diff --git a/packages/quill/src/core/selection.ts b/packages/quill/src/core/selection.ts
index 33f7f2a576..551c19273d 100644
--- a/packages/quill/src/core/selection.ts
+++ b/packages/quill/src/core/selection.ts
@@ -116,18 +116,7 @@ class Selection {
     });
     this.emitter.on(Emitter.events.COMPOSITION_END, () => {
       this.composing = false;
-      if (this.cursor.parent) {
-        const range = this.cursor.restore();
-        if (!range) return;
-        setTimeout(() => {
-          this.setNativeRange(
-            range.startNode,
-            range.startOffset,
-            range.endNode,
-            range.endOffset,
-          );
-        }, 1);
-      }
+      this.restoreCursor();
     });
   }
 
@@ -449,15 +438,7 @@ class Selection {
         nativeRange.native.collapsed &&
         nativeRange.start.node !== this.cursor.textNode
       ) {
-        const range = this.cursor.restore();
-        if (range) {
-          this.setNativeRange(
-            range.startNode,
-            range.startOffset,
-            range.endNode,
-            range.endOffset,
-          );
-        }
+        this.restoreCursor();
       }
       const args = [
         Emitter.events.SELECTION_CHANGE,
@@ -471,6 +452,38 @@ class Selection {
       }
     }
   }
+
+  private restoreCursor() {
+    if (!this.cursor.parent) return;
+
+    const restoredRange = this.cursor.restore();
+    if (restoredRange) {
+      this.setNativeRange(
+        restoredRange.startNode,
+        restoredRange.startOffset,
+        restoredRange.endNode,
+        restoredRange.endOffset,
+      );
+    }
+    this.emitter.once(Emitter.events.SCROLL_OPTIMIZE, () => {
+      // Re-apply the selection after the optimize phase.
+      // This is needed in two cases:
+      // 1. When `restoredRange` is null: this can happen when the caret
+      //    is moved out of the cursor blot by the user.
+      // 2. When `restoredRange` is not null but either point of it does not
+      //    exist in the DOM tree anymore: this can happen when the cursor blot
+      //    is empty (e.g. when user cancels a composition session) so that the
+      //    wrapping empty blot referred by `restoredRange` is removed in the
+      //    optimize phase.
+      if (
+        !restoredRange ||
+        !this.root.contains(restoredRange.startNode) ||
+        (restoredRange.endNode && !this.root.contains(restoredRange.endNode))
+      ) {
+        this.setRange(this.lastRange);
+      }
+    });
+  }
 }
 
 function contains(parent: Node, descendant: Node) {
diff --git a/packages/quill/test/e2e/cursor.spec.ts b/packages/quill/test/e2e/cursor.spec.ts
new file mode 100644
index 0000000000..a9e31667a4
--- /dev/null
+++ b/packages/quill/test/e2e/cursor.spec.ts
@@ -0,0 +1,137 @@
+import { expect } from '@playwright/test';
+import { test } from './fixtures/index.js';
+import { SHORTKEY } from './utils/index.js';
+
+test.describe('cursor', () => {
+  test.beforeEach(async ({ editorPage }) => {
+    await editorPage.open();
+  });
+
+  test.describe('type', () => {
+    test('normal typing with one format', async ({ page, editorPage }) => {
+      await editorPage.setContents([{ insert: '1234\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      await page.keyboard.type('abc');
+      expect(await editorPage.getContents()).toEqual([
+        { insert: '12' },
+        { insert: 'abc', attributes: { bold: true } },
+        { insert: '34\n' },
+      ]);
+      expect(await editorPage.getSelection()).toEqual({ index: 5, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+
+    test('normal typing with two formats', async ({ page, editorPage }) => {
+      await editorPage.setContents([{ insert: '1234\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      await page.keyboard.press(`${SHORTKEY}+i`);
+      await page.keyboard.type('abc');
+      expect(await editorPage.getContents()).toEqual([
+        { insert: '12' },
+        { insert: 'abc', attributes: { bold: true, italic: true } },
+        { insert: '34\n' },
+      ]);
+      expect(await editorPage.getSelection()).toEqual({ index: 5, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+
+    test('normal typing with one format omitting', async ({
+      page,
+      editorPage,
+    }) => {
+      await editorPage.setContents([
+        { insert: '1234', attributes: { bold: true, italic: true } },
+        { insert: '\n' },
+      ]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      await page.keyboard.type('abc');
+      expect(await editorPage.getContents()).toEqual([
+        { insert: '12', attributes: { bold: true, italic: true } },
+        { insert: 'abc', attributes: { italic: true } },
+        { insert: '34', attributes: { bold: true, italic: true } },
+        { insert: '\n' },
+      ]);
+      expect(await editorPage.getSelection()).toEqual({ index: 5, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+  });
+
+  test('paste', async ({ clipboard, editorPage, page }) => {
+    await editorPage.setContents([{ insert: '1234\n' }]);
+    await editorPage.moveCursorAfterText('12');
+    await clipboard.writeText('abc');
+    await page.keyboard.press(`${SHORTKEY}+b`);
+    await clipboard.paste();
+    expect(await editorPage.getContents()).toEqual([
+      { insert: '12' },
+      { insert: 'abc', attributes: { bold: true } },
+      { insert: '34\n' },
+    ]);
+    expect(await editorPage.getSelection()).toEqual({ index: 5, length: 0 });
+    await expect(editorPage.cursorBlot).not.toBeAttached();
+  });
+
+  test.describe('IME', () => {
+    test('confirm composition', async ({ composition, editorPage, page }) => {
+      await editorPage.setContents([{ insert: '1234\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      const ime = await composition.start();
+      await ime.update('w');
+      await ime.update('o');
+      await ime.commit('我');
+      expect(await editorPage.getContents()).toEqual([
+        { insert: '12' },
+        { insert: '我', attributes: { bold: true } },
+        { insert: '34\n' },
+      ]);
+      expect(await editorPage.getSelection()).toEqual({ index: 3, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+
+    test('cancel composition', async ({ composition, editorPage, page }) => {
+      await editorPage.setContents([{ insert: '1234\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      const ime = await composition.start();
+      await ime.update('w');
+      await ime.update('o');
+      await ime.cancel();
+      expect(await editorPage.getContents()).toEqual([{ insert: '1234\n' }]);
+      expect(await editorPage.getSelection()).toEqual({ index: 2, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+  });
+
+  test.describe('caret movements', () => {
+    test('right arrow key', async ({ editorPage, page }) => {
+      await editorPage.setContents([{ insert: '1234\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      await page.keyboard.press('ArrowRight');
+      expect(await editorPage.getSelection()).toEqual({ index: 3, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+
+    test('left arrow key', async ({ editorPage, page }) => {
+      await editorPage.setContents([{ insert: '1234\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      await page.keyboard.press('ArrowLeft');
+      expect(await editorPage.getSelection()).toEqual({ index: 1, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+
+    test('jumping', async ({ editorPage, page }) => {
+      await editorPage.setContents([{ insert: '12345\n' }]);
+      await editorPage.moveCursorAfterText('12');
+      await page.keyboard.press(`${SHORTKEY}+b`);
+      await editorPage.moveCursorAfterText('34');
+      expect(await editorPage.getSelection()).toEqual({ index: 4, length: 0 });
+      await expect(editorPage.cursorBlot).not.toBeAttached();
+    });
+  });
+});
diff --git a/packages/quill/test/e2e/fixtures/Composition.ts b/packages/quill/test/e2e/fixtures/Composition.ts
index ca2c8c6ff0..33d891cbb5 100644
--- a/packages/quill/test/e2e/fixtures/Composition.ts
+++ b/packages/quill/test/e2e/fixtures/Composition.ts
@@ -7,6 +7,7 @@ import type {
 abstract class CompositionSession {
   abstract update(key: string): Promise<void>;
   abstract commit(committedText: string): Promise<void>;
+  abstract cancel(): Promise<void>;
 
   protected composingData = '';
 
@@ -35,12 +36,7 @@ class ChromiumCompositionSession extends CompositionSession {
   async update(key: string) {
     await this.withKeyboardEvents(key, async () => {
       this.composingData += key;
-
-      await this.session.send('Input.imeSetComposition', {
-        selectionStart: this.composingData.length,
-        selectionEnd: this.composingData.length,
-        text: this.composingData,
-      });
+      this.updateComposition();
     });
   }
 
@@ -51,6 +47,21 @@ class ChromiumCompositionSession extends CompositionSession {
       });
     });
   }
+
+  async cancel() {
+    await this.withKeyboardEvents('Escape', async () => {
+      this.composingData = '';
+      await this.updateComposition();
+    });
+  }
+
+  private async updateComposition() {
+    await this.session.send('Input.imeSetComposition', {
+      selectionStart: this.composingData.length,
+      selectionEnd: this.composingData.length,
+      text: this.composingData,
+    });
+  }
 }
 
 class Composition {
diff --git a/packages/quill/test/e2e/pageobjects/EditorPage.ts b/packages/quill/test/e2e/pageobjects/EditorPage.ts
index 0e770e0891..ce65b2d07a 100644
--- a/packages/quill/test/e2e/pageobjects/EditorPage.ts
+++ b/packages/quill/test/e2e/pageobjects/EditorPage.ts
@@ -61,6 +61,10 @@ export default class EditorPage {
     return this.page.locator('.ql-editor');
   }
 
+  get cursorBlot() {
+    return this.root.locator('.ql-cursor');
+  }
+
   async open() {
     await this.page.goto('/');
     await this.page.waitForSelector('.ql-editor', { timeout: 10000 });