diff --git a/pkgs/applications/editors/vscode/extensions/vscode-utils.nix b/pkgs/applications/editors/vscode/extensions/vscode-utils.nix
index 0eba230ad8e0..053d11b71eff 100644
--- a/pkgs/applications/editors/vscode/extensions/vscode-utils.nix
+++ b/pkgs/applications/editors/vscode/extensions/vscode-utils.nix
@@ -32,6 +32,10 @@ let
 
     inherit configurePhase buildPhase dontPatchELF dontStrip;
 
+    # Some .vsix files contain other directories (e.g., `package`) that we don't use.
+    # If other directories are present but `sourceRoot` is unset, the unpacker phase fails.
+    sourceRoot = "extension";
+
     installPrefix = "share/vscode/extensions/${vscodeExtUniqueId}";
 
     nativeBuildInputs = [ unzip ] ++ nativeBuildInputs;