diff --git a/src/library-authoring/add-content/AddContentContainer.test.tsx b/src/library-authoring/add-content/AddContentContainer.test.tsx
index e8f53c3fd..95e9e4ccb 100644
--- a/src/library-authoring/add-content/AddContentContainer.test.tsx
+++ b/src/library-authoring/add-content/AddContentContainer.test.tsx
@@ -6,7 +6,7 @@ import {
   initializeMocks,
 } from '../../testUtils';
 import { mockContentLibrary } from '../data/api.mocks';
-import { getCreateLibraryBlockUrl, getLibraryPasteClipboardUrl } from '../data/api';
+import { getCreateLibraryBlockUrl, getLibraryCollectionComponentApiUrl, getLibraryPasteClipboardUrl } from '../data/api';
 import { mockBroadcastChannel, mockClipboardEmpty, mockClipboardHtml } from '../../generic/data/api.mock';
 import { LibraryProvider } from '../common/context';
 import AddContentContainer from './AddContentContainer';
@@ -14,11 +14,23 @@ import AddContentContainer from './AddContentContainer';
 mockBroadcastChannel();
 
 const { libraryId } = mockContentLibrary;
-const render = () => baseRender(<AddContentContainer />, {
-  path: '/library/:libraryId/*',
-  params: { libraryId },
-  extraWrapper: ({ children }) => <LibraryProvider libraryId={libraryId}>{ children }</LibraryProvider>,
-});
+const render = (collectionId?: string) => {
+  const params: { libraryId: string, collectionId?: string } = { libraryId };
+  if (collectionId) {
+    params.collectionId = collectionId;
+  }
+  return baseRender(<AddContentContainer />, {
+    path: '/library/:libraryId/*',
+    params,
+    extraWrapper: ({ children }) => (
+      <LibraryProvider
+        libraryId={libraryId}
+        collectionId={collectionId}
+      >{ children }
+      </LibraryProvider>
+    ),
+  });
+};
 
 describe('<AddContentContainer />', () => {
   it('should render content buttons', () => {
@@ -47,6 +59,29 @@ describe('<AddContentContainer />', () => {
     fireEvent.click(textButton);
 
     await waitFor(() => expect(axiosMock.history.post[0].url).toEqual(url));
+    await waitFor(() => expect(axiosMock.history.patch.length).toEqual(0));
+  });
+
+  it('should create a content in a collection', async () => {
+    const { axiosMock } = initializeMocks();
+    mockClipboardEmpty.applyMock();
+    const collectionId = 'some-collection-id';
+    const url = getCreateLibraryBlockUrl(libraryId);
+    const collectionComponentUrl = getLibraryCollectionComponentApiUrl(
+      libraryId,
+      collectionId,
+    );
+    axiosMock.onPost(url).reply(200, { id: 'some-component-id' });
+    axiosMock.onPatch(collectionComponentUrl).reply(200);
+
+    render(collectionId);
+
+    const textButton = screen.getByRole('button', { name: /text/i });
+    fireEvent.click(textButton);
+
+    await waitFor(() => expect(axiosMock.history.post[0].url).toEqual(url));
+    await waitFor(() => expect(axiosMock.history.patch.length).toEqual(1));
+    await waitFor(() => expect(axiosMock.history.patch[0].url).toEqual(collectionComponentUrl));
   });
 
   it('should render paste button if clipboard contains pastable xblock', async () => {
@@ -76,6 +111,59 @@ describe('<AddContentContainer />', () => {
     await waitFor(() => expect(axiosMock.history.post[0].url).toEqual(pasteUrl));
   });
 
+  it('should paste content inside a collection', async () => {
+    const { axiosMock } = initializeMocks();
+    // Simulate having an HTML block in the clipboard:
+    const getClipboardSpy = mockClipboardHtml.applyMock();
+
+    const pasteUrl = getLibraryPasteClipboardUrl(libraryId);
+    const collectionId = 'some-collection-id';
+    const collectionComponentUrl = getLibraryCollectionComponentApiUrl(
+      libraryId,
+      collectionId,
+    );
+    axiosMock.onPatch(collectionComponentUrl).reply(200);
+    axiosMock.onPost(pasteUrl).reply(200, { id: 'some-component-id' });
+
+    render(collectionId);
+
+    expect(getClipboardSpy).toHaveBeenCalled(); // Hmm, this is getting called four times! Refactor to use react-query.
+
+    const pasteButton = await screen.findByRole('button', { name: /paste from clipboard/i });
+    fireEvent.click(pasteButton);
+
+    await waitFor(() => expect(axiosMock.history.post[0].url).toEqual(pasteUrl));
+    await waitFor(() => expect(axiosMock.history.patch.length).toEqual(1));
+    await waitFor(() => expect(axiosMock.history.patch[0].url).toEqual(collectionComponentUrl));
+  });
+
+  it('should show error toast on linking failure', async () => {
+    const { axiosMock, mockShowToast } = initializeMocks();
+    // Simulate having an HTML block in the clipboard:
+    const getClipboardSpy = mockClipboardHtml.applyMock();
+
+    const pasteUrl = getLibraryPasteClipboardUrl(libraryId);
+    const collectionId = 'some-collection-id';
+    const collectionComponentUrl = getLibraryCollectionComponentApiUrl(
+      libraryId,
+      collectionId,
+    );
+    axiosMock.onPatch(collectionComponentUrl).reply(500);
+    axiosMock.onPost(pasteUrl).reply(200, { id: 'some-component-id' });
+
+    render(collectionId);
+
+    expect(getClipboardSpy).toHaveBeenCalled(); // Hmm, this is getting called four times! Refactor to use react-query.
+
+    const pasteButton = await screen.findByRole('button', { name: /paste from clipboard/i });
+    fireEvent.click(pasteButton);
+
+    await waitFor(() => expect(axiosMock.history.post[0].url).toEqual(pasteUrl));
+    await waitFor(() => expect(axiosMock.history.patch.length).toEqual(1));
+    await waitFor(() => expect(axiosMock.history.patch[0].url).toEqual(collectionComponentUrl));
+    expect(mockShowToast).toHaveBeenCalledWith('There was an error linking the content to this collection.');
+  });
+
   it('should handle failure to paste content', async () => {
     const { axiosMock, mockShowToast } = initializeMocks();
     // Simulate having an HTML block in the clipboard:
diff --git a/src/library-authoring/add-content/AddContentContainer.tsx b/src/library-authoring/add-content/AddContentContainer.tsx
index 27a5bed84..3ae948b8a 100644
--- a/src/library-authoring/add-content/AddContentContainer.tsx
+++ b/src/library-authoring/add-content/AddContentContainer.tsx
@@ -158,6 +158,14 @@ const AddContentContainer = () => {
     contentTypes.push(pasteButton);
   }
 
+  const linkComponent = (usageKey: string) => {
+    updateComponentsMutation.mutateAsync([usageKey]).then(() => {
+      showToast(intl.formatMessage(messages.successAssociateComponentMessage));
+    }).catch(() => {
+      showToast(intl.formatMessage(messages.errorAssociateComponentMessage));
+    });
+  };
+
   const onPaste = () => {
     if (!isBlockTypeEnabled(sharedClipboardData.content?.blockType)) {
       showToast(intl.formatMessage(messages.unsupportedBlockPasteClipboardMessage));
@@ -166,7 +174,8 @@ const AddContentContainer = () => {
     pasteClipboardMutation.mutateAsync({
       libraryId,
       blockId: `${uuid4()}`,
-    }).then(() => {
+    }).then((data) => {
+      linkComponent(data.id);
       showToast(intl.formatMessage(messages.successPasteClipboardMessage));
     }).catch((error) => {
       showToast(parsePasteErrorMsg(error));
@@ -179,10 +188,8 @@ const AddContentContainer = () => {
       blockType,
       definitionId: `${uuid4()}`,
     }).then((data) => {
+      linkComponent(data.id);
       const hasEditor = canEditComponent(data.id);
-      updateComponentsMutation.mutateAsync([data.id]).catch(() => {
-        showToast(intl.formatMessage(messages.errorAssociateComponentMessage));
-      });
       if (hasEditor) {
         openComponentEditor(data.id);
       } else {
@@ -210,6 +217,10 @@ const AddContentContainer = () => {
     showToast(intl.formatMessage(messages.pastingClipboardMessage));
   }
 
+  if (updateComponentsMutation.isLoading) {
+    showToast(intl.formatMessage(messages.linkingComponentMessage));
+  }
+
   return (
     <Stack direction="vertical">
       {collectionId ? (
diff --git a/src/library-authoring/add-content/messages.ts b/src/library-authoring/add-content/messages.ts
index 6971849d7..b1be04e89 100644
--- a/src/library-authoring/add-content/messages.ts
+++ b/src/library-authoring/add-content/messages.ts
@@ -66,6 +66,11 @@ const messages = defineMessages({
     defaultMessage: 'There was an error creating the content.',
     description: 'Message when creation of content in library is on error',
   },
+  linkingComponentMessage: {
+    id: 'course-authoring.library-authoring.linking-collection-content.progress.text',
+    defaultMessage: 'Adding component to collection...',
+    description: 'Message when component is being linked to collection in library',
+  },
   successAssociateComponentMessage: {
     id: 'course-authoring.library-authoring.associate-collection-content.success.text',
     defaultMessage: 'Content linked successfully.',