diff --git a/packages/lexical-markdown/src/MarkdownTransformers.ts b/packages/lexical-markdown/src/MarkdownTransformers.ts
index 144f2bf1480..0270e4e2bba 100644
--- a/packages/lexical-markdown/src/MarkdownTransformers.ts
+++ b/packages/lexical-markdown/src/MarkdownTransformers.ts
@@ -101,10 +101,23 @@ const LIST_INDENT_SIZE = 4;
 const listReplace = (listType: ListType): ElementTransformer['replace'] => {
   return (parentNode, children, match) => {
     const previousNode = parentNode.getPreviousSibling();
+    const nextNode = parentNode.getNextSibling();
     const listItem = $createListItemNode(
       listType === 'check' ? match[3] === 'x' : undefined,
     );
-    if ($isListNode(previousNode) && previousNode.getListType() === listType) {
+    if ($isListNode(nextNode) && nextNode.getListType() === listType) {
+      const firstChild = nextNode.getFirstChild();
+      if (firstChild !== null) {
+        firstChild.insertBefore(listItem);
+      } else {
+        // should never happen, but let's handle gracefully, just in case.
+        nextNode.append(listItem);
+      }
+      parentNode.remove();
+    } else if (
+      $isListNode(previousNode) &&
+      previousNode.getListType() === listType
+    ) {
       previousNode.append(listItem);
       parentNode.remove();
     } else {
diff --git a/packages/lexical-playground/__tests__/regression/3433-merge-markdown-lists.spec.mjs b/packages/lexical-playground/__tests__/regression/3433-merge-markdown-lists.spec.mjs
new file mode 100644
index 00000000000..728a6c0883d
--- /dev/null
+++ b/packages/lexical-playground/__tests__/regression/3433-merge-markdown-lists.spec.mjs
@@ -0,0 +1,49 @@
+/**
+ * Copyright (c) Meta Platforms, Inc. and affiliates.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ */
+
+import {
+  assertHTML,
+  focusEditor,
+  html,
+  initialize,
+  test,
+} from '../utils/index.mjs';
+
+test.describe('Regression test #3433', () => {
+  test.beforeEach(({isCollab, page}) => initialize({isCollab, page}));
+  test('can merge markdown lists created immediately before existing lists', async ({
+    page,
+    isPlainText,
+  }) => {
+    test.skip(isPlainText);
+    await focusEditor(page);
+    await page.keyboard.press('Enter');
+    await page.keyboard.type('- one');
+    await page.keyboard.press('ArrowUp');
+    await page.keyboard.type('- two');
+    await assertHTML(
+      page,
+      html`
+        <ul class="PlaygroundEditorTheme__ul">
+          <li
+            value="1"
+            class="PlaygroundEditorTheme__listItem PlaygroundEditorTheme__ltr"
+            dir="ltr">
+            <span data-lexical-text="true">two</span>
+          </li>
+          <li
+            value="2"
+            class="PlaygroundEditorTheme__listItem PlaygroundEditorTheme__ltr"
+            dir="ltr">
+            <span data-lexical-text="true">one</span>
+          </li>
+        </ul>
+      `,
+    );
+  });
+});