diff --git a/lib/block-supports/background.php b/lib/block-supports/background.php
index 7095789722959..8e3c06159a120 100644
--- a/lib/block-supports/background.php
+++ b/lib/block-supports/background.php
@@ -53,10 +53,10 @@ function gutenberg_render_background_support( $block_content, $block ) {
 	}
 
 	$background_styles                    = array();
-	$background_styles['backgroundSize']  = isset( $block_attributes['style']['background']['backgroundSize'] ) ? $block_attributes['style']['background']['backgroundSize'] : 'cover';
 	$background_styles['backgroundImage'] = isset( $block_attributes['style']['background']['backgroundImage'] ) ? $block_attributes['style']['background']['backgroundImage'] : array();
 
-	if ( isset( $background_styles['backgroundImage']['source'] ) && 'file' === $background_styles['backgroundImage']['source'] && isset( $background_styles['backgroundImage']['url'] ) ) {
+	if ( ! empty( $background_styles['backgroundImage'] ) ) {
+		$background_styles['backgroundSize']     = isset( $block_attributes['style']['background']['backgroundSize'] ) ? $block_attributes['style']['background']['backgroundSize'] : 'cover';
 		$background_styles['backgroundPosition'] = isset( $block_attributes['style']['background']['backgroundPosition'] ) ? $block_attributes['style']['background']['backgroundPosition'] : null;
 		$background_styles['backgroundRepeat']   = isset( $block_attributes['style']['background']['backgroundRepeat'] ) ? $block_attributes['style']['background']['backgroundRepeat'] : null;
 
diff --git a/packages/block-editor/src/components/global-styles/test/get-global-styles-changes.js b/packages/block-editor/src/components/global-styles/test/get-global-styles-changes.js
index 6eb4974ec041a..9c220da7ead12 100644
--- a/packages/block-editor/src/components/global-styles/test/get-global-styles-changes.js
+++ b/packages/block-editor/src/components/global-styles/test/get-global-styles-changes.js
@@ -20,7 +20,6 @@ describe( 'getGlobalStylesChanges and utils', () => {
 			background: {
 				backgroundImage: {
 					url: 'https://example.com/image.jpg',
-					source: 'file',
 				},
 				backgroundSize: 'contain',
 				backgroundPosition: '30% 30%',
@@ -96,7 +95,6 @@ describe( 'getGlobalStylesChanges and utils', () => {
 			background: {
 				backgroundImage: {
 					url: 'https://example.com/image_new.jpg',
-					source: 'file',
 				},
 				backgroundSize: 'contain',
 				backgroundPosition: '40% 77%',
diff --git a/packages/block-editor/src/hooks/background.js b/packages/block-editor/src/hooks/background.js
index 3d47f42645afc..3e23efcbf5fc9 100644
--- a/packages/block-editor/src/hooks/background.js
+++ b/packages/block-editor/src/hooks/background.js
@@ -59,7 +59,7 @@ export function setBackgroundStyleDefaults( backgroundStyle ) {
 	let backgroundStylesWithDefaults;
 
 	// Set block background defaults.
-	if ( backgroundImage?.source === 'file' && !! backgroundImage?.url ) {
+	if ( !! backgroundImage?.url ) {
 		if ( ! backgroundStyle?.backgroundSize ) {
 			backgroundStylesWithDefaults = {
 				backgroundSize: 'cover',
diff --git a/packages/block-library/src/embed/icons.js b/packages/block-library/src/embed/icons.js
index 21a3b20ae278a..2e9386373f083 100644
--- a/packages/block-library/src/embed/icons.js
+++ b/packages/block-library/src/embed/icons.js
@@ -178,3 +178,12 @@ export const embedPocketCastsIcon = {
 		</SVG>
 	),
 };
+
+export const embedBlueskyIcon = (
+	<SVG viewBox="0 0 24 24">
+		<Path
+			fill="#0a7aff"
+			d="M6.3,4.2c2.3,1.7,4.8,5.3,5.7,7.2.9-1.9,3.4-5.4,5.7-7.2,1.7-1.3,4.3-2.2,4.3.9s-.4,5.2-.6,5.9c-.7,2.6-3.3,3.2-5.6,2.8,4,.7,5.1,3,2.9,5.3-5,5.2-6.7-2.8-6.7-2.8,0,0-1.7,8-6.7,2.8-2.2-2.3-1.2-4.6,2.9-5.3-2.3.4-4.9-.3-5.6-2.8-.2-.7-.6-5.3-.6-5.9,0-3.1,2.7-2.1,4.3-.9h0Z"
+		/>
+	</SVG>
+);
diff --git a/packages/block-library/src/embed/variations.js b/packages/block-library/src/embed/variations.js
index 6083ea1adc90b..e770c12ddfd97 100644
--- a/packages/block-library/src/embed/variations.js
+++ b/packages/block-library/src/embed/variations.js
@@ -27,6 +27,7 @@ import {
 	embedPinterestIcon,
 	embedWolframIcon,
 	embedPocketCastsIcon,
+	embedBlueskyIcon,
 } from './icons';
 
 /** @typedef {import('@wordpress/blocks').WPBlockVariation} WPBlockVariation */
@@ -360,6 +361,14 @@ const variations = [
 		patterns: [ /^https?:\/\/(www\.)?wolframcloud\.com\/obj\/.+/i ],
 		attributes: { providerNameSlug: 'wolfram-cloud', responsive: true },
 	},
+	{
+		name: 'bluesky',
+		title: 'Bluesky',
+		icon: embedBlueskyIcon,
+		description: __( 'Embed a Bluesky post.' ),
+		patterns: [ /^https?:\/\/bsky\.app\/profile\/.+\/post\/.+/i ],
+		attributes: { providerNameSlug: 'bluesky' },
+	},
 ];
 
 /**
diff --git a/packages/style-engine/src/styles/background/index.ts b/packages/style-engine/src/styles/background/index.ts
index 748cb15b4f309..a8c8679888e15 100644
--- a/packages/style-engine/src/styles/background/index.ts
+++ b/packages/style-engine/src/styles/background/index.ts
@@ -8,11 +8,7 @@ const backgroundImage = {
 	name: 'backgroundImage',
 	generate: ( style: Style, options: StyleOptions ) => {
 		const _backgroundImage = style?.background?.backgroundImage;
-		if (
-			typeof _backgroundImage === 'object' &&
-			_backgroundImage?.source === 'file' &&
-			_backgroundImage?.url
-		) {
+		if ( typeof _backgroundImage === 'object' && _backgroundImage?.url ) {
 			return [
 				{
 					selector: options.selector,
diff --git a/packages/style-engine/src/test/index.js b/packages/style-engine/src/test/index.js
index 5869c4a349baa..fbccc8c48bc92 100644
--- a/packages/style-engine/src/test/index.js
+++ b/packages/style-engine/src/test/index.js
@@ -226,7 +226,6 @@ describe( 'getCSSRules', () => {
 				{
 					background: {
 						backgroundImage: {
-							source: 'file',
 							url: 'https://example.com/image.jpg',
 						},
 						backgroundPosition: '50% 50%',
diff --git a/phpunit/class-wp-theme-json-test.php b/phpunit/class-wp-theme-json-test.php
index 8df33334e82d0..00799b7ba0b47 100644
--- a/phpunit/class-wp-theme-json-test.php
+++ b/phpunit/class-wp-theme-json-test.php
@@ -4812,8 +4812,7 @@ public function test_get_top_level_background_image_styles() {
 						'core/paragraph' => array(
 							'background' => array(
 								'backgroundImage'    => array(
-									'url'    => 'http://example.org/image.png',
-									'source' => 'file',
+									'url' => 'http://example.org/image.png',
 								),
 								'backgroundSize'     => 'cover',
 								'backgroundRepeat'   => 'no-repeat',
diff --git a/schemas/json/theme.json b/schemas/json/theme.json
index 755fb09e57e3c..773419d472f33 100644
--- a/schemas/json/theme.json
+++ b/schemas/json/theme.json
@@ -2331,12 +2331,6 @@
 										{
 											"type": "object",
 											"properties": {
-												"source": {
-													"description": "The origin of the image. 'file' denotes that the 'url' is a path to an image or other file.",
-													"type": "string",
-													"enum": [ "file" ],
-													"default": "file"
-												},
 												"url": {
 													"description": "A URL to an image file.",
 													"type": "string"