diff --git a/packages/react/src/components/SideMenu/SideMenuController.tsx b/packages/react/src/components/SideMenu/SideMenuController.tsx
index 37022b4d16..cb650d85cf 100644
--- a/packages/react/src/components/SideMenu/SideMenuController.tsx
+++ b/packages/react/src/components/SideMenu/SideMenuController.tsx
@@ -1,5 +1,10 @@
 import { SideMenuExtension } from "@blocknote/core/extensions";
-import { autoUpdate, ReferenceElement } from "@floating-ui/react";
+import {
+  autoUpdate,
+  offset,
+  OffsetOptions,
+  ReferenceElement,
+} from "@floating-ui/react";
 import { FC, useCallback, useMemo } from "react";
 
 import { useBlockNoteEditor } from "../../hooks/useBlockNoteEditor.js";
@@ -9,6 +14,36 @@ import { FloatingUIOptions } from "../Popovers/FloatingUIOptions.js";
 import { SideMenu } from "./SideMenu.js";
 import { SideMenuProps } from "./SideMenuProps.js";
 
+/**
+ * Pass to Floating UI's `offset` middleware to keep the side menu aligned
+ * with table blocks:
+ *   middleware: [offset(tableWrapperOffset), ...other]
+ *
+ * Compensates for the top padding on `.tableWrapper` (the in-block container
+ * that reserves space for row/column handles) — without this, the side menu
+ * floats above the visible top of the table.
+ *
+ * Assumes `placement: "left-start"`. Other placements map `crossAxis` to a
+ * different visual axis.
+ */
+export const tableWrapperOffset: OffsetOptions = (state) => {
+  const { reference } = state.elements;
+  const refEl =
+    reference instanceof Element ? reference : reference.contextElement;
+  // The side menu's reference is the block's outer `.bn-block` element.
+  // For tables, the `.tableWrapper` lives one level deeper inside
+  // `.bn-block-content`. Match that exact path so unrelated descendants
+  // (e.g. a nested table inside a multi-column block) don't trigger.
+  const wrapper = refEl?.querySelector(
+    ":scope > .bn-block-content > .tableWrapper",
+  );
+  if (!wrapper) {
+    return 0;
+  }
+  const padding = parseFloat(getComputedStyle(wrapper).paddingTop);
+  return padding > 0 ? { mainAxis: 0, crossAxis: padding } : 0;
+};
+
 export const SideMenuController = (props: {
   sideMenu?: FC<SideMenuProps>;
   floatingUIOptions?: Partial<FloatingUIOptions>;
@@ -67,6 +102,10 @@ export const SideMenuController = (props: {
         placement: "left-start",
         whileElementsMounted,
         ...props.floatingUIOptions?.useFloatingOptions,
+        middleware: [
+          offset(tableWrapperOffset),
+          ...(props.floatingUIOptions?.useFloatingOptions?.middleware ?? []),
+        ],
       },
       useDismissProps: {
         enabled: false,
diff --git a/tests/src/end-to-end/draghandle/draghandle.test.ts b/tests/src/end-to-end/draghandle/draghandle.test.ts
index f77c414d2b..26c3fc712d 100644
--- a/tests/src/end-to-end/draghandle/draghandle.test.ts
+++ b/tests/src/end-to-end/draghandle/draghandle.test.ts
@@ -10,6 +10,7 @@ import {
   H_TWO_BLOCK_SELECTOR,
   PARAGRAPH_SELECTOR,
   SLASH_MENU_SELECTOR,
+  TABLE_SELECTOR,
 } from "../../utils/const.js";
 import { insertHeading } from "../../utils/copypaste.js";
 import {
@@ -45,6 +46,20 @@ test.describe("Check Draghandle functionality", () => {
     await page.waitForSelector(DRAG_HANDLE_SELECTOR);
   });
 
+  test("Draghandle should align vertically with the top of a table block", async () => {
+    await executeSlashCommand(page, "table");
+    await page.waitForSelector(TABLE_SELECTOR);
+
+    const handleY = await getDragHandleYCoord(page, TABLE_SELECTOR);
+    const tableY = (await page.locator(`${TABLE_SELECTOR} table`).boundingBox())!.y;
+
+    // Regression test for #2604: prior to the fix the drag handle floated
+    // ~8px above the visible top of the table because it anchored to the
+    // bn-block-content wrapper, ignoring the tableWrapper's top padding (the
+    // space reserved for in-block row/column handles).
+    expect(Math.abs(handleY - tableY)).toBeLessThanOrEqual(2);
+  });
+
   test("Draghandle should display next to correct block", async () => {
     await insertHeading(page, 1);
     await insertHeading(page, 2);