diff --git a/packages/frontend-plugin-api/src/components/ExtensionBoundary.test.tsx b/packages/frontend-plugin-api/src/components/ExtensionBoundary.test.tsx
new file mode 100644
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+++ b/packages/frontend-plugin-api/src/components/ExtensionBoundary.test.tsx
@@ -0,0 +1,136 @@
+/*
+ * 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 React, { useEffect } from 'react';
+import { screen, waitFor } from '@testing-library/react';
+import {
+  MockAnalyticsApi,
+  MockConfigApi,
+  TestApiProvider,
+  renderWithEffects,
+} from '@backstage/test-utils';
+import { ExtensionBoundary } from './ExtensionBoundary';
+import {
+  Extension,
+  coreExtensionData,
+  createExtension,
+  createPlugin,
+} from '../wiring';
+import { analyticsApiRef, useAnalytics } from '@backstage/core-plugin-api';
+import { createApp } from '@backstage/frontend-app-api';
+import { JsonObject } from '@backstage/types';
+import { createRouteRef } from '../routing';
+import { toInternalRouteRef } from '../routing/RouteRef';
+
+function renderExtensionInTestApp(
+  extension: Extension<unknown>,
+  options?: {
+    config?: JsonObject;
+  },
+) {
+  const { config = {} } = options ?? {};
+
+  const app = createApp({
+    features: [
+      createPlugin({
+        id: 'plugin',
+        extensions: [extension],
+      }),
+    ],
+    configLoader: async () => new MockConfigApi(config),
+  });
+
+  return renderWithEffects(app.createRoot());
+}
+
+const wrapInBoundaryExtension = (element: JSX.Element) => {
+  const id = 'plugin.extension';
+  const routeRef = createRouteRef();
+  toInternalRouteRef(routeRef).setId(id);
+  return createExtension({
+    id,
+    attachTo: { id: 'core.routes', input: 'routes' },
+    output: {
+      element: coreExtensionData.reactElement,
+      path: coreExtensionData.routePath,
+      routeRef: coreExtensionData.routeRef.optional(),
+    },
+    factory({ bind, source }) {
+      bind({
+        routeRef,
+        path: '/',
+        element: (
+          <ExtensionBoundary id={id} source={source} routeRef={routeRef}>
+            {element}
+          </ExtensionBoundary>
+        ),
+      });
+    },
+  });
+};
+
+describe('ExtensionBoundary', () => {
+  it('should render children when there is no error', async () => {
+    const text = 'Text Component';
+    const TextComponent = () => {
+      return <p>{text}</p>;
+    };
+    await renderExtensionInTestApp(wrapInBoundaryExtension(<TextComponent />));
+    await waitFor(() => expect(screen.getByText(text)).toBeInTheDocument());
+  });
+
+  it('should show app error component when an error is thrown', async () => {
+    const error = 'Something went wrong';
+    const ErrorComponent = () => {
+      throw new Error(error);
+    };
+    await renderExtensionInTestApp(wrapInBoundaryExtension(<ErrorComponent />));
+    await waitFor(() => expect(screen.getByText(error)).toBeInTheDocument());
+  });
+
+  it('should wrap children with analytics context', async () => {
+    const action = 'render';
+    const subject = 'analytics';
+    const analyticsApiMock = new MockAnalyticsApi();
+
+    const AnalyticsComponent = () => {
+      const analytics = useAnalytics();
+      useEffect(() => {
+        analytics.captureEvent(action, subject);
+      }, [analytics]);
+      return null;
+    };
+
+    await renderExtensionInTestApp(
+      wrapInBoundaryExtension(
+        <TestApiProvider apis={[[analyticsApiRef, analyticsApiMock]]}>
+          <AnalyticsComponent />
+        </TestApiProvider>,
+      ),
+    );
+
+    await waitFor(() =>
+      expect(analyticsApiMock.getEvents()[0]).toMatchObject({
+        action,
+        subject,
+        context: {
+          extension: 'plugin.extension',
+          routeRef: 'plugin.extension',
+        },
+      }),
+    );
+  });
+});