diff --git a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/form.tsx b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/form.tsx
index 4fe9675e286..4df31be4c05 100644
--- a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/form.tsx
+++ b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/form.tsx
@@ -3,13 +3,12 @@
  */
 import { __ } from '@wordpress/i18n';
 import { SelectControl, TextControl } from '@wordpress/components';
-import { getSetting } from '@woocommerce/settings';
 
 /**
  * Internal dependencies
  */
 import type { PickupLocation } from '../types';
-import StateControl from './state-control';
+import { countryStateOptions, states } from '../utils';
 
 const Form = ( {
 	formRef,
@@ -20,11 +19,7 @@ const Form = ( {
 	values: PickupLocation;
 	setValues: React.Dispatch< React.SetStateAction< PickupLocation > >;
 } ) => {
-	const countries = getSetting< Record< string, string > >( 'countries', [] );
-	const states = getSetting< Record< string, Record< string, string > > >(
-		'countryStates',
-		[]
-	);
+	const { country: selectedCountry, state: selectedState } = values.address;
 	const setLocationField =
 		( field: keyof PickupLocation ) => ( newValue: string | boolean ) => {
 			setValues( ( prevValue: PickupLocation ) => ( {
@@ -45,6 +40,10 @@ const Form = ( {
 			} ) );
 		};
 
+	const countryHasStates =
+		states[ selectedCountry ] &&
+		Object.keys( states[ selectedCountry ] ).length > 0;
+
 	return (
 		<form ref={ formRef }>
 			<TextControl
@@ -97,42 +96,77 @@ const Form = ( {
 				onChange={ setLocationAddressField( 'postcode' ) }
 				autoComplete="off"
 			/>
-			<StateControl
-				label={ __( 'State', 'woo-gutenberg-products-block' ) }
-				name={ 'location_state' }
-				hideLabelFromVision={ true }
-				placeholder={ __( 'State', 'woo-gutenberg-products-block' ) }
-				value={ values.address.state }
-				onChange={ setLocationAddressField( 'state' ) }
-				autoComplete="off"
-				states={ states }
-				currentCountry={ values.address.country }
-			/>
+			{ ! countryHasStates && (
+				<TextControl
+					placeholder={ __(
+						'State',
+						'woo-gutenberg-products-block'
+					) }
+					value={ selectedState }
+					onChange={ setLocationAddressField( 'state' ) }
+				/>
+			) }
 			<SelectControl
-				label={ __( 'Country', 'woo-gutenberg-products-block' ) }
-				name={ 'location_country' }
+				name="location_country_state"
+				label={ __(
+					'Country / State',
+					'woo-gutenberg-products-block'
+				) }
 				hideLabelFromVision={ true }
-				placeholder={ __( 'Country', 'woo-gutenberg-products-block' ) }
-				value={ values.address.country }
+				placeholder={ __(
+					'Country / State',
+					'woo-gutenberg-products-block'
+				) }
+				value={ ( () => {
+					if ( ! selectedState && countryHasStates ) {
+						return `${ selectedCountry }:${
+							Object.keys( states[ selectedCountry ] )[ 0 ]
+						}`;
+					}
+
+					return `${ selectedCountry }${
+						selectedState &&
+						states[ selectedCountry ]?.[ selectedState ]
+							? ':' + selectedState
+							: ''
+					}`;
+				} )() }
 				onChange={ ( val: string ) => {
-					setLocationAddressField( 'state' )( '' );
-					setLocationAddressField( 'country' )( val );
+					const [ country, state = '' ] = val.split( ':' );
+					setLocationAddressField( 'country' )( country );
+					setLocationAddressField( 'state' )( state );
 				} }
-				autoComplete="off"
-				options={ [
-					{
-						value: '',
-						disabled: true,
-						label: __( 'Country', 'woo-gutenberg-products-block' ),
-					},
-					...Object.entries( countries ).map(
-						( [ code, country ] ) => ( {
-							value: code,
-							label: country,
-						} )
-					),
-				] }
-			/>
+			>
+				{ countryStateOptions.options.map( ( option ) => {
+					if ( option.label ) {
+						return (
+							<optgroup
+								key={ option.label }
+								label={ option.label }
+							>
+								{ option.options.map( ( subOption ) => (
+									<option
+										key={ subOption.value }
+										value={ subOption.value }
+									>
+										{ subOption.label }
+									</option>
+								) ) }
+							</optgroup>
+						);
+					}
+
+					return (
+						<option
+							key={ option.options[ 0 ].value }
+							value={ option.options[ 0 ].value }
+						>
+							{ option.options[ 0 ].label }
+						</option>
+					);
+				} ) }
+			</SelectControl>
+
 			<TextControl
 				label={ __( 'Pickup details', 'woo-gutenberg-products-block' ) }
 				name={ 'pickup_details' }
diff --git a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/state-control.tsx b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/state-control.tsx
deleted file mode 100644
index 07ea29ef92a..00000000000
--- a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/edit-location/state-control.tsx
+++ /dev/null
@@ -1,45 +0,0 @@
-/**
- * External dependencies
- */
-import { __ } from '@wordpress/i18n';
-import { SelectControl, TextControl } from '@wordpress/components';
-
-const StateControl = ( {
-	states,
-	currentCountry,
-	...props
-}: {
-	states: Record< string, Record< string, string > >;
-	currentCountry: string;
-} ): JSX.Element | null => {
-	const filteredStates = states[ currentCountry ] || [];
-
-	if ( filteredStates.length === 0 ) {
-		return (
-			<TextControl
-				{ ...props }
-				disabled={ ! currentCountry || props.disabled }
-			/>
-		);
-	}
-	return (
-		<SelectControl
-			{ ...props }
-			options={ [
-				{
-					value: '',
-					disabled: true,
-					label: __( 'State', 'woo-gutenberg-products-block' ),
-				},
-				...Object.entries( filteredStates ).map(
-					( [ code, state ] ) => ( {
-						value: code,
-						label: state,
-					} )
-				),
-			] }
-		/>
-	);
-};
-
-export default StateControl;
diff --git a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/location-settings.tsx b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/location-settings.tsx
index 0eaaeaa85bf..963ae74fdbf 100644
--- a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/location-settings.tsx
+++ b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/location-settings.tsx
@@ -4,7 +4,7 @@
 import { __ } from '@wordpress/i18n';
 import { useState } from '@wordpress/element';
 import type { UniqueIdentifier } from '@dnd-kit/core';
-import { isObject, isBoolean } from '@woocommerce/types';
+import { isBoolean } from '@woocommerce/types';
 import { ToggleControl, Button, ExternalLink } from '@wordpress/components';
 import styled from '@emotion/styled';
 
@@ -19,6 +19,7 @@ import {
 import EditLocation from './edit-location';
 import type { SortablePickupLocation } from './types';
 import { useSettingsContext } from './settings-context';
+import { getUserFriendlyAddress } from './utils';
 
 const LocationSettingsDescription = () => (
 	<>
@@ -62,10 +63,7 @@ const LocationSettings = () => {
 				<>
 					{ row.name }
 					<StyledAddress>
-						{ isObject( row.address ) &&
-							Object.values( row.address )
-								.filter( ( value ) => value !== '' )
-								.join( ', ' ) }
+						{ getUserFriendlyAddress( row.address ) }
 					</StyledAddress>
 				</>
 			),
@@ -137,7 +135,7 @@ const LocationSettings = () => {
 									address: {
 										address_1: '',
 										city: '',
-										state: '',
+										state: readOnlySettings.storeState,
 										postcode: '',
 										country: readOnlySettings.storeCountry,
 									},
diff --git a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/types.ts b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/types.ts
index 57741f3b69b..daa50364545 100644
--- a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/types.ts
+++ b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/types.ts
@@ -32,6 +32,7 @@ export type ShippingMethodSettings = {
 
 export type ReadOnlySettings = {
 	storeCountry: string;
+	storeState: string;
 	hasLegacyPickup: boolean;
 };
 
diff --git a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/utils.ts b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/utils.ts
index 99900025868..43dfba322fe 100644
--- a/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/utils.ts
+++ b/plugins/woocommerce-blocks/assets/js/extensions/shipping-methods/pickup-location/utils.ts
@@ -3,6 +3,8 @@
  */
 import { cleanForSlug } from '@wordpress/url';
 import { __ } from '@wordpress/i18n';
+import { isObject } from '@woocommerce/types';
+import { getSetting } from '@woocommerce/settings';
 /**
  * Internal dependencies
  */
@@ -33,6 +35,7 @@ export const defaultSettings = {
 export const defaultReadyOnlySettings = {
 	hasLegacyPickup: false,
 	storeCountry: '',
+	storeState: '',
 };
 declare global {
 	const hydratedScreenSettings: {
@@ -65,3 +68,60 @@ export const getInitialPickupLocations = (): SortablePickupLocation[] =>
 
 export const readOnlySettings =
 	hydratedScreenSettings.readonlySettings || defaultReadyOnlySettings;
+
+export const countries = getSetting< Record< string, string > >(
+	'countries',
+	[]
+);
+export const states = getSetting< Record< string, Record< string, string > > >(
+	'countryStates',
+	[]
+);
+export const getUserFriendlyAddress = ( address: unknown ) => {
+	const updatedAddress = isObject( address ) && {
+		...address,
+		country:
+			typeof address.country === 'string' && countries[ address.country ],
+		state:
+			typeof address.country === 'string' &&
+			typeof address.state === 'string' &&
+			states[ address.country ]?.[ address.state ]
+				? states[ address.country ][ address.state ]
+				: address.state,
+	};
+
+	return Object.values( updatedAddress )
+		.filter( ( value ) => value !== '' )
+		.join( ', ' );
+};
+
+// Outputs the list of countries and states in a single dropdown select.
+const countryStateDropdownOptions = () => {
+	const countryStateOptions = Object.keys( countries ).map( ( country ) => {
+		const countryStates = states[ country ] || {};
+
+		if ( Object.keys( countryStates ).length === 0 ) {
+			return {
+				options: [
+					{
+						value: country,
+						label: countries[ country ],
+					},
+				],
+			};
+		}
+
+		const stateOptions = Object.keys( countryStates ).map( ( state ) => ( {
+			value: `${ country }:${ state }`,
+			label: `${ countries[ country ] } — ${ countryStates[ state ] }`,
+		} ) );
+		return {
+			label: countries[ country ],
+			options: [ ...stateOptions ],
+		};
+	} );
+	return {
+		options: countryStateOptions,
+	};
+};
+export const countryStateOptions = countryStateDropdownOptions();
diff --git a/plugins/woocommerce-blocks/src/Shipping/ShippingController.php b/plugins/woocommerce-blocks/src/Shipping/ShippingController.php
index d0bdae7e910..5c7686be569 100644
--- a/plugins/woocommerce-blocks/src/Shipping/ShippingController.php
+++ b/plugins/woocommerce-blocks/src/Shipping/ShippingController.php
@@ -302,6 +302,7 @@ class ShippingController {
 			'readonlySettings'       => array(
 				'hasLegacyPickup' => $has_legacy_pickup,
 				'storeCountry'    => WC()->countries->get_base_country(),
+				'storeState'      => WC()->countries->get_base_state(),
 			),
 		);