diff --git a/lib/client-assets.php b/lib/client-assets.php
index 6ad90f97fc8f52..b34eccebf8a977 100644
--- a/lib/client-assets.php
+++ b/lib/client-assets.php
@@ -249,7 +249,8 @@ function gutenberg_register_scripts_and_styles() {
 		sprintf(
 			'wp.apiFetch.nonceMiddleware = wp.apiFetch.createNonceMiddleware( "%s" );' .
 			'wp.apiFetch.use( wp.apiFetch.nonceMiddleware );' .
-			'wp.apiFetch.nonceEndpoint = "%s";',
+			'wp.apiFetch.nonceEndpoint = "%s";' .
+			'wp.apiFetch.use( wp.apiFetch.mediaUploadMiddleware );',
 			( wp_installing() && ! is_multisite() ) ? '' : wp_create_nonce( 'wp_rest' ),
 			admin_url( 'admin-ajax.php?action=gutenberg_rest_nonce' )
 		),
diff --git a/packages/api-fetch/src/index.js b/packages/api-fetch/src/index.js
index 7535d2117b2f24..dc7dda91fa1e60 100644
--- a/packages/api-fetch/src/index.js
+++ b/packages/api-fetch/src/index.js
@@ -1,8 +1,3 @@
-/**
- * WordPress dependencies
- */
-import { __ } from '@wordpress/i18n';
-
 /**
  * Internal dependencies
  */
@@ -13,6 +8,8 @@ import fetchAllMiddleware from './middlewares/fetch-all-middleware';
 import namespaceEndpointMiddleware from './middlewares/namespace-endpoint';
 import httpV1Middleware from './middlewares/http-v1';
 import userLocaleMiddleware from './middlewares/user-locale';
+import mediaUploadMiddleware from './middlewares/media-upload';
+import { parseResponseAndNormalizeError, parseAndThrowError } from './utils/response';
 
 /**
  * Default set of header values which should be sent with every request unless
@@ -80,48 +77,10 @@ const defaultFetchHandler = ( nextOptions ) => {
 		}
 	);
 
-	const parseResponse = ( response ) => {
-		if ( parse ) {
-			if ( response.status === 204 ) {
-				return null;
-			}
-
-			return response.json ? response.json() : Promise.reject( response );
-		}
-
-		return response;
-	};
-
 	return responsePromise
 		.then( checkStatus )
-		.then( parseResponse )
-		.catch( ( response ) => {
-			if ( ! parse ) {
-				throw response;
-			}
-
-			const invalidJsonError = {
-				code: 'invalid_json',
-				message: __( 'The response is not a valid JSON response.' ),
-			};
-
-			if ( ! response || ! response.json ) {
-				throw invalidJsonError;
-			}
-
-			return response.json()
-				.catch( () => {
-					throw invalidJsonError;
-				} )
-				.then( ( error ) => {
-					const unknownError = {
-						code: 'unknown_error',
-						message: __( 'An unknown error occurred.' ),
-					};
-
-					throw error || unknownError;
-				} );
-		} );
+		.catch( ( response ) => parseAndThrowError( response, parse ) )
+		.then( ( response ) => parseResponseAndNormalizeError( response, parse ) );
 };
 
 let fetchHandler = defaultFetchHandler;
@@ -179,5 +138,6 @@ apiFetch.createNonceMiddleware = createNonceMiddleware;
 apiFetch.createPreloadingMiddleware = createPreloadingMiddleware;
 apiFetch.createRootURLMiddleware = createRootURLMiddleware;
 apiFetch.fetchAllMiddleware = fetchAllMiddleware;
+apiFetch.mediaUploadMiddleware = mediaUploadMiddleware;
 
 export default apiFetch;
diff --git a/packages/api-fetch/src/middlewares/media-upload.js b/packages/api-fetch/src/middlewares/media-upload.js
new file mode 100644
index 00000000000000..b7a14d6b5b050a
--- /dev/null
+++ b/packages/api-fetch/src/middlewares/media-upload.js
@@ -0,0 +1,74 @@
+/**
+ * WordPress dependencies
+ */
+import { __ } from '@wordpress/i18n';
+
+/**
+ * Internal dependencies
+ */
+import {
+	parseAndThrowError,
+	parseResponseAndNormalizeError,
+} from '../utils/response';
+
+/**
+ * Middleware handling media upload failures and retries.
+ *
+ * @param {Object}   options Fetch options.
+ * @param {Function} next    [description]
+ *
+ * @return {*} The evaluated result of the remaining middleware chain.
+ */
+function mediaUploadMiddleware( options, next ) {
+	const isMediaUploadRequest =
+		( options.path && options.path.indexOf( '/wp/v2/media' ) !== -1 ) ||
+		( options.url && options.url.indexOf( '/wp/v2/media' ) !== -1 );
+
+	if ( ! isMediaUploadRequest ) {
+		return next( options, next );
+	}
+	let retries = 0;
+	const maxRetries = 5;
+
+	const postProcess = ( attachmentId ) => {
+		retries++;
+		return next( {
+			path: `/wp/v2/media/${ attachmentId }/post-process`,
+			method: 'POST',
+			data: { action: 'create-image-subsizes' },
+			parse: false,
+		} )
+			.catch( () => {
+				if ( retries < maxRetries ) {
+					return postProcess( attachmentId );
+				}
+				next( {
+					path: `/wp/v2/media/${ attachmentId }?force=true`,
+					method: 'DELETE',
+				} );
+
+				return Promise.reject();
+			} );
+	};
+
+	return next( { ...options, parse: false } )
+		.catch( ( response ) => {
+			const attachmentId = response.headers.get( 'x-wp-upload-attachment-id' );
+			if ( ( response.status === 500 || response.status === 502 ) && attachmentId ) {
+				return postProcess( attachmentId ).catch( () => {
+					if ( options.parse !== false ) {
+						return Promise.reject( {
+							code: 'post_process',
+							message: __( 'Media upload failed. If this is a photo or a large image, please scale it down and try again.' ),
+						} );
+					}
+
+					return Promise.reject( response );
+				} );
+			}
+			return parseAndThrowError( response, options.parse );
+		} )
+		.then( ( response ) => parseResponseAndNormalizeError( response, options.parse ) );
+}
+
+export default mediaUploadMiddleware;
diff --git a/packages/api-fetch/src/utils/response.js b/packages/api-fetch/src/utils/response.js
new file mode 100644
index 00000000000000..bb7b79ce2f8254
--- /dev/null
+++ b/packages/api-fetch/src/utils/response.js
@@ -0,0 +1,70 @@
+/**
+ * WordPress dependencies
+ */
+import { __ } from '@wordpress/i18n';
+
+/**
+ * Parses the apiFetch response.
+ *
+ * @param {Response} response
+ * @param {boolean}  shouldParseResponse
+ *
+ * @return {Promise} Parsed response
+ */
+const parseResponse = ( response, shouldParseResponse = true ) => {
+	if ( shouldParseResponse ) {
+		if ( response.status === 204 ) {
+			return null;
+		}
+
+		return response.json ? response.json() : Promise.reject( response );
+	}
+
+	return response;
+};
+
+const parseJsonAndNormalizeError = ( response ) => {
+	const invalidJsonError = {
+		code: 'invalid_json',
+		message: __( 'The response is not a valid JSON response.' ),
+	};
+
+	if ( ! response || ! response.json ) {
+		throw invalidJsonError;
+	}
+
+	return response.json()
+		.catch( () => {
+			throw invalidJsonError;
+		} );
+};
+
+/**
+ * Parses the apiFetch response properly and normalize response errors.
+ *
+ * @param {Response} response
+ * @param {boolean}  shouldParseResponse
+ *
+ * @return {Promise} Parsed response.
+ */
+export const parseResponseAndNormalizeError = ( response, shouldParseResponse = true ) => {
+	return Promise.resolve( parseResponse( response, shouldParseResponse ) )
+		.catch( ( res ) => parseAndThrowError( res, shouldParseResponse ) );
+};
+
+export function parseAndThrowError( response, shouldParseResponse = true ) {
+	if ( ! shouldParseResponse ) {
+		throw response;
+	}
+
+	return parseJsonAndNormalizeError( response )
+		.then( ( error ) => {
+			const unknownError = {
+				code: 'unknown_error',
+				message: __( 'An unknown error occurred.' ),
+			};
+
+			throw error || unknownError;
+		} );
+}
+