diff --git a/CHANGELOG.md b/CHANGELOG.md
index f6af419913d6..25c0aa209326 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -6,6 +6,7 @@
 * Expose compiler version in dev events ([#4047](https://github.com/sveltejs/svelte/issues/4047))
 * Don't run actions before their element is in the document ([#4166](https://github.com/sveltejs/svelte/issues/4166))
 * Fix reactive assignments with destructuring and stores where the destructured value should be undefined ([#4170](https://github.com/sveltejs/svelte/issues/4170))
+* Fix hydrating `{:else}` in `{#each}` ([#4202](https://github.com/sveltejs/svelte/issues/4202))
 * Do not automatically declare variables in reactive declarations when assigning to a member expression ([#4212](https://github.com/sveltejs/svelte/issues/4212))
 
 ## 3.16.7
diff --git a/src/compiler/compile/render_dom/wrappers/EachBlock.ts b/src/compiler/compile/render_dom/wrappers/EachBlock.ts
index 5b13b486e61d..4928b5a38cd4 100644
--- a/src/compiler/compile/render_dom/wrappers/EachBlock.ts
+++ b/src/compiler/compile/render_dom/wrappers/EachBlock.ts
@@ -264,10 +264,23 @@ export default class EachBlockWrapper extends Wrapper {
 			block.chunks.init.push(b`
 				if (!${this.vars.data_length}) {
 					${each_block_else} = ${this.else.block.name}(#ctx);
+				}
+			`);
+
+			block.chunks.create.push(b`
+				if (${each_block_else}) {
 					${each_block_else}.c();
 				}
 			`);
 
+			if (this.renderer.options.hydratable) {
+				block.chunks.claim.push(b`
+					if (${each_block_else}) {
+						${each_block_else}.l(${parent_nodes});
+					}
+				`);
+			}
+
 			block.chunks.mount.push(b`
 				if (${each_block_else}) {
 					${each_block_else}.m(${initial_mount_node}, ${initial_anchor_node});
diff --git a/test/hydration/samples/each-else/_after.html b/test/hydration/samples/each-else/_after.html
new file mode 100644
index 000000000000..7920500ec3fe
--- /dev/null
+++ b/test/hydration/samples/each-else/_after.html
@@ -0,0 +1,4 @@
+<h1>Hello, world</h1>
+<p>
+  weird
+</p>
\ No newline at end of file
diff --git a/test/hydration/samples/each-else/_before.html b/test/hydration/samples/each-else/_before.html
new file mode 100644
index 000000000000..7920500ec3fe
--- /dev/null
+++ b/test/hydration/samples/each-else/_before.html
@@ -0,0 +1,4 @@
+<h1>Hello, world</h1>
+<p>
+  weird
+</p>
\ No newline at end of file
diff --git a/test/hydration/samples/each-else/main.svelte b/test/hydration/samples/each-else/main.svelte
new file mode 100644
index 000000000000..64d3a37c5878
--- /dev/null
+++ b/test/hydration/samples/each-else/main.svelte
@@ -0,0 +1,15 @@
+<script>
+	export let name = "world";
+	export let array = [];
+</script>
+
+<h1>Hello, {name}</h1>
+{#each array as elem}
+	<p>
+	item
+	</p>
+{:else}
+	<p>
+	weird
+	</p>
+{/each}