diff --git a/packages/react-dom/src/__tests__/ReactDOMNestedEvents-test.js b/packages/react-dom/src/__tests__/ReactDOMNestedEvents-test.js
index 6c632cd31e..1fac2c6ed1 100644
--- a/packages/react-dom/src/__tests__/ReactDOMNestedEvents-test.js
+++ b/packages/react-dom/src/__tests__/ReactDOMNestedEvents-test.js
@@ -11,6 +11,7 @@
 
 describe('ReactDOMNestedEvents', () => {
   let React;
+  let ReactDOM;
   let ReactDOMClient;
   let Scheduler;
   let act;
@@ -19,13 +20,14 @@ describe('ReactDOMNestedEvents', () => {
   beforeEach(() => {
     jest.resetModules();
     React = require('react');
+    ReactDOM = require('react-dom');
     ReactDOMClient = require('react-dom/client');
     Scheduler = require('scheduler');
     act = require('jest-react').act;
     useState = React.useState;
   });
 
-  test('nested event dispatches should not cause updates to flush', async () => {
+  it('nested event dispatches should not cause updates to flush', async () => {
     const buttonRef = React.createRef(null);
     function App() {
       const [isClicked, setIsClicked] = useState(false);
@@ -72,4 +74,160 @@ describe('ReactDOMNestedEvents', () => {
     ]);
     expect(buttonRef.current.innerHTML).toEqual('Clicked: true, Focused: true');
   });
+
+  it('custom events inside a discrete event is batched with sync updates and flushed synchronously', async () => {
+    const buttonRef = React.createRef(null);
+    function App() {
+      const [isClicked, setIsClicked] = useState(false);
+      const [isCustom, setIsCustom] = useState(false);
+      const onClick = () => {
+        setIsClicked(true);
+        buttonRef.current.dispatchEvent(new Event('custom'));
+      };
+      const onCustomEvent = () => {
+        setIsCustom(true);
+      };
+      React.useEffect(() => {
+        buttonRef.current.addEventListener('click', onClick);
+        buttonRef.current.addEventListener('custom', onCustomEvent);
+      }, []);
+      Scheduler.unstable_yieldValue(`render: ${isClicked} / ${isCustom}`);
+      return <button ref={buttonRef} />;
+    }
+
+    const container = document.createElement('div');
+    document.body.appendChild(container);
+    const root = ReactDOMClient.createRoot(container);
+
+    await act(async () => {
+      root.render(<App />);
+    });
+    expect(Scheduler).toHaveYielded(['render: false / false']);
+
+    await act(async () => {
+      buttonRef.current.click();
+    });
+    expect(Scheduler).toHaveYielded(['render: true / true']);
+  });
+
+  // This just exists to assert the Jest behavior. Once it has the expected behavior,
+  // this and related mocks can be deleted in this file
+  it('jest does not have the right `window.event` in queueMicrotask', () => {
+    const btn = document.createElement('button');
+    const customEvent = new CustomEvent('custom');
+    btn.addEventListener('custom', () => {
+      queueMicrotask(() => {
+        // This should be 'click'
+        expect(window.event).toBe(undefined);
+      });
+    });
+    btn.addEventListener('click', () => {
+      btn.dispatchEvent(customEvent);
+    });
+
+    btn.click();
+  });
+
+  it('custom events inside a discrete event flushes synchronously', async () => {
+    const buttonRef = React.createRef(null);
+
+    // Mock the browser behavior on setting `window.event` in microtasks
+    let outterEvent;
+
+    function App() {
+      const [isCustom, setIsCustom] = useState(false);
+      const onClick = () => {
+        outterEvent = window.event;
+        const customEvent = new Event('custom');
+        buttonRef.current.dispatchEvent(customEvent);
+        queueMicrotask(() => {
+          window.event = undefined;
+        });
+      };
+      const onCustomEvent = () => {
+        // In the microtask, `window.event` should be the outter click event
+        queueMicrotask(() => {
+          window.event = outterEvent;
+        });
+        setIsCustom(true);
+      };
+      React.useEffect(() => {
+        buttonRef.current.addEventListener('custom', onCustomEvent);
+        buttonRef.current.addEventListener('click', onClick);
+      }, []);
+      Scheduler.unstable_yieldValue(`render: ${isCustom}`);
+      return <button ref={buttonRef} />;
+    }
+
+    const container = document.createElement('div');
+    document.body.appendChild(container);
+    const root = ReactDOMClient.createRoot(container);
+
+    await act(async () => {
+      root.render(<App />);
+    });
+    expect(Scheduler).toHaveYielded(['render: false']);
+
+    await act(async () => {
+      buttonRef.current.click();
+      queueMicrotask(() => {
+        Scheduler.unstable_yieldValue('Sync');
+      });
+      Scheduler.unstable_scheduleCallback(
+        Scheduler.unstable_ImmediatePriority,
+        () => {
+          Scheduler.unstable_yieldValue('Immediate');
+        },
+      );
+    });
+    // The custom update should happens synchronously before yielding 'Immediate' 
+    expect(Scheduler).toHaveYielded(['render: true', 'Sync', 'Immediate']);
+  });
+
+  it('custom events inside other events keeps the default priority', async () => {
+    const buttonRef = React.createRef(null);
+
+    function App() {
+      const [isCustom, setIsCustom] = useState(false);
+      const onClick = () => {
+        buttonRef.current.dispatchEvent(new Event('custom'));
+      };
+      const onCustomEvent = () => {
+        setIsCustom(true);
+      };
+      React.useEffect(() => {
+        buttonRef.current.addEventListener('custom', onCustomEvent);
+        buttonRef.current.addEventListener('mouseover', onClick);
+      }, []);
+      Scheduler.unstable_yieldValue(`render: ${isCustom}`);
+      return <button ref={buttonRef} />;
+    }
+
+    const container = document.createElement('div');
+    document.body.appendChild(container);
+    const root = ReactDOMClient.createRoot(container);
+
+    await act(async () => {
+      root.render(<App />);
+    });
+    expect(Scheduler).toHaveYielded(['render: false']);
+
+    await act(async () => {
+      buttonRef.current.dispatchEvent(new Event('mouseover', {bubbles: true}));
+      Scheduler.unstable_scheduleCallback(
+        Scheduler.unstable_UserBlockingPriority,
+        () => {
+          Scheduler.unstable_yieldValue('Continuous');
+        },
+      );
+      Scheduler.unstable_scheduleCallback(
+        Scheduler.unstable_NormalPriority,
+        () => {
+          Scheduler.unstable_yieldValue('Default');
+        },
+      );
+    });
+    // The custom update should happens with the default priority
+    expect(Scheduler).toHaveYielded(['Continuous', 'render: true', 'Default']);
+  });
 });