diff --git a/packages/block-library/src/html/block.json b/packages/block-library/src/html/block.json
index e72a674373e14..c1e1e94b87496 100644
--- a/packages/block-library/src/html/block.json
+++ b/packages/block-library/src/html/block.json
@@ -10,7 +10,7 @@
 	"attributes": {
 		"content": {
 			"type": "string",
-			"source": "html"
+			"source": "raw"
 		}
 	},
 	"supports": {
diff --git a/packages/blocks/src/api/parser/get-block-attributes.js b/packages/blocks/src/api/parser/get-block-attributes.js
index b9fd3dcf67508..c8d7aa88204cc 100644
--- a/packages/blocks/src/api/parser/get-block-attributes.js
+++ b/packages/blocks/src/api/parser/get-block-attributes.js
@@ -104,16 +104,18 @@ export function isOfTypes( value, types ) {
  *
  * @param {string}      attributeKey      Attribute key.
  * @param {Object}      attributeSchema   Attribute's schema.
- * @param {string|Node} innerHTML         Block's raw content.
+ * @param {Node}        innerDOM          Parsed DOM of block's inner HTML.
  * @param {Object}      commentAttributes Block's comment attributes.
+ * @param {string}      innerHTML         Raw HTML from block node's innerHTML property.
  *
  * @return {*} Attribute value.
  */
 export function getBlockAttribute(
 	attributeKey,
 	attributeSchema,
-	innerHTML,
-	commentAttributes
+	innerDOM,
+	commentAttributes,
+	innerHTML
 ) {
 	let value;
 
@@ -125,6 +127,10 @@ export function getBlockAttribute(
 				? commentAttributes[ attributeKey ]
 				: undefined;
 			break;
+		// raw source means that it's the original raw block content.
+		case 'raw':
+			value = innerHTML;
+			break;
 		case 'attribute':
 		case 'property':
 		case 'html':
@@ -133,7 +139,7 @@ export function getBlockAttribute(
 		case 'node':
 		case 'query':
 		case 'tag':
-			value = parseWithAttributeSchema( innerHTML, attributeSchema );
+			value = parseWithAttributeSchema( innerDOM, attributeSchema );
 			break;
 	}
 
@@ -270,7 +276,7 @@ export function getBlockAttributes(
 	const blockType = normalizeBlockType( blockTypeOrName );
 
 	const blockAttributes = mapValues( blockType.attributes, ( schema, key ) =>
-		getBlockAttribute( key, schema, doc, attributes )
+		getBlockAttribute( key, schema, doc, attributes, innerHTML )
 	);
 
 	return applyFilters(
diff --git a/schemas/json/block.json b/schemas/json/block.json
index 93ed4e5a12b94..f23ef249577bd 100644
--- a/schemas/json/block.json
+++ b/schemas/json/block.json
@@ -160,6 +160,7 @@
 								"attribute",
 								"text",
 								"html",
+								"raw",
 								"query",
 								"meta"
 							]
diff --git a/test/e2e/specs/editor/blocks/html.spec.js b/test/e2e/specs/editor/blocks/html.spec.js
index dedb9197984fc..77e9d2a9186a7 100644
--- a/test/e2e/specs/editor/blocks/html.spec.js
+++ b/test/e2e/specs/editor/blocks/html.spec.js
@@ -30,4 +30,20 @@ test.describe( 'HTML block', () => {
 <!-- /wp:html -->`
 		);
 	} );
+
+	test( 'should not encode <', async ( { editor, page } ) => {
+		// Create a Custom HTML block with the slash shortcut.
+		await page.click( 'role=button[name="Add default block"i]' );
+		await page.keyboard.type( '/html' );
+		await expect(
+			page.locator( 'role=option[name="Custom HTML"i][selected]' )
+		).toBeVisible();
+		await page.keyboard.press( 'Enter' );
+		await page.keyboard.type( '1 < 2' );
+		await editor.publishPost();
+		await page.reload();
+		await expect(
+			page.locator( '[data-type="core/html"] textarea' )
+		).toBeVisible();
+	} );
 } );