diff --git a/app/common/state/extensionState.js b/app/common/state/extensionState.js
index 32fa5f0fd22..68cfa50022b 100644
--- a/app/common/state/extensionState.js
+++ b/app/common/state/extensionState.js
@@ -5,6 +5,7 @@
 const { makeImmutable } = require('./immutableUtil')
 const Immutable = require('immutable')
 const platformUtil = require('../lib/platformUtil')
+const {chromeUrl} = require('../../../js/lib/appUrlUtil')
 
 const browserActionDefaults = Immutable.fromJS({
   tabs: {}
@@ -77,7 +78,7 @@ const extensionState = {
   browserActionBackgroundImage: (browserAction, tabId) => {
     tabId = tabId ? tabId.toString() : '-1'
     let path = browserAction.getIn(['tabs', tabId, 'path']) || browserAction.get('path')
-    let basePath = browserAction.get('base_path')
+    let basePath = chromeUrl(browserAction.get('base_path'))
     if (path && basePath) {
       // Older extensions may provide a string path
       if (typeof path === 'string') {
diff --git a/app/extensions.js b/app/extensions.js
index 8509e5d5771..3bd1aa6641e 100644
--- a/app/extensions.js
+++ b/app/extensions.js
@@ -3,7 +3,7 @@ const contextMenus = require('./browser/extensions/contextMenus')
 const extensionActions = require('./common/actions/extensionActions')
 const config = require('../js/constants/config')
 const appConfig = require('../js/constants/appConfig')
-const {chromeUrl} = require('../js/lib/appUrlUtil')
+const {fileUrl} = require('../js/lib/appUrlUtil')
 const {getExtensionsPath, getBraveExtUrl, getBraveExtIndexHTML} = require('../js/lib/appUrlUtil')
 const {getSetting} = require('../js/settings')
 const settings = require('../js/constants/settings')
@@ -408,7 +408,7 @@ module.exports.init = () => {
     extensionInfo.setInstallInfo(installInfo.id, installInfo)
     installInfo.filePath = installInfo.base_path
 
-    installInfo.base_path = chromeUrl(installInfo.base_path)
+    installInfo.base_path = fileUrl(installInfo.base_path)
 
     extensionActions.extensionInstalled(installInfo.id, installInfo)
     extensionActions.extensionEnabled(installInfo.id)
diff --git a/js/lib/appUrlUtil.js b/js/lib/appUrlUtil.js
index 24f3b7f5cfc..3543b9c83f3 100644
--- a/js/lib/appUrlUtil.js
+++ b/js/lib/appUrlUtil.js
@@ -24,11 +24,11 @@ module.exports.fileUrl = (filePath) => {
   return encodeURI('file://' + fileUrlPath)
 }
 
-module.exports.chromeUrl = (filePath = '') => {
-  filePath = module.exports.fileUrl(filePath)
-  filePath = filePath.replace('file://', 'chrome://brave')
-
-  return filePath
+/**
+ * Converts file URL to chrome:// URL
+ */
+module.exports.chromeUrl = (fileUrl = '') => {
+  return fileUrl.replace('file://', 'chrome://brave')
 }
 
 /**
diff --git a/test/unit/lib/appUrlUtilTest.js b/test/unit/lib/appUrlUtilTest.js
index 083e8f746fc..12d13044ad3 100644
--- a/test/unit/lib/appUrlUtilTest.js
+++ b/test/unit/lib/appUrlUtilTest.js
@@ -81,7 +81,7 @@ describe('appUrlUtil test', function () {
   })
   describe('chromeUrl', function () {
     it('can convert file paths', function () {
-      const filePath = '/users/bbondy/space here/tesT.html'
+      const filePath = 'file:///users/bbondy/space%20here/tesT.html'
       const chromeUrl = appUrlUtil.chromeUrl(filePath)
       const expected = 'chrome://brave/users/bbondy/space%20here/tesT.html'
       assert.equal(chromeUrl, expected)