diff --git a/editor/components/button/index.js b/editor/components/button/index.js
index 4f56ecd2b7e46d..34342d0909d631 100644
--- a/editor/components/button/index.js
+++ b/editor/components/button/index.js
@@ -16,6 +16,7 @@ function Button( { isPrimary, isLarge, isToggled, className, ...additionalProps
 		<button
 			type="button"
 			{ ...additionalProps }
+			ref={ additionalProps.buttonRef }
 			className={ classes } />
 	);
 }
diff --git a/editor/components/inserter/helpers/index.js b/editor/components/inserter/helpers/index.js
new file mode 100644
index 00000000000000..e2a979e9809123
--- /dev/null
+++ b/editor/components/inserter/helpers/index.js
@@ -0,0 +1,83 @@
+/**
+ * Helpers associated with the Inserter Component.
+ *
+ * This file contains a group of functions that help in managing the inserter.
+ */
+
+export const isShownBlock = state => block => block.title.toLowerCase().indexOf( state.filterValue.toLowerCase() ) !== -1;
+
+export const listVisibleBlocksByCategory = ( state ) => ( blocks ) => {
+	return blocks.reduce( ( groups, block ) => {
+		if ( ! isShownBlock( state )( block ) ) {
+			return groups;
+		}
+		if ( ! groups[ block.category ] ) {
+			groups[ block.category ] = [];
+		}
+		groups[ block.category ].push( block );
+		return groups;
+	}, {} );
+};
+
+const flattenObjectIntoArray = ( object ) => {
+	let list = [];
+	for ( const key in object ) {
+		list.push( object[ key ] );
+	}
+	list = list.reduce( ( values, objectValue ) => values.concat( objectValue ), [] );
+
+	return list;
+};
+
+const nextFocusableRef = ( component ) => {
+	const visibleBlocksByCategory = flattenObjectIntoArray( listVisibleBlocksByCategory( component.state )( component.blockTypes ) );
+	const focusables = visibleBlocksByCategory.map( blockType => blockType.slug ).concat( 'search' );
+
+	if ( null === component.state.focusedElementRef ) {
+		return focusables[ 0 ];
+	}
+
+	const currentIndex = focusables.findIndex( ( elementRef ) => elementRef === component.state.focusedElementRef );
+	const nextIndex = currentIndex + 1;
+	const highestIndex = focusables.length - 1;
+
+	// Check boundary so that the index is does not exceed the length.
+	if ( nextIndex > highestIndex ) {
+		// Cycle back to other end.
+		return focusables[ 0 ];
+	}
+
+	return focusables[ nextIndex ];
+};
+
+const previousFocusableRef = ( component ) => {
+	const visibleBlocksByCategory = flattenObjectIntoArray( listVisibleBlocksByCategory( component.state )( component.blockTypes ) );
+	const focusables = visibleBlocksByCategory.map( blockType => blockType.slug ).concat( 'search' );
+
+	// Initiate the menu with the first block.
+	if ( null === component.state.focusedElementRef ) {
+		return focusables[ 0 ];
+	}
+
+	const currentIndex = focusables.findIndex( ( elementRef ) => elementRef === component.state.focusedElementRef );
+	const nextIndex = currentIndex - 1;
+	const lowestIndex = 0;
+
+	// Check boundary so that the index is does not exceed the length.
+	if ( nextIndex < lowestIndex ) {
+		// Cycle back to other end.
+		return focusables[ focusables.length - 1 ];
+	}
+
+	return focusables[ nextIndex ];
+};
+
+export const focusNextFocusableRef = ( component ) => {
+	const next = nextFocusableRef( component );
+	component.changeMenuSelection( next );
+};
+
+export const focusPreviousFocusableRef = ( component ) => {
+	const previous = previousFocusableRef( component );
+	component.changeMenuSelection( previous );
+};
diff --git a/editor/components/inserter/index.js b/editor/components/inserter/index.js
index dab8bf2d4b1cc2..faf2bb274930c1 100644
--- a/editor/components/inserter/index.js
+++ b/editor/components/inserter/index.js
@@ -7,6 +7,7 @@ import IconButton from 'components/icon-button';
 class Inserter extends wp.element.Component {
 	constructor() {
 		super( ...arguments );
+		this.nodes = {};
 		this.toggle = this.toggle.bind( this );
 		this.close = this.close.bind( this );
 		this.state = {
@@ -15,6 +16,10 @@ class Inserter extends wp.element.Component {
 	}
 
 	toggle() {
+		if ( this.state.opened === true ) {
+			this.nodes.toggle.focus();
+		}
+
 		this.setState( {
 			opened: ! this.state.opened
 		} );
@@ -36,8 +41,12 @@ class Inserter extends wp.element.Component {
 					icon="insert"
 					label={ wp.i18n.__( 'Insert block' ) }
 					onClick={ this.toggle }
-					className="editor-inserter__toggle" />
-				{ opened && <InserterMenu position={ position } onSelect={ this.close } /> }
+					className="editor-inserter__toggle"
+					aria-haspopup="true"
+					id="inserter-toggle"
+					buttonRef={ ( node ) => this.nodes.toggle = node }
+					/>
+				{ opened && <InserterMenu position={ position } onSelect={ this.close } closeMenu={ this.toggle } /> }
 			</div>
 		);
 	}
diff --git a/editor/components/inserter/menu.js b/editor/components/inserter/menu.js
index 1e4a08b1ac85ab..68912ffc512ffe 100644
--- a/editor/components/inserter/menu.js
+++ b/editor/components/inserter/menu.js
@@ -2,20 +2,83 @@
  * External dependencies
  */
 import { connect } from 'react-redux';
+import { Observable } from 'rxjs/Observable';
+import 'rxjs/add/observable/fromEvent';
+import 'rxjs/add/operator/filter';
 
 /**
  * Internal dependencies
  */
 import './style.scss';
 import Dashicon from 'components/dashicon';
+import { focusNextFocusableRef, focusPreviousFocusableRef, listVisibleBlocksByCategory } from './helpers';
 
 class InserterMenu extends wp.element.Component {
 	constructor() {
 		super( ...arguments );
+		this.blockTypes = wp.blocks.getBlocks();
+		this.categories = wp.blocks.getCategories();
+		this.nodes = {};
 		this.state = {
-			filterValue: ''
+			filterValue: '',
+			focusedElementRef: null
 		};
 		this.filter = this.filter.bind( this );
+		this.isShownBlock = this.isShownBlock.bind( this );
+		this.changeMenuSelection = this.changeMenuSelection.bind( this );
+		this.setSearchFocus = this.setSearchFocus.bind( this );
+		this.bindReferenceNode = this.bindReferenceNode.bind( this );
+	}
+
+	bindReferenceNode( nodeName ) {
+		const binder = ( node ) => this.nodes[ nodeName ] = node;
+		binder.bind( this );
+
+		return binder;
+	}
+
+	componentDidMount() {
+		// Build a stream of keydown events on component mount.
+		this.keyStream$ = Observable.fromEvent( document, 'keydown' );
+
+		// Out of keydown stream build a stream matching arrow down and arrow right.
+		this.focusNextFocusableRef$ = this.keyStream$.filter( keydown => keydown.code === 'ArrowDown' || keydown.code === 'ArrowRight' || ( keydown.code === 'Tab' && keydown.shiftKey === false ) );
+
+		// Out of keydown stream build a stream matching arrow left and arrow up.
+		this.focusPreviousFocusableRef$ = this.keyStream$.filter( keydown => keydown.code === 'ArrowUp' || keydown.code === 'ArrowLeft' || ( keydown.code === 'Tab' && keydown.shiftKey === true ) );
+
+		// Get escape key presses.
+		this.closeInserter$ = this.keyStream$.filter( keydown => keydown.code === 'Escape' );
+
+		// Create subscriptions for our next and previous blockType focus actions.
+		this.nextBlockSubscription = this.focusNextFocusableRef$.subscribe( ( keydown ) => {
+			keydown.preventDefault();
+			focusNextFocusableRef( this );
+		} );
+		this.previousBlockSubscription = this.focusPreviousFocusableRef$.subscribe( ( keydown ) => {
+			keydown.preventDefault();
+			focusPreviousFocusableRef( this );
+		} );
+		this.closeInserterSubscription = this.closeInserter$.subscribe( () => {
+			this.props.closeMenu();
+		} );
+	}
+
+	componentWillUnmount() {
+		// Unsubscribe from the stream.
+		this.nextBlockSubscription.unsubscribe();
+		this.previousBlockSubscription.unsubscribe();
+		this.closeInserterSubscription.unsubscribe();
+
+		// These deletes are most likely not necessary but memory leaks can be pretty ugly.
+		delete this.nextBlockSubscription;
+		delete this.previousBlockSubscription;
+		delete this.closeInserterSubscription;
+		delete this.closeInserter$;
+		delete this.focusPreviousFocusableRef$;
+		delete this.focusNextFocusableRef$;
+		delete this.keyStreamSubscription;
+		delete this.keyStream$;
 	}
 
 	filter( event ) {
@@ -24,44 +87,57 @@ class InserterMenu extends wp.element.Component {
 		} );
 	}
 
+	isShownBlock( block ) {
+		return block.title.toLowerCase().indexOf( this.state.filterValue.toLowerCase() ) !== -1;
+	}
+
 	selectBlock( slug ) {
 		return () => {
 			this.props.onInsertBlock( slug );
 			this.props.onSelect();
-			this.setState( { filterValue: '' } );
+			this.setState( {
+				filterValue: '',
+				focusedElementRef: null
+			} );
 		};
 	}
 
+	changeMenuSelection( refName ) {
+		this.setState( {
+			focusedElementRef: refName
+		} );
+
+		// Focus the DOM node.
+		this.nodes[ refName ].focus();
+	}
+
+	setSearchFocus() {
+		this.changeMenuSelection( 'search' );
+	}
+
 	render() {
 		const { position = 'top' } = this.props;
-		const blocks = wp.blocks.getBlocks();
-		const isShownBlock = block => block.title.toLowerCase().indexOf( this.state.filterValue.toLowerCase() ) !== -1;
-		const blocksByCategory = blocks.reduce( ( groups, block ) => {
-			if ( ! isShownBlock( block ) ) {
-				return groups;
-			}
-			if ( ! groups[ block.category ] ) {
-				groups[ block.category ] = [];
-			}
-			groups[ block.category ].push( block );
-			return groups;
-		}, {} );
-		const categories = wp.blocks.getCategories();
+		const blocks = this.blockTypes;
+		const visibleBlocksByCategory = listVisibleBlocksByCategory( this.state )( blocks );
+		const categories = this.categories;
 
 		return (
-			<div className={ `editor-inserter__menu is-${ position }` }>
+			<div className={ `editor-inserter__menu is-${ position }` } tabIndex="0">
 				<div className="editor-inserter__arrow" />
-				<div className="editor-inserter__content">
+				<div role="menu" className="editor-inserter__content">
 					{ categories
-						.map( ( category ) => !! blocksByCategory[ category.slug ] && (
+						.map( ( category ) => !! visibleBlocksByCategory[ category.slug ] && (
 							<div key={ category.slug }>
 								<div className="editor-inserter__separator">{ category.title }</div>
 								<div className="editor-inserter__category-blocks">
-									{ blocksByCategory[ category.slug ].map( ( { slug, title, icon } ) => (
+									{ visibleBlocksByCategory[ category.slug ].map( ( { slug, title, icon } ) => (
 										<button
 											key={ slug }
 											className="editor-inserter__block"
 											onClick={ this.selectBlock( slug ) }
+											role="menuitem"
+											ref={ this.bindReferenceNode( slug ) }
+											tabIndex="-1"
 										>
 											<Dashicon icon={ icon } />
 											{ title }
@@ -77,6 +153,8 @@ class InserterMenu extends wp.element.Component {
 					placeholder={ wp.i18n.__( 'Search…' ) }
 					className="editor-inserter__search"
 					onChange={ this.filter }
+					onClick={ this.setSearchFocus }
+					ref={ this.bindReferenceNode( 'search' ) }
 				/>
 			</div>
 		);
diff --git a/editor/components/inserter/style.scss b/editor/components/inserter/style.scss
index 6b4665f7f0afa7..be4e9a77a5b437 100644
--- a/editor/components/inserter/style.scss
+++ b/editor/components/inserter/style.scss
@@ -24,7 +24,8 @@
 	padding: 0;
 	transition: color .2s ease;
 
-	&:hover {
+	&:hover,
+	&:focus {
 		color: $blue-medium;
 	}
 }
@@ -142,9 +143,11 @@ input[type=search].editor-inserter__search {
 	border: 1px solid transparent;
 	background: none;
 
-	&:hover {
+	&:hover,
+	&:focus {
 		border: 1px solid $dark-gray-500;
 		position: relative;
+		outline: 0;
 	}
 
 	&:active,
diff --git a/package.json b/package.json
index 189dd973ba591d..08ee62203c3bf6 100644
--- a/package.json
+++ b/package.json
@@ -55,7 +55,8 @@
     "style-loader": "^0.14.1",
     "tinymce": "^4.5.6",
     "webpack": "^2.2.1",
-    "webpack-node-externals": "^1.5.4"
+    "webpack-node-externals": "^1.5.4",
+    "webpack-rxjs-externals": "^1.0.0"
   },
   "dependencies": {
     "classnames": "^2.2.5",
@@ -69,6 +70,7 @@
     "react-redux": "^5.0.4",
     "react-slot-fill": "^1.0.0-alpha.11",
     "redux": "^3.6.0",
+    "rxjs": "^5.3.0",
     "uuid": "^3.0.1"
   }
 }
diff --git a/webpack.config.js b/webpack.config.js
index 352778f3eedfca..3e26b76f84052e 100644
--- a/webpack.config.js
+++ b/webpack.config.js
@@ -23,7 +23,7 @@ const config = {
 	externals: {
 		react: 'React',
 		'react-dom': 'ReactDOM',
-		'react-dom/server': 'ReactDOMServer'
+		'react-dom/server': 'ReactDOMServer',
 	},
 	resolve: {
 		alias: {
@@ -104,7 +104,10 @@ switch ( process.env.NODE_ENV ) {
 			'./editor/index.js',
 			...glob.sync( `./{${ Object.keys( config.entry ).join() }}/**/test/*.js` )
 		];
-		config.externals = [ require( 'webpack-node-externals' )() ];
+		config.externals = [
+			require( 'webpack-node-externals' )(),
+			require( 'webpack-rxjs-externals' )()
+		];
 		config.output = {
 			filename: 'build/test.js',
 			path: __dirname