diff --git a/docs/reference-guides/core-blocks.md b/docs/reference-guides/core-blocks.md
index 08a299bc17b71..b16bc7137b58f 100644
--- a/docs/reference-guides/core-blocks.md
+++ b/docs/reference-guides/core-blocks.md
@@ -387,7 +387,7 @@ Insert an image to make a visual statement. ([Source](https://github.com/WordPre
 
 -	**Name:** core/image
 -	**Category:** media
--	**Supports:** align (center, full, left, right, wide), anchor, color (~~background~~, ~~text~~), filter (duotone), interactivity, shadow ()
+-	**Supports:** align (center, full, left, right, wide), anchor, color (~~background~~, ~~text~~), filter (duotone), interactivity, shadow (), spacing (margin)
 -	**Attributes:** alt, aspectRatio, blob, caption, height, href, id, lightbox, linkClass, linkDestination, linkTarget, rel, scale, sizeSlug, title, url, width
 
 ## Latest Comments
diff --git a/packages/block-library/src/image/block.json b/packages/block-library/src/image/block.json
index b9d269db67462..6417879164a22 100644
--- a/packages/block-library/src/image/block.json
+++ b/packages/block-library/src/image/block.json
@@ -106,6 +106,9 @@
 		"filter": {
 			"duotone": true
 		},
+		"spacing": {
+			"margin": true
+		},
 		"__experimentalBorder": {
 			"color": true,
 			"radius": true,
diff --git a/packages/block-library/src/image/index.php b/packages/block-library/src/image/index.php
index ace6a36546901..ce9c958c19b6c 100644
--- a/packages/block-library/src/image/index.php
+++ b/packages/block-library/src/image/index.php
@@ -306,12 +306,12 @@ class="wp-lightbox-overlay zoom"
 					<svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 24 24" width="20" height="20" aria-hidden="true" focusable="false"><path d="m13.06 12 6.47-6.47-1.06-1.06L12 10.94 5.53 4.47 4.47 5.53 10.94 12l-6.47 6.47 1.06 1.06L12 13.06l6.47 6.47 1.06-1.06L13.06 12Z"></path></svg>
 				</button>
 				<div class="lightbox-image-container">
-					<figure data-wp-bind--class="state.currentImage.figureClassNames" data-wp-bind--style="state.currentImage.figureStyles">
+					<figure data-wp-bind--class="state.currentImage.figureClassNames" data-wp-bind--style="state.figureStyles">
 						<img data-wp-bind--alt="state.currentImage.alt" data-wp-bind--class="state.currentImage.imgClassNames" data-wp-bind--style="state.imgStyles" data-wp-bind--src="state.currentImage.currentSrc">
 					</figure>
 				</div>
 				<div class="lightbox-image-container">
-					<figure data-wp-bind--class="state.currentImage.figureClassNames" data-wp-bind--style="state.currentImage.figureStyles">
+					<figure data-wp-bind--class="state.currentImage.figureClassNames" data-wp-bind--style="state.figureStyles">
 						<img data-wp-bind--alt="state.currentImage.alt" data-wp-bind--class="state.currentImage.imgClassNames" data-wp-bind--style="state.imgStyles" data-wp-bind--src="state.enlargedSrc">
 					</figure>
 				</div>
diff --git a/packages/block-library/src/image/view.js b/packages/block-library/src/image/view.js
index 99cc84d79f0f4..5ff97cccf1834 100644
--- a/packages/block-library/src/image/view.js
+++ b/packages/block-library/src/image/view.js
@@ -42,6 +42,15 @@ const { state, actions, callbacks } = store(
 					'data:image/gif;base64,R0lGODlhAQABAAD/ACwAAAAAAQABAAACADs='
 				);
 			},
+			get figureStyles() {
+				return (
+					state.overlayOpened &&
+					`${ state.currentImage.figureStyles?.replace(
+						/margin[^;]*;?/g,
+						''
+					) };`
+				);
+			},
 			get imgStyles() {
 				return (
 					state.overlayOpened &&
diff --git a/test/e2e/specs/editor/blocks/image.spec.js b/test/e2e/specs/editor/blocks/image.spec.js
index 3cb1565c8d416..c4c725e083625 100644
--- a/test/e2e/specs/editor/blocks/image.spec.js
+++ b/test/e2e/specs/editor/blocks/image.spec.js
@@ -937,6 +937,37 @@ test.describe( 'Image - lightbox', () => {
 			} );
 		} );
 	} );
+
+	test.describe( 'should render as expected on front end', () => {
+		test( "Overlay image should not inherit content image's margins", async ( {
+			editor,
+			page,
+		} ) => {
+			await editor.setContent( `<!-- wp:image {"id":${ uploadedMedia.id },"sizeSlug":"full","linkDestination":"none",
+			"lightbox":{"enabled":true},"style":{"spacing":{"margin":{"top":"var:preset|spacing|40","bottom":"var:preset|spacing|40","left":"var:preset|spacing|40","right":"var:preset|spacing|40"}}}} -->
+			<figure class="wp-block-image size-full" style="margin-top:var(--wp--preset--spacing--40);margin-right:var(--wp--preset--spacing--40);margin-bottom:var(--wp--preset--spacing--40);margin-left:var(--wp--preset--spacing--40)">
+			<img src="${ uploadedMedia.source_url }" alt="" class="wp-image-${ uploadedMedia.id }"/></figure>
+			<!-- /wp:image --> ` );
+
+			const postId = await editor.publishPost();
+			await page.goto( `/?p=${ postId }` );
+
+			const lightboxImage = page.locator( '.wp-lightbox-container img' );
+			await expect( lightboxImage ).toBeVisible();
+			await lightboxImage.click();
+
+			const figure = page
+				.locator( '.wp-lightbox-overlay .wp-block-image' )
+				.first();
+			await expect( figure ).toBeVisible();
+			const margin = await figure.evaluate( ( element ) => {
+				return window
+					.getComputedStyle( element )
+					.getPropertyValue( 'margin' );
+			} );
+			expect( margin ).toBe( '0px' );
+		} );
+	} );
 } );
 
 // Added to prevent regressions of https://github.com/WordPress/gutenberg/pull/57040.