diff --git a/packages/edit-site/src/components/start-template-options/style.scss b/packages/edit-site/src/components/start-template-options/style.scss
index 4a2199908de2e..11b971a7f4dd1 100644
--- a/packages/edit-site/src/components/start-template-options/style.scss
+++ b/packages/edit-site/src/components/start-template-options/style.scss
@@ -17,16 +17,17 @@
 	display: grid;
 	width: 100%;
 	margin-top: $grid-unit-05;
-	gap: $grid-unit-10;
+	gap: $grid-unit-30;
 	grid-template-columns: repeat(auto-fit, minmax(min(100%/2, max(240px, 100%/10)), 1fr));
 	grid-auto-rows: var(--wp-edit-site-start-template-options-grid-height);
 	.block-editor-block-patterns-list__list-item {
 		break-inside: avoid-column;
-		margin-bottom: $grid-unit-30;
+		margin-bottom: 0;
 		width: 100%;
 
 		.block-editor-block-preview__container {
 			height: 100%;
+			box-shadow: 0 0 0 1px $gray-300;
 		}
 
 		.block-editor-block-preview__content {
@@ -37,6 +38,21 @@
 		.block-editor-block-patterns-list__item-title {
 			display: none;
 		}
+
+		&:hover {
+			.block-editor-block-preview__container {
+				box-shadow: 0 0 0 2px var(--wp-admin-theme-color);
+			}
+		}
+
+		&:focus {
+			.block-editor-block-preview__container {
+				box-shadow: inset 0 0 0 1px $white, 0 0 0 var(--wp-admin-border-width-focus) var(--wp-admin-theme-color);
+
+				// Windows High Contrast mode will show this outline, but not the box-shadow.
+				outline: 2px solid transparent;
+			}
+		}
 	}
 
 	// The start blank pattern is the last and we are selecting it.
diff --git a/phpunit/class-gutenberg-rest-templates-controller-test.php b/phpunit/class-gutenberg-rest-templates-controller-test.php
index 2c8521d63fd82..62087282abac1 100644
--- a/phpunit/class-gutenberg-rest-templates-controller-test.php
+++ b/phpunit/class-gutenberg-rest-templates-controller-test.php
@@ -48,6 +48,18 @@ public function test_get_template_fallback() {
 		$request->set_param( 'template_prefix', 'page' );
 		$response = rest_get_server()->dispatch( $request );
 		$this->assertSame( 'singular', $response->get_data()['slug'], 'Should fallback to `singular.html`.' );
+		// Should fallback to `tag.html`.
+		$request->set_param( 'slug', 'tag' );
+		$request->set_param( 'ignore_empty', false );
+		$request->set_param( 'is_custom', false );
+		$response = rest_get_server()->dispatch( $request );
+		$this->assertSame( 'tag', $response->get_data()['slug'], 'Should fallback to `tag.html`.' );
+		// Should fallback to `index.html`.
+		$request->set_param( 'slug', 'tag' );
+		$request->set_param( 'ignore_empty', true );
+		$request->set_param( 'is_custom', false );
+		$response = rest_get_server()->dispatch( $request );
+		$this->assertSame( 'index', $response->get_data()['slug'], 'Should fallback to `index.html`.' );
 		// Should fallback to `index.html`.
 		$request->set_param( 'slug', 'tag-rigas' );
 		$request->set_param( 'is_custom', false );
diff --git a/test/emptytheme/templates/tag.html b/test/emptytheme/templates/tag.html
new file mode 100644
index 0000000000000..e69de29bb2d1d