diff --git a/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.test.tsx b/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.test.tsx
new file mode 100644
index 000000000000..377bc56b7d18
--- /dev/null
+++ b/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.test.tsx
@@ -0,0 +1,89 @@
+import { describe, it, expect, vi } from 'vitest';
+import { render, screen, waitFor } from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
+import ExtensionModal from './ExtensionModal';
+import { ExtensionFormData } from '../utils';
+
+describe('ExtensionModal', () => {
+  it('creates a http_streamable extension', async () => {
+    const user = userEvent.setup();
+    const mockOnSubmit = vi.fn();
+    const mockOnClose = vi.fn();
+
+    const initialData: ExtensionFormData = {
+      name: '',
+      description: '',
+      type: 'stdio', // Default type
+      cmd: '',
+      endpoint: '',
+      enabled: true,
+      timeout: 300,
+      envVars: [],
+      headers: [],
+    };
+
+    render(
+      <ExtensionModal
+        title="Add custom extension"
+        initialData={initialData}
+        onClose={mockOnClose}
+        onSubmit={mockOnSubmit}
+        submitLabel="Add Extension"
+        modalType="add"
+      />
+    );
+
+    const nameInput = screen.getByPlaceholderText('Enter extension name...');
+    const submitButton = screen.getByTestId('extension-submit-btn');
+
+    await user.type(nameInput, 'Test MCP');
+
+    const typeSelect = screen.getByRole('combobox');
+    await user.click(typeSelect);
+
+    const httpOption = screen.getByText('Streamable HTTP');
+    await user.click(httpOption);
+
+    await waitFor(() => {
+      expect(screen.getByText('Request Headers')).toBeInTheDocument();
+    });
+
+    const endpointInput = screen.getByPlaceholderText('Enter endpoint URL...');
+    await user.type(endpointInput, 'https://foo.bar.com/mcp/');
+
+    const descriptionInput = screen.getByPlaceholderText('Optional description...');
+    await user.type(descriptionInput, 'Test MCP extension');
+
+    const headerNameInput = screen.getByPlaceholderText('Header name');
+    const headerValueInput = screen
+      .getAllByPlaceholderText('Value')
+      .find(
+        (input) =>
+          input.closest('div')?.textContent?.includes('Request Headers') ||
+          input.parentElement?.parentElement?.textContent?.includes('Request Headers')
+      );
+
+    await user.type(headerNameInput, 'Authorization');
+    if (headerValueInput) {
+      await user.type(headerValueInput, 'Bearer abc123');
+    }
+
+    await user.click(submitButton);
+
+    await waitFor(() => {
+      expect(mockOnSubmit).toHaveBeenCalled();
+    });
+
+    const submittedData = mockOnSubmit.mock.calls[0][0];
+
+    expect(submittedData.name).toBe('Test MCP');
+    expect(submittedData.type).toBe('streamable_http');
+    expect(submittedData.endpoint).toBe('https://foo.bar.com/mcp/');
+    expect(submittedData.description).toBe('Test MCP extension');
+    expect(submittedData.timeout).toBe(300);
+    expect(submittedData.headers).toHaveLength(1);
+    expect(submittedData.headers).toEqual([
+      { key: 'Authorization', value: 'Bearer abc123', isEdited: true },
+    ]);
+  });
+});
diff --git a/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.tsx b/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.tsx
index 3a7c84f658f4..788cd08d3ae4 100644
--- a/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.tsx
+++ b/ui/desktop/src/components/settings/extensions/modal/ExtensionModal.tsx
@@ -1,4 +1,4 @@
-import { useState } from 'react';
+import { useState, useCallback } from 'react';
 import { Button } from '../../../ui/button';
 import {
   Dialog,
@@ -43,6 +43,7 @@ export default function ExtensionModal({
   const [showCloseConfirmation, setShowCloseConfirmation] = useState(false);
   const [hasPendingEnvVars, setHasPendingEnvVars] = useState(false);
   const [hasPendingHeaders, setHasPendingHeaders] = useState(false);
+  const [pendingHeader, setPendingHeader] = useState<{ key: string; value: string } | null>(null);
 
   // Function to check if form has been modified
   const hasFormChanges = (): boolean => {
@@ -72,7 +73,7 @@ export default function ExtensionModal({
         envVar.value !== '••••••••'
     );
 
-    // Check if there are pending environment variables being typed
+    // Check if there are pending environment variables or headers being typed
     const hasPendingInput = hasPendingEnvVars || hasPendingHeaders;
 
     return (
@@ -168,6 +169,14 @@ export default function ExtensionModal({
     });
   };
 
+  const handlePendingHeaderChange = useCallback(
+    (hasPending: boolean, header: { key: string; value: string } | null) => {
+      setHasPendingHeaders(hasPending);
+      setPendingHeader(header);
+    },
+    []
+  );
+
   // Function to store a secret value
   const storeSecret = async (key: string, value: string) => {
     try {
@@ -217,8 +226,16 @@ export default function ExtensionModal({
     );
   };
 
+  const getFinalHeaders = () => {
+    const finalHeaders = [...formData.headers];
+    if (pendingHeader && pendingHeader.key.trim() !== '' && pendingHeader.value.trim() !== '') {
+      finalHeaders.push({ ...pendingHeader, isEdited: true });
+    }
+    return finalHeaders;
+  };
+
   const isHeadersValid = () => {
-    return formData.headers.every(
+    return getFinalHeaders().every(
       ({ key, value }) => (key === '' && value === '') || (key !== '' && value !== '')
     );
   };
@@ -249,8 +266,13 @@ export default function ExtensionModal({
     setSubmitAttempted(true);
 
     if (isFormValid()) {
+      const finalFormData = {
+        ...formData,
+        headers: getFinalHeaders(),
+      };
+
       // Only store env vars that have been edited (which includes new)
-      const secretPromises = formData.envVars
+      const secretPromises = finalFormData.envVars
         .filter((envVar) => envVar.isEdited)
         .map(({ key, value }) => storeSecret(key, value));
 
@@ -261,9 +283,11 @@ export default function ExtensionModal({
         if (results.every((success) => success)) {
           // Convert timeout to number if needed
           const dataToSubmit = {
-            ...formData,
+            ...finalFormData,
             timeout:
-              typeof formData.timeout === 'string' ? Number(formData.timeout) : formData.timeout,
+              typeof finalFormData.timeout === 'string'
+                ? Number(finalFormData.timeout)
+                : finalFormData.timeout,
           };
           onSubmit(dataToSubmit);
           onClose();
@@ -366,7 +390,7 @@ export default function ExtensionModal({
                   onRemove={handleRemoveHeader}
                   onChange={handleHeaderChange}
                   submitAttempted={submitAttempted}
-                  onPendingInputChange={setHasPendingHeaders}
+                  onPendingInputChange={handlePendingHeaderChange}
                 />
               </div>
             </>
diff --git a/ui/desktop/src/components/settings/extensions/modal/HeadersSection.tsx b/ui/desktop/src/components/settings/extensions/modal/HeadersSection.tsx
index 5fe28dc1c181..f7ea5037b5b8 100644
--- a/ui/desktop/src/components/settings/extensions/modal/HeadersSection.tsx
+++ b/ui/desktop/src/components/settings/extensions/modal/HeadersSection.tsx
@@ -10,7 +10,10 @@ interface HeadersSectionProps {
   onRemove: (index: number) => void;
   onChange: (index: number, field: 'key' | 'value', value: string) => void;
   submitAttempted: boolean;
-  onPendingInputChange?: (hasPending: boolean) => void;
+  onPendingInputChange: (
+    hasPendingInput: boolean,
+    pendingHeader: { key: string; value: string } | null
+  ) => void;
 }
 
 export default function HeadersSection({
@@ -29,10 +32,12 @@ export default function HeadersSection({
     value: false,
   });
 
-  // Track pending input changes
+  // Notify parent when pending input changes
   React.useEffect(() => {
     const hasPendingInput = newKey.trim() !== '' || newValue.trim() !== '';
-    onPendingInputChange?.(hasPendingInput);
+    const pendingHeader =
+      newKey.trim() && newValue.trim() ? { key: newKey, value: newValue } : null;
+    onPendingInputChange(hasPendingInput, pendingHeader);
   }, [newKey, newValue, onPendingInputChange]);
 
   const handleAdd = () => {