diff --git a/CHANGES.rst b/CHANGES.rst
index 36db0843a..88d0f3e5a 100644
--- a/CHANGES.rst
+++ b/CHANGES.rst
@@ -1,5 +1,19 @@
 .. currentmodule:: jinja2
 
+Unreleased
+
+-   Fix compiler. As compiled jinja blocks does not have info about
+    parent template scopes like autoescape, due to which it is ignoring those inherited
+    properties. So we made blocks compilation volatile, so that it will figure correct
+    property during rendering time. :issue:`1898`
+
+-   Fix NodeParser error. Ideally child templates body should contain blocks as first
+    child. because only blocks in child template are going to be replaced with
+    blocks in main template. So each node in child template body is inspected to
+    identify first block node and moving it into the template body.
+    These blocks will seamlessly placed in the main template body. :issue:`1898`
+
+
 Version 3.1.3
 -------------
 
diff --git a/src/jinja2/compiler.py b/src/jinja2/compiler.py
index 7dfac0a71..19b6ad28a 100644
--- a/src/jinja2/compiler.py
+++ b/src/jinja2/compiler.py
@@ -920,6 +920,9 @@ def visit_Template(
             # interesting issues with identifier tracking.
             block_frame = Frame(eval_ctx)
             block_frame.block_frame = True
+            # during compile time we are not aware of parent template configuration,
+            # so it's better to decide child blocks configuration at runtime.
+            block_frame.eval_ctx.volatile = True
             undeclared = find_undeclared(block.body, ("self", "super"))
             if "self" in undeclared:
                 ref = block_frame.symbols.declare_parameter("self")
@@ -1406,7 +1409,7 @@ def _make_finalize(self) -> _FinalizeInfo:
 
             if pass_arg is None:
 
-                def finalize(value: t.Any) -> t.Any:
+                def finalize(value: t.Any) -> t.Any:  # noqa: F811
                     return default(env_finalize(value))
 
             else:
@@ -1414,7 +1417,7 @@ def finalize(value: t.Any) -> t.Any:
 
                 if pass_arg == "environment":
 
-                    def finalize(value: t.Any) -> t.Any:
+                    def finalize(value: t.Any) -> t.Any:  # noqa: F811
                         return default(env_finalize(self.environment, value))
 
         self._finalize = self._FinalizeInfo(finalize, src)
diff --git a/src/jinja2/parser.py b/src/jinja2/parser.py
index 12703a97a..678c83a6d 100644
--- a/src/jinja2/parser.py
+++ b/src/jinja2/parser.py
@@ -1031,4 +1031,46 @@ def parse(self) -> nodes.Template:
         """Parse the whole template into a `Template` node."""
         result = nodes.Template(self.subparse(), lineno=1)
         result.set_environment(self.environment)
+        # ideally child templates body should contain blocks as first child.
+        # because only blocks are going to be replaced with blocks in main template.
+        # So we are using below method to move blocks as first child
+        # (items in template-node body list ).
+        # and other non-block nodes will remain as it is. And while rendering those
+        # non-block nodes will be ignored automatically.
+        result = self.parse_extend_blocks(result)
         return result
+
+    def parse_extend_blocks(self, template: nodes.Template) -> nodes.Template:
+        """Parse the whole template and move first found Block Node to the top."""
+
+        have_extends = template.find(nodes.Extends) is not None
+
+        if not have_extends:
+            return template
+
+        new_body = []
+        for node in template.body:
+            new_body.append(node)
+            new_body.extend(self.extract_first_child_block(node))
+        template.body = new_body
+        return template
+
+    def extract_first_child_block(
+        self, template: nodes.Node
+    ) -> typing.List[nodes.Node]:
+        """Remove first found block node from each child node."""
+        new_child: typing.List[nodes.Node] = []
+        counter = 0
+        if not hasattr(template, "body") or isinstance(template, nodes.Block):
+            return new_child
+        while len(template.body) > counter:
+            if not hasattr(template.body[counter], "body"):
+                counter += 1
+                continue
+
+            if isinstance(template.body[counter], nodes.Block):
+                new_child.append(template.body.pop(counter))
+                continue
+            new_child.extend(self.extract_first_child_block(template.body[counter]))
+            counter += 1
+        return new_child
diff --git a/tests/test_regression.py b/tests/test_regression.py
index 46e492bdd..cbcf93ccc 100644
--- a/tests/test_regression.py
+++ b/tests/test_regression.py
@@ -1,3 +1,5 @@
+import textwrap
+
 import pytest
 
 from jinja2 import DictLoader
@@ -8,6 +10,7 @@
 from jinja2 import TemplateNotFound
 from jinja2 import TemplateSyntaxError
 from jinja2.utils import pass_context
+from jinja2.utils import select_autoescape
 
 
 class TestCorner:
@@ -736,6 +739,50 @@ def test_nested_loop_scoping(self, env):
         )
         assert tmpl.render() == "hellohellohello"
 
+    def test_autoescape_block_inheritance(self, env):
+        text = "hel'lo"
+        output = "Subject: hel'lo\nBody: hel'lo"
+        templates = {
+            "base.html": textwrap.dedent(
+                """
+                Subject: {% autoescape false %}{% block subject %}
+                {% endblock %}{% endautoescape %}
+                Body: {% block body %}{% endblock %}
+            """
+            ).strip(),
+            "test1.html": textwrap.dedent(
+                """
+                {% extends 'base.html' %}
+                {% block subject %}{{ text }}{% endblock %}
+                {% block body %}{{ text }}{% endblock %}
+            """
+            ).strip(),
+            "test2.html": textwrap.dedent(
+                """
+                {% extends 'base.html' %}
+                {% autoescape false -%}
+                    {% block subject %}{{ text }}{% endblock %}
+                {%- endautoescape %}
+                {% block body %}{{ text }}{% endblock %}
+            """
+            ).strip(),
+            "test3.html": textwrap.dedent(
+                """
+                {% extends 'base.html' %}
+                {% block subject %}
+                    {%- autoescape false %}{{ text }}{% endautoescape -%}
+                {% endblock %}
+                {% block body %}{{ text }}{% endblock %}
+            """
+            ).strip(),
+        }
+
+        env = Environment(loader=DictLoader(templates), autoescape=select_autoescape())
+
+        assert env.get_template("test1.html").render(text=text) == output
+        assert env.get_template("test2.html").render(text=text) == output
+        assert env.get_template("test3.html").render(text=text) == output
+
 
 @pytest.mark.parametrize("unicode_char", ["\N{FORM FEED}", "\x85"])
 def test_unicode_whitespace(env, unicode_char):