diff --git a/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme.spec.ts b/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme.spec.ts
index b7bd223859f..7e98aeff5b8 100644
--- a/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme.spec.ts
+++ b/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme.spec.ts
@@ -11,6 +11,8 @@ import { CUSTOMIZABLE_WC_TEMPLATES, WC_TEMPLATES_SLUG } from './constants';
 CUSTOMIZABLE_WC_TEMPLATES.forEach( ( testData ) => {
 	const userText = `Hello World in the ${ testData.templateName } template`;
 	const fallbackTemplateUserText = `Hello World in the fallback ${ testData.templateName } template`;
+	const templateTypeName =
+		testData.templateType === 'wp_template' ? 'template' : 'template part';
 
 	test.describe( `${ testData.templateName } template`, async () => {
 		test( 'can be modified and reverted', async ( {
@@ -31,6 +33,14 @@ CUSTOMIZABLE_WC_TEMPLATES.forEach( ( testData ) => {
 				attributes: { content: userText },
 			} );
 			await editorUtils.saveTemplate();
+			// Verify template name didn't change.
+			// See: https://github.com/woocommerce/woocommerce/issues/42221
+			await expect(
+				page.getByRole( 'heading', {
+					name: `Editing ${ templateTypeName }: ${ testData.templateName }`,
+				} )
+			).toBeVisible();
+
 			await testData.visitPage( { frontendUtils, page } );
 			await expect( page.getByText( userText ).first() ).toBeVisible();
 
diff --git a/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme_with_templates.spec.ts b/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme_with_templates.spec.ts
index f841be90643..259c4b0404c 100644
--- a/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme_with_templates.spec.ts
+++ b/plugins/woocommerce-blocks/tests/e2e/tests/templates/template-customization.block_theme_with_templates.spec.ts
@@ -15,6 +15,8 @@ CUSTOMIZABLE_WC_TEMPLATES.forEach( ( testData ) => {
 	}
 	const userText = `Hello World in the ${ testData.templateName } template`;
 	const fallbackTemplateUserText = `Hello World in the fallback ${ testData.templateName } template`;
+	const templateTypeName =
+		testData.templateType === 'wp_template' ? 'template' : 'template part';
 
 	test.describe( `${ testData.templateName } template`, async () => {
 		test( "theme template has priority over WooCommerce's and can be modified", async ( {
@@ -35,6 +37,13 @@ CUSTOMIZABLE_WC_TEMPLATES.forEach( ( testData ) => {
 				attributes: { content: userText },
 			} );
 			await editorUtils.saveTemplate();
+			// Verify template name didn't change.
+			// See: https://github.com/woocommerce/woocommerce/issues/42221
+			await expect(
+				page.getByRole( 'heading', {
+					name: `Editing ${ templateTypeName }: ${ testData.templateName }`,
+				} )
+			).toBeVisible();
 
 			// Verify the template is the one modified by the user.
 			await testData.visitPage( { frontendUtils, page } );
diff --git a/plugins/woocommerce/changelog/44254-fix-42221-wrong-template-title b/plugins/woocommerce/changelog/44254-fix-42221-wrong-template-title
new file mode 100644
index 00000000000..600f83f7448
--- /dev/null
+++ b/plugins/woocommerce/changelog/44254-fix-42221-wrong-template-title
@@ -0,0 +1,4 @@
+Significance: patch
+Type: fix
+
+Fix the Site Editor showing the template slug instead of the template title when saving a WooCommerce block template customized by the theme.
\ No newline at end of file
diff --git a/plugins/woocommerce/src/Blocks/BlockTemplatesController.php b/plugins/woocommerce/src/Blocks/BlockTemplatesController.php
index b78fb978f47..3b713561b49 100644
--- a/plugins/woocommerce/src/Blocks/BlockTemplatesController.php
+++ b/plugins/woocommerce/src/Blocks/BlockTemplatesController.php
@@ -58,6 +58,7 @@ class BlockTemplatesController {
 		add_action( 'template_redirect', array( $this, 'render_block_template' ) );
 		add_filter( 'pre_get_block_template', array( $this, 'get_block_template_fallback' ), 10, 3 );
 		add_filter( 'pre_get_block_file_template', array( $this, 'get_block_file_template' ), 10, 3 );
+		add_filter( 'get_block_template', array( $this, 'add_block_template_details' ), 10, 1 );
 		add_filter( 'get_block_templates', array( $this, 'add_block_templates' ), 10, 3 );
 		add_filter( 'current_theme_supports-block-templates', array( $this, 'remove_block_template_support_for_shop_page' ) );
 		add_filter( 'taxonomy_template_hierarchy', array( $this, 'add_archive_product_to_eligible_for_fallback_templates' ), 10, 1 );
@@ -346,6 +347,25 @@ class BlockTemplatesController {
 		return $template;
 	}
 
+	/**
+	 * Add the template title and description to WooCommerce templates.
+	 *
+	 * @param WP_Block_Template|null $block_template The found block template, or null if there isn't one.
+	 * @return WP_Block_Template|null
+	 */
+	public function add_block_template_details( $block_template ) {
+		if ( ! $block_template ) {
+			return $block_template;
+		}
+		if ( ! BlockTemplateUtils::template_has_title( $block_template ) ) {
+			$block_template->title = BlockTemplateUtils::get_block_template_title( $block_template->slug );
+		}
+		if ( ! $block_template->description ) {
+			$block_template->description = BlockTemplateUtils::get_block_template_description( $block_template->slug );
+		}
+		return $block_template;
+	}
+
 	/**
 	 * Add the block template objects to be used.
 	 *
@@ -389,9 +409,7 @@ class BlockTemplatesController {
 			if ( 'custom' !== $template_file->source ) {
 				$template = BlockTemplateUtils::build_template_result_from_file( $template_file, $template_type );
 			} else {
-				$template_file->title       = BlockTemplateUtils::get_block_template_title( $template_file->slug );
-				$template_file->description = BlockTemplateUtils::get_block_template_description( $template_file->slug );
-				$query_result[]             = $template_file;
+				$query_result[] = $template_file;
 				continue;
 			}
 
@@ -456,15 +474,13 @@ class BlockTemplatesController {
 					}
 				}
 
-				if ( 'theme' === $template->origin && BlockTemplateUtils::template_has_title( $template ) ) {
-					return $template;
-				}
-				if ( $template->title === $template->slug ) {
+				if ( ! BlockTemplateUtils::template_has_title( $template ) ) {
 					$template->title = BlockTemplateUtils::get_block_template_title( $template->slug );
 				}
 				if ( ! $template->description ) {
 					$template->description = BlockTemplateUtils::get_block_template_description( $template->slug );
 				}
+
 				return $template;
 			},
 			$query_result