diff --git a/packages/edit-site/src/components/block-editor/editor-canvas.js b/packages/edit-site/src/components/block-editor/editor-canvas.js
index 15d638aa329e1..137018da1eb82 100644
--- a/packages/edit-site/src/components/block-editor/editor-canvas.js
+++ b/packages/edit-site/src/components/block-editor/editor-canvas.js
@@ -26,6 +26,7 @@ import {
 	FOCUSABLE_ENTITIES,
 	NAVIGATION_POST_TYPE,
 } from '../../utils/constants';
+import useIsNavigationOverlay from './use-is-navigation-overlay';
 
 const { ExperimentalBlockCanvas: BlockCanvas } = unlock(
 	blockEditorPrivateApis
@@ -68,6 +69,7 @@ function EditorCanvas( {
 	const { setCanvasMode } = unlock( useDispatch( editSiteStore ) );
 	const deviceStyles = useResizeCanvas( deviceType );
 	const [ isFocused, setIsFocused ] = useState( false );
+	const isNavigationOverlayTemplate = useIsNavigationOverlay();
 
 	useEffect( () => {
 		if ( canvasMode === 'edit' ) {
@@ -95,9 +97,12 @@ function EditorCanvas( {
 	const isNavigationFocusMode = isTemplateTypeNavigation && isFocusMode;
 	// Hide the appender when:
 	// - In navigation focus mode (should only allow the root Nav block).
+	// - editing the navigation overlay template.
 	// - In view mode (i.e. not editing).
 	const showBlockAppender =
-		( isNavigationFocusMode && hasBlocks ) || canvasMode === 'view'
+		( isNavigationFocusMode && hasBlocks ) ||
+		isNavigationOverlayTemplate ||
+		canvasMode === 'view'
 			? false
 			: undefined;
 
diff --git a/packages/edit-site/src/components/block-editor/site-editor-canvas.js b/packages/edit-site/src/components/block-editor/site-editor-canvas.js
index 953f45ab4c8e4..1fd98d5b3e2ba 100644
--- a/packages/edit-site/src/components/block-editor/site-editor-canvas.js
+++ b/packages/edit-site/src/components/block-editor/site-editor-canvas.js
@@ -9,7 +9,6 @@ import { useSelect, useDispatch } from '@wordpress/data';
 import { useRef } from '@wordpress/element';
 import { BlockTools, store as blockEditorStore } from '@wordpress/block-editor';
 import { useViewportMatch, useResizeObserver } from '@wordpress/compose';
-import { useEntityProp } from '@wordpress/core-data';
 
 /**
  * Internal dependencies
@@ -26,11 +25,7 @@ import {
 } from '../../utils/constants';
 import { unlock } from '../../lock-unlock';
 import PageContentFocusNotifications from '../page-content-focus-notifications';
-
-function useIsNavigationOverlay() {
-	const [ area ] = useEntityProp( 'postType', 'wp_template_part', 'area' );
-	return area === 'navigation-overlay';
-}
+import useIsNavigationOverlay from './use-is-navigation-overlay';
 
 export default function SiteEditorCanvas() {
 	const { clearSelectedBlock } = useDispatch( blockEditorStore );
diff --git a/packages/edit-site/src/components/block-editor/use-is-navigation-overlay.js b/packages/edit-site/src/components/block-editor/use-is-navigation-overlay.js
new file mode 100644
index 0000000000000..53bd7b19feec7
--- /dev/null
+++ b/packages/edit-site/src/components/block-editor/use-is-navigation-overlay.js
@@ -0,0 +1,9 @@
+/**
+ * WordPress dependencies
+ */
+import { useEntityProp } from '@wordpress/core-data';
+
+export default function useIsNavigationOverlay() {
+	const [ area ] = useEntityProp( 'postType', 'wp_template_part', 'area' );
+	return area === 'navigation-overlay';
+}