diff --git a/packages/frontend-app-api/src/tree/instantiateAppNodeTree.test.ts b/packages/frontend-app-api/src/tree/instantiateAppNodeTree.test.ts
index b4090185a3..de8889daf0 100644
--- a/packages/frontend-app-api/src/tree/instantiateAppNodeTree.test.ts
+++ b/packages/frontend-app-api/src/tree/instantiateAppNodeTree.test.ts
@@ -914,7 +914,7 @@ describe('instantiateAppNodeTree', () => {
                   namespace: 'app',
                   name: 'test',
                   attachTo: { id: 'ignored', input: 'ignored' },
-                  output: [],
+                  output: [testDataRef],
                   factory() {
                     const error = new Error('NOPE');
                     error.name = 'NopeError';
@@ -981,11 +981,12 @@ describe('instantiateAppNodeTree', () => {
           createAppNodeInstance({
             node: makeNode(
               resolveExtensionDefinition(
+                // @ts-expect-error
                 createExtension({
                   namespace: 'app',
                   name: 'test',
                   attachTo: { id: 'ignored', input: 'ignored' },
-                  output: [],
+                  output: [], // Output not declared
                   factory({}) {
                     return [testDataRef('test')] as any;
                   },
diff --git a/packages/frontend-plugin-api/src/wiring/createExtension.test.ts b/packages/frontend-plugin-api/src/wiring/createExtension.test.ts
index 327639af37..ab6a6c19a5 100644
--- a/packages/frontend-plugin-api/src/wiring/createExtension.test.ts
+++ b/packages/frontend-plugin-api/src/wiring/createExtension.test.ts
@@ -394,6 +394,18 @@ describe('createExtension', () => {
       }),
     ).toMatchObject({ version: 'v2' });
 
+    expect(
+      // @ts-expect-error
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef],
+        factory() {
+          return [stringDataRef('hello'), numberDataRef(4)];
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
     expect(
       createExtension({
         namespace: 'test',
@@ -428,6 +440,93 @@ describe('createExtension', () => {
     ).toMatchObject({ version: 'v2' });
   });
 
+  it('should support new form of outputs with a generator', () => {
+    expect(
+      // @ts-expect-error
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef, numberDataRef],
+        *factory() {
+          // Missing all outputs
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
+    expect(
+      // @ts-expect-error
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef, numberDataRef],
+        *factory() {
+          yield stringDataRef('hello'); // Missing number output
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
+    // Duplicate output, we won't attempt to handle this a compile time and instead error out at runtime
+    expect(
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef],
+        *factory() {
+          yield stringDataRef('hello');
+          yield stringDataRef('hello');
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
+    expect(
+      // @ts-expect-error
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef],
+        *factory() {
+          yield stringDataRef('hello');
+          yield numberDataRef(4); // No declared output
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
+    expect(
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef, numberDataRef],
+        *factory() {
+          yield stringDataRef('hello');
+          yield numberDataRef(4);
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
+    expect(
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef, numberDataRef.optional()],
+        *factory() {
+          yield stringDataRef('hello');
+          yield numberDataRef(4);
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+
+    expect(
+      createExtension({
+        namespace: 'test',
+        attachTo: { id: 'root', input: 'default' },
+        output: [stringDataRef, numberDataRef.optional()],
+        *factory() {
+          yield stringDataRef('hello'); // Missing number output, but it's optional so that's allowed
+        },
+      }),
+    ).toMatchObject({ version: 'v2' });
+  });
+
   it('should support new form of inputs', () => {
     expect(
       createExtension({
diff --git a/packages/frontend-plugin-api/src/wiring/createExtension.ts b/packages/frontend-plugin-api/src/wiring/createExtension.ts
index 4d31982ed3..a8bf4ef17c 100644
--- a/packages/frontend-plugin-api/src/wiring/createExtension.ts
+++ b/packages/frontend-plugin-api/src/wiring/createExtension.ts
@@ -157,9 +157,16 @@ export type VerifyExtensionFactoryOutput<
     : never
 ) extends infer IRequiredOutputIds
   ? [IRequiredOutputIds] extends [UFactoryOutput['id']]
-    ? {}
+    ? [UFactoryOutput['id']] extends [UDeclaredOutput['id']]
+      ? {}
+      : {
+          'Error: The extension factory has undeclared output(s)': Exclude<
+            UFactoryOutput['id'],
+            UDeclaredOutput['id']
+          >;
+        }
     : {
-        'Error: The extension factory is missing the following outputs': Exclude<
+        'Error: The extension factory is missing the following output(s)': Exclude<
           IRequiredOutputIds,
           UFactoryOutput['id']
         >;
diff --git a/packages/frontend-plugin-api/src/wiring/createExtensionBlueprint.test.tsx b/packages/frontend-plugin-api/src/wiring/createExtensionBlueprint.test.tsx
index f57cc2b70e..6cf10d7f08 100644
--- a/packages/frontend-plugin-api/src/wiring/createExtensionBlueprint.test.tsx
+++ b/packages/frontend-plugin-api/src/wiring/createExtensionBlueprint.test.tsx
@@ -64,6 +64,45 @@ describe('createExtensionBlueprint', () => {
     expect(container.querySelector('h1')).toHaveTextContent('Hello, world!');
   });
 
+  it('should allow creation of extension blueprints with a generator', () => {
+    const TestExtensionBlueprint = createExtensionBlueprint({
+      kind: 'test-extension',
+      attachTo: { id: 'test', input: 'default' },
+      output: [coreExtensionData.reactElement],
+      *factory(params: { text: string }) {
+        yield coreExtensionData.reactElement(<h1>{params.text}</h1>);
+      },
+    });
+
+    const extension = TestExtensionBlueprint.make({
+      name: 'my-extension',
+      params: {
+        text: 'Hello, world!',
+      },
+    });
+
+    expect(extension).toEqual({
+      $$type: '@backstage/ExtensionDefinition',
+      attachTo: {
+        id: 'test',
+        input: 'default',
+      },
+      configSchema: undefined,
+      disabled: false,
+      inputs: {},
+      kind: 'test-extension',
+      name: 'my-extension',
+      namespace: undefined,
+      output: [coreExtensionData.reactElement],
+      factory: expect.any(Function),
+      toString: expect.any(Function),
+      version: 'v2',
+    });
+
+    const { container } = createExtensionTester(extension).render();
+    expect(container.querySelector('h1')).toHaveTextContent('Hello, world!');
+  });
+
   it('should allow overriding of the default factory', () => {
     const TestExtensionBlueprint = createExtensionBlueprint({
       kind: 'test-extension',