diff --git a/packages/components/CHANGELOG.md b/packages/components/CHANGELOG.md
index a15f95fb47414..2a6102335c2f6 100644
--- a/packages/components/CHANGELOG.md
+++ b/packages/components/CHANGELOG.md
@@ -7,6 +7,7 @@
 -   Fixed error thrown in `ColorPicker` when used in controlled state in color gradients ([#36941](https://github.com/WordPress/gutenberg/pull/36941)).
 -   Updated readme to include default value introduced in fix for unexpected movements in the `ColorPicker` ([#35670](https://github.com/WordPress/gutenberg/pull/35670)).
 -   Replaced hardcoded blue in `ColorPicker` with UI theme color ([#36153](https://github.com/WordPress/gutenberg/pull/36153)).
+-   Fixed empty `ToolsPanel` height by correcting menu button line-height ([#36895](https://github.com/WordPress/gutenberg/pull/36895)).
 
 ### Experimental
 
diff --git a/packages/components/src/tools-panel/styles.ts b/packages/components/src/tools-panel/styles.ts
index 373847efa5fc4..15a08912225fe 100644
--- a/packages/components/src/tools-panel/styles.ts
+++ b/packages/components/src/tools-panel/styles.ts
@@ -70,6 +70,7 @@ export const ToolsPanelHeader = css`
 	 */
 	.components-dropdown-menu {
 		margin: ${ space( -1 ) } 0;
+		line-height: 0;
 	}
 	&&&& .components-dropdown-menu__toggle {
 		padding: 0;