diff --git a/src/extensions/__tests__/is-compatible-extension.test.ts b/src/extensions/__tests__/is-compatible-extension.test.ts
new file mode 100644
index 0000000000..2b7737c468
--- /dev/null
+++ b/src/extensions/__tests__/is-compatible-extension.test.ts
@@ -0,0 +1,65 @@
+/**
+ * Copyright (c) OpenLens Authors. All rights reserved.
+ * Licensed under MIT License. See LICENSE in root directory for more information.
+ */
+
+import semver from "semver";
+import {
+  isCompatibleExtension,
+} from "../extension-discovery/is-compatible-extension/is-compatible-extension";
+import type { LensExtensionManifest } from "../lens-extension";
+
+describe("Extension/App versions compatibility check", () => {
+  it("is compatible with exact version matching", () => {
+    expect(isCompatibleExtension({
+      appSemVer: semver.coerce("5.5.0"), // current app version
+    })(getExtensionManifestMock({
+      lensEngine: "5.5.0", // requested app version by extension ("semver"-format)
+    }))).toBeTruthy();
+  });
+
+  it("is compatible with higher patch-versions of main app", () => {
+    expect(isCompatibleExtension({
+      appSemVer: semver.coerce("5.5.5"), // for patch-versions
+    })(getExtensionManifestMock({
+      lensEngine: "^5.5.0",
+    }))).toBeTruthy();
+  });
+
+  it("supports short versions format for engines.lens", () => {
+    const isCompatible = isCompatibleExtension({
+      appSemVer: semver.coerce("5.5.0"),
+    })(getExtensionManifestMock({
+      lensEngine: "5.5",
+    }));
+
+    expect(isCompatible).toBeTruthy();
+  });
+
+  it("supporting `manifest.engines.lens='*'` to match any base-app version", () => {
+    expect(isCompatibleExtension({
+      appSemVer: semver.coerce("1.0.0"),
+    })(getExtensionManifestMock({
+      lensEngine: "*",
+    }))).toBeTruthy();
+
+    expect(isCompatibleExtension({
+      appSemVer: semver.coerce("2.0.0"),
+    })(getExtensionManifestMock({
+      lensEngine: "*",
+    }))).toBeTruthy();
+  })
+});
+
+function getExtensionManifestMock(
+  {
+    lensEngine = "1.0",
+  } = {}): LensExtensionManifest {
+  return {
+    name: "some-extension",
+    version: "1.0",
+    engines: {
+      lens: lensEngine,
+    },
+  };
+}