diff --git a/resources/js/wysiwyg/services/drop-paste-handling.ts b/resources/js/wysiwyg/services/drop-paste-handling.ts
index 57f9a80ae..b63c57ada 100644
--- a/resources/js/wysiwyg/services/drop-paste-handling.ts
+++ b/resources/js/wysiwyg/services/drop-paste-handling.ts
@@ -1,40 +1,35 @@
 import {
     $createParagraphNode,
     $insertNodes,
-    $isDecoratorNode, COMMAND_PRIORITY_HIGH, DROP_COMMAND,
+    $isDecoratorNode, $isTextNode, $setSelection, COMMAND_PRIORITY_HIGH, DROP_COMMAND,
     LexicalEditor,
     LexicalNode, PASTE_COMMAND
 } from "lexical";
-import {$insertNewBlockNodesAtSelection, $selectSingleNode} from "../utils/selection";
-import {$getNearestBlockNodeForCoords, $htmlToBlockNodes} from "../utils/nodes";
+import {$insertNewNodesAtSelection, $selectSingleNode} from "../utils/selection";
+import {$getNodePositionFromMouseEvent, $htmlToBlockNodes} from "../utils/nodes";
 import {Clipboard} from "../../services/clipboard";
 import {$createImageNode} from "@lexical/rich-text/LexicalImageNode";
 import {$createLinkNode} from "@lexical/link";
 import {EditorImageData, uploadImageFile} from "../utils/images";
 import {EditorUiContext} from "../ui/framework/core";
 
-function $getNodeFromMouseEvent(event: MouseEvent, editor: LexicalEditor): LexicalNode|null {
-    const x = event.clientX;
-    const y = event.clientY;
-    const dom = document.elementFromPoint(x, y);
-    if (!dom) {
-        return null;
-    }
-
-    return $getNearestBlockNodeForCoords(editor, event.clientX, event.clientY);
-}
 
 function $insertNodesAtEvent(nodes: LexicalNode[], event: DragEvent, editor: LexicalEditor) {
-    const positionNode = $getNodeFromMouseEvent(event, editor);
+    const position = $getNodePositionFromMouseEvent(event, editor);
 
-    if (positionNode) {
-        $selectSingleNode(positionNode);
+    if (position && $isTextNode(position.node)) {
+        const selection = position.node.select(position.offset, position.offset);
+        $setSelection(selection);
+    } else if  (position) {
+        $selectSingleNode(position.node);
     }
 
-    $insertNewBlockNodesAtSelection(nodes, true);
+    $insertNewNodesAtSelection(nodes);
 
-    if (!$isDecoratorNode(positionNode) || !positionNode?.getTextContent()) {
-        positionNode?.remove();
+    if (position) {
+        if (!$isDecoratorNode(position.node) && !position.node?.getTextContent()) {
+            position.node.remove();
+        }
     }
 }
 
@@ -113,6 +108,7 @@ function handleImageLinkInsert(data: DataTransfer, context: EditorUiContext): bo
 function createDropListener(context: EditorUiContext): (event: DragEvent) => boolean {
     const editor = context.editor;
     return (event: DragEvent): boolean => {
+
         // Template handling
         const templateId = event.dataTransfer?.getData('bookstack/template') || '';
         if (templateId) {
diff --git a/resources/js/wysiwyg/utils/nodes.ts b/resources/js/wysiwyg/utils/nodes.ts
index ed70bf699..eab8203a0 100644
--- a/resources/js/wysiwyg/utils/nodes.ts
+++ b/resources/js/wysiwyg/utils/nodes.ts
@@ -1,5 +1,6 @@
 import {
     $createParagraphNode,
+    $getNearestNodeFromDOMNode,
     $getRoot,
     $isDecoratorNode,
     $isElementNode, $isRootNode,
@@ -64,6 +65,27 @@ export function $getAllNodesOfType(matcher: LexicalNodeMatcher, root?: ElementNo
     return matches;
 }
 
+/**
+ * Get the node based on the given mouse event.
+ */
+export function $getNodePositionFromMouseEvent(event: MouseEvent, editor: LexicalEditor): {node: LexicalNode, offset: number}|null {
+    const x = event.clientX;
+    const y = event.clientY;
+    const caretPosition = window.document.caretPositionFromPoint(event.x, event.y);
+    if (!caretPosition) {
+        const backup = $getNearestBlockNodeForCoords(editor, x, y);
+        return backup ? {node: backup, offset: 0} : null;
+    }
+
+    const node = $getNearestNodeFromDOMNode(caretPosition.offsetNode);
+    if (!node) {
+        const backup = $getNearestBlockNodeForCoords(editor, x, y);
+        return backup ? {node: backup, offset: 0} : null;
+    }
+
+    return {node, offset: caretPosition.offset};
+}
+
 /**
  * Get the nearest root/block level node for the given position.
  */
diff --git a/resources/js/wysiwyg/utils/selection.ts b/resources/js/wysiwyg/utils/selection.ts
index e4b5bf2dc..f5d3699fc 100644
--- a/resources/js/wysiwyg/utils/selection.ts
+++ b/resources/js/wysiwyg/utils/selection.ts
@@ -109,6 +109,45 @@ export function $insertNewBlockNodesAtSelection(nodes: LexicalNode[], insertAfte
     }
 }
 
+export function $insertNewNodesAtSelection(nodes: LexicalNode[]) {
+    const selection = $getSelection();
+    const selectionPoints = selection?.getStartEndPoints();
+    let target: LexicalNode|null = null;
+    let targetBlock: LexicalNode|null = null;
+    if (selectionPoints) {
+        const selectionEnd = selectionPoints[1];
+        target = selectionEnd.getNode();
+        targetBlock = target ? $getNearestNodeBlockParent(target) : null;
+    }
+
+    for (const node of nodes) {
+        const isBlock = $isBlockElementNode(node);
+
+        if (isBlock && !targetBlock) {
+            // Append to the root if its a block and we can't determine position
+            $getRoot().append(node);
+        } else if (isBlock && targetBlock) {
+            // Insert after the target block if we have a block
+            targetBlock.insertAfter(node);
+        } else if (!isBlock && selection) {
+            // Insert at selection if likely inline
+            selection.insertNodes(nodes);
+        } else if (!isBlock && $isElementNode(targetBlock)) {
+            // Append inside the target block if inline but we don't have
+            // a selection (typically used by the case below)
+            targetBlock.append(node);
+        } else {
+            // Otherwise (where inline) create a new root level paragraph
+            // and insert content into that. Update the target block
+            // for re-use by other inline elements.
+            const paragraph = $createParagraphNode();
+            paragraph.append(node);
+            $getRoot().append(paragraph);
+            targetBlock = paragraph;
+        }
+    }
+}
+
 export function $selectSingleNode(node: LexicalNode) {
     const nodeSelection = $createNodeSelection();
     nodeSelection.add(node.getKey());