diff --git a/src/constants.js b/src/constants.js
index 163a16ef84..bf4696d734 100644
--- a/src/constants.js
+++ b/src/constants.js
@@ -76,3 +76,7 @@ export const REGEX_RULES = {
   specialCharsRule: /^[a-zA-Z0-9_\-.'*~\s]+$/,
   noSpaceRule: /^\S*$/,
 };
+
+export const IFRAME_FEATURE_POLICY = (
+  'microphone *; camera *; midi *; geolocation *; encrypted-media *, clipboard-write *'
+);
diff --git a/src/course-unit/CourseUnit.test.jsx b/src/course-unit/CourseUnit.test.jsx
index 896fad036c..bce5f5c1b6 100644
--- a/src/course-unit/CourseUnit.test.jsx
+++ b/src/course-unit/CourseUnit.test.jsx
@@ -52,8 +52,9 @@ import CourseUnit from './CourseUnit';
 import configureModalMessages from '../generic/configure-modal/messages';
 import addComponentMessages from './add-component/messages';
 import {
-  PUBLISH_TYPES, UNIT_VISIBILITY_STATES, IFRAME_FEATURE_POLICY, messageTypes,
+  PUBLISH_TYPES, UNIT_VISIBILITY_STATES, messageTypes,
 } from './constants';
+import { IFRAME_FEATURE_POLICY } from '../constants';
 import messages from './messages';
 import xblockContainerIframeMessages from './xblock-container-iframe/messages';
 import { getContentTaxonomyTagsApiUrl, getContentTaxonomyTagsCountApiUrl } from '../content-tags-drawer/data/api';
@@ -452,6 +453,26 @@ describe('<CourseUnit />', () => {
     window.open = open;
   });
 
+  it('updates iframe height when dropdown menu is toggled', async () => {
+    const { getByTitle } = render(<RootWrapper />);
+
+    const ACTION_DROPDOWN_HEIGHT = 300;
+
+    await waitFor(() => {
+      const iframe = getByTitle(xblockContainerIframeMessages.xblockIframeTitle.defaultMessage);
+      expect(iframe.getAttribute('style')).toContain('height: 0px;');
+    });
+
+    simulatePostMessageEvent(messageTypes.toggleDropdownMenu, {
+      subMenuHeight: ACTION_DROPDOWN_HEIGHT,
+    });
+
+    await waitFor(() => {
+      const iframe = getByTitle(xblockContainerIframeMessages.xblockIframeTitle.defaultMessage);
+      expect(iframe.getAttribute('style')).toContain(`height: ${ACTION_DROPDOWN_HEIGHT}px;`);
+    });
+  });
+
   it('checks courseUnit title changing when edit query is successfully', async () => {
     const {
       findByText,
diff --git a/src/course-unit/constants.js b/src/course-unit/constants.js
index 6de376da23..c5b0c820ea 100644
--- a/src/course-unit/constants.js
+++ b/src/course-unit/constants.js
@@ -58,8 +58,5 @@ export const messageTypes = {
   duplicateXBlock: 'duplicateXBlock',
   refreshPositions: 'refreshPositions',
   newXBlockEditor: 'newXBlockEditor',
+  toggleDropdownMenu: 'toggleDropdownMenu',
 };
-
-export const IFRAME_FEATURE_POLICY = (
-  'microphone *; camera *; midi *; geolocation *; encrypted-media *, clipboard-write *'
-);
diff --git a/src/course-unit/xblock-container-iframe/index.tsx b/src/course-unit/xblock-container-iframe/index.tsx
index 0c7bfd4e9b..58e23aa84d 100644
--- a/src/course-unit/xblock-container-iframe/index.tsx
+++ b/src/course-unit/xblock-container-iframe/index.tsx
@@ -10,15 +10,13 @@ import { useNavigate } from 'react-router-dom';
 import DeleteModal from '../../generic/delete-modal/DeleteModal';
 import ConfigureModal from '../../generic/configure-modal/ConfigureModal';
 import { copyToClipboard } from '../../generic/data/thunks';
-import { COURSE_BLOCK_NAMES } from '../../constants';
-import { IFRAME_FEATURE_POLICY, messageTypes } from '../constants';
+import { COURSE_BLOCK_NAMES, IFRAME_FEATURE_POLICY } from '../../constants';
+import { messageTypes } from '../constants';
 import { fetchCourseUnitQuery } from '../data/thunk';
 import { useIframe } from '../context/hooks';
 import { useIFrameBehavior } from './hooks';
 import messages from './messages';
 
-const IFRAME_BOTTOM_OFFSET = 220;
-
 interface XBlockContainerIframeProps {
   courseId: string;
   blockId: string;
@@ -73,6 +71,7 @@ const XBlockContainerIframe: FC<XBlockContainerIframeProps> = ({
   const [deleteXblockId, setDeleteXblockId] = useState<string | null>(null);
   const [isDeleteModalOpen, openDeleteModal, closeDeleteModal] = useToggle(false);
   const [isConfigureModalOpen, openConfigureModal, closeConfigureModal] = useToggle(false);
+  const [dropdownHeight, setDropdownHeight] = useState(0);
   const { setIframeRef, sendMessageToIframe } = useIframe();
   const [editXblockId, setEditXblockId] = useState<string | null>(null);
   const [currentXblockData, setCurrentXblockData] = useState<any>({});
@@ -141,10 +140,12 @@ const XBlockContainerIframe: FC<XBlockContainerIframeProps> = ({
       [messageTypes.duplicateXBlock]: (payload) => handleDuplicateXBlock(payload.id),
       [messageTypes.refreshPositions]: handleRefreshXBlocks,
       [messageTypes.newXBlockEditor]: (payload) => navigateToNewXBlockEditor(payload.url),
+      [messageTypes.toggleDropdownMenu]: ({ subMenuHeight }) => setDropdownHeight(subMenuHeight),
     };
 
     const handleMessage = (event: MessageEvent) => {
       const { type, payload } = event.data || {};
+
       if (type && messageHandlers[type]) {
         messageHandlers[type](payload);
       }
@@ -209,7 +210,10 @@ const XBlockContainerIframe: FC<XBlockContainerIframeProps> = ({
         allow={IFRAME_FEATURE_POLICY}
         allowFullScreen
         loading="lazy"
-        style={{ width: '100%', height: iframeHeight + IFRAME_BOTTOM_OFFSET }}
+        style={{
+          width: '100%',
+          height: iframeHeight + dropdownHeight,
+        }}
         scrolling="no"
         referrerPolicy="origin"
         aria-label={intl.formatMessage(messages.xblockIframeLabel, { xblockCount: xblocks.length })}