diff --git a/packages/block-editor/src/components/provider/index.js b/packages/block-editor/src/components/provider/index.js
index a4ebeed9ab2459..a31fae9524ddb0 100644
--- a/packages/block-editor/src/components/provider/index.js
+++ b/packages/block-editor/src/components/provider/index.js
@@ -148,10 +148,16 @@ export const ExperimentalBlockEditorProvider = withRegistryProvider(
 
 		const settings = useMemo( () => {
 			if ( isClientSideMediaEnabled && _settings?.mediaUpload ) {
-				// Create a new object so that the original props.settings.mediaUpload is not modified.
+				// Preserve the original server-side function. If _settings already
+				// has __unstableMediaUploadServer (from a parent provider), reuse it;
+				// otherwise use _settings.mediaUpload (the real function at root level).
+				const serverMediaUpload =
+					_settings.__unstableMediaUploadServer ||
+					_settings.mediaUpload;
 				return {
 					..._settings,
 					mediaUpload: mediaUpload.bind( null, registry ),
+					__unstableMediaUploadServer: serverMediaUpload,
 				};
 			}
 			return _settings;
diff --git a/packages/block-editor/src/components/provider/use-media-upload-settings.js b/packages/block-editor/src/components/provider/use-media-upload-settings.js
index 7c00c145d27a72..49ae91ede72c0b 100644
--- a/packages/block-editor/src/components/provider/use-media-upload-settings.js
+++ b/packages/block-editor/src/components/provider/use-media-upload-settings.js
@@ -13,7 +13,8 @@ import { useMemo } from '@wordpress/element';
 function useMediaUploadSettings( settings = {} ) {
 	return useMemo(
 		() => ( {
-			mediaUpload: settings.mediaUpload,
+			mediaUpload:
+				settings.__unstableMediaUploadServer || settings.mediaUpload,
 			mediaSideload: settings.mediaSideload,
 			maxUploadFileSize: settings.maxUploadFileSize,
 			allowedMimeTypes: settings.allowedMimeTypes,