diff --git a/core/java/android/text/method/InsertModeTransformationMethod.java b/core/java/android/text/method/InsertModeTransformationMethod.java
index fbdaa3d735f4b..0c933d996ff30 100644
--- a/core/java/android/text/method/InsertModeTransformationMethod.java
+++ b/core/java/android/text/method/InsertModeTransformationMethod.java
@@ -80,12 +80,34 @@ public class InsertModeTransformationMethod implements TransformationMethod, Tex
      */
     public InsertModeTransformationMethod(@IntRange(from = 0) int offset, boolean singleLine,
             @NonNull TransformationMethod oldTransformationMethod) {
-        mStart = offset;
-        mEnd = offset;
+        this(offset, offset, singleLine, oldTransformationMethod);
+    }
+
+    private InsertModeTransformationMethod(int start, int end, boolean singleLine,
+            @NonNull TransformationMethod oldTransformationMethod) {
+        mStart = start;
+        mEnd = end;
         mSingleLine = singleLine;
         mOldTransformationMethod = oldTransformationMethod;
     }
 
+    /**
+     * Create a new {@code InsertModeTransformation} with the given new inner
+     * {@code oldTransformationMethod} and the {@code singleLine} value. The returned
+     * {@link InsertModeTransformationMethod} will keep the highlight range.
+     *
+     * @param oldTransformationMethod the updated inner transformation method at the
+     * {@link android.widget.TextView}.
+     * @param singleLine the updated singleLine value.
+     * @return the new {@link InsertModeTransformationMethod} with the updated
+     * {@code oldTransformationMethod} and {@code singleLine} value.
+     */
+    public InsertModeTransformationMethod update(TransformationMethod oldTransformationMethod,
+            boolean singleLine) {
+        return new InsertModeTransformationMethod(mStart, mEnd, singleLine,
+                oldTransformationMethod);
+    }
+
     public TransformationMethod getOldTransformationMethod() {
         return mOldTransformationMethod;
     }
diff --git a/core/java/android/widget/Editor.java b/core/java/android/widget/Editor.java
index 616957a0bdd50..b89dd31725b7b 100644
--- a/core/java/android/widget/Editor.java
+++ b/core/java/android/widget/Editor.java
@@ -8072,7 +8072,7 @@ public class Editor {
             final boolean isSingleLine = mTextView.isSingleLine();
             mInsertModeTransformationMethod = new InsertModeTransformationMethod(offset,
                     isSingleLine, oldTransformationMethod);
-            mTextView.setTransformationMethod(mInsertModeTransformationMethod);
+            mTextView.setTransformationMethodInternal(mInsertModeTransformationMethod);
             Selection.setSelection((Spannable) mTextView.getText(), offset);
 
             mIsInsertModeActive = true;
@@ -8083,11 +8083,6 @@ public class Editor {
             if (!mIsInsertModeActive) return;
             if (mInsertModeTransformationMethod == null
                     || mInsertModeTransformationMethod != mTextView.getTransformationMethod()) {
-                // If mInsertionModeTransformationMethod doesn't match the one on TextView,
-                // something else have changed the TextView's TransformationMethod while the
-                // insertion mode is active. We don't need to restore the oldTransformationMethod.
-                // TODO(265871733): support the case where setTransformationMethod is called in
-                // the insert mode.
                 mIsInsertModeActive = false;
                 return;
             }
@@ -8097,7 +8092,7 @@ public class Editor {
             final int selectionEnd = mTextView.getSelectionEnd();
             final TransformationMethod oldTransformationMethod =
                     mInsertModeTransformationMethod.getOldTransformationMethod();
-            mTextView.setTransformationMethod(oldTransformationMethod);
+            mTextView.setTransformationMethodInternal(oldTransformationMethod);
             Selection.setSelection((Spannable) mTextView.getText(), selectionStart, selectionEnd);
             mIsInsertModeActive = false;
         }
@@ -8118,6 +8113,25 @@ public class Editor {
                 layout.getSelection(highlightStart, highlightEnd, consumer);
             }
         }
+
+        /**
+         * Notify the {@link InsertModeController} before the TextView's
+         * {@link TransformationMethod} is updated. If it's not in the insert mode,
+         * the given method is directly returned. Otherwise, it will wrap the given transformation
+         * method with an {@link InsertModeTransformationMethod} and then return.
+         *
+         * @param oldTransformationMethod the new {@link TransformationMethod} to be set on the
+         *                             TextView.
+         * @return the updated {@link TransformationMethod} to be set on the Textview.
+         */
+        TransformationMethod updateTransformationMethod(
+                TransformationMethod oldTransformationMethod) {
+            if (!mIsInsertModeActive) return oldTransformationMethod;
+
+            mInsertModeTransformationMethod = mInsertModeTransformationMethod.update(
+                    oldTransformationMethod, mTextView.isSingleLine());
+            return mInsertModeTransformationMethod;
+        }
     }
 
     boolean enterInsertMode(int offset) {
@@ -8133,6 +8147,26 @@ public class Editor {
         mInsertModeController.exitInsertMode();
     }
 
+    /**
+     * Called by the {@link TextView} when the {@link TransformationMethod} is updated.
+     *
+     * @param method the {@link TransformationMethod} to be set on the TextView.
+     */
+    void setTransformationMethod(TransformationMethod method) {
+        if (mInsertModeController == null || !mInsertModeController.mIsInsertModeActive) {
+            mTextView.setTransformationMethodInternal(method);
+            return;
+        }
+
+        // Changing TransformationMethod will reset selection range to [0, 0), we need to
+        // manually restore the old selection range.
+        final int selectionStart = mTextView.getSelectionStart();
+        final int selectionEnd = mTextView.getSelectionEnd();
+        method = mInsertModeController.updateTransformationMethod(method);
+        mTextView.setTransformationMethodInternal(method);
+        Selection.setSelection((Spannable) mTextView.getText(), selectionStart, selectionEnd);
+    }
+
     /**
      * Initializes the nodeInfo with smart actions.
      */
diff --git a/core/java/android/widget/TextView.java b/core/java/android/widget/TextView.java
index 56bdea3d0eed0..5de807936c8ac 100644
--- a/core/java/android/widget/TextView.java
+++ b/core/java/android/widget/TextView.java
@@ -2769,6 +2769,14 @@ public class TextView extends View implements ViewTreeObserver.OnPreDrawListener
      * @attr ref android.R.styleable#TextView_singleLine
      */
     public final void setTransformationMethod(TransformationMethod method) {
+        if (mEditor != null) {
+            mEditor.setTransformationMethod(method);
+        } else {
+            setTransformationMethodInternal(method);
+        }
+    }
+
+    void setTransformationMethodInternal(@Nullable TransformationMethod method) {
         if (method == mTransformation) {
             // Avoid the setText() below if the transformation is
             // the same.