diff --git a/packages/plugin-ext/package.json b/packages/plugin-ext/package.json
index 688aa324f796a..9361bcb84212f 100644
--- a/packages/plugin-ext/package.json
+++ b/packages/plugin-ext/package.json
@@ -81,7 +81,9 @@
     "@types/escape-html": "^0.0.20",
     "@types/lodash.clonedeep": "^4.5.3",
     "@types/ps-tree": "^1.1.0",
-    "@types/request": "^2.0.3"
+    "@types/request": "^2.0.3",
+    "chai": "^4.2.0",
+    "rimraf": "^3.0.2"
   },
   "nyc": {
     "extends": "../../configs/nyc.json"
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..dac31553af4b6
--- /dev/null
+++ b/packages/plugin-ext/src/main/node/plugin-deployer-file-handler-context-impl.spec.ts
@@ -0,0 +1,67 @@
+/********************************************************************************
+ * 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
+ ********************************************************************************/
+
+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');
+
+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('should prevent zip-slip', 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(dest));
+
+        const zipSlipArchivePath = path.join(testDataPath, 'slip.tar.gz');
+        const slippedFilePath = '/tmp/slipped.txt';
+
+        finalizers.push(() => rimraf.sync(slippedFilePath));
+        rimraf.sync(slippedFilePath);
+
+        // eslint-disable-next-line @typescript-eslint/no-explicit-any
+        const pluginDeployerFileHandlerContext = new PluginDeployerFileHandlerContextImpl(undefined as any);
+        await pluginDeployerFileHandlerContext.unzip(zipSlipArchivePath, dest);
+
+        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..0ca46f0438c19 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
@@ -14,6 +14,8 @@
  * SPDX-License-Identifier: EPL-2.0 OR GPL-2.0 WITH Classpath-exception-2.0
  ********************************************************************************/
 
+import * as path from 'path';
+import { promises as fs } from 'fs';
 import { PluginDeployerEntry, PluginDeployerFileHandlerContext } from '../../common/plugin-protocol';
 import * as decompress from 'decompress';
 
@@ -24,8 +26,30 @@ export class PluginDeployerFileHandlerContextImpl implements PluginDeployerFileH
     }
 
     async unzip(sourcePath: string, destPath: string): Promise<void> {
-        await decompress(sourcePath, destPath);
-        return Promise.resolve();
+        const zipSlipFiles = new Set<[string, string]>();
+        const absoluteDestPath = await fs.realpath(destPath);
+        await decompress(sourcePath, absoluteDestPath, {
+            /**
+             * Prevent zip-slip: https://snyk.io/research/zip-slip-vulnerability
+             */
+            filter(file: decompress.File): boolean {
+                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))) {
+                    zipSlipFiles.add([file.path, expectedFilePath]);
+                    return false; // only skip the exploit files, maybe the rest is fine.
+                } else {
+                    return true;
+                }
+            }
+        });
+        if (zipSlipFiles.size > 0) {
+            console.error(`Detected a zip-slip exploit in archive: "${sourcePath}"`);
+            for (const [relativePath, expectedPath] of zipSlipFiles) {
+                console.error(` - File "${relativePath}" was going to write to: "${expectedPath}"`);
+            }
+            console.error('See: https://snyk.io/research/zip-slip-vulnerability');
+        }
     }
 
     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
diff --git a/yarn.lock b/yarn.lock
index 883a4616e1da4..3452de3172f86 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -10928,6 +10928,13 @@ rimraf@^3.0.0:
   dependencies:
     glob "^7.1.3"
 
+rimraf@^3.0.2:
+  version "3.0.2"
+  resolved "https://registry.yarnpkg.com/rimraf/-/rimraf-3.0.2.tgz#f1a5402ba6220ad52cc1282bac1ae3aa49fd061a"
+  integrity sha512-JZkJMZkAGFFPP2YqXZXPbMlMBgsxzE8ILs4lMIX/2o0L9UBw9O/Y3o6wFw/i9YLapcUJWwqbi3kdxIPdC62TIA==
+  dependencies:
+    glob "^7.1.3"
+
 rimraf@~2.4.0:
   version "2.4.5"
   resolved "https://registry.yarnpkg.com/rimraf/-/rimraf-2.4.5.tgz#ee710ce5d93a8fdb856fb5ea8ff0e2d75934b2da"