;
 
+			// Check whether other entities exist for switching/selection.
+			const availableReplacementArgs = [
+				'postType',
+				'wp_template_part',
+				_area && 'uncategorized' !== _area && { area: _area },
+			];
+			const matchingReplacements = getEntityRecords(
+				...availableReplacementArgs
+			);
+			const _enableSelection = templatePartId
+				? matchingReplacements?.length > 1
+				: matchingReplacements?.length > 0;
+
 			const hasResolvedEntity = templatePartId
 				? hasFinishedResolution(
 						'getEditedEntityRecord',
@@ -82,6 +99,7 @@ export default function TemplatePartEdit( {
 				isMissing: hasResolvedEntity && ! entityRecord,
 				defaultWrapper: defaultWrapperElement || 'div',
 				area: _area,
+				enableSelection: _enableSelection,
 			};
 		},
 		[ templatePartId, clientId ]
@@ -138,10 +156,11 @@ export default function TemplatePartEdit( {
 						area={ attributes.area }
 						clientId={ clientId }
 						setAttributes={ setAttributes }
+						enableSelection={ enableSelection }
 					/>
 				</TagName>
 			) }
-			{ isEntityAvailable && (
+			{ isEntityAvailable && enableSelection && (
 				<BlockControls>
 					<ToolbarGroup className="wp-block-template-part__block-control-group">
 						<Dropdown
@@ -164,6 +183,7 @@ export default function TemplatePartEdit( {
 									setAttributes={ setAttributes }
 									onClose={ onClose }
 									area={ area }
+									templatePartId={ templatePartId }
 								/>
 							) }
 						/>
diff --git a/packages/block-library/src/template-part/edit/placeholder/index.js b/packages/block-library/src/template-part/edit/placeholder/index.js
index b19fe0f74ea323..db5da513802590 100644
--- a/packages/block-library/src/template-part/edit/placeholder/index.js
+++ b/packages/block-library/src/template-part/edit/placeholder/index.js
@@ -29,6 +29,7 @@ export default function TemplatePartPlaceholder( {
 	area,
 	clientId,
 	setAttributes,
+	enableSelection,
 } ) {
 	const { saveEntityRecord } = useDispatch( coreStore );
 	const [ step, setStep ] = useState( PLACEHOLDER_STEPS.initial );
@@ -85,26 +86,38 @@ export default function TemplatePartPlaceholder( {
 				<Placeholder
 					icon={ areaIcon }
 					label={ areaLabel }
-					instructions={ sprintf(
-						// Translators: %s as template part area title ("Header", "Footer", etc.).
-						'Choose an existing %s or create a new one.',
-						areaLabel.toLowerCase()
-					) }
+					instructions={
+						enableSelection
+							? sprintf(
+									// Translators: %s as template part area title ("Header", "Footer", etc.).
+									'Choose an existing %s or create a new one.',
+									areaLabel.toLowerCase()
+							  )
+							: sprintf(
+									// Translators: %s as template part area title ("Header", "Footer", etc.).
+									'Create a new %s.',
+									areaLabel.toLowerCase()
+							  )
+					}
 				>
 					<Dropdown
 						contentClassName="wp-block-template-part__placeholder-preview-dropdown-content"
 						position="bottom right left"
 						renderToggle={ ( { isOpen, onToggle } ) => (
 							<>
+								{ enableSelection && (
+									<Button
+										isPrimary
+										onClick={ onToggle }
+										aria-expanded={ isOpen }
+									>
+										{ __( 'Choose existing' ) }
+									</Button>
+								) }
 								<Button
-									isPrimary
-									onClick={ onToggle }
-									aria-expanded={ isOpen }
-								>
-									{ __( 'Choose existing' ) }
-								</Button>
-								<Button
-									isTertiary
+									{ ...( enableSelection
+										? { isTertiary: true }
+										: { isPrimary: true } ) }
 									onClick={ () =>
 										setStep( PLACEHOLDER_STEPS.patterns )
 									}
diff --git a/packages/block-library/src/template-part/edit/selection/index.js b/packages/block-library/src/template-part/edit/selection/index.js
index 93a39b8c3bec21..2ed5ac835f81f2 100644
--- a/packages/block-library/src/template-part/edit/selection/index.js
+++ b/packages/block-library/src/template-part/edit/selection/index.js
@@ -26,6 +26,7 @@ export default function TemplatePartSelection( {
 	setAttributes,
 	onClose,
 	area,
+	templatePartId = null,
 } ) {
 	const [ filterValue, setFilterValue ] = useState( '' );
 	return (
@@ -44,6 +45,7 @@ export default function TemplatePartSelection( {
 					filterValue={ filterValue }
 					onClose={ onClose }
 					area={ area }
+					templatePartId={ templatePartId }
 				/>
 			</div>
 		</div>
diff --git a/packages/block-library/src/template-part/edit/selection/template-part-previews.js b/packages/block-library/src/template-part/edit/selection/template-part-previews.js
index 90509ce3eda162..8c0da142d339fb 100644
--- a/packages/block-library/src/template-part/edit/selection/template-part-previews.js
+++ b/packages/block-library/src/template-part/edit/selection/template-part-previews.js
@@ -1,7 +1,7 @@
 /**
  * External dependencies
  */
-import { groupBy, deburr } from 'lodash';
+import { groupBy, deburr, flatten } from 'lodash';
 
 /**
  * WordPress dependencies
@@ -22,7 +22,18 @@ import { useAsyncList } from '@wordpress/compose';
 import { store as noticesStore } from '@wordpress/notices';
 import { store as coreStore } from '@wordpress/core-data';
 import { store as editorStore } from '@wordpress/editor';
+/**
+ * Internal dependencies
+ */
+import { createTemplatePartId } from '../utils/create-template-part-id';
 
+function getAreaGroupTitle( areaLabel ) {
+	return sprintf(
+		// Translators: %s for the area the template part is assigned to (Header, Footer, General, etc.)
+		__( 'Area: %s' ),
+		areaLabel
+	);
+}
 function PreviewPlaceholder() {
 	return (
 		<div
@@ -111,23 +122,50 @@ function TemplatePartsByArea( {
 	area = 'uncategorized',
 	labelsByArea,
 } ) {
-	const templatePartsByArea = useMemo( () => {
-		return Object.values( groupBy( templateParts, 'area' ) );
+	const { templatePartsByArea, templatePartsToShow } = useMemo( () => {
+		const _templatePartsToShow =
+			templateParts.filter(
+				( templatePart ) =>
+					'uncategorized' === area || templatePart.area === area
+			) || [];
+		const _templatePartsByArea = Object.values(
+			groupBy( _templatePartsToShow, 'area' )
+		);
+		const orderedTemplatePartsToShow = flatten( _templatePartsToShow );
+		return {
+			templatePartsByArea: _templatePartsByArea,
+			templatePartsToShow: orderedTemplatePartsToShow,
+		};
 	}, [ templateParts, area ] );
-	const currentShownTPs = useAsyncList( templateParts );
+
+	const currentShownTPs = useAsyncList( templatePartsToShow );
+
+	if ( ! templatePartsToShow.length ) {
+		return (
+			<PanelGroup
+				title={ getAreaGroupTitle(
+					labelsByArea[ area ] || labelsByArea.uncategorized
+				) }
+			>
+				{ sprintf(
+					// Translators: %s for the template part variation ("Header", "Footer", "Template Part").
+					'There is no other %s available. If you are looking for another type of template part, try searching for it using the input above.',
+					area && area !== 'uncategorized'
+						? labelsByArea[ area ] || area
+						: __( 'Template Part' )
+				) }
+			</PanelGroup>
+		);
+	}
 
 	return templatePartsByArea.map( ( templatePartList ) => {
-		// Only return corresponding area if block/entity is not uncategorized/general version.
-		if ( 'uncategorized' !== area && templatePartList[ 0 ].area !== area ) {
-			return null;
-		}
 		return (
 			<PanelGroup
 				key={ templatePartList[ 0 ].area }
-				title={
+				title={ getAreaGroupTitle(
 					labelsByArea[ templatePartList[ 0 ].area ] ||
-					__( 'General' )
-				}
+						labelsByArea.uncategorized
+				) }
 			>
 				{ templatePartList.map( ( templatePart ) => {
 					return currentShownTPs.includes( templatePart ) ? (
@@ -222,7 +260,9 @@ function TemplatePartSearchResults( {
 	return groupedResults.map( ( group ) => (
 		<PanelGroup
 			key={ group[ 0 ].id }
-			title={ labelsByArea[ group[ 0 ].area ] || __( 'General' ) }
+			title={ getAreaGroupTitle(
+				labelsByArea[ group[ 0 ].area ] || labelsByArea.uncategorized
+			) }
 		>
 			{ group.map( ( templatePart ) =>
 				currentShownTPs.includes( templatePart ) ? (
@@ -246,18 +286,26 @@ export default function TemplatePartPreviews( {
 	filterValue,
 	onClose,
 	area,
+	templatePartId,
 } ) {
 	const composite = useCompositeState();
 
 	const { templateParts, labelsByArea } = useSelect( ( select ) => {
-		const _templateParts =
+		const _templateParts = (
 			select( coreStore ).getEntityRecords(
 				'postType',
 				'wp_template_part',
 				{
 					per_page: -1,
 				}
-			) || [];
+			) || []
+		).filter(
+			( templatePart ) =>
+				createTemplatePartId(
+					templatePart.theme,
+					templatePart.slug
+				) !== templatePartId
+		);
 
 		const definedAreas = select(
 			editorStore
@@ -274,7 +322,11 @@ export default function TemplatePartPreviews( {
 	}, [] );
 
 	if ( ! templateParts || ! templateParts.length ) {
-		return null;
+		return (
+			<PanelGroup>
+				{ __( 'There are no existing template parts to select.' ) }
+			</PanelGroup>
+		);
 	}
 
 	if ( filterValue ) {
diff --git a/packages/block-library/src/template-part/edit/utils/create-template-part-id.js b/packages/block-library/src/template-part/edit/utils/create-template-part-id.js
new file mode 100644
index 00000000000000..1612fa32f9c403
--- /dev/null
+++ b/packages/block-library/src/template-part/edit/utils/create-template-part-id.js
@@ -0,0 +1,10 @@
+/**
+ * Generates a template part Id based on slug and theme inputs.
+ *
+ * @param {string} theme the template part's theme.
+ * @param {string} slug the template part's slug
+ * @return {string|null} the template part's Id.
+ */
+export function createTemplatePartId( theme, slug ) {
+	return theme && slug ? theme + '//' + slug : null;
+}
diff --git a/packages/e2e-tests/specs/experiments/template-part.test.js b/packages/e2e-tests/specs/experiments/template-part.test.js
index ea6a3fa74caf35..4f86248fd79b5e 100644
--- a/packages/e2e-tests/specs/experiments/template-part.test.js
+++ b/packages/e2e-tests/specs/experiments/template-part.test.js
@@ -277,6 +277,7 @@ describe( 'Template Part', () => {
 			await disablePrePublishChecks();
 			// Create new template part.
 			await insertBlock( 'Template Part' );
+			await page.waitForXPath( chooseExistingButtonSelector );
 			const [ createNewButton ] = await page.$x(
 				createNewButtonSelector
 			);
@@ -297,7 +298,7 @@ describe( 'Template Part', () => {
 			await createNewPost();
 			// Try to insert the template part we created.
 			await insertBlock( 'Template Part' );
-			const [ chooseExistingButton ] = await page.$x(
+			const chooseExistingButton = await page.waitForXPath(
 				chooseExistingButtonSelector
 			);
 			await chooseExistingButton.click();