diff --git a/packages/block-library/src/navigation-link/edit.js b/packages/block-library/src/navigation-link/edit.js
index a1ce7bb2781d9c..f3ebcfaf656fd9 100644
--- a/packages/block-library/src/navigation-link/edit.js
+++ b/packages/block-library/src/navigation-link/edit.js
@@ -133,6 +133,50 @@ function getSuggestionsQuery( type, kind ) {
 	}
 }
 
+export const updateNavigationLinkBlockAttributes = (
+	updatedValue = {},
+	{ setAttributes, label = '' }
+) => {
+	const {
+		title = '',
+		url = '',
+		opensInNewTab,
+		id,
+		kind = '',
+		type = '',
+	} = updatedValue;
+
+	const normalizedTitle = title.replace( /http(s?):\/\//gi, '' );
+	const normalizedURL = url.replace( /http(s?):\/\//gi, '' );
+	const escapeTitle =
+		title !== '' && normalizedTitle !== normalizedURL && label !== title;
+	const newLabel = escapeTitle
+		? escape( title )
+		: label || escape( normalizedURL );
+
+	const isBuiltInType =
+		[ 'post', 'page', 'tag', 'category', 'post_type' ].indexOf( type ) > -1;
+
+	if ( ! kind && ! isBuiltInType ) {
+		return setAttributes( {
+			url: encodeURI( url ),
+			label: newLabel,
+			opensInNewTab,
+			...( Number.isInteger( id ) && { id } ),
+			kind: 'custom',
+		} );
+	}
+
+	return setAttributes( {
+		url: encodeURI( url ),
+		label: newLabel,
+		opensInNewTab,
+		...( Number.isInteger( id ) && { id } ),
+		...( kind && { kind } ),
+		...( type && { type } ),
+	} );
+};
+
 export default function NavigationLinkEdit( {
 	attributes,
 	isSelected,
@@ -519,49 +563,11 @@ export default function NavigationLinkEdit( {
 									type,
 									kind
 								) }
-								onChange={ ( {
-									title: newTitle = '',
-									url: newURL = '',
-									opensInNewTab: newOpensInNewTab,
-									id,
-									kind: newKind = '',
-									type: newType = '',
-								} = {} ) =>
-									setAttributes( {
-										url: encodeURI( newURL ),
-										label: ( () => {
-											const normalizedTitle = newTitle.replace(
-												/http(s?):\/\//gi,
-												''
-											);
-											const normalizedURL = newURL.replace(
-												/http(s?):\/\//gi,
-												''
-											);
-											if (
-												newTitle !== '' &&
-												normalizedTitle !==
-													normalizedURL &&
-												label !== newTitle
-											) {
-												return escape( newTitle );
-											} else if ( label ) {
-												return label;
-											}
-											// If there's no label, add the URL.
-											return escape( normalizedURL );
-										} )(),
-										opensInNewTab: newOpensInNewTab,
-										id,
-										...( newKind && {
-											kind: newKind,
-										} ),
-										...( newType &&
-											newType !== 'URL' &&
-											newType !== 'post-format' && {
-												type: newType,
-											} ),
-									} )
+								onChange={ ( updatedValue ) =>
+									updateNavigationLinkBlockAttributes(
+										updatedValue,
+										{ setAttributes, label }
+									)
 								}
 							/>
 						</Popover>
diff --git a/packages/block-library/src/navigation-link/test/edit.js b/packages/block-library/src/navigation-link/test/edit.js
new file mode 100644
index 00000000000000..c0d5319441380d
--- /dev/null
+++ b/packages/block-library/src/navigation-link/test/edit.js
@@ -0,0 +1,296 @@
+/**
+ * Internal dependencies
+ */
+import { updateNavigationLinkBlockAttributes } from '../edit';
+
+describe( 'edit', () => {
+	describe( 'updateNavigationLinkBlockAttributes', () => {
+		// data shapes are linked to fetchLinkSuggestions from
+		// core-data/src/fetch/__experimental-fetch-link-suggestions.js
+		it( 'can update a post link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				opensInNewTab: false,
+				id: 1337,
+				url: 'https://wordpress.local/menu-test/',
+				kind: 'post-type',
+				title: 'Menu Test',
+				type: 'post',
+			};
+
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 1337,
+				label: 'Menu Test',
+				opensInNewTab: false,
+				kind: 'post-type',
+				type: 'post',
+				url: 'https://wordpress.local/menu-test/',
+			} );
+		} );
+
+		it( 'can update a page link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 2,
+				kind: 'post-type',
+				opensInNewTab: false,
+				title: 'Sample Page',
+				type: 'page',
+				url: 'http://wordpress.local/sample-page/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 2,
+				kind: 'post-type',
+				label: 'Sample Page',
+				opensInNewTab: false,
+				type: 'page',
+				url: 'http://wordpress.local/sample-page/',
+			} );
+		} );
+
+		it( 'can update a tag link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 15,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				title: 'bar',
+				type: 'post_tag',
+				url: 'http://wordpress.local/tag/bar/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			// TODO: existing bug: if url is not set, placeholder has "tag" and set value has "post_tag"
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 15,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				label: 'bar',
+				type: 'tag',
+				url: 'http://wordpress.local/tag/bar/',
+			} );
+		} );
+
+		it( 'can update a category link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 9,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				title: 'Cats',
+				type: 'category',
+				url: 'http://wordpress.local/category/cats/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 9,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				label: 'Cats',
+				type: 'category',
+				url: 'http://wordpress.local/category/cats/',
+			} );
+		} );
+
+		it( 'can update a custom post type link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 131,
+				kind: 'post-type',
+				opensInNewTab: false,
+				title: 'Fall',
+				type: 'portfolio',
+				url: 'http://wordpress.local/portfolio/fall/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 131,
+				kind: 'post-type',
+				opensInNewTab: false,
+				label: 'Fall',
+				type: 'portfolio',
+				url: 'http://wordpress.local/portfolio/fall/',
+			} );
+		} );
+
+		it( 'can update a custom tag link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 4,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				title: 'PortfolioTag',
+				type: 'portfolio_tag',
+				url: 'http://wordpress.local/portfolio_tag/portfoliotag/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 4,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				label: 'PortfolioTag',
+				type: 'portfolio_tag',
+				url: 'http://wordpress.local/portfolio_tag/portfoliotag/',
+			} );
+		} );
+
+		it( 'can update a custom category link', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 2,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				title: 'Portfolioz Category',
+				type: 'portfolio_category',
+				url:
+					'http://wordpress.local/portfolio_category/portfolioz-category/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				id: 2,
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				label: 'Portfolioz Category',
+				type: 'portfolio_category',
+				url:
+					'http://wordpress.local/portfolio_category/portfolioz-category/',
+			} );
+		} );
+
+		it( 'can update a post format', () => {
+			const setAttributes = jest.fn();
+			const linkSuggestion = {
+				id: 'video',
+				kind: undefined, //TODO also fix this in experimental fetch link suggestions
+				opensInNewTab: false,
+				title: 'Video',
+				type: 'post-format',
+				url: 'http://wordpress.local/type/video/',
+			};
+			updateNavigationLinkBlockAttributes( linkSuggestion, {
+				setAttributes,
+			} );
+			expect( setAttributes ).toHaveBeenCalledWith( {
+				kind: 'taxonomy',
+				opensInNewTab: false,
+				label: 'Video',
+				type: 'post_format',
+				url: 'http://wordpress.local/type/video/',
+			} );
+		} );
+
+		describe( 'various link protocols save as custom links', () => {
+			it( 'when typing a url, but not selecting a search suggestion', () => {
+				const setAttributes = jest.fn();
+				const linkSuggestion = {
+					opensInNewTab: false,
+					url: 'www.wordpress.org',
+				};
+				updateNavigationLinkBlockAttributes( linkSuggestion, {
+					setAttributes,
+				} );
+				expect( setAttributes ).toHaveBeenCalledWith( {
+					opensInNewTab: false,
+					url: 'www.wordpress.org',
+					label: 'www.wordpress.org',
+					kind: 'custom',
+				} );
+			} );
+
+			it( 'url', () => {
+				const setAttributes = jest.fn();
+				const linkSuggestion = {
+					id: 'www.wordpress.org',
+					opensInNewTab: false,
+					title: 'www.wordpress.org',
+					type: 'URL',
+					url: 'http://www.wordpress.org',
+				};
+				updateNavigationLinkBlockAttributes( linkSuggestion, {
+					setAttributes,
+				} );
+				expect( setAttributes ).toHaveBeenCalledWith( {
+					opensInNewTab: false,
+					label: 'www.wordpress.org',
+					kind: 'custom',
+					url: 'http://www.wordpress.org',
+				} );
+			} );
+
+			it( 'email', () => {
+				const setAttributes = jest.fn();
+				const linkSuggestion = {
+					id: 'mailto:foo@example.com',
+					opensInNewTab: false,
+					title: 'mailto:foo@example.com',
+					type: 'mailto',
+					url: 'mailto:foo@example.com',
+				};
+				updateNavigationLinkBlockAttributes( linkSuggestion, {
+					setAttributes,
+				} );
+				expect( setAttributes ).toHaveBeenCalledWith( {
+					opensInNewTab: false,
+					label: 'mailto:foo@example.com',
+					kind: 'custom',
+					url: 'mailto:foo@example.com',
+				} );
+			} );
+
+			it( 'anchor links (internal links)', () => {
+				const setAttributes = jest.fn();
+				const linkSuggestion = {
+					id: '#foo',
+					opensInNewTab: false,
+					title: '#foo',
+					type: 'internal',
+					url: '#foo',
+				};
+				updateNavigationLinkBlockAttributes( linkSuggestion, {
+					setAttributes,
+				} );
+				expect( setAttributes ).toHaveBeenCalledWith( {
+					opensInNewTab: false,
+					label: '#foo',
+					kind: 'custom',
+					url: '#foo',
+				} );
+			} );
+
+			it( 'telephone', () => {
+				const setAttributes = jest.fn();
+				const linkSuggestion = {
+					id: 'tel:5555555',
+					opensInNewTab: false,
+					title: 'tel:5555555',
+					type: 'tel',
+					url: 'tel:5555555',
+				};
+				updateNavigationLinkBlockAttributes( linkSuggestion, {
+					setAttributes,
+				} );
+				expect( setAttributes ).toHaveBeenCalledWith( {
+					opensInNewTab: false,
+					label: 'tel:5555555',
+					kind: 'custom',
+					url: 'tel:5555555',
+				} );
+			} );
+		} );
+	} );
+} );
diff --git a/packages/e2e-tests/specs/experiments/blocks/__snapshots__/navigation.test.js.snap b/packages/e2e-tests/specs/experiments/blocks/__snapshots__/navigation.test.js.snap
index 74860922357e8d..e8b9bce026c57d 100644
--- a/packages/e2e-tests/specs/experiments/blocks/__snapshots__/navigation.test.js.snap
+++ b/packages/e2e-tests/specs/experiments/blocks/__snapshots__/navigation.test.js.snap
@@ -46,7 +46,7 @@ exports[`Navigation Creating from existing Pages allows a navigation block to be
 
 exports[`Navigation allows an empty navigation block to be created and manually populated using a mixture of internal and external links 1`] = `
 "<!-- wp:navigation {\\"orientation\\":\\"horizontal\\"} -->
-<!-- wp:navigation-link {\\"label\\":\\"WP\\",\\"id\\":\\"https://wordpress.org\\",\\"url\\":\\"https://wordpress.org\\"} /-->
+<!-- wp:navigation-link {\\"label\\":\\"WP\\",\\"type\\":\\"custom\\",\\"url\\":\\"https://wordpress.org\\"} /-->
 
 <!-- wp:navigation-link {\\"label\\":\\"Contact\\",\\"type\\":\\"page\\",\\"id\\":1,\\"url\\":\\"https://this/is/a/test/search/get-in-touch\\",\\"kind\\":\\"post-type\\"} /-->
 <!-- /wp:navigation -->"