Index: src/wp-admin/js/editor.js
===================================================================
--- src/wp-admin/js/editor.js	(revision 39686)
+++ src/wp-admin/js/editor.js	(working copy)
@@ -118,7 +118,7 @@
 
 		// Replace paragraphs with double line breaks
 		function removep( html ) {
-			var blocklist = 'blockquote|ul|ol|li|dl|dt|dd|table|thead|tbody|tfoot|tr|th|td|h[1-6]|fieldset',
+			var blocklist = 'blockquote|ul|ol|li|dl|dt|dd|table|thead|tbody|tfoot|tr|th|td|h[1-6]|fieldset|figure',
 				blocklist1 = blocklist + '|div|p',
 				blocklist2 = blocklist + '|pre',
 				preserve_linebreaks = false,
@@ -245,6 +245,11 @@
 				});
 			}
 
+			if ( text.indexOf( '<figcaption' ) !== -1 ) {
+				text = text.replace( /\s*(<figcaption[^>]*>)/g, '$1' );
+				text = text.replace( /<\/figcaption>\s*/g, '</figcaption>' );
+			}
+
 			text = text.replace( /<[^<>]+>/g, function( a ) {
 				return a.replace( /[\n\t ]+/g, ' ' );
 			});
Index: src/wp-includes/formatting.php
===================================================================
--- src/wp-includes/formatting.php	(revision 39686)
+++ src/wp-includes/formatting.php	(working copy)
@@ -506,6 +506,12 @@
 		$pee = preg_replace( '%\s*(<(?:source|track)[^>]*>)\s*%', '$1', $pee );
 	}
 
+	// Collapse line breaks before and after <figcaption> elements.
+	if ( strpos( $pee, '<figcaption' ) !== false ) {
+		$pee = preg_replace( '|\s*(<figcaption[^>]*>)|', '$1', $pee );
+		$pee = preg_replace( '|</figcaption>\s*|', '</figcaption>', $pee );
+	}
+
 	// Remove more than two contiguous line breaks.
 	$pee = preg_replace("/\n\n+/", "\n\n", $pee);