diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/block-context-menu.tsx b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/block-context-menu.tsx
index 8945b13dc8..a7889a1227 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/block-context-menu.tsx
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/block-context-menu.tsx
@@ -29,6 +29,8 @@ export function BlockContextMenu({
   onRemoveFromSubflow,
   onOpenEditor,
   onRename,
+  onGroupBlocks,
+  onUngroupBlocks,
   hasClipboard = false,
   showRemoveFromSubflow = false,
   disableEdit = false,
@@ -47,6 +49,14 @@ export function BlockContextMenu({
 
   const canRemoveFromSubflow = showRemoveFromSubflow && !hasStarterBlock
 
+  // Check if we can group: need at least 2 blocks selected
+  const canGroup = selectedBlocks.length >= 2
+
+  // Check if we can ungroup: at least one selected block must be in a group
+  // Ungrouping will ungroup all blocks in that group (the entire group, not just selected blocks)
+  const hasGroupedBlock = selectedBlocks.some((b) => !!b.groupId)
+  const canUngroup = hasGroupedBlock
+
   const getToggleEnabledLabel = () => {
     if (allEnabled) return 'Disable'
     if (allDisabled) return 'Enable'
@@ -141,6 +151,31 @@ export function BlockContextMenu({
           </PopoverItem>
         )}
 
+        {/* Block group actions */}
+        {(canGroup || canUngroup) && <PopoverDivider />}
+        {canGroup && (
+          <PopoverItem
+            disabled={disableEdit}
+            onClick={() => {
+              onGroupBlocks()
+              onClose()
+            }}
+          >
+            Group Blocks
+          </PopoverItem>
+        )}
+        {canUngroup && (
+          <PopoverItem
+            disabled={disableEdit}
+            onClick={() => {
+              onUngroupBlocks()
+              onClose()
+            }}
+          >
+            Ungroup
+          </PopoverItem>
+        )}
+
         {/* Single block actions */}
         {isSingleBlock && <PopoverDivider />}
         {isSingleBlock && !isSubflow && (
diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/types.ts b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/types.ts
index ed0ecd26ee..18990070f1 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/types.ts
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/context-menu/types.ts
@@ -24,6 +24,8 @@ export interface ContextMenuBlockInfo {
   parentId?: string
   /** Parent type ('loop' | 'parallel') if nested */
   parentType?: string
+  /** Group ID if block is in a group */
+  groupId?: string
 }
 
 /**
@@ -50,6 +52,8 @@ export interface BlockContextMenuProps {
   onRemoveFromSubflow: () => void
   onOpenEditor: () => void
   onRename: () => void
+  onGroupBlocks: () => void
+  onUngroupBlocks: () => void
   /** Whether clipboard has content for pasting */
   hasClipboard?: boolean
   /** Whether remove from subflow option should be shown */
diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/hooks/use-canvas-context-menu.ts b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/hooks/use-canvas-context-menu.ts
index be4bc6bdfc..4b7961e1b7 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/hooks/use-canvas-context-menu.ts
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/hooks/use-canvas-context-menu.ts
@@ -35,6 +35,7 @@ export function useCanvasContextMenu({ blocks, getNodes }: UseCanvasContextMenuP
         const block = blocks[n.id]
         const parentId = block?.data?.parentId
         const parentType = parentId ? blocks[parentId]?.type : undefined
+        const groupId = block?.data?.groupId
         return {
           id: n.id,
           type: block?.type || '',
@@ -42,6 +43,7 @@ export function useCanvasContextMenu({ blocks, getNodes }: UseCanvasContextMenuP
           horizontalHandles: block?.horizontalHandles ?? false,
           parentId,
           parentType,
+          groupId,
         }
       }),
     [blocks]
@@ -49,14 +51,22 @@ export function useCanvasContextMenu({ blocks, getNodes }: UseCanvasContextMenuP
 
   /**
    * Handle right-click on a node (block)
+   * If the node is part of a multiselection, include all selected nodes.
+   * If the node is not selected, just use that node.
    */
   const handleNodeContextMenu = useCallback(
     (event: React.MouseEvent, node: Node) => {
       event.preventDefault()
       event.stopPropagation()
 
-      const selectedNodes = getNodes().filter((n) => n.selected)
-      const nodesToUse = selectedNodes.some((n) => n.id === node.id) ? selectedNodes : [node]
+      // Get all currently selected nodes
+      const allNodes = getNodes()
+      const selectedNodes = allNodes.filter((n) => n.selected)
+
+      // If the right-clicked node is already selected, use all selected nodes
+      // Otherwise, just use the right-clicked node
+      const isNodeSelected = selectedNodes.some((n) => n.id === node.id)
+      const nodesToUse = isNodeSelected && selectedNodes.length > 0 ? selectedNodes : [node]
 
       setPosition({ x: event.clientX, y: event.clientY })
       setSelectedBlocks(nodesToBlockInfos(nodesToUse))
diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/workflow.tsx b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/workflow.tsx
index f4e2b54883..6023127237 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/workflow.tsx
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/workflow.tsx
@@ -264,12 +264,14 @@ const WorkflowContent = React.memo(() => {
   const canUndo = undoRedoStack.undo.length > 0
   const canRedo = undoRedoStack.redo.length > 0
 
-  const { updateNodeDimensions, setDragStartPosition, getDragStartPosition } = useWorkflowStore(
-    useShallow((state) => ({
-      updateNodeDimensions: state.updateNodeDimensions,
-      setDragStartPosition: state.setDragStartPosition,
-      getDragStartPosition: state.getDragStartPosition,
-    }))
+  const { updateNodeDimensions, setDragStartPosition, getDragStartPosition, getGroups } =
+    useWorkflowStore(
+      useShallow((state) => ({
+        updateNodeDimensions: state.updateNodeDimensions,
+        setDragStartPosition: state.setDragStartPosition,
+        getDragStartPosition: state.getDragStartPosition,
+        getGroups: state.getGroups,
+      }))
   )
 
   const copilotCleanup = useCopilotStore((state) => state.cleanup)
@@ -458,6 +460,8 @@ const WorkflowContent = React.memo(() => {
     collaborativeBatchRemoveBlocks,
     collaborativeBatchToggleBlockEnabled,
     collaborativeBatchToggleBlockHandles,
+    collaborativeGroupBlocks,
+    collaborativeUngroupBlocks,
     undo,
     redo,
   } = useCollaborativeWorkflow()
@@ -782,6 +786,21 @@ const WorkflowContent = React.memo(() => {
     collaborativeBatchToggleBlockHandles(blockIds)
   }, [contextMenuBlocks, collaborativeBatchToggleBlockHandles])
 
+  const handleContextGroupBlocks = useCallback(() => {
+    const blockIds = contextMenuBlocks.map((block) => block.id)
+    if (blockIds.length >= 2) {
+      collaborativeGroupBlocks(blockIds)
+    }
+  }, [contextMenuBlocks, collaborativeGroupBlocks])
+
+  const handleContextUngroupBlocks = useCallback(() => {
+    // Find the first block with a groupId and ungroup that entire group
+    const groupedBlock = contextMenuBlocks.find((block) => block.groupId)
+    if (groupedBlock?.groupId) {
+      collaborativeUngroupBlocks(groupedBlock.groupId)
+    }
+  }, [contextMenuBlocks, collaborativeUngroupBlocks])
+
   const handleContextRemoveFromSubflow = useCallback(() => {
     const blocksToRemove = contextMenuBlocks.filter(
       (block) => block.parentId && (block.parentType === 'loop' || block.parentType === 'parallel')
@@ -2060,16 +2079,56 @@ const WorkflowContent = React.memo(() => {
       window.removeEventListener('remove-from-subflow', handleRemoveFromSubflow as EventListener)
   }, [blocks, edgesForDisplay, getNodeAbsolutePosition, collaborativeBatchUpdateParent])
 
-  /** Handles node changes - applies changes and resolves parent-child selection conflicts. */
+  /** Handles node changes - applies changes and resolves parent-child selection conflicts.
+   *  Also expands selection to include all group members when a grouped block is selected.
+   */
   const onNodesChange = useCallback(
     (changes: NodeChange[]) => {
       setDisplayNodes((nds) => {
-        const updated = applyNodeChanges(changes, nds)
+        let updated = applyNodeChanges(changes, nds)
         const hasSelectionChange = changes.some((c) => c.type === 'select')
-        return hasSelectionChange ? resolveParentChildSelectionConflicts(updated, blocks) : updated
+
+        if (hasSelectionChange) {
+          // Expand selection to include all group members
+          const groups = getGroups()
+          const selectedNodeIds = new Set(updated.filter((n) => n.selected).map((n) => n.id))
+          const groupsToInclude = new Set<string>()
+
+          // Find all groups that have at least one selected member
+          selectedNodeIds.forEach((nodeId) => {
+            const groupId = blocks[nodeId]?.data?.groupId
+            if (groupId && groups[groupId]) {
+              groupsToInclude.add(groupId)
+            }
+          })
+
+          // Add all blocks from those groups to the selection
+          if (groupsToInclude.size > 0) {
+            const expandedNodeIds = new Set(selectedNodeIds)
+            groupsToInclude.forEach((groupId) => {
+              const group = groups[groupId]
+              if (group) {
+                group.blockIds.forEach((blockId) => expandedNodeIds.add(blockId))
+              }
+            })
+
+            // Update nodes to include expanded selection
+            if (expandedNodeIds.size > selectedNodeIds.size) {
+              updated = updated.map((n) => ({
+                ...n,
+                selected: expandedNodeIds.has(n.id) ? true : n.selected,
+              }))
+            }
+          }
+
+          // Resolve parent-child conflicts
+          updated = resolveParentChildSelectionConflicts(updated, blocks)
+        }
+
+        return updated
       })
     },
-    [blocks]
+    [blocks, getGroups]
   )
 
   /**
@@ -3168,19 +3227,56 @@ const WorkflowContent = React.memo(() => {
 
   /**
    * Handles node click to select the node in ReactFlow.
+   * When clicking on a grouped block, also selects all other blocks in the group.
    * Parent-child conflict resolution happens automatically in onNodesChange.
    */
   const handleNodeClick = useCallback(
     (event: React.MouseEvent, node: Node) => {
       const isMultiSelect = event.shiftKey || event.metaKey || event.ctrlKey
-      setNodes((nodes) =>
-        nodes.map((n) => ({
+      const groups = getGroups()
+
+      setNodes((nodes) => {
+        // First, calculate the base selection
+        let updatedNodes = nodes.map((n) => ({
           ...n,
           selected: isMultiSelect ? (n.id === node.id ? true : n.selected) : n.id === node.id,
         }))
-      )
+
+        // Expand selection to include all group members
+        const selectedNodeIds = new Set(updatedNodes.filter((n) => n.selected).map((n) => n.id))
+        const groupsToInclude = new Set<string>()
+
+        // Find all groups that have at least one selected member
+        selectedNodeIds.forEach((nodeId) => {
+          const groupId = blocks[nodeId]?.data?.groupId
+          if (groupId && groups[groupId]) {
+            groupsToInclude.add(groupId)
+          }
+        })
+
+        // Add all blocks from those groups to the selection
+        if (groupsToInclude.size > 0) {
+          const expandedNodeIds = new Set(selectedNodeIds)
+          groupsToInclude.forEach((groupId) => {
+            const group = groups[groupId]
+            if (group) {
+              group.blockIds.forEach((blockId) => expandedNodeIds.add(blockId))
+            }
+          })
+
+          // Update nodes with expanded selection
+          if (expandedNodeIds.size > selectedNodeIds.size) {
+            updatedNodes = updatedNodes.map((n) => ({
+              ...n,
+              selected: expandedNodeIds.has(n.id) ? true : n.selected,
+            }))
+          }
+        }
+
+        return updatedNodes
+      })
     },
-    [setNodes]
+    [setNodes, blocks, getGroups]
   )
 
   /** Handles edge selection with container context tracking and Shift-click multi-selection. */
@@ -3415,6 +3511,8 @@ const WorkflowContent = React.memo(() => {
               onRemoveFromSubflow={handleContextRemoveFromSubflow}
               onOpenEditor={handleContextOpenEditor}
               onRename={handleContextRename}
+              onGroupBlocks={handleContextGroupBlocks}
+              onUngroupBlocks={handleContextUngroupBlocks}
               hasClipboard={hasClipboard()}
               showRemoveFromSubflow={contextMenuBlocks.some(
                 (b) => b.parentId && (b.parentType === 'loop' || b.parentType === 'parallel')
diff --git a/apps/sim/hooks/use-collaborative-workflow.ts b/apps/sim/hooks/use-collaborative-workflow.ts
index c2fa032d86..8bde2d7952 100644
--- a/apps/sim/hooks/use-collaborative-workflow.ts
+++ b/apps/sim/hooks/use-collaborative-workflow.ts
@@ -424,6 +424,35 @@ export function useCollaborativeWorkflow() {
               logger.info('Successfully applied batch-update-parent from remote user')
               break
             }
+            case BLOCKS_OPERATIONS.GROUP_BLOCKS: {
+              const { blockIds, groupId } = payload
+              logger.info('Received group-blocks from remote user', {
+                userId,
+                groupId,
+                blockCount: (blockIds || []).length,
+              })
+
+              if (blockIds && blockIds.length > 0 && groupId) {
+                workflowStore.groupBlocks(blockIds, groupId)
+              }
+
+              logger.info('Successfully applied group-blocks from remote user')
+              break
+            }
+            case BLOCKS_OPERATIONS.UNGROUP_BLOCKS: {
+              const { groupId } = payload
+              logger.info('Received ungroup-blocks from remote user', {
+                userId,
+                groupId,
+              })
+
+              if (groupId) {
+                workflowStore.ungroupBlocks(groupId)
+              }
+
+              logger.info('Successfully applied ungroup-blocks from remote user')
+              break
+            }
           }
         }
       } catch (error) {
@@ -1584,6 +1613,84 @@ export function useCollaborativeWorkflow() {
     ]
   )
 
+  const collaborativeGroupBlocks = useCallback(
+    (blockIds: string[]) => {
+      if (!isInActiveRoom()) {
+        logger.debug('Skipping group blocks - not in active workflow')
+        return null
+      }
+
+      if (blockIds.length < 2) {
+        logger.debug('Cannot group fewer than 2 blocks')
+        return null
+      }
+
+      const groupId = crypto.randomUUID()
+
+      const operationId = crypto.randomUUID()
+
+      addToQueue({
+        id: operationId,
+        operation: {
+          operation: BLOCKS_OPERATIONS.GROUP_BLOCKS,
+          target: OPERATION_TARGETS.BLOCKS,
+          payload: { blockIds, groupId },
+        },
+        workflowId: activeWorkflowId || '',
+        userId: session?.user?.id || 'unknown',
+      })
+
+      workflowStore.groupBlocks(blockIds, groupId)
+
+      undoRedo.recordGroupBlocks(blockIds, groupId)
+
+      logger.info('Grouped blocks collaboratively', { groupId, blockCount: blockIds.length })
+      return groupId
+    },
+    [addToQueue, activeWorkflowId, session?.user?.id, isInActiveRoom, workflowStore, undoRedo]
+  )
+
+  const collaborativeUngroupBlocks = useCallback(
+    (groupId: string) => {
+      if (!isInActiveRoom()) {
+        logger.debug('Skipping ungroup blocks - not in active workflow')
+        return []
+      }
+
+      const groups = workflowStore.getGroups()
+      const group = groups[groupId]
+
+      if (!group) {
+        logger.warn('Cannot ungroup - group not found', { groupId })
+        return []
+      }
+
+      const blockIds = [...group.blockIds]
+      const parentGroupId = group.parentGroupId
+
+      const operationId = crypto.randomUUID()
+
+      addToQueue({
+        id: operationId,
+        operation: {
+          operation: BLOCKS_OPERATIONS.UNGROUP_BLOCKS,
+          target: OPERATION_TARGETS.BLOCKS,
+          payload: { groupId, blockIds, parentGroupId },
+        },
+        workflowId: activeWorkflowId || '',
+        userId: session?.user?.id || 'unknown',
+      })
+
+      workflowStore.ungroupBlocks(groupId)
+
+      undoRedo.recordUngroupBlocks(groupId, blockIds, parentGroupId)
+
+      logger.info('Ungrouped blocks collaboratively', { groupId, blockCount: blockIds.length })
+      return blockIds
+    },
+    [addToQueue, activeWorkflowId, session?.user?.id, isInActiveRoom, workflowStore, undoRedo]
+  )
+
   return {
     // Connection status
     isConnected,
@@ -1622,6 +1729,10 @@ export function useCollaborativeWorkflow() {
     collaborativeUpdateIterationCount,
     collaborativeUpdateIterationCollection,
 
+    // Collaborative block group operations
+    collaborativeGroupBlocks,
+    collaborativeUngroupBlocks,
+
     // Direct access to stores for non-collaborative operations
     workflowStore,
     subBlockStore,
diff --git a/apps/sim/hooks/use-undo-redo.ts b/apps/sim/hooks/use-undo-redo.ts
index 1bb6bf590c..7a48e8b91c 100644
--- a/apps/sim/hooks/use-undo-redo.ts
+++ b/apps/sim/hooks/use-undo-redo.ts
@@ -22,7 +22,9 @@ import {
   type BatchToggleHandlesOperation,
   type BatchUpdateParentOperation,
   createOperationEntry,
+  type GroupBlocksOperation,
   runWithUndoRedoRecordingSuspended,
+  type UngroupBlocksOperation,
   type UpdateParentOperation,
   useUndoRedoStore,
 } from '@/stores/undo-redo'
@@ -874,6 +876,46 @@ export function useUndoRedo() {
           })
           break
         }
+        case UNDO_REDO_OPERATIONS.GROUP_BLOCKS: {
+          // Undoing group = ungroup (inverse is ungroup operation)
+          const inverseOp = entry.inverse as unknown as UngroupBlocksOperation
+          const { groupId } = inverseOp.data
+
+          addToQueue({
+            id: opId,
+            operation: {
+              operation: BLOCKS_OPERATIONS.UNGROUP_BLOCKS,
+              target: OPERATION_TARGETS.BLOCKS,
+              payload: { groupId, blockIds: inverseOp.data.blockIds },
+            },
+            workflowId: activeWorkflowId,
+            userId,
+          })
+
+          workflowStore.ungroupBlocks(groupId)
+          logger.debug('Undid group blocks', { groupId })
+          break
+        }
+        case UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS: {
+          // Undoing ungroup = re-group (inverse is group operation)
+          const inverseOp = entry.inverse as unknown as GroupBlocksOperation
+          const { groupId, blockIds } = inverseOp.data
+
+          addToQueue({
+            id: opId,
+            operation: {
+              operation: BLOCKS_OPERATIONS.GROUP_BLOCKS,
+              target: OPERATION_TARGETS.BLOCKS,
+              payload: { groupId, blockIds },
+            },
+            workflowId: activeWorkflowId,
+            userId,
+          })
+
+          workflowStore.groupBlocks(blockIds, groupId)
+          logger.debug('Undid ungroup blocks', { groupId })
+          break
+        }
         case UNDO_REDO_OPERATIONS.APPLY_DIFF: {
           const applyDiffInverse = entry.inverse as any
           const { baselineSnapshot } = applyDiffInverse.data
@@ -1482,6 +1524,46 @@ export function useUndoRedo() {
           })
           break
         }
+        case UNDO_REDO_OPERATIONS.GROUP_BLOCKS: {
+          // Redo group = group again
+          const groupOp = entry.operation as GroupBlocksOperation
+          const { groupId, blockIds } = groupOp.data
+
+          addToQueue({
+            id: opId,
+            operation: {
+              operation: BLOCKS_OPERATIONS.GROUP_BLOCKS,
+              target: OPERATION_TARGETS.BLOCKS,
+              payload: { groupId, blockIds },
+            },
+            workflowId: activeWorkflowId,
+            userId,
+          })
+
+          workflowStore.groupBlocks(blockIds, groupId)
+          logger.debug('Redid group blocks', { groupId })
+          break
+        }
+        case UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS: {
+          // Redo ungroup = ungroup again
+          const ungroupOp = entry.operation as UngroupBlocksOperation
+          const { groupId } = ungroupOp.data
+
+          addToQueue({
+            id: opId,
+            operation: {
+              operation: BLOCKS_OPERATIONS.UNGROUP_BLOCKS,
+              target: OPERATION_TARGETS.BLOCKS,
+              payload: { groupId, blockIds: ungroupOp.data.blockIds },
+            },
+            workflowId: activeWorkflowId,
+            userId,
+          })
+
+          workflowStore.ungroupBlocks(groupId)
+          logger.debug('Redid ungroup blocks', { groupId })
+          break
+        }
         case UNDO_REDO_OPERATIONS.APPLY_DIFF: {
           // Redo apply-diff means re-applying the proposed state with diff markers
           const applyDiffOp = entry.operation as any
@@ -1793,6 +1875,66 @@ export function useUndoRedo() {
     [activeWorkflowId, userId, undoRedoStore]
   )
 
+  const recordGroupBlocks = useCallback(
+    (blockIds: string[], groupId: string) => {
+      if (!activeWorkflowId || blockIds.length === 0) return
+
+      const operation: GroupBlocksOperation = {
+        id: crypto.randomUUID(),
+        type: UNDO_REDO_OPERATIONS.GROUP_BLOCKS,
+        timestamp: Date.now(),
+        workflowId: activeWorkflowId,
+        userId,
+        data: { groupId, blockIds },
+      }
+
+      const inverse: UngroupBlocksOperation = {
+        id: crypto.randomUUID(),
+        type: UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS,
+        timestamp: Date.now(),
+        workflowId: activeWorkflowId,
+        userId,
+        data: { groupId, blockIds },
+      }
+
+      const entry = createOperationEntry(operation, inverse)
+      undoRedoStore.push(activeWorkflowId, userId, entry)
+
+      logger.debug('Recorded group blocks', { groupId, blockCount: blockIds.length })
+    },
+    [activeWorkflowId, userId, undoRedoStore]
+  )
+
+  const recordUngroupBlocks = useCallback(
+    (groupId: string, blockIds: string[], parentGroupId?: string) => {
+      if (!activeWorkflowId || blockIds.length === 0) return
+
+      const operation: UngroupBlocksOperation = {
+        id: crypto.randomUUID(),
+        type: UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS,
+        timestamp: Date.now(),
+        workflowId: activeWorkflowId,
+        userId,
+        data: { groupId, blockIds, parentGroupId },
+      }
+
+      const inverse: GroupBlocksOperation = {
+        id: crypto.randomUUID(),
+        type: UNDO_REDO_OPERATIONS.GROUP_BLOCKS,
+        timestamp: Date.now(),
+        workflowId: activeWorkflowId,
+        userId,
+        data: { groupId, blockIds },
+      }
+
+      const entry = createOperationEntry(operation, inverse)
+      undoRedoStore.push(activeWorkflowId, userId, entry)
+
+      logger.debug('Recorded ungroup blocks', { groupId, blockCount: blockIds.length })
+    },
+    [activeWorkflowId, userId, undoRedoStore]
+  )
+
   return {
     recordBatchAddBlocks,
     recordBatchRemoveBlocks,
@@ -1806,6 +1948,8 @@ export function useUndoRedo() {
     recordApplyDiff,
     recordAcceptDiff,
     recordRejectDiff,
+    recordGroupBlocks,
+    recordUngroupBlocks,
     undo,
     redo,
     getStackSizes,
diff --git a/apps/sim/lib/workflows/diff/diff-engine.ts b/apps/sim/lib/workflows/diff/diff-engine.ts
index f22365d145..9b74e4e5a4 100644
--- a/apps/sim/lib/workflows/diff/diff-engine.ts
+++ b/apps/sim/lib/workflows/diff/diff-engine.ts
@@ -1174,5 +1174,6 @@ export function stripWorkflowDiffMarkers(state: WorkflowState): WorkflowState {
     edges: structuredClone(state.edges || []),
     loops: structuredClone(state.loops || {}),
     parallels: structuredClone(state.parallels || {}),
+    groups: structuredClone(state.groups || {}),
   }
 }
diff --git a/apps/sim/socket/constants.ts b/apps/sim/socket/constants.ts
index 98f49d846e..7a703e74f9 100644
--- a/apps/sim/socket/constants.ts
+++ b/apps/sim/socket/constants.ts
@@ -16,6 +16,8 @@ export const BLOCKS_OPERATIONS = {
   BATCH_TOGGLE_ENABLED: 'batch-toggle-enabled',
   BATCH_TOGGLE_HANDLES: 'batch-toggle-handles',
   BATCH_UPDATE_PARENT: 'batch-update-parent',
+  GROUP_BLOCKS: 'group-blocks',
+  UNGROUP_BLOCKS: 'ungroup-blocks',
 } as const
 
 export type BlocksOperation = (typeof BLOCKS_OPERATIONS)[keyof typeof BLOCKS_OPERATIONS]
@@ -87,6 +89,8 @@ export const UNDO_REDO_OPERATIONS = {
   APPLY_DIFF: 'apply-diff',
   ACCEPT_DIFF: 'accept-diff',
   REJECT_DIFF: 'reject-diff',
+  GROUP_BLOCKS: 'group-blocks',
+  UNGROUP_BLOCKS: 'ungroup-blocks',
 } as const
 
 export type UndoRedoOperation = (typeof UNDO_REDO_OPERATIONS)[keyof typeof UNDO_REDO_OPERATIONS]
diff --git a/apps/sim/socket/database/operations.ts b/apps/sim/socket/database/operations.ts
index 1f52d46ef9..a6bd24f8b7 100644
--- a/apps/sim/socket/database/operations.ts
+++ b/apps/sim/socket/database/operations.ts
@@ -810,6 +810,89 @@ async function handleBlocksOperationTx(
       break
     }
 
+    case BLOCKS_OPERATIONS.GROUP_BLOCKS: {
+      const { blockIds, groupId } = payload
+      if (!Array.isArray(blockIds) || blockIds.length === 0 || !groupId) {
+        logger.debug('Invalid payload for group blocks operation')
+        return
+      }
+
+      logger.info(`Grouping ${blockIds.length} blocks into group ${groupId} in workflow ${workflowId}`)
+
+      for (const blockId of blockIds) {
+        const [currentBlock] = await tx
+          .select({ data: workflowBlocks.data })
+          .from(workflowBlocks)
+          .where(and(eq(workflowBlocks.id, blockId), eq(workflowBlocks.workflowId, workflowId)))
+          .limit(1)
+
+        if (!currentBlock) {
+          logger.warn(`Block ${blockId} not found for grouping`)
+          continue
+        }
+
+        const currentData = currentBlock?.data || {}
+        const updatedData = { ...currentData, groupId }
+
+        await tx
+          .update(workflowBlocks)
+          .set({
+            data: updatedData,
+            updatedAt: new Date(),
+          })
+          .where(and(eq(workflowBlocks.id, blockId), eq(workflowBlocks.workflowId, workflowId)))
+      }
+
+      logger.debug(`Grouped ${blockIds.length} blocks into group ${groupId}`)
+      break
+    }
+
+    case BLOCKS_OPERATIONS.UNGROUP_BLOCKS: {
+      const { groupId, blockIds, parentGroupId } = payload
+      if (!groupId || !Array.isArray(blockIds)) {
+        logger.debug('Invalid payload for ungroup blocks operation')
+        return
+      }
+
+      logger.info(`Ungrouping ${blockIds.length} blocks from group ${groupId} in workflow ${workflowId}`)
+
+      for (const blockId of blockIds) {
+        const [currentBlock] = await tx
+          .select({ data: workflowBlocks.data })
+          .from(workflowBlocks)
+          .where(and(eq(workflowBlocks.id, blockId), eq(workflowBlocks.workflowId, workflowId)))
+          .limit(1)
+
+        if (!currentBlock) {
+          logger.warn(`Block ${blockId} not found for ungrouping`)
+          continue
+        }
+
+        const currentData = currentBlock?.data || {}
+        let updatedData: Record<string, any>
+
+        if (parentGroupId) {
+          // Move to parent group
+          updatedData = { ...currentData, groupId: parentGroupId }
+        } else {
+          // Remove from group entirely
+          const { groupId: _removed, ...restData } = currentData
+          updatedData = restData
+        }
+
+        await tx
+          .update(workflowBlocks)
+          .set({
+            data: updatedData,
+            updatedAt: new Date(),
+          })
+          .where(and(eq(workflowBlocks.id, blockId), eq(workflowBlocks.workflowId, workflowId)))
+      }
+
+      logger.debug(`Ungrouped ${blockIds.length} blocks from group ${groupId}`)
+      break
+    }
+
     default:
       throw new Error(`Unsupported blocks operation: ${operation}`)
   }
diff --git a/apps/sim/socket/handlers/operations.ts b/apps/sim/socket/handlers/operations.ts
index 9b74293bbf..026a683694 100644
--- a/apps/sim/socket/handlers/operations.ts
+++ b/apps/sim/socket/handlers/operations.ts
@@ -465,6 +465,70 @@ export function setupOperationsHandlers(
         return
       }
 
+      if (
+        target === OPERATION_TARGETS.BLOCKS &&
+        operation === BLOCKS_OPERATIONS.GROUP_BLOCKS
+      ) {
+        await persistWorkflowOperation(workflowId, {
+          operation,
+          target,
+          payload,
+          timestamp: operationTimestamp,
+          userId: session.userId,
+        })
+
+        room.lastModified = Date.now()
+
+        socket.to(workflowId).emit('workflow-operation', {
+          operation,
+          target,
+          payload,
+          timestamp: operationTimestamp,
+          senderId: socket.id,
+          userId: session.userId,
+          userName: session.userName,
+          metadata: { workflowId, operationId: crypto.randomUUID() },
+        })
+
+        if (operationId) {
+          socket.emit('operation-confirmed', { operationId, serverTimestamp: Date.now() })
+        }
+
+        return
+      }
+
+      if (
+        target === OPERATION_TARGETS.BLOCKS &&
+        operation === BLOCKS_OPERATIONS.UNGROUP_BLOCKS
+      ) {
+        await persistWorkflowOperation(workflowId, {
+          operation,
+          target,
+          payload,
+          timestamp: operationTimestamp,
+          userId: session.userId,
+        })
+
+        room.lastModified = Date.now()
+
+        socket.to(workflowId).emit('workflow-operation', {
+          operation,
+          target,
+          payload,
+          timestamp: operationTimestamp,
+          senderId: socket.id,
+          userId: session.userId,
+          userName: session.userName,
+          metadata: { workflowId, operationId: crypto.randomUUID() },
+        })
+
+        if (operationId) {
+          socket.emit('operation-confirmed', { operationId, serverTimestamp: Date.now() })
+        }
+
+        return
+      }
+
       if (target === OPERATION_TARGETS.EDGES && operation === EDGES_OPERATIONS.BATCH_ADD_EDGES) {
         await persistWorkflowOperation(workflowId, {
           operation,
diff --git a/apps/sim/socket/middleware/permissions.ts b/apps/sim/socket/middleware/permissions.ts
index 1ff6b09e8b..b9f6139c1d 100644
--- a/apps/sim/socket/middleware/permissions.ts
+++ b/apps/sim/socket/middleware/permissions.ts
@@ -30,6 +30,8 @@ const WRITE_OPERATIONS: string[] = [
   BLOCKS_OPERATIONS.BATCH_TOGGLE_ENABLED,
   BLOCKS_OPERATIONS.BATCH_TOGGLE_HANDLES,
   BLOCKS_OPERATIONS.BATCH_UPDATE_PARENT,
+  BLOCKS_OPERATIONS.GROUP_BLOCKS,
+  BLOCKS_OPERATIONS.UNGROUP_BLOCKS,
   // Edge operations
   EDGE_OPERATIONS.ADD,
   EDGE_OPERATIONS.REMOVE,
diff --git a/apps/sim/socket/validation/schemas.ts b/apps/sim/socket/validation/schemas.ts
index 395b321028..236c3583ce 100644
--- a/apps/sim/socket/validation/schemas.ts
+++ b/apps/sim/socket/validation/schemas.ts
@@ -221,6 +221,30 @@ export const BatchUpdateParentSchema = z.object({
   operationId: z.string().optional(),
 })
 
+export const GroupBlocksSchema = z.object({
+  operation: z.literal(BLOCKS_OPERATIONS.GROUP_BLOCKS),
+  target: z.literal(OPERATION_TARGETS.BLOCKS),
+  payload: z.object({
+    blockIds: z.array(z.string()),
+    groupId: z.string(),
+    name: z.string().optional(),
+  }),
+  timestamp: z.number(),
+  operationId: z.string().optional(),
+})
+
+export const UngroupBlocksSchema = z.object({
+  operation: z.literal(BLOCKS_OPERATIONS.UNGROUP_BLOCKS),
+  target: z.literal(OPERATION_TARGETS.BLOCKS),
+  payload: z.object({
+    groupId: z.string(),
+    blockIds: z.array(z.string()),
+    parentGroupId: z.string().optional(),
+  }),
+  timestamp: z.number(),
+  operationId: z.string().optional(),
+})
+
 export const WorkflowOperationSchema = z.union([
   BlockOperationSchema,
   BatchPositionUpdateSchema,
@@ -229,6 +253,8 @@ export const WorkflowOperationSchema = z.union([
   BatchToggleEnabledSchema,
   BatchToggleHandlesSchema,
   BatchUpdateParentSchema,
+  GroupBlocksSchema,
+  UngroupBlocksSchema,
   EdgeOperationSchema,
   BatchAddEdgesSchema,
   BatchRemoveEdgesSchema,
diff --git a/apps/sim/stores/copilot-training/store.ts b/apps/sim/stores/copilot-training/store.ts
index fc6a346769..b4e5121f2b 100644
--- a/apps/sim/stores/copilot-training/store.ts
+++ b/apps/sim/stores/copilot-training/store.ts
@@ -25,6 +25,7 @@ function captureWorkflowSnapshot(): WorkflowState {
     edges: rawState.edges || [],
     loops: rawState.loops || {},
     parallels: rawState.parallels || {},
+    groups: rawState.groups || {},
     lastSaved: Date.now(),
   }
 }
diff --git a/apps/sim/stores/undo-redo/types.ts b/apps/sim/stores/undo-redo/types.ts
index f68aa66e68..70cd429cad 100644
--- a/apps/sim/stores/undo-redo/types.ts
+++ b/apps/sim/stores/undo-redo/types.ts
@@ -126,6 +126,23 @@ export interface RejectDiffOperation extends BaseOperation {
   }
 }
 
+export interface GroupBlocksOperation extends BaseOperation {
+  type: typeof UNDO_REDO_OPERATIONS.GROUP_BLOCKS
+  data: {
+    groupId: string
+    blockIds: string[]
+  }
+}
+
+export interface UngroupBlocksOperation extends BaseOperation {
+  type: typeof UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS
+  data: {
+    groupId: string
+    blockIds: string[]
+    parentGroupId?: string
+  }
+}
+
 export type Operation =
   | BatchAddBlocksOperation
   | BatchRemoveBlocksOperation
@@ -139,6 +156,8 @@ export type Operation =
   | ApplyDiffOperation
   | AcceptDiffOperation
   | RejectDiffOperation
+  | GroupBlocksOperation
+  | UngroupBlocksOperation
 
 export interface OperationEntry {
   id: string
diff --git a/apps/sim/stores/undo-redo/utils.ts b/apps/sim/stores/undo-redo/utils.ts
index e747c2fd2d..e38a9215d5 100644
--- a/apps/sim/stores/undo-redo/utils.ts
+++ b/apps/sim/stores/undo-redo/utils.ts
@@ -6,8 +6,10 @@ import type {
   BatchRemoveBlocksOperation,
   BatchRemoveEdgesOperation,
   BatchUpdateParentOperation,
+  GroupBlocksOperation,
   Operation,
   OperationEntry,
+  UngroupBlocksOperation,
 } from '@/stores/undo-redo/types'
 
 export function createOperationEntry(operation: Operation, inverse: Operation): OperationEntry {
@@ -164,6 +166,30 @@ export function createInverseOperation(operation: Operation): Operation {
         },
       }
 
+    case UNDO_REDO_OPERATIONS.GROUP_BLOCKS: {
+      const op = operation as GroupBlocksOperation
+      return {
+        ...operation,
+        type: UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS,
+        data: {
+          groupId: op.data.groupId,
+          blockIds: op.data.blockIds,
+        },
+      } as UngroupBlocksOperation
+    }
+
+    case UNDO_REDO_OPERATIONS.UNGROUP_BLOCKS: {
+      const op = operation as UngroupBlocksOperation
+      return {
+        ...operation,
+        type: UNDO_REDO_OPERATIONS.GROUP_BLOCKS,
+        data: {
+          groupId: op.data.groupId,
+          blockIds: op.data.blockIds,
+        },
+      } as GroupBlocksOperation
+    }
+
     default: {
       const exhaustiveCheck: never = operation
       throw new Error(`Unhandled operation type: ${(exhaustiveCheck as Operation).type}`)
diff --git a/apps/sim/stores/workflow-diff/utils.ts b/apps/sim/stores/workflow-diff/utils.ts
index 3245875f77..464dbceaee 100644
--- a/apps/sim/stores/workflow-diff/utils.ts
+++ b/apps/sim/stores/workflow-diff/utils.ts
@@ -16,6 +16,7 @@ export function cloneWorkflowState(state: WorkflowState): WorkflowState {
     edges: structuredClone(state.edges || []),
     loops: structuredClone(state.loops || {}),
     parallels: structuredClone(state.parallels || {}),
+    groups: structuredClone(state.groups || {}),
   }
 }
 
diff --git a/apps/sim/stores/workflows/workflow/store.ts b/apps/sim/stores/workflows/workflow/store.ts
index 398c662812..7f5e1398c7 100644
--- a/apps/sim/stores/workflows/workflow/store.ts
+++ b/apps/sim/stores/workflows/workflow/store.ts
@@ -95,6 +95,7 @@ const initialState = {
   edges: [],
   loops: {},
   parallels: {},
+  groups: {},
   lastSaved: undefined,
   deploymentStatuses: {},
   needsRedeployment: false,
@@ -577,6 +578,7 @@ export const useWorkflowStore = create<WorkflowStore>()(
           edges: state.edges,
           loops: state.loops,
           parallels: state.parallels,
+          groups: state.groups,
           lastSaved: state.lastSaved,
           deploymentStatuses: state.deploymentStatuses,
           needsRedeployment: state.needsRedeployment,
@@ -597,6 +599,7 @@ export const useWorkflowStore = create<WorkflowStore>()(
             Object.keys(workflowState.parallels || {}).length > 0
               ? workflowState.parallels
               : generateParallelBlocks(nextBlocks)
+          const nextGroups = workflowState.groups || state.groups
 
           return {
             ...state,
@@ -604,6 +607,7 @@ export const useWorkflowStore = create<WorkflowStore>()(
             edges: nextEdges,
             loops: nextLoops,
             parallels: nextParallels,
+            groups: nextGroups,
             deploymentStatuses: workflowState.deploymentStatuses || state.deploymentStatuses,
             needsRedeployment:
               workflowState.needsRedeployment !== undefined
@@ -1333,6 +1337,135 @@ export const useWorkflowStore = create<WorkflowStore>()(
       getDragStartPosition: () => {
         return get().dragStartPosition || null
       },
+
+      groupBlocks: (blockIds: string[], groupId?: string) => {
+        if (blockIds.length === 0) return ''
+
+        const newGroupId = groupId || crypto.randomUUID()
+        const currentGroups = get().groups || {}
+        const currentBlocks = get().blocks
+
+        // Remove blocks from any existing groups they might be in
+        const updatedGroups = { ...currentGroups }
+        for (const gId of Object.keys(updatedGroups)) {
+          updatedGroups[gId] = {
+            ...updatedGroups[gId],
+            blockIds: updatedGroups[gId].blockIds.filter((bid) => !blockIds.includes(bid)),
+          }
+          // Remove empty groups
+          if (updatedGroups[gId].blockIds.length === 0) {
+            delete updatedGroups[gId]
+          }
+        }
+
+        // Create the new group
+        updatedGroups[newGroupId] = {
+          id: newGroupId,
+          blockIds: [...blockIds],
+        }
+
+        // Update blocks with the new groupId
+        const newBlocks = { ...currentBlocks }
+        for (const blockId of blockIds) {
+          if (newBlocks[blockId]) {
+            newBlocks[blockId] = {
+              ...newBlocks[blockId],
+              data: {
+                ...newBlocks[blockId].data,
+                groupId: newGroupId,
+              },
+            }
+          }
+        }
+
+        set({
+          blocks: newBlocks,
+          groups: updatedGroups,
+        })
+
+        get().updateLastSaved()
+        logger.info('Created block group', { groupId: newGroupId, blockCount: blockIds.length })
+        return newGroupId
+      },
+
+      ungroupBlocks: (groupId: string) => {
+        const currentGroups = get().groups || {}
+        const currentBlocks = get().blocks
+        const group = currentGroups[groupId]
+
+        if (!group) {
+          logger.warn('Attempted to ungroup non-existent group', { groupId })
+          return []
+        }
+
+        const blockIds = [...group.blockIds]
+        const parentGroupId = group.parentGroupId
+
+        // Remove the group
+        const updatedGroups = { ...currentGroups }
+        delete updatedGroups[groupId]
+
+        // Update blocks - remove groupId or assign to parent group
+        const newBlocks = { ...currentBlocks }
+        for (const blockId of blockIds) {
+          if (newBlocks[blockId]) {
+            const newData = { ...newBlocks[blockId].data }
+            if (parentGroupId) {
+              newData.groupId = parentGroupId
+            } else {
+              delete newData.groupId
+            }
+            newBlocks[blockId] = {
+              ...newBlocks[blockId],
+              data: newData,
+            }
+          }
+        }
+
+        // If there's a parent group, add the blocks to it
+        if (parentGroupId && updatedGroups[parentGroupId]) {
+          updatedGroups[parentGroupId] = {
+            ...updatedGroups[parentGroupId],
+            blockIds: [...updatedGroups[parentGroupId].blockIds, ...blockIds],
+          }
+        }
+
+        set({
+          blocks: newBlocks,
+          groups: updatedGroups,
+        })
+
+        get().updateLastSaved()
+        logger.info('Ungrouped blocks', { groupId, blockCount: blockIds.length })
+        return blockIds
+      },
+
+      getGroupBlockIds: (groupId: string, recursive = false) => {
+        const groups = get().groups || {}
+        const group = groups[groupId]
+
+        if (!group) return []
+
+        if (!recursive) {
+          return [...group.blockIds]
+        }
+
+        // Recursively get all block IDs, including from nested groups
+        const allBlockIds: string[] = [...group.blockIds]
+
+        // Find child groups (groups whose parentGroupId is this group)
+        for (const g of Object.values(groups)) {
+          if (g.parentGroupId === groupId) {
+            allBlockIds.push(...get().getGroupBlockIds(g.id, true))
+          }
+        }
+
+        return allBlockIds
+      },
+
+      getGroups: () => {
+        return get().groups || {}
+      },
     }),
     { name: 'workflow-store' }
   )
diff --git a/apps/sim/stores/workflows/workflow/types.ts b/apps/sim/stores/workflows/workflow/types.ts
index 43afa31a66..210aba943e 100644
--- a/apps/sim/stores/workflows/workflow/types.ts
+++ b/apps/sim/stores/workflows/workflow/types.ts
@@ -63,6 +63,9 @@ export interface BlockData {
 
   // Container node type (for ReactFlow node type determination)
   type?: string
+
+  // Block group membership
+  groupId?: string
 }
 
 export interface BlockLayoutState {
@@ -144,6 +147,22 @@ export interface Variable {
   value: unknown
 }
 
+/**
+ * Represents a group of blocks on the canvas.
+ * Groups can be nested (a group can contain other groups via block membership).
+ * When a block is in a group, it stores the groupId in its data.
+ */
+export interface BlockGroup {
+  /** Unique identifier for the group */
+  id: string
+  /** Optional display name for the group */
+  name?: string
+  /** Block IDs that are direct members of this group */
+  blockIds: string[]
+  /** Parent group ID if this group is nested inside another group */
+  parentGroupId?: string
+}
+
 export interface DragStartPosition {
   id: string
   x: number
@@ -157,6 +176,8 @@ export interface WorkflowState {
   lastSaved?: number
   loops: Record<string, Loop>
   parallels: Record<string, Parallel>
+  /** Block groups for organizing blocks on the canvas */
+  groups?: Record<string, BlockGroup>
   lastUpdate?: number
   metadata?: {
     name?: string
@@ -243,6 +264,28 @@ export interface WorkflowActions {
     workflowState: WorkflowState,
     options?: { updateLastSaved?: boolean }
   ) => void
+
+  // Block group operations
+  /**
+   * Groups the specified blocks together.
+   * If any blocks are already in a group, they are removed from their current group first.
+   * @returns The new group ID
+   */
+  groupBlocks: (blockIds: string[], groupId?: string) => string
+  /**
+   * Ungroups a group, removing it and releasing its blocks.
+   * If the group has a parent group, blocks are moved to the parent group.
+   * @returns The block IDs that were in the group
+   */
+  ungroupBlocks: (groupId: string) => string[]
+  /**
+   * Gets all block IDs in a group, including blocks in nested groups (recursive).
+   */
+  getGroupBlockIds: (groupId: string, recursive?: boolean) => string[]
+  /**
+   * Gets all groups in the workflow.
+   */
+  getGroups: () => Record<string, BlockGroup>
 }
 
 export type WorkflowStore = WorkflowState & WorkflowActions