diff --git a/server/filestore.go b/server/filestore.go
index df2b0682..99b37b0d 100644
--- a/server/filestore.go
+++ b/server/filestore.go
@@ -343,7 +343,7 @@ func newFileStoreWithCreated(fcfg FileStoreConfig, cfg StreamConfig, created tim
 	}
 	// Default values.
 	if fcfg.BlockSize == 0 {
-		fcfg.BlockSize = dynBlkSize(cfg.Retention, cfg.MaxBytes, fcfg.Cipher)
+		fcfg.BlockSize = dynBlkSize(cfg.Retention, cfg.MaxBytes, prf != nil)
 	}
 	if fcfg.BlockSize > maxBlockSize {
 		return nil, fmt.Errorf("filestore max block size is %s", friendlyBytes(maxBlockSize))
@@ -590,7 +590,7 @@ func (fs *fileStore) UpdateConfig(cfg *StreamConfig) error {
 	return nil
 }
 
-func dynBlkSize(retention RetentionPolicy, maxBytes int64, cipher StoreCipher) uint64 {
+func dynBlkSize(retention RetentionPolicy, maxBytes int64, encrypted bool) uint64 {
 	if maxBytes > 0 {
 		blkSize := (maxBytes / 4) + 1 // (25% overhead)
 		// Round up to nearest 100
@@ -604,7 +604,7 @@ func dynBlkSize(retention RetentionPolicy, maxBytes int64, cipher StoreCipher) u
 		} else {
 			blkSize = defaultMediumBlockSize
 		}
-		if cipher != NoCipher && blkSize > maximumEncryptedBlockSize {
+		if encrypted && blkSize > maximumEncryptedBlockSize {
 			// Notes on this below.
 			blkSize = maximumEncryptedBlockSize
 		}
@@ -612,7 +612,7 @@ func dynBlkSize(retention RetentionPolicy, maxBytes int64, cipher StoreCipher) u
 	}
 
 	switch {
-	case cipher != NoCipher:
+	case encrypted:
 		// In the case of encrypted stores, large blocks can result in worsened perf
 		// since many writes on disk involve re-encrypting the entire block. For now,
 		// we will enforce a cap on the block size when encryption is enabled to avoid
diff --git a/server/jetstream_cluster_3_test.go b/server/jetstream_cluster_3_test.go
index f6ad499a..cac07898 100644
--- a/server/jetstream_cluster_3_test.go
+++ b/server/jetstream_cluster_3_test.go
@@ -5544,3 +5544,91 @@ func TestJetStreamClusterConsumerDefaultsFromStream(t *testing.T) {
 		}
 	})
 }
+
+// Discovered that we are not properly setting certain default filestore blkSizes.
+func TestJetStreamClusterCheckFileStoreBlkSizes(t *testing.T) {
+	c := createJetStreamClusterExplicit(t, "R3S", 3)
+	defer c.shutdown()
+
+	nc, js := jsClientConnect(t, c.randomServer())
+	defer nc.Close()
+
+	// Nowmal Stream
+	_, err := js.AddStream(&nats.StreamConfig{
+		Name:     "TEST",
+		Subjects: []string{"*"},
+		Replicas: 3,
+	})
+	require_NoError(t, err)
+
+	_, err = js.AddConsumer("TEST", &nats.ConsumerConfig{
+		Durable:   "C3",
+		AckPolicy: nats.AckExplicitPolicy,
+	})
+	require_NoError(t, err)
+
+	// KV
+	_, err = js.CreateKeyValue(&nats.KeyValueConfig{
+		Bucket:   "TEST",
+		Replicas: 3,
+	})
+	require_NoError(t, err)
+
+	blkSize := func(fs *fileStore) uint64 {
+		fs.mu.RLock()
+		defer fs.mu.RUnlock()
+		return fs.fcfg.BlockSize
+	}
+
+	// We will check now the following filestores.
+	//  meta
+	//  TEST stream and NRG
+	//  C3 NRG
+	//  KV_TEST stream and NRG
+	for _, s := range c.servers {
+		js, cc := s.getJetStreamCluster()
+		// META
+		js.mu.RLock()
+		meta := cc.meta
+		js.mu.RUnlock()
+		require_True(t, meta != nil)
+		fs := meta.(*raft).wal.(*fileStore)
+		require_True(t, blkSize(fs) == defaultMetaFSBlkSize)
+
+		// TEST STREAM
+		mset, err := s.GlobalAccount().lookupStream("TEST")
+		require_NoError(t, err)
+		mset.mu.RLock()
+		fs = mset.store.(*fileStore)
+		mset.mu.RUnlock()
+		require_True(t, blkSize(fs) == defaultLargeBlockSize)
+
+		// KV STREAM
+		// Now the KV which is different default size.
+		kv, err := s.GlobalAccount().lookupStream("KV_TEST")
+		require_NoError(t, err)
+		kv.mu.RLock()
+		fs = kv.store.(*fileStore)
+		kv.mu.RUnlock()
+		require_True(t, blkSize(fs) == defaultKVBlockSize)
+
+		// Now check NRGs
+		// TEST Stream
+		n := mset.raftNode()
+		require_True(t, n != nil)
+		fs = n.(*raft).wal.(*fileStore)
+		require_True(t, blkSize(fs) == defaultMediumBlockSize)
+		// KV TEST Stream
+		n = kv.raftNode()
+		require_True(t, n != nil)
+		fs = n.(*raft).wal.(*fileStore)
+		require_True(t, blkSize(fs) == defaultMediumBlockSize)
+		// Consumer
+		o := mset.lookupConsumer("C3")
+		require_True(t, o != nil)
+		n = o.raftNode()
+		require_True(t, n != nil)
+		fs = n.(*raft).wal.(*fileStore)
+		require_True(t, blkSize(fs) == defaultMediumBlockSize)
+	}
+}