diff --git a/src/wp-includes/blocks.php b/src/wp-includes/blocks.php
index 28e269c1d9..cec2f36925 100644
--- a/src/wp-includes/blocks.php
+++ b/src/wp-includes/blocks.php
@@ -20,10 +20,14 @@ function remove_block_asset_path_prefix( $asset_handle_or_path ) {
 	if ( 0 !== strpos( $asset_handle_or_path, $path_prefix ) ) {
 		return $asset_handle_or_path;
 	}
-	return substr(
+	$path = substr(
 		$asset_handle_or_path,
 		strlen( $path_prefix )
 	);
+	if ( strpos( $path, './' ) === 0 ) {
+		$path = substr( $path, 2 );
+	}
+	return $path;
 }
 
 /**
diff --git a/tests/phpunit/tests/blocks/register.php b/tests/phpunit/tests/blocks/register.php
index 07800a98a3..542fe3c726 100644
--- a/tests/phpunit/tests/blocks/register.php
+++ b/tests/phpunit/tests/blocks/register.php
@@ -122,9 +122,18 @@ class Tests_Blocks_Register extends WP_UnitTestCase {
 	 * @ticket 50263
 	 */
 	public function test_removes_block_asset_path_prefix() {
+		$result = remove_block_asset_path_prefix( 'file:block.js' );
+
+		$this->assertSame( 'block.js', $result );
+	}
+
+	/**
+	 * @ticket 54797
+	 */
+	public function test_removes_block_asset_path_prefix_and_current_directory() {
 		$result = remove_block_asset_path_prefix( 'file:./block.js' );
 
-		$this->assertSame( './block.js', $result );
+		$this->assertSame( 'block.js', $result );
 	}
 
 	/**