diff --git a/packages/blocks/src/api/raw-handling/html-formatting-remover.js b/packages/blocks/src/api/raw-handling/html-formatting-remover.js
new file mode 100644
index 00000000000000..615feb80508a98
--- /dev/null
+++ b/packages/blocks/src/api/raw-handling/html-formatting-remover.js
@@ -0,0 +1,92 @@
+/**
+ * Internal dependencies
+ */
+import { isPhrasingContent } from './phrasing-content';
+
+function getSibling( node, which ) {
+ const sibling = node[ `${ which }Sibling` ];
+
+ if ( sibling && isPhrasingContent( sibling ) ) {
+ return sibling;
+ }
+
+ const { parentNode } = node;
+
+ if ( ! parentNode || ! isPhrasingContent( parentNode ) ) {
+ return;
+ }
+
+ return getSibling( parentNode, which );
+}
+
+function isFormattingSpace( character ) {
+ return (
+ character === ' ' ||
+ character === '\r' ||
+ character === '\n' ||
+ character === '\t'
+ );
+}
+
+/**
+ * Removes spacing that formats HTML.
+ *
+ * @see https://www.w3.org/TR/css-text-3/#white-space-processing
+ *
+ * @param {Node} node The node to be processed.
+ * @return {void}
+ */
+export default function( node ) {
+ if ( node.nodeType !== node.TEXT_NODE ) {
+ return;
+ }
+
+ // Ignore pre content.
+ if ( node.parentElement.closest( 'pre' ) ) {
+ return;
+ }
+
+ // First, replace any sequence of HTML formatting space with a single space.
+ let newData = node.data.replace( /[ \r\n\t]+/g, ' ' );
+
+ // Remove the leading space if the text element is at the start of a block,
+ // is preceded by a line break element, or has a space in the previous
+ // node.
+ if ( newData[ 0 ] === ' ' ) {
+ const previousSibling = getSibling( node, 'previous' );
+
+ if (
+ ! previousSibling ||
+ previousSibling.nodeName === 'BR' ||
+ previousSibling.textContent.slice( -1 ) === ' '
+ ) {
+ newData = newData.slice( 1 );
+ }
+ }
+
+ // Remove the trailing space if the text element is at the end of a block,
+ // is succeded by a line break element, or has a space in the next text
+ // node.
+ if ( newData[ newData.length - 1 ] === ' ' ) {
+ const nextSibling = getSibling( node, 'next' );
+
+ if (
+ ! nextSibling ||
+ nextSibling.nodeName === 'BR' ||
+ (
+ nextSibling.nodeType === nextSibling.TEXT_NODE &&
+ isFormattingSpace( nextSibling.textContent[ 0 ] )
+ )
+ ) {
+ newData = newData.slice( 0, -1 );
+ }
+ }
+
+ // If there's no data left, remove the node, so `previousSibling` stays
+ // accurate. Otherwise, update the node data.
+ if ( ! newData ) {
+ node.parentNode.removeChild( node );
+ } else {
+ node.data = newData;
+ }
+}
diff --git a/packages/blocks/src/api/raw-handling/paste-handler.js b/packages/blocks/src/api/raw-handling/paste-handler.js
index fdea17bd0eba2f..4468eb87c51db5 100644
--- a/packages/blocks/src/api/raw-handling/paste-handler.js
+++ b/packages/blocks/src/api/raw-handling/paste-handler.js
@@ -24,6 +24,7 @@ import shortcodeConverter from './shortcode-converter';
import markdownConverter from './markdown-converter';
import iframeRemover from './iframe-remover';
import googleDocsUIDRemover from './google-docs-uid-remover';
+import htmlFormattingRemover from './html-formatting-remover';
import { getPhrasingContentSchema } from './phrasing-content';
import {
deepFilterHTML,
@@ -224,6 +225,7 @@ export function pasteHandler( { HTML = '', plainText = '', mode = 'AUTO', tagNam
piece = deepFilterHTML( piece, filters, blockContentSchema );
piece = removeInvalidHTML( piece, schema );
+ piece = deepFilterHTML( piece, [ htmlFormattingRemover ], blockContentSchema );
piece = normaliseBlocks( piece );
// Allows us to ask for this information when we get a report.
diff --git a/packages/blocks/src/api/raw-handling/test/html-formatting-remover.js b/packages/blocks/src/api/raw-handling/test/html-formatting-remover.js
new file mode 100644
index 00000000000000..d5efd50f4db857
--- /dev/null
+++ b/packages/blocks/src/api/raw-handling/test/html-formatting-remover.js
@@ -0,0 +1,110 @@
+/**
+ * Internal dependencies
+ */
+import filter from '../html-formatting-remover';
+import { deepFilterHTML } from '../utils';
+
+describe( 'HTMLFormattingRemover', () => {
+ it( 'should trim text node without parent', () => {
+ const input = 'a';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( input );
+ } );
+
+ it( 'should remove formatting space', () => {
+ const input = `
+
+ a
+ b
+
+ `;
+ const output = 'a b
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should remove nested formatting space', () => {
+ const input = `
+
+
+ a
+ b
+
+
+ `;
+ const output = 'a b
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should not remove leading or trailing space if previous or next element has no space', () => {
+ const input = `
+
+ a
+ b
+ c
+
+ `;
+ const output = 'a b c
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should remove formatting space (empty)', () => {
+ const input = `
+
+
+ `;
+ const output = '
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should remove block level formatting space', () => {
+ const input = `
+
+ `;
+ const output = '';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should remove formatting space around br', () => {
+ const input = `
+
+ a
+
+ `;
+ const output = 'a
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should remove formatting space around phasing content elements', () => {
+ const input = `
+
+
+ a
+
+
+ b
+
+
+ `;
+ const output = 'a b
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+
+ it( 'should ignore pre', () => {
+ const input = ` a\n b\n `;
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( input );
+ } );
+
+ it( 'should not remove white space if next elemnt has none', () => {
+ const input = `a b
`;
+ const output = 'a b
';
+ expect( deepFilterHTML( input, [ filter ] ) ).toEqual( output );
+ } );
+} );
diff --git a/test/integration/fixtures/apple-out.html b/test/integration/fixtures/apple-out.html
index 40d4f1a8d133ed..f040d382352910 100644
--- a/test/integration/fixtures/apple-out.html
+++ b/test/integration/fixtures/apple-out.html
@@ -19,27 +19,9 @@
-
-One
-
-Two
-
-Three
-
-1
-
-2
-
-3
-
-I
-
-II
-
-III
-
An image:
+An image:
diff --git a/test/integration/fixtures/classic-out.html b/test/integration/fixtures/classic-out.html
index dbc94528db7b22..1298053376dfa0 100644
--- a/test/integration/fixtures/classic-out.html
+++ b/test/integration/fixtures/classic-out.html
@@ -15,7 +15,7 @@
-Fourth paragraph
+Fourth paragraph
diff --git a/test/integration/fixtures/evernote-out.html b/test/integration/fixtures/evernote-out.html
index c984df312f0bef..32d2deb7648970 100644
--- a/test/integration/fixtures/evernote-out.html
+++ b/test/integration/fixtures/evernote-out.html
@@ -1,7 +1,5 @@
-This is a paragraph .
-link .
-
+This is a paragraph .link .
@@ -17,13 +15,7 @@
-One
- Two
- Three
- Four
- Five
- Six
-
This is a heading with italic
-Preserve
+Preserve
diff --git a/test/integration/fixtures/ms-word-out.html b/test/integration/fixtures/ms-word-out.html
index 47f7cab83ae73f..79871a73e6a3fe 100644
--- a/test/integration/fixtures/ms-word-out.html
+++ b/test/integration/fixtures/ms-word-out.html
@@ -1,11 +1,9 @@
-This is a
-title
+This is a title
-This is a
-subtitle
+This is a subtitle
@@ -29,25 +27,7 @@ This is a heading level 2
-
- One
-
- Two
-
- Three
-
- 1
-
- 2
-
- 3
-
- I
-
- II
-
- III
-
-Lorem
-ipsum dolor sit amet, consectetur adipiscing elit
-
+Lorem ipsum dolor sit amet, consectetur adipiscing elit
-
-Lorem
-ipsum dolor sit amet, consectetur adipiscing elit. Pellentesque
-aliquet hendrerit auctor. Nam lobortis, est vel lacinia tincidunt,
-purus tellus vehicula ex, nec pharetra justo dui sed lorem. Nam
-congue laoreet massa, quis varius est tincidunt ut.
+Lorem ipsum dolor sit amet, consectetur adipiscing elit. Pellentesque aliquet hendrerit auctor. Nam lobortis, est vel lacinia tincidunt, purus tellus vehicula ex, nec pharetra justo dui sed lorem. Nam congue laoreet massa, quis varius est tincidunt ut.