diff --git a/packages/block-library/src/code/block.json b/packages/block-library/src/code/block.json
index d39e5f213bbe6..354d30b04fd6d 100644
--- a/packages/block-library/src/code/block.json
+++ b/packages/block-library/src/code/block.json
@@ -4,7 +4,7 @@
 	"attributes": {
 		"content": {
 			"type": "string",
-			"source": "text",
+			"source": "html",
 			"selector": "code"
 		}
 	}
diff --git a/packages/block-library/src/code/test/utils.js b/packages/block-library/src/code/test/utils.js
index 4926eef16d528..4dbf5e1c40e42 100644
--- a/packages/block-library/src/code/test/utils.js
+++ b/packages/block-library/src/code/test/utils.js
@@ -38,6 +38,11 @@ describe( 'core/code', () => {
 			expect( text ).toBe( '&' );
 		} );
 
+		it( 'should unescape escaped less than and greater than characters', () => {
+			const text = unescape( '<button>Click</button>' );
+			expect( text ).toBe( '<button>Click</button>' );
+		} );
+
 		it( 'should unescape escaped opening square brackets', () => {
 			const text = unescape( '&#91;shortcode]&#91;/shortcode]' );
 			expect( text ).toBe( '[shortcode][/shortcode]' );
diff --git a/packages/block-library/src/code/utils.js b/packages/block-library/src/code/utils.js
index fb8557a95b18e..c5f2040db9048 100644
--- a/packages/block-library/src/code/utils.js
+++ b/packages/block-library/src/code/utils.js
@@ -27,6 +27,7 @@ export function unescape( content ) {
 	return flow(
 		unescapeProtocolInIsolatedUrls,
 		unescapeOpeningSquareBrackets,
+		unescapeTagDelimiters,
 		unescapeAmpersands
 	)( content || '' );
 }
@@ -54,6 +55,18 @@ function unescapeAmpersands( content ) {
 	return content.replace( /&amp;/g, '&' );
 }
 
+/**
+ * Returns the given content with all &lt; and &gt; HTML entities converted
+ * into < and >, respectively.
+ *
+ * @param {string}  content The content of a code block.
+ * @return {string} The given content with all &lt; and &gt; HTML entities
+ *                  converted into < and >, respectively
+ */
+function unescapeTagDelimiters( content ) {
+	return content.replace( /&lt;/g, '<' ).replace( /&gt;/g, '>' );
+}
+
 /**
  * Returns the given content with all opening shortcode characters converted
  * into their HTML entity counterpart (i.e. [ => &#91;). For instance, a