diff --git a/.changeset/strong-lobsters-hide.md b/.changeset/strong-lobsters-hide.md
new file mode 100644
index 0000000000..7b51355eb7
--- /dev/null
+++ b/.changeset/strong-lobsters-hide.md
@@ -0,0 +1,5 @@
+---
+'@backstage/frontend-plugin-api': patch
+---
+
+App component extensions are no longer wrapped in an `ExtensionBoundary`, allowing them to inherit the outer context instead.
diff --git a/packages/frontend-plugin-api/src/extensions/createComponentExtension.tsx b/packages/frontend-plugin-api/src/extensions/createComponentExtension.tsx
index 2efa106750..a1231d8353 100644
--- a/packages/frontend-plugin-api/src/extensions/createComponentExtension.tsx
+++ b/packages/frontend-plugin-api/src/extensions/createComponentExtension.tsx
@@ -14,7 +14,7 @@
  * limitations under the License.
  */
 
-import React, { lazy, ComponentType } from 'react';
+import { lazy, ComponentType } from 'react';
 import {
   AnyExtensionInputMap,
   ResolvedExtensionInputs,
@@ -23,7 +23,7 @@ import {
 } from '../wiring';
 import { Expand } from '../types';
 import { PortableSchema } from '../schema';
-import { ExtensionBoundary, ComponentRef } from '../components';
+import { ComponentRef } from '../components';
 
 /** @public */
 export function createComponentExtension<
@@ -61,28 +61,26 @@ export function createComponentExtension<
     output: {
       component: createComponentExtension.componentDataRef,
     },
-    factory({ config, inputs, node }) {
-      let ExtensionComponent: ComponentType<TProps>;
-
+    factory({ config, inputs }) {
       if ('sync' in options.loader) {
-        ExtensionComponent = options.loader.sync({ config, inputs });
-      } else {
-        const lazyLoader = options.loader.lazy;
-        ExtensionComponent = lazy(() =>
-          lazyLoader({ config, inputs }).then(Component => ({
-            default: Component,
-          })),
-        ) as unknown as ComponentType<TProps>;
+        return {
+          component: {
+            ref: options.ref,
+            impl: options.loader.sync({ config, inputs }) as ComponentType,
+          },
+        };
       }
+      const lazyLoader = options.loader.lazy;
+      const ExtensionComponent = lazy(() =>
+        lazyLoader({ config, inputs }).then(Component => ({
+          default: Component,
+        })),
+      ) as unknown as ComponentType;
 
       return {
         component: {
           ref: options.ref,
-          impl: props => (
-            <ExtensionBoundary node={node}>
-              <ExtensionComponent {...(props as TProps)} />
-            </ExtensionBoundary>
-          ),
+          impl: ExtensionComponent,
         },
       };
     },