diff --git a/packages/plugin-ext-vscode/src/browser/plugin-vscode-commands-contribution.ts b/packages/plugin-ext-vscode/src/browser/plugin-vscode-commands-contribution.ts
index d5a173465af2c..006df2d3bfa4b 100755
--- a/packages/plugin-ext-vscode/src/browser/plugin-vscode-commands-contribution.ts
+++ b/packages/plugin-ext-vscode/src/browser/plugin-vscode-commands-contribution.ts
@@ -45,7 +45,7 @@ import {
 } from '@theia/plugin-ext/lib/common/plugin-api-rpc-model';
 import { DocumentsMainImpl } from '@theia/plugin-ext/lib/main/browser/documents-main';
 import { createUntitledURI } from '@theia/plugin-ext/lib/main/browser/editor/untitled-resource';
-import { toDocumentSymbol } from '@theia/plugin-ext/lib/plugin/type-converters';
+import { isUriComponents, toDocumentSymbol } from '@theia/plugin-ext/lib/plugin/type-converters';
 import { ViewColumn } from '@theia/plugin-ext/lib/plugin/types-impl';
 import { WorkspaceCommands } from '@theia/workspace/lib/browser';
 import { WorkspaceService, WorkspaceInput } from '@theia/workspace/lib/browser/workspace-service';
@@ -65,6 +65,7 @@ import {
 import { FILE_NAVIGATOR_ID, FileNavigatorWidget } from '@theia/navigator/lib/browser';
 import { SelectableTreeNode } from '@theia/core/lib/browser/tree/tree-selection';
 import { UriComponents } from '@theia/plugin-ext/lib/common/uri-components';
+import { FileService } from '@theia/filesystem/lib/browser/file-service';
 
 export namespace VscodeCommands {
     export const OPEN: Command = {
@@ -78,6 +79,10 @@ export namespace VscodeCommands {
     export const DIFF: Command = {
         id: 'vscode.diff'
     };
+
+    export const INSTALL_FROM_VSIX: Command = {
+        id: 'workbench.extensions.installExtension'
+    };
 }
 
 @injectable()
@@ -110,6 +115,8 @@ export class PluginVscodeCommandsContribution implements CommandContribution {
     protected readonly codeEditorWidgetUtil: CodeEditorWidgetUtil;
     @inject(PluginServer)
     protected readonly pluginServer: PluginServer;
+    @inject(FileService)
+    protected readonly fileService: FileService;
 
     registerCommands(commands: CommandRegistry): void {
         commands.registerCommand(VscodeCommands.OPEN, {
@@ -219,12 +226,13 @@ export class PluginVscodeCommandsContribution implements CommandContribution {
         commands.registerCommand({ id: 'workbench.action.openSettings' }, {
             execute: () => commands.executeCommand(CommonCommands.OPEN_PREFERENCES.id)
         });
-        commands.registerCommand({ id: 'workbench.extensions.installExtension' }, {
-            execute: async (vsixUriOrExtensionId: UriComponents | string) => {
+        commands.registerCommand({ id: VscodeCommands.INSTALL_FROM_VSIX.id }, {
+            execute: async (vsixUriOrExtensionId: TheiaURI | UriComponents | string) => {
                 if (typeof vsixUriOrExtensionId === 'string') {
-                    this.pluginServer.deploy(`vscode:extension/${vsixUriOrExtensionId}`);
+                    await this.pluginServer.deploy(`vscode:extension/${vsixUriOrExtensionId}`);
                 } else {
-                    this.pluginServer.deploy(`local-file:${URI.revive(vsixUriOrExtensionId).fsPath}`);
+                    const uriPath = isUriComponents(vsixUriOrExtensionId) ? URI.revive(vsixUriOrExtensionId).fsPath : await this.fileService.fsPath(vsixUriOrExtensionId);
+                    await this.pluginServer.deploy(`local-file:${uriPath}`);
                 }
             }
         });
diff --git a/packages/vsx-registry/src/browser/vsx-extensions-contribution.ts b/packages/vsx-registry/src/browser/vsx-extensions-contribution.ts
index de5c7d9198072..f44f710294c33 100644
--- a/packages/vsx-registry/src/browser/vsx-extensions-contribution.ts
+++ b/packages/vsx-registry/src/browser/vsx-extensions-contribution.ts
@@ -22,8 +22,12 @@ import { Widget } from '@theia/core/lib/browser/widgets/widget';
 import { VSXExtensionsModel } from './vsx-extensions-model';
 import { ColorContribution } from '@theia/core/lib/browser/color-application-contribution';
 import { ColorRegistry, Color } from '@theia/core/lib/browser/color-registry';
-import { TabBarToolbarContribution, TabBarToolbarRegistry } from '@theia/core/lib/browser/shell/tab-bar-toolbar';
+import { TabBarToolbarContribution, TabBarToolbarItem, TabBarToolbarRegistry } from '@theia/core/lib/browser/shell/tab-bar-toolbar';
 import { FrontendApplicationContribution, FrontendApplication } from '@theia/core/lib/browser/frontend-application';
+import { MessageService, Mutable } from '@theia/core/lib/common';
+import { FileDialogService, OpenFileDialogProps } from '@theia/filesystem/lib/browser';
+import { LabelProvider } from '@theia/core/lib/browser';
+import { VscodeCommands } from '@theia/plugin-ext-vscode/lib/browser/plugin-vscode-commands-contribution';
 
 export namespace VSXExtensionsCommands {
     export const CLEAR_ALL: Command = {
@@ -32,14 +36,24 @@ export namespace VSXExtensionsCommands {
         label: 'Clear Search Results',
         iconClass: 'clear-all'
     };
+    export const INSTALL_FROM_VSIX: Command & { dialogLabel: string } = {
+        id: 'vsxExtensions.installFromVSIX',
+        category: 'Extensions',
+        label: 'Install from VSIX...',
+        dialogLabel: 'Install from VSIX'
+    };
 }
 
 @injectable()
 export class VSXExtensionsContribution extends AbstractViewContribution<VSXExtensionsViewContainer>
     implements ColorContribution, FrontendApplicationContribution, TabBarToolbarContribution {
 
-    @inject(VSXExtensionsModel)
-    protected readonly model: VSXExtensionsModel;
+    @inject(VSXExtensionsModel) protected readonly model: VSXExtensionsModel;
+    @inject(CommandRegistry) protected readonly commandRegistry: CommandRegistry;
+    @inject(TabBarToolbarRegistry) protected readonly tabbarToolbarRegistry: TabBarToolbarRegistry;
+    @inject(FileDialogService) protected readonly fileDialogService: FileDialogService;
+    @inject(MessageService) protected readonly messageService: MessageService;
+    @inject(LabelProvider) protected readonly labelProvider: LabelProvider;
 
     constructor() {
         super({
@@ -65,6 +79,10 @@ export class VSXExtensionsContribution extends AbstractViewContribution<VSXExten
             isEnabled: w => this.withWidget(w, () => !!this.model.search.query),
             isVisible: w => this.withWidget(w, () => true)
         });
+
+        commands.registerCommand(VSXExtensionsCommands.INSTALL_FROM_VSIX, {
+            execute: () => this.installFromVSIX()
+        });
     }
 
     registerToolbarItems(registry: TabBarToolbarRegistry): void {
@@ -75,8 +93,36 @@ export class VSXExtensionsContribution extends AbstractViewContribution<VSXExten
             priority: 1,
             onDidChange: this.model.onDidChange
         });
+
+        this.registerMoreToolbarItem({
+            id: VSXExtensionsCommands.INSTALL_FROM_VSIX.id,
+            command: VSXExtensionsCommands.INSTALL_FROM_VSIX.id,
+            tooltip: VSXExtensionsCommands.INSTALL_FROM_VSIX.label,
+            group: 'other_1'
+        });
     }
 
+    /**
+     * Register commands to the `More Actions...` extensions toolbar item.
+     */
+    registerMoreToolbarItem = (item: Mutable<TabBarToolbarItem>) => {
+        const commandId = item.command;
+        const id = 'vsxExtensions.tabbar.toolbar.' + commandId;
+        const command = this.commandRegistry.getCommand(commandId);
+        this.commandRegistry.registerCommand({ id, iconClass: command && command.iconClass }, {
+            execute: (w, ...args) => w instanceof VSXExtensionsViewContainer
+                && this.commandRegistry.executeCommand(commandId, ...args),
+            isEnabled: (w, ...args) => w instanceof VSXExtensionsViewContainer
+                && this.commandRegistry.isEnabled(commandId, ...args),
+            isVisible: (w, ...args) => w instanceof VSXExtensionsViewContainer
+                && this.commandRegistry.isVisible(commandId, ...args),
+            isToggled: (w, ...args) => w instanceof VSXExtensionsViewContainer
+                && this.commandRegistry.isToggled(commandId, ...args),
+        });
+        item.command = id;
+        this.tabbarToolbarRegistry.registerItem(item);
+    };
+
     registerColors(colors: ColorRegistry): void {
         // VS Code colors should be aligned with https://code.visualstudio.com/api/references/theme-color#extensions
         colors.register(
@@ -107,4 +153,31 @@ export class VSXExtensionsContribution extends AbstractViewContribution<VSXExten
         }
         return false;
     }
+
+    /**
+     * Installs a local .vsix file after prompting the `Open File` dialog. Resolves to the URI of the file.
+     */
+    protected async installFromVSIX(): Promise<void> {
+        const props: OpenFileDialogProps = {
+            title: VSXExtensionsCommands.INSTALL_FROM_VSIX.dialogLabel,
+            openLabel: 'Install',
+            filters: { 'VSIX Extensions (*.vsix)': ['vsix'] },
+            canSelectMany: false
+        };
+        const extensionUri = await this.fileDialogService.showOpenDialog(props);
+        if (extensionUri) {
+            if (extensionUri.path.ext === '.vsix') {
+                const extensionName = this.labelProvider.getName(extensionUri);
+                try {
+                    await this.commandRegistry.executeCommand(VscodeCommands.INSTALL_FROM_VSIX.id, extensionUri);
+                    this.messageService.info(`Completed installing ${extensionName} from VSIX.`);
+                } catch (e) {
+                    this.messageService.error(`Failed to install ${extensionName} from VSIX.`);
+                    console.warn(e);
+                }
+            } else {
+                this.messageService.error('The selected file is not a valid "*.vsix" plugin.');
+            }
+        }
+    }
 }