diff --git a/acceptance/acceptance_test.go b/acceptance/acceptance_test.go
index 24cb083c997..b22929ed560 100644
--- a/acceptance/acceptance_test.go
+++ b/acceptance/acceptance_test.go
@@ -54,6 +54,15 @@ func TestGPGKeys(t *testing.T) {
 	testscript.Run(t, testScriptParamsFor(tsEnv, "gpg-key"))
 }
 
+func TestExtensions(t *testing.T) {
+	var tsEnv testScriptEnv
+	if err := tsEnv.fromEnv(); err != nil {
+		t.Fatal(err)
+	}
+
+	testscript.Run(t, testScriptParamsFor(tsEnv, "extension"))
+}
+
 func TestIssues(t *testing.T) {
 	var tsEnv testScriptEnv
 	if err := tsEnv.fromEnv(); err != nil {
diff --git a/acceptance/testdata/extension/extension.txtar b/acceptance/testdata/extension/extension.txtar
new file mode 100644
index 00000000000..a4d194757de
--- /dev/null
+++ b/acceptance/testdata/extension/extension.txtar
@@ -0,0 +1,69 @@
+# Skip if Bash is not available given script extension
+[!exec:bash] skip
+
+# Setup environment variables used for testscript
+env EXT_NAME=${SCRIPT_NAME}-${RANDOM_STRING}
+env EXT_SCRIPT=gh-${EXT_NAME}
+env REPO=gh-${EXT_NAME}
+
+# Use gh as a credential helper
+exec gh auth setup-git
+
+# Create local repository for extension
+exec gh extension create $EXT_NAME
+cd $REPO
+
+# Setup v1 executable baseline for extension
+mv ../v1.sh $EXT_SCRIPT
+chmod 777 $EXT_SCRIPT
+exec git add $EXT_SCRIPT
+exec git commit -m 'Setup extension as v1'
+
+# Upload local extension repository
+exec gh repo create $ORG/$REPO --private --source . --push
+
+# Defer repo cleanup
+defer gh repo delete --yes $ORG/$REPO
+
+# Verify extension shows up in search, sleep for indexing
+exec gh repo edit --add-topic gh-extension
+sleep 10
+exec gh extension search --owner $ORG $EXT_NAME
+stdout ${ORG}/${REPO}
+
+# Verify repository can be installed as extension
+exec gh extension install $ORG/$REPO
+exec gh extension list
+stdout ${ORG}/${REPO}
+
+# Verify v1 extension behavior before upgrade
+exec gh extension exec $EXT_NAME
+stdout 'gh ext create v1'
+
+# Setup v2 executable upgrade for extension
+mv ../v2.sh $EXT_SCRIPT
+chmod 777 $EXT_SCRIPT
+exec git add $EXT_SCRIPT
+exec git commit -m 'Upgrade extension to v2'
+exec git push -u origin
+
+# Verify v2 extension upgrade
+exec gh extension upgrade $EXT_NAME
+exec gh extension exec $EXT_NAME
+stdout 'gh ext upgrade v2'
+
+# Verify extension can be removed
+exec gh extension remove $EXT_NAME
+! stdout ${ORG}/${REPO}
+
+-- v1.sh --
+#!/usr/bin/env bash
+set -e
+
+echo "gh ext create v1"
+
+-- v2.sh --
+#!/usr/bin/env bash
+set -e
+
+echo "gh ext upgrade v2"