diff --git a/src/wp-includes/block-editor.php b/src/wp-includes/block-editor.php
index 2bd9f2dfbf050..96fc9c4eb6149 100644
--- a/src/wp-includes/block-editor.php
+++ b/src/wp-includes/block-editor.php
@@ -766,7 +766,7 @@ function block_editor_rest_api_preload( array $preload_paths, $block_editor_cont
 		'wp-api-fetch',
 		sprintf(
 			'wp.apiFetch.use( wp.apiFetch.createPreloadingMiddleware( %s ) );',
-			wp_json_encode( $preload_data )
+			wp_json_encode( $preload_data, JSON_UNESCAPED_SLASHES )
 		),
 		'after'
 	);
diff --git a/src/wp-includes/functions.wp-scripts.php b/src/wp-includes/functions.wp-scripts.php
index 1be1822aa7c3d..fced2ebaf9978 100644
--- a/src/wp-includes/functions.wp-scripts.php
+++ b/src/wp-includes/functions.wp-scripts.php
@@ -130,18 +130,42 @@ function wp_print_scripts( $handles = false ) {
 function wp_add_inline_script( $handle, $data, $position = 'after' ) {
 	_wp_scripts_maybe_doing_it_wrong( __FUNCTION__, $handle );
 
-	if ( false !== stripos( $data, '</script>' ) ) {
-		_doing_it_wrong(
-			__FUNCTION__,
-			sprintf(
-				/* translators: 1: <script>, 2: wp_add_inline_script() */
-				__( 'Do not pass %1$s tags to %2$s.' ),
-				'<code>&lt;script&gt;</code>',
-				'<code>wp_add_inline_script()</code>'
-			),
-			'4.5.0'
-		);
-		$data = trim( preg_replace( '#<script[^>]*>(.*)</script>#is', '$1', $data ) );
+	/*
+	 * Check whether the script data appears to be enclosed in an HTML <script> tag.
+	 */
+	if (
+		strlen( $data ) >= 17 &&
+		0 === substr_compare( $data, '<script', 0, 7, true ) &&
+		(
+			"\t" === $data[7] ||
+			"\n" === $data[7] ||
+			/*
+			 * \r\n and \r are normalized to \n in HTML newline normalization.
+			 * Therefore, \r always behaves like \n and terminates a tag name.
+			 */
+			"\r" === $data[7] ||
+			"\f" === $data[7] ||
+			' ' === $data[7] ||
+			'/' === $data[7] ||
+			'>' === $data[7]
+		)
+	) {
+		// Try to parse and extract the script contents.
+		$processor = new WP_HTML_Tag_Processor( $data );
+		$processor->next_token();
+		if ( $processor->get_tag() === 'SCRIPT' ) {
+			_doing_it_wrong(
+				__FUNCTION__,
+				sprintf(
+					/* translators: 1: <script>, 2: wp_add_inline_script() */
+					__( 'Do not pass %1$s tags to %2$s.' ),
+					'<code>&lt;script&gt;</code>',
+					'<code>wp_add_inline_script()</code>'
+				),
+				'4.5.0'
+			);
+			$data = $processor->get_modifiable_text();
+		}
 	}
 
 	return wp_scripts()->add_inline_script( $handle, $data, $position );
diff --git a/src/wp-includes/html-api/class-wp-html-tag-processor.php b/src/wp-includes/html-api/class-wp-html-tag-processor.php
index 032ca2af32e57..665ff702c0fcf 100644
--- a/src/wp-includes/html-api/class-wp-html-tag-processor.php
+++ b/src/wp-includes/html-api/class-wp-html-tag-processor.php
@@ -3726,17 +3726,54 @@ public function set_modifiable_text( string $plaintext_content ): bool {
 		switch ( $this->get_tag() ) {
 			case 'SCRIPT':
 				/*
-				 * This is over-protective, but ensures the update doesn't break
-				 * out of the SCRIPT element. A more thorough check would need to
-				 * ensure that the script closing tag doesn't exist, and isn't
-				 * also "hidden" inside the script double-escaped state.
+				 * SCRIPT tag contents can be dangerous.
 				 *
-				 * It may seem like replacing `</script` with `<\/script` would
-				 * properly escape these things, but this could mask regex patterns
-				 * that previously worked. Resolve this by not sending `</script`
+				 * The text `</script>` could close the SCRIPT element prematurely.
+				 *
+				 * The text `<script>` could enter the "script data double escaped state", preventing the
+				 * SCRIPT element from closing as expected, for example:
+				 *
+				 *     <script>
+				 *     // If this "<!--" then "<script>" the closing tag will not be recognized.
+				 *     </script>
+				 *     <h1>This appears inside the preceding SCRIPT element.</h1>
+				 *
+				 * The relevant state transitions happen on text like:
+				 *     1. <
+				 *     2. / (optional)
+				 *     3. script (case-insensitive)
+				 *     4. One of the following characters:
+				 *        - \t
+				 *        - \n
+				 *        - \r (\r and \r\n newlines are normalized to \n in HTML pre-processing)
+				 *        - \f
+				 *        - " " (U+0020 SPACE)
+				 *        - /
+				 *        - >
+				 *
+				 * @see https://html.spec.whatwg.org/multipage/parsing.html#script-data-double-escaped-state
 				 */
-				if ( false !== stripos( $plaintext_content, '</script' ) ) {
-					return false;
+				if ( preg_match( '~</?script[\t\r\n\f />]~i', $plaintext_content ) ) {
+					/*
+					 * JavaScript can be safely escaped.
+					 * Non-JavaScript script tags have unknown semantics.
+					 *
+					 * @todo consider applying to JSON and importmap script tags as well.
+					 */
+					if ( $this->is_javascript_script_tag() ) {
+						$plaintext_content = preg_replace_callback(
+							'~<(/?)(s)(cript)([\t\r\n\f />])~i',
+							static function ( $matches ) {
+								$escaped_s_char = 's' === $matches[2]
+									? '\u0073'
+									: '\u0053';
+								return "<{$matches[1]}{$escaped_s_char}{$matches[3]}{$matches[4]}";
+							},
+							$plaintext_content
+						);
+					} else {
+						return false;
+					}
 				}
 
 				$this->lexical_updates['modifiable text'] = new WP_HTML_Text_Replacement(
@@ -3794,6 +3831,123 @@ static function ( $tag_match ) {
 		return false;
 	}
 
+	/**
+	 * Indicates if the currently matched tag is a JavaScript script tag.
+	 *
+	 * @see https://html.spec.whatwg.org/multipage/scripting.html#prepare-the-script-element
+	 *
+	 * @since {WP_VERSION}
+	 *
+	 * @return bool True if the script tag will be evaluated as JavaScript.
+	 */
+	public function is_javascript_script_tag(): bool {
+		if ( 'SCRIPT' !== $this->get_tag() || $this->get_namespace() !== 'html' ) {
+			return false;
+		}
+
+		/*
+		 * > If any of the following are true:
+		 * >   - el has a type attribute whose value is the empty string;
+		 * >   - el has no type attribute but it has a language attribute and that attribute's
+		 * >     value is the empty string; or
+		 * >   - el has neither a type attribute nor a language attribute,
+		 * > then let the script block's type string for this script element be "text/javascript".
+		 */
+		$type_attr     = $this->get_attribute( 'type' );
+		$language_attr = $this->get_attribute( 'language' );
+
+		if ( true === $type_attr || '' === $type_attr ) {
+			return true;
+		}
+		if (
+			null === $type_attr && (
+				true === $language_attr ||
+				'' === $language_attr ||
+				null === $language_attr
+			)
+		) {
+			return true;
+		}
+
+		/*
+		 * > Otherwise, if el has a type attribute, then let the script block's type string be
+		 * > the value of that attribute with leading and trailing ASCII whitespace stripped.
+		 * > Otherwise, el has a non-empty language attribute; let the script block's type string
+		 * > be the concatenation of "text/" and the value of el's language attribute.
+		 */
+		$type_string = $type_attr ? trim( $type_attr, " \t\f\r\n" ) : "text/{$language_attr}";
+
+		/*
+		 * > If the script block's type string is a JavaScript MIME type essence match, then
+		 * > set el's type to "classic".
+		 *
+		 * > A string is a JavaScript MIME type essence match if it is an ASCII case-insensitive
+		 * > match for one of the JavaScript MIME type essence strings.
+		 *
+		 * > A JavaScript MIME type is any MIME type whose essence is one of the following:
+		 * >
+		 * > - application/ecmascript
+		 * > - application/javascript
+		 * > - application/x-ecmascript
+		 * > - application/x-javascript
+		 * > - text/ecmascript
+		 * > - text/javascript
+		 * > - text/javascript1.0
+		 * > - text/javascript1.1
+		 * > - text/javascript1.2
+		 * > - text/javascript1.3
+		 * > - text/javascript1.4
+		 * > - text/javascript1.5
+		 * > - text/jscript
+		 * > - text/livescript
+		 * > - text/x-ecmascript
+		 * > - text/x-javascript
+		 *
+		 * @see https://mimesniff.spec.whatwg.org/#javascript-mime-type-essence-match
+		 * @see https://mimesniff.spec.whatwg.org/#javascript-mime-type
+		 */
+		switch ( strtolower( $type_string ) ) {
+			case 'application/ecmascript':
+			case 'application/javascript':
+			case 'application/x-ecmascript':
+			case 'application/x-javascript':
+			case 'text/ecmascript':
+			case 'text/javascript':
+			case 'text/javascript1.0':
+			case 'text/javascript1.1':
+			case 'text/javascript1.2':
+			case 'text/javascript1.3':
+			case 'text/javascript1.4':
+			case 'text/javascript1.5':
+			case 'text/jscript':
+			case 'text/livescript':
+			case 'text/x-ecmascript':
+			case 'text/x-javascript':
+				return true;
+
+			/*
+			 * > Otherwise, if the script block's type string is an ASCII case-insensitive match for
+			 * > the string "module", then set el's type to "module".
+			 *
+			 * A module is evaluated as JavaScript.
+			 */
+			case 'module':
+				return true;
+		}
+
+		/*
+		 * > - Otherwise, if the script block's type string is an ASCII case-insensitive match for
+		 * >   the string "importmap", then set el's type to "importmap".
+		 *
+		 * An importmap is JSON and not evaluated as JavaScript. This case is not handled here.
+		 */
+
+		/*
+		 * > Otherwise, return. (No script is executed, and el's type is left as null.)
+		 */
+		return false;
+	}
+
 	/**
 	 * Updates or creates a new attribute on the currently matched tag with the passed value.
 	 *
diff --git a/src/wp-includes/script-loader.php b/src/wp-includes/script-loader.php
index 54193c841c7c3..52578b880062d 100644
--- a/src/wp-includes/script-loader.php
+++ b/src/wp-includes/script-loader.php
@@ -3006,6 +3006,12 @@ function wp_get_inline_script_tag( $data, $attributes = array() ) {
 	 */
 	$attributes = apply_filters( 'wp_inline_script_attributes', $attributes, $data );
 
+	$script_tag = sprintf( '<script%s></script>', wp_sanitize_script_attributes( $attributes ) );
+	$processor  = new WP_HTML_Tag_Processor( $script_tag );
+	if ( $processor->next_tag( 'SCRIPT' ) && $processor->set_modifiable_text( $data ) ) {
+		return $processor->get_updated_html() . "\n";
+	}
+
 	return sprintf( "<script%s>%s</script>\n", wp_sanitize_script_attributes( $attributes ), $data );
 }
 
diff --git a/tests/phpunit/tests/blocks/editor.php b/tests/phpunit/tests/blocks/editor.php
index 838137fa76f0d..71d28e62a4e6f 100644
--- a/tests/phpunit/tests/blocks/editor.php
+++ b/tests/phpunit/tests/blocks/editor.php
@@ -9,7 +9,6 @@
  * @group blocks
  */
 class Tests_Blocks_Editor extends WP_UnitTestCase {
-
 	/**
 	 * Sets up each test method.
 	 */
@@ -631,8 +630,8 @@ function filter_add_preload_paths( $preload_paths, WP_Block_Editor_Context $cont
 
 		$after = implode( '', wp_scripts()->registered['wp-api-fetch']->extra['after'] );
 		$this->assertStringContainsString( 'wp.apiFetch.createPreloadingMiddleware', $after );
-		$this->assertStringContainsString( '"\/wp\/v2\/blocks"', $after );
-		$this->assertStringContainsString( '"\/wp\/v2\/types"', $after );
+		$this->assertStringContainsString( '"/wp/v2/blocks"', $after );
+		$this->assertStringContainsString( '"/wp/v2/types"', $after );
 	}
 
 	/**
@@ -697,11 +696,11 @@ public function data_block_editor_rest_api_preload_adds_missing_leading_slash()
 		return array(
 			'a string without a slash'               => array(
 				'preload_paths' => array( 'wp/v2/blocks' ),
-				'expected'      => '\/wp\/v2\/blocks',
+				'expected'      => '/wp/v2/blocks',
 			),
 			'a string with a slash'                  => array(
 				'preload_paths' => array( '/wp/v2/blocks' ),
-				'expected'      => '\/wp\/v2\/blocks',
+				'expected'      => '/wp/v2/blocks',
 			),
 			'a string starting with a question mark' => array(
 				'preload_paths' => array( '?context=edit' ),
@@ -709,16 +708,63 @@ public function data_block_editor_rest_api_preload_adds_missing_leading_slash()
 			),
 			'an array with a string without a slash' => array(
 				'preload_paths' => array( array( 'wp/v2/blocks', 'OPTIONS' ) ),
-				'expected'      => '\/wp\/v2\/blocks',
+				'expected'      => '/wp/v2/blocks',
 			),
 			'an array with a string with a slash'    => array(
 				'preload_paths' => array( array( '/wp/v2/blocks', 'OPTIONS' ) ),
-				'expected'      => '\/wp\/v2\/blocks',
+				'expected'      => '/wp/v2/blocks',
 			),
 			'an array with a string starting with a question mark' => array(
 				'preload_paths' => array( array( '?context=edit', 'OPTIONS' ) ),
-				'expected'      => '\/?context=edit',
+				'expected'      => '/?context=edit',
 			),
 		);
 	}
+
+	/**
+	 * @ticket 62797
+	 *
+	 * @covers ::block_editor_rest_api_preload
+	 *
+	 * Some valid JSON-encoded data is dangerous to embed in HTML without appropriate
+	 * escaping. This test includes prints an example of such data that would prevent
+	 * the enclosing `<script>` from closing on its apparent closer and remain open.
+	 */
+	public function test_ensure_preload_data_script_tag_closes() {
+		add_theme_support( 'html5', array( 'script' ) );
+		register_rest_route(
+			'test/v0',
+			'test-62797',
+			array(
+				'methods'             => 'GET',
+				'callback'            => function () {
+					return '<!-- unclosed comment and a script tag <SCRIPT></SCRIPT><script></script>';
+				},
+				'permission_callback' => '__return_true',
+			)
+		);
+
+		// Prevent a bunch of noisy or unstable data from being included in the test output.
+		wp_scripts()->registered['wp-api-fetch']->ver            = 'test';
+		wp_scripts()->registered['wp-api-fetch']->extra['after'] = array();
+
+		block_editor_rest_api_preload(
+			array( '/test/v0/test-62797' ),
+			new WP_Block_Editor_Context()
+		);
+
+		ob_start();
+		wp_scripts()->do_item( 'wp-api-fetch' );
+		$output = ob_get_clean();
+
+		$baseurl  = site_url();
+		$expected = <<<HTML
+<script src="{$baseurl}/wp-includes/js/dist/api-fetch.min.js?ver=test" id="wp-api-fetch-js"></script>
+<script id="wp-api-fetch-js-after">
+wp.apiFetch.use( wp.apiFetch.createPreloadingMiddleware( {"/test/v0/test-62797":{"body":["<!-- unclosed comment and a script tag <\u0053CRIPT></\u0053CRIPT><\u0073cript></\u0073cript>"],"headers":{"Allow":"GET"}}} ) );
+</script>
+
+HTML;
+		$this->assertEqualHTML( $expected, $output );
+	}
 }
diff --git a/tests/phpunit/tests/html-api/wpHtmlTagProcessorModifiableText.php b/tests/phpunit/tests/html-api/wpHtmlTagProcessorModifiableText.php
index 5be6bb8f73083..1830bb15711b2 100644
--- a/tests/phpunit/tests/html-api/wpHtmlTagProcessorModifiableText.php
+++ b/tests/phpunit/tests/html-api/wpHtmlTagProcessorModifiableText.php
@@ -448,13 +448,14 @@ public static function data_tokens_with_basic_modifiable_text_updates() {
 	 * the structure of the containing element, such as in a script or comment.
 	 *
 	 * @ticket 61617
+	 * @ticket 62797
 	 *
 	 * @dataProvider data_unallowed_modifiable_text_updates
 	 *
 	 * @param string $html_with_nonempty_modifiable_text Will be used to find the test element.
 	 * @param string $invalid_update                     Update containing possibly-compromising text.
 	 */
-	public function test_rejects_updates_with_unallowed_substrings( string $html_with_nonempty_modifiable_text, string $invalid_update ) {
+	public function test_rejects_dangerous_updates( string $html_with_nonempty_modifiable_text, string $invalid_update ) {
 		$processor = new WP_HTML_Tag_Processor( $html_with_nonempty_modifiable_text );
 
 		while ( '' === $processor->get_modifiable_text() && $processor->next_token() ) {
@@ -486,10 +487,56 @@ public function test_rejects_updates_with_unallowed_substrings( string $html_wit
 	 */
 	public static function data_unallowed_modifiable_text_updates() {
 		return array(
-			'Comment with -->'                 => array( '<!-- this is a comment -->', 'Comments end in -->' ),
-			'Comment with --!>'                => array( '<!-- this is a comment -->', 'Invalid but legitimate comments end in --!>' ),
-			'SCRIPT with </script>'            => array( '<script>Replace me</script>', 'Just a </script>' ),
-			'SCRIPT with </script attributes>' => array( '<script>Replace me</script>', 'before</script id=sneak>after' ),
+			'Comment with -->'                        => array( '<!-- this is a comment -->', 'Comments end in -->' ),
+			'Comment with --!>'                       => array( '<!-- this is a comment -->', 'Invalid but legitimate comments end in --!>' ),
+			'Non-JS SCRIPT with <script>'             => array( '<script type="text/html">Replace me</script>', '<!-- Just a <script>' ),
+			'Non-JS SCRIPT with </script>'            => array( '<script type="text/html">Replace me</script>', 'Just a </script>' ),
+			'Non-JS SCRIPT with <script attributes>'  => array( '<script language="text">Replace me</script>', '<!-- <script sneaky>after' ),
+			'Non-JS SCRIPT with </script attributes>' => array( '<script language="text">Replace me</script>', 'before</script sneaky>after' ),
+		);
+	}
+
+	/**
+	 * Ensures that JavaScript script tag contents are safely updated.
+	 *
+	 * @ticket 62797
+	 *
+	 * @dataProvider data_script_tag_text_updates
+	 *
+	 * @param string $html     HTML containing a SCRIPT tag to be modified.
+	 * @param string $update   Update containing possibly-compromising text.
+	 * @param string $expected Expected result.
+	 */
+	public function test_safely_updates_script_tag_contents( string $html, string $update, string $expected ) {
+		$processor = new WP_HTML_Tag_Processor( $html );
+		$this->assertTrue( $processor->next_tag( 'SCRIPT' ) );
+		$this->assertTrue( $processor->set_modifiable_text( $update ) );
+		$this->assertSame( $expected, $processor->get_updated_html() );
+	}
+
+	/**
+	 * Data provider.
+	 *
+	 * @return array[]
+	 */
+	public static function data_script_tag_text_updates(): array {
+		return array(
+			'Simple update'                         => array( '<script></script>', '{}', '<script>{}</script>' ),
+			'Needs no replacement'                  => array( '<script></script>', '<!--<scriptish>', '<script><!--<scriptish></script>' ),
+			'var script;1<script>0'                 => array( '<script></script>', 'var script;1<script>0', '<script>var script;1<\u0073cript>0</script>' ),
+			'1</script>/'                           => array( '<script></script>', '1</script>/', '<script>1</\u0073cript>/</script>' ),
+			'var SCRIPT;1<SCRIPT>0'                 => array( '<script></script>', 'var SCRIPT;1<SCRIPT>0', '<script>var SCRIPT;1<\u0053CRIPT>0</script>' ),
+			'1</SCRIPT>/'                           => array( '<script></script>', '1</SCRIPT>/', '<script>1</\u0053CRIPT>/</script>' ),
+			'"</script>"'                           => array( '<script></script>', '"</script>"', '<script>"</\u0073cript>"</script>' ),
+			'"</ScRiPt>"'                           => array( '<script></script>', '"</ScRiPt>"', '<script>"</\u0053cRiPt>"</script>' ),
+			'Tricky script open tag with \r'        => array( '<script></script>', "<!-- <script\r>", "<script><!-- <\\u0073cript\r></script>" ),
+			'Tricky script open tag with \r\n'      => array( '<script></script>', "<!-- <script\r\n>", "<script><!-- <\\u0073cript\r\n></script>" ),
+			'Tricky script close tag with \r'       => array( '<script></script>', "// </script\r>", "<script>// </\\u0073cript\r></script>" ),
+			'Tricky script close tag with \r\n'     => array( '<script></script>', "// </script\r\n>", "<script>// </\\u0073cript\r\n></script>" ),
+			'Module tag'                            => array( '<script type="module"></script>', '"<script>"', '<script type="module">"<\u0073cript>"</script>' ),
+			'Tag with type'                         => array( '<script type="text/javascript"></script>', '"<script>"', '<script type="text/javascript">"<\u0073cript>"</script>' ),
+			'Tag with language'                     => array( '<script language="javascript"></script>', '"<script>"', '<script language="javascript">"<\u0073cript>"</script>' ),
+			'Non-JS script, save HTML-like content' => array( '<script type="text/html"></script>', '<h1>This & that</h1>', '<script type="text/html"><h1>This & that</h1></script>' ),
 		);
 	}
 }