diff --git a/package-lock.json b/package-lock.json
index b9518fcb..b7c33a84 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -2891,6 +2891,29 @@
       "license": "MIT",
       "optional": true
     },
+    "node_modules/@lvce-editor/api": {
+      "version": "8.84.0",
+      "resolved": "https://registry.npmjs.org/@lvce-editor/api/-/api-8.84.0.tgz",
+      "integrity": "sha512-7Zck/G4gOz75lw25KHNuI3YPSjEPRgrYeMlWnWkSNph7Gi8oxPFiE3LLTnF8Ip7Xd2qkWk45LqulUmo68yRU4Q==",
+      "dev": true,
+      "license": "MIT",
+      "dependencies": {
+        "@lvce-editor/command": "^2.0.0",
+        "@lvce-editor/rpc": "^6.4.0",
+        "@lvce-editor/rpc-registry": "^9.24.0",
+        "@lvce-editor/virtual-dom-worker": "^10.0.0"
+      }
+    },
+    "node_modules/@lvce-editor/api/node_modules/@lvce-editor/virtual-dom-worker": {
+      "version": "10.2.0",
+      "resolved": "https://registry.npmjs.org/@lvce-editor/virtual-dom-worker/-/virtual-dom-worker-10.2.0.tgz",
+      "integrity": "sha512-URtDWcAFadP7SLOqfepRxomJmNRQDmON8GFKRfsA1dOgcqBnoBR4G5xwo6oDeZvP4pnRAzHR3QB3b8I6nASU+w==",
+      "dev": true,
+      "license": "MIT",
+      "dependencies": {
+        "@lvce-editor/constants": "^5.14.0"
+      }
+    },
     "node_modules/@lvce-editor/assert": {
       "version": "1.9.0",
       "resolved": "https://registry.npmjs.org/@lvce-editor/assert/-/assert-1.9.0.tgz",
@@ -15808,7 +15831,9 @@
       "version": "0.0.0-dev",
       "license": "MIT",
       "devDependencies": {
-        "@lvce-editor/test-with-playwright": "^22.29.0"
+        "@lvce-editor/api": "^8.84.0",
+        "@lvce-editor/test-with-playwright": "^22.29.0",
+        "esbuild": "^0.28.2"
       }
     },
     "packages/server": {
diff --git a/package.json b/package.json
index f8a80323..8460f6fb 100644
--- a/package.json
+++ b/package.json
@@ -26,6 +26,11 @@
     "trigger-ci-branches": "bash packages/build/trigger-ci-branches.sh",
     "type-check": "tsc -b"
   },
+  "knip": {
+    "ignoreDependencies": [
+      "@lvce-editor/api"
+    ]
+  },
   "prettier": {
     "semi": false,
     "singleQuote": true,
diff --git a/packages/diff-view/src/parts/ReadFile/ReadFile.ts b/packages/diff-view/src/parts/ReadFile/ReadFile.ts
index 0acc1be7..f97c7dc3 100644
--- a/packages/diff-view/src/parts/ReadFile/ReadFile.ts
+++ b/packages/diff-view/src/parts/ReadFile/ReadFile.ts
@@ -7,15 +7,26 @@ interface FileSystemProviderResult {
   readonly result?: unknown
 }
 
+interface BlobLike {
+  readonly text: () => Promise<string>
+}
+
+const isBlobLike = (value: unknown): value is BlobLike => {
+  return typeof value === 'object' && value !== null && Object.prototype.toString.call(value) === '[object Blob]' && 'text' in value && typeof value.text === 'function'
+}
+
 const readExtensionFile = async (protocol: string, uri: string): Promise<string> => {
   const response = (await ExtensionManagementWorker.invoke('Extensions.executeFileSystemProviderReadFile', protocol, uri)) as FileSystemProviderResult
   if (!response.found) {
     throw new Error(`no file system provider found for ${protocol}`)
   }
-  if (typeof response.result !== 'string') {
-    throw new TypeError(`expected file system provider ${protocol} to return a string`)
+  if (typeof response.result === 'string') {
+    return response.result
+  }
+  if (isBlobLike(response.result)) {
+    return response.result.text()
   }
-  return response.result
+  throw new TypeError(`expected file system provider ${protocol} to return a string or Blob`)
 }
 
 export const readFile = async (uri: string): Promise<string> => {
diff --git a/packages/diff-view/test/ReadFile.test.ts b/packages/diff-view/test/ReadFile.test.ts
index 3d6ad1fc..ab7dc8da 100644
--- a/packages/diff-view/test/ReadFile.test.ts
+++ b/packages/diff-view/test/ReadFile.test.ts
@@ -2,6 +2,11 @@ import { expect, test } from '@jest/globals'
 import { ExtensionManagementWorker, FileSystemWorker, RendererWorker } from '@lvce-editor/rpc-registry'
 import { readFile } from '../src/parts/ReadFile/ReadFile.ts'
 
+const createBlob = (parts: readonly string[]): unknown => {
+  const BlobConstructor = (globalThis as unknown as { readonly Blob: new (parts: readonly string[]) => unknown }).Blob
+  return new BlobConstructor(parts)
+}
+
 test('readFile returns empty content for untitled uri', async (): Promise<void> => {
   const result = await readFile('untitled://Untitled-1')
 
@@ -80,6 +85,36 @@ test('readFile reads extension protocols through extension management worker', a
   ])
 })
 
+test('readFile decodes Blob content from extension file system providers', async (): Promise<void> => {
+  ExtensionManagementWorker.registerMockRpc({
+    'Extensions.executeFileSystemProviderReadFile': async (): Promise<unknown> => ({
+      found: true,
+      result: createBlob(['before 😀\nafter']),
+    }),
+  })
+
+  await expect(readFile('remote-ssh:///workspace/file.txt')).resolves.toBe('before 😀\nafter')
+})
+
+test('readFile returns empty content from an empty Blob extension provider', async (): Promise<void> => {
+  ExtensionManagementWorker.registerMockRpc({
+    'Extensions.executeFileSystemProviderReadFile': async (): Promise<unknown> => ({
+      found: true,
+      result: createBlob([]),
+    }),
+  })
+
+  await expect(readFile('remote-ssh:///workspace/empty.txt')).resolves.toBe('')
+})
+
+test('readFile rejects invalid extension file system provider results', async (): Promise<void> => {
+  ExtensionManagementWorker.registerMockRpc({
+    'Extensions.executeFileSystemProviderReadFile': async (): Promise<unknown> => ({ found: true, result: { content: 'not text' } }),
+  })
+
+  await expect(readFile('remote-ssh:///workspace/file.txt')).rejects.toThrow('expected file system provider remote-ssh to return a string or Blob')
+})
+
 test('readFile rejects when no isolated extension provides the protocol', async (): Promise<void> => {
   ExtensionManagementWorker.registerMockRpc({
     'Extensions.executeFileSystemProviderReadFile': async (): Promise<unknown> => ({ found: false }),
diff --git a/packages/e2e/fixtures/blob-file-system/extension.json b/packages/e2e/fixtures/blob-file-system/extension.json
new file mode 100644
index 00000000..b8f5c92b
--- /dev/null
+++ b/packages/e2e/fixtures/blob-file-system/extension.json
@@ -0,0 +1,10 @@
+{
+  "id": "test.blob-file-system",
+  "isolated": true,
+  "fileSystemProviders": [
+    {
+      "id": "blob-fixture"
+    }
+  ],
+  "browser": ".tmp/main.js"
+}
diff --git a/packages/e2e/fixtures/blob-file-system/main.js b/packages/e2e/fixtures/blob-file-system/main.js
new file mode 100644
index 00000000..e3464c4f
--- /dev/null
+++ b/packages/e2e/fixtures/blob-file-system/main.js
@@ -0,0 +1,18 @@
+import { activate as activateExtensionApi, registerFileSystemProvider } from '@lvce-editor/api'
+
+const fileSystemProvider = {
+  id: 'blob-fixture',
+  async readFile(uri) {
+    if (uri.endsWith('/empty.txt')) {
+      return new Blob([])
+    }
+    return new Blob(['remote 😀 content'])
+  },
+}
+
+const main = async () => {
+  await activateExtensionApi()
+  registerFileSystemProvider(fileSystemProvider)
+}
+
+main().catch(console.error)
diff --git a/packages/e2e/package.json b/packages/e2e/package.json
index 8c8f0661..64bf3b62 100644
--- a/packages/e2e/package.json
+++ b/packages/e2e/package.json
@@ -5,15 +5,18 @@
   "type": "module",
   "main": "index.js",
   "scripts": {
-    "e2e": "test-with-playwright --only-extension=. --test-path=. --reuse-page",
-    "e2e:firefox": "test-with-playwright --only-extension=. --test-path=. --browser=firefox --reuse-page",
-    "e2e:firefox:headless": "test-with-playwright --only-extension=. --test-path=. --browser=firefox --headless --reuse-page",
-    "e2e:headless": "test-with-playwright --only-extension=. --test-path=. --headless --reuse-page",
-    "e2e:webkit": "test-with-playwright --only-extension=. --test-path=. --browser=webkit --reuse-page",
-    "e2e:webkit:headless": "test-with-playwright --only-extension=. --test-path=. --browser=webkit --headless --reuse-page",
+    "e2e": "npm run e2e:prepare && test-with-playwright --only-extension=. --test-path=. --reuse-page",
+    "e2e:firefox": "npm run e2e:prepare && test-with-playwright --only-extension=. --test-path=. --browser=firefox --reuse-page",
+    "e2e:firefox:headless": "npm run e2e:prepare && test-with-playwright --only-extension=. --test-path=. --browser=firefox --headless --reuse-page",
+    "e2e:headless": "npm run e2e:prepare && test-with-playwright --only-extension=. --test-path=. --headless --reuse-page",
+    "e2e:prepare": "node ./scripts/prepare-extension.js",
+    "e2e:webkit": "npm run e2e:prepare && test-with-playwright --only-extension=. --test-path=. --browser=webkit --reuse-page",
+    "e2e:webkit:headless": "npm run e2e:prepare && test-with-playwright --only-extension=. --test-path=. --browser=webkit --headless --reuse-page",
     "type-check": "tsc"
   },
   "devDependencies": {
-    "@lvce-editor/test-with-playwright": "^22.29.0"
+    "@lvce-editor/api": "^8.84.0",
+    "@lvce-editor/test-with-playwright": "^22.29.0",
+    "esbuild": "^0.28.2"
   }
 }
diff --git a/packages/e2e/scripts/prepare-extension.js b/packages/e2e/scripts/prepare-extension.js
new file mode 100644
index 00000000..d8a6c164
--- /dev/null
+++ b/packages/e2e/scripts/prepare-extension.js
@@ -0,0 +1,19 @@
+import { mkdir, rm } from 'node:fs/promises'
+import { dirname, join } from 'node:path'
+import { fileURLToPath } from 'node:url'
+import { build } from 'esbuild'
+
+const packageRoot = join(dirname(fileURLToPath(import.meta.url)), '..')
+const extensionDirectory = join(packageRoot, 'fixtures', 'blob-file-system')
+const temporaryDirectory = join(extensionDirectory, '.tmp')
+
+await rm(temporaryDirectory, { force: true, recursive: true })
+await mkdir(temporaryDirectory, { recursive: true })
+await build({
+  bundle: true,
+  entryPoints: [join(extensionDirectory, 'main.js')],
+  external: ['electron', 'node:*'],
+  format: 'esm',
+  outfile: join(temporaryDirectory, 'main.js'),
+  platform: 'browser',
+})
diff --git a/packages/e2e/src/diff.extension-blob-file-system-provider.ts b/packages/e2e/src/diff.extension-blob-file-system-provider.ts
new file mode 100644
index 00000000..9bcfd00f
--- /dev/null
+++ b/packages/e2e/src/diff.extension-blob-file-system-provider.ts
@@ -0,0 +1,16 @@
+import type { Test } from '@lvce-editor/test-with-playwright'
+
+export const name = 'diff.extension-blob-file-system-provider'
+
+export const test: Test = async ({ DiffView, expect, Extension, FileSystem, Locator, Workspace }) => {
+  const tmpDir = await FileSystem.getTmpDir()
+  await Workspace.setPath(tmpDir)
+  await Extension.addWebExtension(import.meta.resolve('../fixtures/blob-file-system'))
+  await DiffView.open('data://before content', 'blob-fixture:///workspace/file.txt')
+
+  const leftRows = Locator('.DiffEditorContentLeft .DiffEditorRows')
+  const rightRowsOrError = Locator('.DiffEditorContentRight .DiffEditorRows, .DiffEditorContentRight .DiffEditorErrorMessage')
+
+  await expect(leftRows).toHaveText('before content')
+  await expect(rightRowsOrError).toHaveText('remote 😀 content')
+}