diff --git a/packages/cli/src/config/extensions/update.test.ts b/packages/cli/src/config/extensions/update.test.ts
index a0a959bebd3..8325450b021 100644
--- a/packages/cli/src/config/extensions/update.test.ts
+++ b/packages/cli/src/config/extensions/update.test.ts
@@ -295,7 +295,16 @@ describe('Extension Update Logic', () => {
         ),
       ).rejects.toThrow('Updated extension not found after installation');
 
-      expect(copyExtension).toHaveBeenCalledWith(
+      // Order matters. A backup taken after the install has already mutated
+      // the extension directory is exactly as empty as no backup at all, so
+      // an unordered pair of assertions would not catch a regression.
+      expect(copyExtension).toHaveBeenNthCalledWith(
+        1,
+        mockExtension.path,
+        '/tmp/mock-dir',
+      );
+      expect(copyExtension).toHaveBeenNthCalledWith(
+        2,
         '/tmp/mock-dir',
         mockExtension.path,
       );
@@ -309,6 +318,27 @@ describe('Extension Update Logic', () => {
       expect(fs.promises.rm).toHaveBeenCalled();
     });
 
+    it('should not restore from the temp dir if the backup itself failed', async () => {
+      vi.mocked(copyExtension).mockRejectedValueOnce(
+        new Error('Backup failed'),
+      );
+
+      await expect(
+        updateExtension(
+          mockExtension,
+          mockExtensionManager,
+          ExtensionUpdateState.UPDATE_AVAILABLE,
+          mockDispatch,
+        ),
+      ).rejects.toThrow('Backup failed');
+
+      // The extension directory is still intact at this point. Copying a
+      // partial temp dir over it would be the corruption the rollback exists
+      // to prevent, so the only call must be the failed backup attempt.
+      expect(copyExtension).toHaveBeenCalledTimes(1);
+      expect(fs.promises.rm).toHaveBeenCalled();
+    });
+
     describe('Integrity Verification', () => {
       it('should fail update with security alert if integrity is invalid', async () => {
         vi.mocked(
diff --git a/packages/cli/src/config/extensions/update.ts b/packages/cli/src/config/extensions/update.ts
index 0d751fd9c5e..9c0f46353cd 100644
--- a/packages/cli/src/config/extensions/update.ts
+++ b/packages/cli/src/config/extensions/update.ts
@@ -100,7 +100,16 @@ export async function updateExtension(
   const originalVersion = extension.version;
 
   const tempDir = await ExtensionStorage.createTmpDir();
+  // Tracks whether tempDir actually holds a copy of the current installation.
+  // The rollback below must not restore from tempDir unless it does, or a
+  // failed backup would overwrite an intact extension with a partial copy.
+  let backedUp = false;
   try {
+    // Back up the current installation before anything mutates it. Without
+    // this, tempDir stays empty and the rollback in the catch block restores
+    // nothing.
+    await copyExtension(extension.path, tempDir);
+    backedUp = true;
     const previousExtensionConfig = await extensionManager.loadExtensionConfig(
       extension.path,
     );
@@ -142,7 +151,9 @@ export async function updateExtension(
       type: 'SET_STATE',
       payload: { name: extension.name, state: ExtensionUpdateState.ERROR },
     });
-    await copyExtension(tempDir, extension.path);
+    if (backedUp) {
+      await copyExtension(tempDir, extension.path);
+    }
     throw e;
   } finally {
     await fs.promises.rm(tempDir, { recursive: true, force: true });