diff --git a/packages/core-app-api/src/app/AppManager.tsx b/packages/core-app-api/src/app/AppManager.tsx
index de078c0ffc..0bd495c03b 100644
--- a/packages/core-app-api/src/app/AppManager.tsx
+++ b/packages/core-app-api/src/app/AppManager.tsx
@@ -14,7 +14,7 @@
  * limitations under the License.
  */
 
-import { AppConfig, Config } from '@backstage/config';
+import { Config } from '@backstage/config';
 import React, {
   ComponentType,
   PropsWithChildren,
@@ -81,6 +81,7 @@ import { InternalAppContext } from './InternalAppContext';
 import { AppRouter, getBasePath } from './AppRouter';
 import { AppTranslationProvider } from './AppTranslationProvider';
 import { AppTranslationApiImpl } from '../apis/implementations/AppTranslationApi';
+import { overrideBaseUrlConfigs } from './overrideBaseUrlConfigs';
 
 type CompatiblePlugin =
   | BackstagePlugin
@@ -88,17 +89,6 @@ type CompatiblePlugin =
       output(): Array<{ type: 'feature-flag'; name: string }>;
     });
 
-/**
- * Creates a base URL that uses to the current document origin.
- */
-function createLocalBaseUrl(fullUrl: string): string {
-  const url = new URL(fullUrl);
-  url.protocol = document.location.protocol;
-  url.hostname = document.location.hostname;
-  url.port = document.location.port;
-  return url.toString().replace(/\/$/, '');
-}
-
 function useConfigLoader(
   configLoader: AppConfigLoader | undefined,
   components: AppComponents,
@@ -131,52 +121,9 @@ function useConfigLoader(
     };
   }
 
-  let configReader;
-  /**
-   * config.value can be undefined or empty. If it's either, don't bother overriding anything.
-   */
-  if (config.value?.length) {
-    const urlConfigReader = ConfigReader.fromConfigs(config.value);
-
-    /**
-     * Test configs may not define `app.baseUrl` or `backend.baseUrl` and we
-     *  don't want to enforce here.
-     */
-    const appBaseUrl = urlConfigReader.getOptionalString('app.baseUrl');
-    const backendBaseUrl = urlConfigReader.getOptionalString('backend.baseUrl');
-
-    let configs = config.value;
-    const relativeResolverConfig: AppConfig = {
-      data: {},
-      context: 'relative-resolver',
-    };
-    if (appBaseUrl && backendBaseUrl) {
-      const appOrigin = new URL(appBaseUrl).origin;
-      const backendOrigin = new URL(backendBaseUrl).origin;
-
-      if (appOrigin === backendOrigin) {
-        const newBackendBaseUrl = createLocalBaseUrl(backendBaseUrl);
-        if (backendBaseUrl !== newBackendBaseUrl) {
-          relativeResolverConfig.data.backend = { baseUrl: newBackendBaseUrl };
-        }
-      }
-    }
-    if (appBaseUrl) {
-      const newAppBaseUrl = createLocalBaseUrl(appBaseUrl);
-      if (appBaseUrl !== newAppBaseUrl) {
-        relativeResolverConfig.data.app = { baseUrl: newAppBaseUrl };
-      }
-    }
-    /**
-     * Only add the relative config if there is actually data to add.
-     */
-    if (Object.keys(relativeResolverConfig.data).length) {
-      configs = configs.concat([relativeResolverConfig]);
-    }
-    configReader = ConfigReader.fromConfigs(configs);
-  } else {
-    configReader = ConfigReader.fromConfigs([]);
-  }
+  const configReader = ConfigReader.fromConfigs(
+    config.value?.length ? overrideBaseUrlConfigs(config.value) : [],
+  );
 
   return { api: configReader };
 }
diff --git a/packages/core-app-api/src/app/overrideBaseUrlConfigs.ts b/packages/core-app-api/src/app/overrideBaseUrlConfigs.ts
new file mode 100644
index 0000000000..5dab6db127
--- /dev/null
+++ b/packages/core-app-api/src/app/overrideBaseUrlConfigs.ts
@@ -0,0 +1,84 @@
+/*
+ * Copyright 2023 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import { AppConfig, ConfigReader } from '@backstage/config';
+
+/**
+ * Creates a base URL that uses to the current document origin.
+ */
+function createLocalBaseUrl(fullUrl: string): string {
+  const url = new URL(fullUrl);
+  url.protocol = document.location.protocol;
+  url.hostname = document.location.hostname;
+  url.port = document.location.port;
+  return url.toString().replace(/\/$/, '');
+}
+
+/**
+ * If we are able to override the app and backend base URLs to values that
+ * match the origin of the current location, then this function returns a
+ * new array of app configs that contain the overrides.
+ *
+ * @internal
+ */
+export function overrideBaseUrlConfigs(inputConfigs: AppConfig[]): AppConfig[] {
+  const urlConfigReader = ConfigReader.fromConfigs(inputConfigs);
+
+  // In tests we may not have `app.baseUrl` or `backend.baseUrl`, to keep them optional
+  const appBaseUrl = urlConfigReader.getOptionalString('app.baseUrl');
+  const backendBaseUrl = urlConfigReader.getOptionalString('backend.baseUrl');
+
+  let configs = inputConfigs;
+
+  let newBackendBaseUrl: string | undefined = undefined;
+  let newAppBaseUrl: string | undefined = undefined;
+
+  if (appBaseUrl && backendBaseUrl) {
+    const appOrigin = new URL(appBaseUrl).origin;
+    const backendOrigin = new URL(backendBaseUrl).origin;
+
+    if (appOrigin === backendOrigin) {
+      const maybeNewBackendBaseUrl = createLocalBaseUrl(backendBaseUrl);
+      if (backendBaseUrl !== maybeNewBackendBaseUrl) {
+        newBackendBaseUrl = maybeNewBackendBaseUrl;
+      }
+    }
+  }
+
+  if (appBaseUrl) {
+    const maybeNewAppBaseUrl = createLocalBaseUrl(appBaseUrl);
+    if (appBaseUrl !== maybeNewAppBaseUrl) {
+      newAppBaseUrl = maybeNewAppBaseUrl;
+    }
+  }
+
+  // Only add the relative config if there is actually data to add.
+  if (newAppBaseUrl || newBackendBaseUrl) {
+    configs = configs.concat({
+      data: {
+        app: newAppBaseUrl && {
+          baseUrl: newAppBaseUrl,
+        },
+        backend: newBackendBaseUrl && {
+          baseUrl: newBackendBaseUrl,
+        },
+      },
+      context: 'relative-resolver',
+    });
+  }
+
+  return configs;
+}