diff --git a/packages/lexical-playground/__tests__/e2e/CodeBlock.spec.mjs b/packages/lexical-playground/__tests__/e2e/CodeBlock.spec.mjs
index 150f5cbc43e..e5e8240f08c 100644
--- a/packages/lexical-playground/__tests__/e2e/CodeBlock.spec.mjs
+++ b/packages/lexical-playground/__tests__/e2e/CodeBlock.spec.mjs
@@ -11,6 +11,7 @@ import {
   moveToEditorBeginning,
   moveToEnd,
   moveToStart,
+  pressShiftEnter,
   selectAll,
   selectCharacters,
 } from '../keyboardShortcuts/index.mjs';
@@ -296,6 +297,57 @@ test.describe('CodeBlock', () => {
     );
   });
 
+  test('Can select a line within line breaks and convert to code block', async ({
+    page,
+    isPlainText,
+  }) => {
+    test.skip(isPlainText);
+    await focusEditor(page);
+    await page.keyboard.type('aaa');
+    await pressShiftEnter(page);
+    await page.keyboard.type('bbb');
+    await pressShiftEnter(page);
+    await page.keyboard.type('ccc');
+    await moveLeft(page, 4);
+    await selectCharacters(page, 'left', 3);
+
+    await assertHTML(
+      page,
+      html`
+        <p class="PlaygroundEditorTheme__paragraph" dir="auto">
+          <span data-lexical-text="true">aaa</span>
+          <br />
+          <span data-lexical-text="true">bbb</span>
+          <br />
+          <span data-lexical-text="true">ccc</span>
+        </p>
+      `,
+    );
+
+    await toggleCodeBlock(page);
+
+    await assertHTML(
+      page,
+      html`
+        <p class="PlaygroundEditorTheme__paragraph" dir="auto">
+          <span data-lexical-text="true">aaa</span>
+        </p>
+        <code
+          class="PlaygroundEditorTheme__code"
+          dir="auto"
+          spellcheck="false"
+          data-gutter="1"
+          data-highlight-language="javascript"
+          data-language="javascript">
+          <span data-lexical-text="true">bbb</span>
+        </code>
+        <p class="PlaygroundEditorTheme__paragraph" dir="auto">
+          <span data-lexical-text="true">ccc</span>
+        </p>
+      `,
+    );
+  });
+
   test('Can switch highlighting language in a toolbar', async ({
     page,
     isRichText,
diff --git a/packages/lexical-playground/src/plugins/ToolbarPlugin/utils.ts b/packages/lexical-playground/src/plugins/ToolbarPlugin/utils.ts
index 7fd7b173733..05878e260b5 100644
--- a/packages/lexical-playground/src/plugins/ToolbarPlugin/utils.ts
+++ b/packages/lexical-playground/src/plugins/ToolbarPlugin/utils.ts
@@ -25,10 +25,19 @@ import {$getNearestBlockElementAncestorOrThrow} from '@lexical/utils';
 import {
   $addUpdateTag,
   $createParagraphNode,
+  $createRangeSelection,
   $getSelection,
+  $isElementNode,
+  $isLineBreakNode,
+  $isParagraphNode,
   $isRangeSelection,
   $isTextNode,
+  $setSelection,
+  $splitNode,
+  ElementNode,
   LexicalEditor,
+  LexicalNode,
+  RangeSelection,
   SKIP_DOM_SELECTION_TAG,
   SKIP_SELECTION_FOCUS_TAG,
 } from 'lexical';
@@ -236,6 +245,62 @@ export const formatQuote = (editor: LexicalEditor, blockType: string) => {
   }
 };
 
+function $splitParagraphsByLineBreaks(selection: RangeSelection): void {
+  const blocks: Set<ElementNode> = new Set();
+  for (const node of selection.getNodes()) {
+    const block = $isParagraphNode(node) ? node : $findParagraphParent(node);
+    if (block !== null) {
+      blocks.add(block);
+    }
+  }
+  for (const point of [selection.anchor, selection.focus]) {
+    const block = $findParagraphParent(point.getNode());
+    if (block !== null) {
+      blocks.add(block);
+    }
+  }
+
+  const anchorKey = selection.anchor.key;
+  const anchorOffset = selection.anchor.offset;
+  const anchorType = selection.anchor.type;
+  const focusKey = selection.focus.key;
+  const focusOffset = selection.focus.offset;
+  const focusType = selection.focus.type;
+
+  for (const block of blocks) {
+    const children = block.getChildren();
+    const lbIndices: number[] = [];
+    for (let i = 0; i < children.length; i++) {
+      if ($isLineBreakNode(children[i])) {
+        lbIndices.push(i);
+      }
+    }
+    if (lbIndices.length === 0) {
+      continue;
+    }
+    for (let j = lbIndices.length - 1; j >= 0; j--) {
+      const [, rightBlock] = $splitNode(block, lbIndices[j]);
+      const firstChild = rightBlock.getFirstChild();
+      if ($isLineBreakNode(firstChild)) {
+        firstChild.remove();
+      }
+    }
+  }
+
+  const newSelection = $createRangeSelection();
+  newSelection.anchor.set(anchorKey, anchorOffset, anchorType);
+  newSelection.focus.set(focusKey, focusOffset, focusType);
+  $setSelection(newSelection);
+}
+
+function $findParagraphParent(node: LexicalNode): ElementNode | null {
+  if ($isParagraphNode(node)) {
+    return node;
+  }
+  const parent = node.getParent();
+  return $isElementNode(parent) && $isParagraphNode(parent) ? parent : null;
+}
+
 export const formatCode = (editor: LexicalEditor, blockType: string) => {
   if (blockType !== 'code') {
     editor.update(() => {
@@ -247,6 +312,11 @@ export const formatCode = (editor: LexicalEditor, blockType: string) => {
       if (!$isRangeSelection(selection) || selection.isCollapsed()) {
         $setBlocksType(selection, () => $createCodeNode());
       } else {
+        $splitParagraphsByLineBreaks(selection);
+        selection = $getSelection();
+        if (!$isRangeSelection(selection)) {
+          return;
+        }
         const textContent = selection.getTextContent();
         const codeNode = $createCodeNode();
         selection.insertNodes([codeNode]);