diff --git a/.changeset/soft-months-grab.md b/.changeset/soft-months-grab.md
new file mode 100644
index 0000000000..6fc765eb10
--- /dev/null
+++ b/.changeset/soft-months-grab.md
@@ -0,0 +1,5 @@
+---
+"svelte": patch
+---
+
+fix: hydrate controlled each blocks correctly
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
index e3ed0c9e81..19b9d3f244 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
@@ -1554,8 +1554,6 @@ function process_children(nodes, parent, { visit, state }) {
 				// get hoisted inside clean_nodes?
 				visit(node, state);
 			} else {
-				// Optimization path for each blocks. If the parent isn't a fragment and it only has
-				// a single child, then we can classify the block as being "controlled".
 				if (
 					node.type === 'EachBlock' &&
 					nodes.length === 1 &&
diff --git a/packages/svelte/src/compiler/types/template.d.ts b/packages/svelte/src/compiler/types/template.d.ts
index 974cb17571..76a579ae5a 100644
--- a/packages/svelte/src/compiler/types/template.d.ts
+++ b/packages/svelte/src/compiler/types/template.d.ts
@@ -368,6 +368,11 @@ export interface EachBlock extends BaseNode {
 		item_name: string;
 		/** List of bindings that are referenced within the expression */
 		references: Binding[];
+		/**
+		 * Optimization path for each blocks: If the parent isn't a fragment and
+		 * it only has a single child, then we can classify the block as being "controlled".
+		 * This saves us from creating an extra comment and insertion being faster.
+		 */
 		is_controlled: boolean;
 	};
 }
diff --git a/packages/svelte/src/constants.js b/packages/svelte/src/constants.js
index e1f211e902..3da2f9e4f2 100644
--- a/packages/svelte/src/constants.js
+++ b/packages/svelte/src/constants.js
@@ -2,6 +2,7 @@ export const EACH_ITEM_REACTIVE = 1;
 export const EACH_INDEX_REACTIVE = 1 << 1;
 export const EACH_KEYED = 1 << 2;
 export const EACH_PROXIED = 1 << 3;
+/** See EachBlock interface metadata.is_controlled for an explanation what this is */
 export const EACH_IS_CONTROLLED = 1 << 3;
 export const EACH_IS_ANIMATED = 1 << 4;
 export const EACH_IS_IMMUTABLE = 1 << 6;
diff --git a/packages/svelte/src/internal/client/each.js b/packages/svelte/src/internal/client/each.js
index 4c0e5dec7e..d098d9d38b 100644
--- a/packages/svelte/src/internal/client/each.js
+++ b/packages/svelte/src/internal/client/each.js
@@ -104,8 +104,17 @@ function each(anchor_node, collection, flags, key_fn, render_fn, fallback_fn, re
 				let anchor = block.a;
 				const is_controlled = (block.f & EACH_IS_CONTROLLED) !== 0;
 				if (is_controlled) {
-					anchor = empty();
-					block.a.appendChild(anchor);
+					// If the each block is controlled, then the anchor node will be the surrounding
+					// element in which the each block is rendered, which requires certain handling
+					// depending on whether we're in hydration mode or not
+					if (current_hydration_fragment === null) {
+						// Create a new anchor on the fly because there's none due to the optimization
+						anchor = empty();
+						block.a.appendChild(anchor);
+					} else {
+						// In case of hydration the anchor will be the first child of the surrounding element
+						anchor = /** @type {Comment} */ (anchor.firstChild);
+					}
 				}
 				/** @type {(anchor: Node) => void} */ (fallback_fn)(anchor);
 				fallback.d = block.d;
diff --git a/packages/svelte/tests/hydration/samples/each-else/_before.html b/packages/svelte/tests/hydration/samples/each-else/_before.html
index 6422263334..3335979fb8 100644
--- a/packages/svelte/tests/hydration/samples/each-else/_before.html
+++ b/packages/svelte/tests/hydration/samples/each-else/_before.html
@@ -1,3 +1,3 @@
 <!--ssr:0--><h1>Hello, world</h1>
-<!--ssr:1--><p>weird</p><!--ssr:1-->
-<!--ssr:0-->
+<!--ssr:1--><p>foo</p><!--ssr:1-->
+<div><!--ssr:2--><p>foo</p><!--ssr:2--></div><!--ssr:0-->
diff --git a/packages/svelte/tests/hydration/samples/each-else/main.svelte b/packages/svelte/tests/hydration/samples/each-else/main.svelte
index 64d3a37c58..5e50436cde 100644
--- a/packages/svelte/tests/hydration/samples/each-else/main.svelte
+++ b/packages/svelte/tests/hydration/samples/each-else/main.svelte
@@ -1,15 +1,16 @@
 <script>
 	export let name = "world";
-	export let array = [];
+	export let foo = 'foo';
 </script>
 
 <h1>Hello, {name}</h1>
-{#each array as elem}
-	<p>
-	item
-	</p>
-{:else}
-	<p>
-	weird
-	</p>
+{#each [] as _}nope{:else}
+	<p>{foo}</p>
 {/each}
+
+<!-- a single each block inside an element is "controlled", which is an optimization which we test here, too -->
+<div>
+	{#each [] as _}nope{:else}
+		<p>{foo}</p>
+	{/each}
+</div>
diff --git a/packages/svelte/types/index.d.ts b/packages/svelte/types/index.d.ts
index db63cf9b3c..6f3ea43a71 100644
--- a/packages/svelte/types/index.d.ts
+++ b/packages/svelte/types/index.d.ts
@@ -1402,6 +1402,11 @@ declare module 'svelte/compiler' {
 			item_name: string;
 			/** List of bindings that are referenced within the expression */
 			references: Binding[];
+			/**
+			 * Optimization path for each blocks: If the parent isn't a fragment and
+			 * it only has a single child, then we can classify the block as being "controlled".
+			 * This saves us from creating an extra comment and insertion being faster.
+			 */
 			is_controlled: boolean;
 		};
 	}