diff --git a/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.spec.ts b/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.spec.ts
new file mode 100644
index 0000000000000..f877949c62ebb
--- /dev/null
+++ b/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.spec.ts
@@ -0,0 +1,87 @@
+/********************************************************************************
+ * Copyright (C) 2020 Ericsson and others.
+ *
+ * This program and the accompanying materials are made available under the
+ * terms of the Eclipse Public License v. 2.0 which is available at
+ * http://www.eclipse.org/legal/epl-2.0.
+ *
+ * This Source Code may also be made available under the following Secondary
+ * Licenses when the conditions for such availability set forth in the Eclipse
+ * Public License v. 2.0 are satisfied: GNU General Public License, version 2
+ * with the GNU Classpath Exception which is available at
+ * https://www.gnu.org/software/classpath/license.html.
+ *
+ * SPDX-License-Identifier: EPL-2.0 OR GPL-2.0 WITH Classpath-exception-2.0
+ ********************************************************************************/
+
+/* eslint-disable no-unused-expressions */
+
+import * as fs from 'fs';
+import * as path from 'path';
+import rimraf = require('rimraf');
+import { expect } from 'chai';
+import { PluginDeployerFileHandlerContextImpl } from './plugin-deployer-file-handler-context-impl';
+
+const testDataPath = path.join(__dirname, '../../../src/main/node/test-data');
+const zipSlipArchivePath = path.join(testDataPath, 'slip.tar.gz');
+const slippedFilePath = '/tmp/slipped.txt';
+
+describe('PluginDeployerFileHandlerContextImpl', () => {
+
+    /**
+     * Clean resources after a test.
+     */
+    const finalizers: Array<() => void> = [];
+
+    beforeEach(() => {
+        finalizers.length = 0;
+    });
+
+    afterEach(() => {
+        for (const finalize of finalizers) {
+            try {
+                finalize();
+            } catch (error) {
+                console.error(error);
+            }
+        }
+    });
+
+    it('zip-slip should happen if we do not prevent it', async function (): Promise<void> {
+        if (process.platform === 'win32') {
+            this.skip(); // Test will not work on Windows (because of the /tmp path)
+        }
+
+        const dest = fs.mkdtempSync('/tmp/plugin-ext-test');
+        finalizers.push(() => rimraf.sync(slippedFilePath));
+        finalizers.push(() => rimraf.sync(dest));
+        rimraf.sync(slippedFilePath);
+
+        // eslint-disable-next-line @typescript-eslint/no-explicit-any
+        const pluginDeployerFileHandlerContext = new PluginDeployerFileHandlerContextImpl(undefined as any);
+        pluginDeployerFileHandlerContext['_safeUnzip'] = false;
+        const success: boolean = await pluginDeployerFileHandlerContext.unzip(zipSlipArchivePath, dest).then(() => true, () => false);
+
+        expect(success).true;
+        expect(fs.existsSync(slippedFilePath)).true;
+    });
+
+    it('should prevent zip-slip by default', async function (): Promise<void> {
+        if (process.platform === 'win32') {
+            this.skip(); // Test will not work on Windows (because of the /tmp path)
+        }
+
+        const dest = fs.mkdtempSync('/tmp/plugin-ext-test');
+        finalizers.push(() => rimraf.sync(slippedFilePath));
+        finalizers.push(() => rimraf.sync(dest));
+        rimraf.sync(slippedFilePath);
+
+        // eslint-disable-next-line @typescript-eslint/no-explicit-any
+        const pluginDeployerFileHandlerContext = new PluginDeployerFileHandlerContextImpl(undefined as any);
+        const success: boolean = await pluginDeployerFileHandlerContext.unzip(zipSlipArchivePath, dest).then(() => true, () => false);
+
+        expect(success).false;
+        expect(fs.existsSync(slippedFilePath)).false;
+    });
+
+});
diff --git a/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.ts b/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.ts
index d8b469f44c676..f42c90bb24b84 100644
--- a/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.ts
+++ b/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.ts
@@ -14,18 +14,40 @@
  * SPDX-License-Identifier: EPL-2.0 OR GPL-2.0 WITH Classpath-exception-2.0
  ********************************************************************************/
 
+import * as path from 'path';
 import { PluginDeployerEntry, PluginDeployerFileHandlerContext } from '../../common/plugin-protocol';
 import * as decompress from 'decompress';
 
 export class PluginDeployerFileHandlerContextImpl implements PluginDeployerFileHandlerContext {
 
+    /**
+     * For testing: set to false to disable zip-slip prevention.
+     */
+    private _safeUnzip = true;
+
     constructor(private readonly pluginDeployerEntry: PluginDeployerEntry) {
 
     }
 
     async unzip(sourcePath: string, destPath: string): Promise<void> {
-        await decompress(sourcePath, destPath);
-        return Promise.resolve();
+        const absoluteDestPath = path.resolve(process.cwd(), destPath);
+        await decompress(sourcePath, absoluteDestPath, {
+            /**
+             * Prevent zip-slip: https://snyk.io/research/zip-slip-vulnerability
+             */
+            filter: (file: decompress.File) => {
+                if (this._safeUnzip) {
+                    const expectedFilePath = path.join(absoluteDestPath, file.path);
+                    // If dest is not found in the expected path, it means file will be unpacked somewhere else.
+                    if (!expectedFilePath.startsWith(path.join(absoluteDestPath, path.sep))) {
+                        throw new Error(`Detected a zip-slip exploit in archive "${sourcePath}"\n` +
+                            `  File "${file.path}" was going to write to "${expectedFilePath}"\n` +
+                            '  See: https://snyk.io/research/zip-slip-vulnerability');
+                    }
+                }
+                return true;
+            }
+        });
     }
 
     pluginEntry(): PluginDeployerEntry {
diff --git a/packages/plugin-ext/src/main/node/test-data/slip.tar.gz b/packages/plugin-ext/src/main/node/test-data/slip.tar.gz
new file mode 100644
index 0000000000000..68369b16bb4fe
Binary files /dev/null and b/packages/plugin-ext/src/main/node/test-data/slip.tar.gz differ