diff --git a/modules/misc/news.nix b/modules/misc/news.nix
index a20a8d373..bee8d3900 100644
--- a/modules/misc/news.nix
+++ b/modules/misc/news.nix
@@ -1222,6 +1222,32 @@ in
           A new module is available: 'programs.readline'.
         '';
       }
+
+      {
+        time = "2020-03-15T16:55:28+00:00";
+        condition = config.programs.firefox.enable;
+        message = ''
+          In anticipation of Firefox dropping support for extension
+          sideloading[1], we now install extensions directly to
+          Firefox profiles managed through Home Manager's
+
+            'programs.firefox.profiles'
+
+          option.
+
+          Unfortunately this will most likely trigger an "Existing
+          file is in the way" error when activating your configuration
+          since Firefox keeps a copy of the add-on in the location
+          Home Manager wants to overwrite. If this is the case, remove
+          the listed '.xpi' files and try again.
+
+          This change also means that extensions installed through
+          Home Manager may disappear from unmanaged profiles in future
+          Firefox releases.
+
+          [1] https://blog.mozilla.org/addons/2019/10/31/firefox-to-discontinue-sideloaded-extensions/
+        '';
+      }
     ];
   };
 }
diff --git a/modules/programs/firefox.nix b/modules/programs/firefox.nix
index 708b05417..1db2952c2 100644
--- a/modules/programs/firefox.nix
+++ b/modules/programs/firefox.nix
@@ -6,8 +6,21 @@ let
 
   cfg = config.programs.firefox;
 
+  mozillaConfigPath = ".mozilla";
+
+  firefoxConfigPath = "${mozillaConfigPath}/firefox";
+
+  profilesPath = firefoxConfigPath;
+
+  # The extensions path shared by all profiles; will not be supported
+  # by future Firefox versions.
   extensionPath = "extensions/{ec8030f7-c20a-464f-9b0e-13a3a9e97384}";
 
+  extensionsEnvPkg = pkgs.buildEnv {
+    name = "hm-firefox-extensions";
+    paths = cfg.extensions;
+  };
+
   profiles =
     flip mapAttrs' cfg.profiles (_: profile:
       nameValuePair "Profile${toString profile.id}" {
@@ -250,32 +263,30 @@ in
 
     home.file = mkMerge (
       [{
-        ".mozilla/${extensionPath}" = mkIf (cfg.extensions != []) (
-          let
-            extensionsEnv = pkgs.buildEnv {
-              name = "hm-firefox-extensions";
-              paths = cfg.extensions;
-            };
-          in {
-            source = "${extensionsEnv}/share/mozilla/${extensionPath}";
-            recursive = true;
-          }
-        );
+        "${mozillaConfigPath}/${extensionPath}" = mkIf (cfg.extensions != []) {
+          source = "${extensionsEnvPkg}/share/mozilla/${extensionPath}";
+          recursive = true;
+        };
 
-        ".mozilla/firefox/profiles.ini" = mkIf (cfg.profiles != {}) {
+        "${firefoxConfigPath}/profiles.ini" = mkIf (cfg.profiles != {}) {
           text = profilesIni;
         };
       }]
       ++ flip mapAttrsToList cfg.profiles (_: profile: {
-        ".mozilla/firefox/${profile.path}/chrome/userChrome.css" =
+        "${profilesPath}/${profile.path}/chrome/userChrome.css" =
           mkIf (profile.userChrome != "") {
             text = profile.userChrome;
           };
 
-        ".mozilla/firefox/${profile.path}/user.js" =
+        "${profilesPath}/${profile.path}/user.js" =
           mkIf (profile.settings != {} || profile.extraConfig != "") {
             text = mkUserJs profile.settings profile.extraConfig;
           };
+
+        "${profilesPath}/${profile.path}/extensions" = mkIf (cfg.extensions != []) {
+          source = "${extensionsEnvPkg}/share/mozilla/${extensionPath}";
+          recursive = true;
+        };
       })
     );
   };