diff --git a/changelog/add-stripe-floating-labels b/changelog/add-stripe-floating-labels
new file mode 100644
index 00000000000..c82d0361748
--- /dev/null
+++ b/changelog/add-stripe-floating-labels
@@ -0,0 +1,4 @@
+Significance: minor
+Type: add
+
+Using Floating Labels with Stripe Appearance API for Blocks Checkout
diff --git a/client/checkout/api/test/index.test.js b/client/checkout/api/test/index.test.js
index dd291f4f8a7..7fe7e8c3f70 100644
--- a/client/checkout/api/test/index.test.js
+++ b/client/checkout/api/test/index.test.js
@@ -50,6 +50,7 @@ const mockAppearance = {
 		fontFamily: undefined,
 		fontSizeBase: undefined,
 	},
+	labels: 'above',
 };
 
 describe( 'WCPayAPI', () => {
diff --git a/client/checkout/blocks/payment-elements.js b/client/checkout/blocks/payment-elements.js
index 84ac4be9393..7359b89a162 100644
--- a/client/checkout/blocks/payment-elements.js
+++ b/client/checkout/blocks/payment-elements.js
@@ -36,7 +36,7 @@ const PaymentElements = ( { api, ...props } ) => {
 	useEffect( () => {
 		async function generateUPEAppearance() {
 			// Generate UPE input styles.
-			let upeAppearance = getAppearance( 'blocks_checkout' );
+			let upeAppearance = getAppearance( 'blocks_checkout', false, true );
 			upeAppearance = await api.saveUPEAppearance(
 				upeAppearance,
 				'blocks_checkout'
diff --git a/client/checkout/upe-styles/index.js b/client/checkout/upe-styles/index.js
index 73f84596924..3636c4cbbe2 100644
--- a/client/checkout/upe-styles/index.js
+++ b/client/checkout/upe-styles/index.js
@@ -8,6 +8,7 @@ import {
 	dashedToCamelCase,
 	isColorLight,
 	getBackgroundColor,
+	handleAppearanceForFloatingLabel,
 } from './utils.js';
 
 export const appearanceSelectors = {
@@ -15,6 +16,7 @@ export const appearanceSelectors = {
 		hiddenContainer: '#wcpay-hidden-div',
 		hiddenInput: '#wcpay-hidden-input',
 		hiddenInvalidInput: '#wcpay-hidden-invalid-input',
+		hiddenValidActiveLabel: '#wcpay-hidden-valid-active-label',
 	},
 	classicCheckout: {
 		appendTarget: '.woocommerce-billing-fields__field-wrapper',
@@ -40,16 +42,15 @@ export const appearanceSelectors = {
 		linkSelectors: [ 'a' ],
 	},
 	blocksCheckout: {
-		appendTarget: '#billing.wc-block-components-address-form',
-		upeThemeInputSelector: '#billing-first_name',
-		upeThemeLabelSelector:
-			'.wc-block-components-checkout-step__description',
+		appendTarget: '#contact-fields',
+		upeThemeInputSelector: '.wc-block-components-text-input #email',
+		upeThemeLabelSelector: '.wc-block-components-text-input label',
 		rowElement: 'div',
-		validClasses: [ 'wc-block-components-text-input' ],
+		validClasses: [ 'wc-block-components-text-input', 'is-active' ],
 		invalidClasses: [ 'wc-block-components-text-input', 'has-error' ],
 		alternateSelectors: {
-			appendTarget: '#shipping.wc-block-components-address-form',
-			upeThemeInputSelector: '#shipping-first_name',
+			appendTarget: '#billing.wc-block-components-address-form',
+			upeThemeInputSelector: '#billing-first_name',
 			upeThemeLabelSelector:
 				'.wc-block-components-checkout-step__description',
 		},
@@ -326,6 +327,13 @@ const hiddenElementsForUPE = {
 			selectors.hiddenInput
 		);
 
+		// Clone & append target label to hidden valid row.
+		this.appendClone(
+			hiddenValidRow,
+			selectors.upeThemeLabelSelector,
+			selectors.hiddenValidActiveLabel
+		);
+
 		// Clone & append target input  to hidden invalid row.
 		this.appendClone(
 			hiddenInvalidRow,
@@ -489,24 +497,40 @@ export const getAppearance = ( elementsLocation, forWooPay = false ) => {
 		fontSizeBase: labelRules.fontSize,
 	};
 
-	const appearance = {
+	const isFloatingLabel = elementsLocation === 'blocks_checkout';
+
+	let appearance = {
 		variables: globalRules,
 		theme: isColorLight( backgroundColor ) ? 'stripe' : 'night',
-		rules: {
-			'.Input': inputRules,
-			'.Input--invalid': inputInvalidRules,
-			'.Label': labelRules,
-			'.Block': blockRules,
-			'.Tab': tabRules,
-			'.Tab:hover': tabHoverRules,
-			'.Tab--selected': selectedTabRules,
-			'.TabIcon:hover': tabIconHoverRules,
-			'.TabIcon--selected': selectedTabIconRules,
-			'.Text': labelRules,
-			'.Text--redirect': labelRules,
-		},
+		labels: isFloatingLabel ? 'floating' : 'above',
+		// We need to clone the object to avoid modifying other rules when updating the appearance for floating labels.
+		rules: JSON.parse(
+			JSON.stringify( {
+				'.Input': inputRules,
+				'.Input--invalid': inputInvalidRules,
+				'.Label': labelRules,
+				'.Block': blockRules,
+				'.Tab': tabRules,
+				'.Tab:hover': tabHoverRules,
+				'.Tab--selected': selectedTabRules,
+				'.TabIcon:hover': tabIconHoverRules,
+				'.TabIcon--selected': selectedTabIconRules,
+				'.Text': labelRules,
+				'.Text--redirect': labelRules,
+			} )
+		),
 	};
 
+	if ( isFloatingLabel ) {
+		appearance = handleAppearanceForFloatingLabel(
+			appearance,
+			getFieldStyles(
+				selectors.hiddenValidActiveLabel,
+				'.Label--floating'
+			)
+		);
+	}
+
 	if ( forWooPay ) {
 		appearance.rules = {
 			...appearance.rules,
diff --git a/client/checkout/upe-styles/test/index.js b/client/checkout/upe-styles/test/index.js
index fc63030ddb0..bc79053555a 100644
--- a/client/checkout/upe-styles/test/index.js
+++ b/client/checkout/upe-styles/test/index.js
@@ -223,6 +223,7 @@ describe( 'Getting styles for automated theming', () => {
 					padding: '10px',
 				},
 			},
+			labels: 'above',
 		} );
 	} );
 
diff --git a/client/checkout/upe-styles/upe-styles.js b/client/checkout/upe-styles/upe-styles.js
index 98c54f50b34..ffc27cee0d2 100644
--- a/client/checkout/upe-styles/upe-styles.js
+++ b/client/checkout/upe-styles/upe-styles.js
@@ -93,6 +93,7 @@ const restrictedTabIconSelectedProperties = [ 'color' ];
 
 export const upeRestrictedProperties = {
 	'.Label': upeSupportedProperties[ '.Label' ],
+	'.Label--floating': [ ...upeSupportedProperties[ '.Label' ], 'transform' ],
 	'.Input': [
 		...upeSupportedProperties[ '.Input' ],
 		'outlineColor',
diff --git a/client/checkout/upe-styles/utils.js b/client/checkout/upe-styles/utils.js
index d8d5cbfe81a..5db80b42a19 100644
--- a/client/checkout/upe-styles/utils.js
+++ b/client/checkout/upe-styles/utils.js
@@ -138,3 +138,79 @@ export const getBackgroundColor = ( selectors ) => {
 export const isColorLight = ( color ) => {
 	return tinycolor( color ).getBrightness() > 125;
 };
+
+/**
+ * Modifies the appearance object to include styles for floating label.
+ *
+ * @param {Object} appearance object to modify.
+ * @param {Object} floatingLabelStyles Floating label styles.
+ * @return {Object} Modified appearance object.
+ */
+export const handleAppearanceForFloatingLabel = (
+	appearance,
+	floatingLabelStyles
+) => {
+	// Add floating label styles.
+	appearance.rules[ '.Label--floating' ] = floatingLabelStyles;
+
+	// Update line-height for floating label to account for scaling.
+	if (
+		appearance.rules[ '.Label--floating' ].transform &&
+		appearance.rules[ '.Label--floating' ].transform !== 'none'
+	) {
+		// Extract the scaling factors from the matrix
+		const transformMatrix =
+			appearance.rules[ '.Label--floating' ].transform;
+		const matrixValues = transformMatrix.match( /matrix\((.+)\)/ );
+		if ( matrixValues && matrixValues[ 1 ] ) {
+			const splitMatrixValues = matrixValues[ 1 ].split( ', ' );
+			const scaleX = parseFloat( splitMatrixValues[ 0 ] );
+			const scaleY = parseFloat( splitMatrixValues[ 3 ] );
+			const scale = ( scaleX + scaleY ) / 2;
+
+			const lineHeight = parseFloat(
+				appearance.rules[ '.Label--floating' ].lineHeight
+			);
+			const newLineHeight = Math.floor( lineHeight * scale );
+			appearance.rules[
+				'.Label--floating'
+			].lineHeight = `${ newLineHeight }px`;
+			appearance.rules[
+				'.Label--floating'
+			].fontSize = `${ newLineHeight }px`;
+		}
+		delete appearance.rules[ '.Label--floating' ].transform;
+	}
+
+	// Subtract the label's lineHeight from padding-top to account for floating label height.
+	// Minus 4px which is a constant value added by stripe to the padding-top.
+	// Minus 1px for each vertical padding to account for the unpredictable input height
+	// (see https://github.com/Automattic/woocommerce-payments/issues/9476#issuecomment-2374766540).
+	// When the result is less than 0, it will automatically use 0.
+	if ( appearance.rules[ '.Input' ].paddingTop ) {
+		appearance.rules[
+			'.Input'
+			// eslint-disable-next-line max-len
+		].paddingTop = `calc(${ appearance.rules[ '.Input' ].paddingTop } - ${ appearance.rules[ '.Label--floating' ].lineHeight } - 4px - 1px)`;
+	}
+	if ( appearance.rules[ '.Input' ].paddingBottom ) {
+		const originalPaddingBottom = parseFloat(
+			appearance.rules[ '.Input' ].paddingBottom
+		);
+		appearance.rules[
+			'.Input'
+			// eslint-disable-next-line max-len
+		].paddingBottom = `${ originalPaddingBottom - 1 }px`;
+
+		const originalLabelMarginTop =
+			appearance.rules[ '.Label' ].marginTop ?? '0';
+		appearance.rules[ '.Label' ].marginTop = `${ Math.floor(
+			( originalPaddingBottom - 1 ) / 3
+		) }px`;
+		appearance.rules[
+			'.Label--floating'
+		].marginTop = originalLabelMarginTop;
+	}
+
+	return appearance;
+};
diff --git a/client/checkout/woopay/express-button/test/woopay-express-checkout-button.test.js b/client/checkout/woopay/express-button/test/woopay-express-checkout-button.test.js
index d31f4e19151..90b35164fe8 100644
--- a/client/checkout/woopay/express-button/test/woopay-express-checkout-button.test.js
+++ b/client/checkout/woopay/express-button/test/woopay-express-checkout-button.test.js
@@ -98,6 +98,7 @@ describe( 'WoopayExpressCheckoutButton', () => {
 			fontFamily: undefined,
 			fontSizeBase: undefined,
 		},
+		labels: 'above',
 	};
 
 	beforeEach( () => {