diff --git a/jupyter_server/extension/handler.py b/jupyter_server/extension/handler.py
index 31377cc367..4285c415b0 100644
--- a/jupyter_server/extension/handler.py
+++ b/jupyter_server/extension/handler.py
@@ -5,6 +5,7 @@
 from logging import Logger
 from typing import TYPE_CHECKING, Any, cast
 
+from jinja2 import Template
 from jinja2.exceptions import TemplateNotFound
 
 from jupyter_server.base.handlers import FileFindHandler
@@ -21,13 +22,14 @@ class ExtensionHandlerJinjaMixin:
     template rendering.
     """
 
-    def get_template(self, name: str) -> str:
+    def get_template(self, name: str) -> Template:
         """Return the jinja template object for a given name"""
         try:
             env = f"{self.name}_jinja2_env"  # type:ignore[attr-defined]
-            return cast(str, self.settings[env].get_template(name))  # type:ignore[attr-defined]
+            template = cast(Template, self.settings[env].get_template(name))  # type:ignore[attr-defined]
+            return template
         except TemplateNotFound:
-            return cast(str, super().get_template(name))  # type:ignore[misc]
+            return cast(Template, super().get_template(name))  # type:ignore[misc]
 
 
 class ExtensionHandlerMixin:
@@ -81,6 +83,20 @@ def server_config(self) -> Config:
     def base_url(self) -> str:
         return cast(str, self.settings.get("base_url", "/"))
 
+    def render_template(self, name: str, **ns) -> str:
+        """Override render template to handle static_paths
+
+        If render_template is called with a template from the base environment
+        (e.g. default error pages)
+        make sure our extension-specific static_url is _not_ used.
+        """
+        template = cast(Template, self.get_template(name))  # type:ignore[attr-defined]
+        ns.update(self.template_namespace)  # type:ignore[attr-defined]
+        if template.environment is self.settings["jinja2_env"]:
+            # default template environment, use default static_url
+            ns["static_url"] = super().static_url  # type:ignore[misc]
+        return cast(str, template.render(**ns))
+
     @property
     def static_url_prefix(self) -> str:
         return self.extensionapp.static_url_prefix
diff --git a/tests/extension/mockextensions/__init__.py b/tests/extension/mockextensions/__init__.py
index a25d9fc670..2c01cfe266 100644
--- a/tests/extension/mockextensions/__init__.py
+++ b/tests/extension/mockextensions/__init__.py
@@ -2,7 +2,7 @@
 to load in various tests.
 """
 
-from .app import MockExtensionApp
+from .app import MockExtensionApp, MockExtensionNoTemplateApp
 
 
 # Function that makes these extensions discoverable
@@ -13,6 +13,10 @@ def _jupyter_server_extension_points():
             "module": "tests.extension.mockextensions.app",
             "app": MockExtensionApp,
         },
+        {
+            "module": "tests.extension.mockextensions.app",
+            "app": MockExtensionNoTemplateApp,
+        },
         {"module": "tests.extension.mockextensions.mock1"},
         {"module": "tests.extension.mockextensions.mock2"},
         {"module": "tests.extension.mockextensions.mock3"},
diff --git a/tests/extension/mockextensions/app.py b/tests/extension/mockextensions/app.py
index c4f7af099c..5546195593 100644
--- a/tests/extension/mockextensions/app.py
+++ b/tests/extension/mockextensions/app.py
@@ -4,6 +4,7 @@
 
 from jupyter_events import EventLogger
 from jupyter_events.schema_registry import SchemaRegistryException
+from tornado import web
 from traitlets import List, Unicode
 
 from jupyter_server.base.handlers import JupyterHandler
@@ -44,6 +45,11 @@ def get(self):
         self.write(self.render_template("index.html"))
 
 
+class MockExtensionErrorHandler(ExtensionHandlerMixin, JupyterHandler):
+    def get(self):
+        raise web.HTTPError(418)
+
+
 class MockExtensionApp(ExtensionAppJinjaMixin, ExtensionApp):
     name = "mockextension"
     template_paths: List[str] = List().tag(config=True)  # type:ignore[assignment]
@@ -51,7 +57,12 @@ class MockExtensionApp(ExtensionAppJinjaMixin, ExtensionApp):
     mock_trait = Unicode("mock trait", config=True)
     loaded = False
 
-    serverapp_config = {"jpserver_extensions": {"tests.extension.mockextensions.mock1": True}}
+    serverapp_config = {
+        "jpserver_extensions": {
+            "tests.extension.mockextensions.mock1": True,
+            "tests.extension.mockextensions.app.mockextension_notemplate": True,
+        }
+    }
 
     @staticmethod
     def get_extension_package():
@@ -69,6 +80,20 @@ def initialize_settings(self):
     def initialize_handlers(self):
         self.handlers.append(("/mock", MockExtensionHandler))
         self.handlers.append(("/mock_template", MockExtensionTemplateHandler))
+        self.handlers.append(("/mock_error_template", MockExtensionErrorHandler))
+        self.loaded = True
+
+
+class MockExtensionNoTemplateApp(ExtensionApp):
+    name = "mockextension_notemplate"
+    loaded = False
+
+    @staticmethod
+    def get_extension_package():
+        return "tests.extension.mockextensions"
+
+    def initialize_handlers(self):
+        self.handlers.append(("/mock_error_notemplate", MockExtensionErrorHandler))
         self.loaded = True
 
 
diff --git a/tests/extension/test_app.py b/tests/extension/test_app.py
index 965fe2ca16..ae324756ec 100644
--- a/tests/extension/test_app.py
+++ b/tests/extension/test_app.py
@@ -171,12 +171,14 @@ async def _stop(*args):
         "Shutting down 2 extensions",
         "jupyter_server_terminals | extension app 'jupyter_server_terminals' stopping",
         f"{extension_name} | extension app 'mockextension' stopping",
+        f"{extension_name} | extension app 'mockextension_notemplate' stopping",
         "jupyter_server_terminals | extension app 'jupyter_server_terminals' stopped",
         f"{extension_name} | extension app 'mockextension' stopped",
+        f"{extension_name} | extension app 'mockextension_notemplate' stopped",
     }
 
     # check the shutdown method was called twice
-    assert calls == 2
+    assert calls == 3
 
 
 async def test_events(jp_serverapp, jp_fetch):
diff --git a/tests/extension/test_handler.py b/tests/extension/test_handler.py
index af4d0568ec..050f734eb4 100644
--- a/tests/extension/test_handler.py
+++ b/tests/extension/test_handler.py
@@ -1,4 +1,7 @@
+from html.parser import HTMLParser
+
 import pytest
+from tornado.httpclient import HTTPClientError
 
 
 @pytest.fixture
@@ -118,3 +121,69 @@ async def test_base_url(jp_fetch, jp_server_config, jp_base_url):
     assert r.code == 200
     body = r.body.decode()
     assert "mock static content" in body
+
+
+class StylesheetFinder(HTMLParser):
+    """Minimal HTML parser to find iframe.src attr"""
+
+    def __init__(self):
+        super().__init__()
+        self.stylesheets = []
+        self.body_chunks = []
+        self.in_head = False
+        self.in_body = False
+        self.in_script = False
+
+    def handle_starttag(self, tag, attrs):
+        tag = tag.lower()
+        if tag == "head":
+            self.in_head = True
+        elif tag == "body":
+            self.in_body = True
+        elif tag == "script":
+            self.in_script = True
+        elif self.in_head and tag.lower() == "link":
+            attr_dict = dict(attrs)
+            if attr_dict.get("rel", "").lower() == "stylesheet":
+                self.stylesheets.append(attr_dict["href"])
+
+    def handle_endtag(self, tag):
+        if tag == "head":
+            self.in_head = False
+        if tag == "body":
+            self.in_body = False
+        if tag == "script":
+            self.in_script = False
+
+    def handle_data(self, data):
+        if self.in_body and not self.in_script:
+            data = data.strip()
+            if data:
+                self.body_chunks.append(data)
+
+
+def find_stylesheets_body(html):
+    """Find the href= attr of stylesheets
+
+    and body text of an HTML document
+
+    stylesheets are used to test static_url prefix
+    """
+    finder = StylesheetFinder()
+    finder.feed(html)
+    return (finder.stylesheets, "\n".join(finder.body_chunks))
+
+
+@pytest.mark.parametrize("error_url", ["mock_error_template", "mock_error_notemplate"])
+async def test_error_render(jp_fetch, jp_serverapp, jp_base_url, error_url):
+    with pytest.raises(HTTPClientError) as e:
+        await jp_fetch(error_url, method="GET")
+    r = e.value.response
+    assert r.code == 418
+    assert r.headers["Content-Type"] == "text/html"
+    html = r.body.decode("utf8")
+    stylesheets, body = find_stylesheets_body(html)
+    static_prefix = f"{jp_base_url}static/"
+    assert stylesheets
+    assert all(stylesheet.startswith(static_prefix) for stylesheet in stylesheets)
+    assert str(r.code) in body