diff --git a/toolkit/mozapps/extensions/internal/XPIProviderUtils.js b/toolkit/mozapps/extensions/internal/XPIProviderUtils.js
index dcfb702d9a96..e58e4050529c 100644
--- a/toolkit/mozapps/extensions/internal/XPIProviderUtils.js
+++ b/toolkit/mozapps/extensions/internal/XPIProviderUtils.js
@@ -1627,10 +1627,12 @@ this.XPIDatabaseReconcile = {
 
       // Remove the invalid add-on from the install location if the install
       // location isn't locked, no restart will be necessary
-      if (!aInstallLocation.locked)
-        aInstallLocation.uninstallAddon(aId);
-      else
+      if (aInstallLocation.isLinkedAddon(aId))
+        logger.warn("Not uninstalling invalid item because it is a proxy file");
+      else if (aInstallLocation.locked)
         logger.warn("Could not uninstall invalid item from locked install location");
+      else
+        aInstallLocation.uninstallAddon(aId);
       return null;
     }
 
diff --git a/toolkit/mozapps/extensions/test/xpcshell/data/test_proxy/bootstrap.js b/toolkit/mozapps/extensions/test/xpcshell/data/test_proxy/bootstrap.js
new file mode 100644
index 000000000000..1666f2972c37
--- /dev/null
+++ b/toolkit/mozapps/extensions/test/xpcshell/data/test_proxy/bootstrap.js
@@ -0,0 +1 @@
+Components.utils.import("resource://xpcshell-data/BootstrapMonitor.jsm").monitor(this);
diff --git a/toolkit/mozapps/extensions/test/xpcshell/head_addons.js b/toolkit/mozapps/extensions/test/xpcshell/head_addons.js
index efd5b4ff7c89..44f1d6775afb 100644
--- a/toolkit/mozapps/extensions/test/xpcshell/head_addons.js
+++ b/toolkit/mozapps/extensions/test/xpcshell/head_addons.js
@@ -2116,3 +2116,36 @@ var promiseConsoleOutput = Task.async(function*(aTask) {
     Services.console.unregisterListener(listener);
   }
 });
+
+/**
+ * Creates an extension proxy file.
+ * See: https://developer.mozilla.org/en-US/Add-ons/Setting_up_extension_development_environment#Firefox_extension_proxy_file
+ * @param   aDir
+ *          The directory to add the proxy file to.
+ * @param   aAddon
+ *          An nsIFile for the add-on file that this is a proxy file for.
+ * @param   aId
+ *          A string to use for the add-on ID.
+ * @return  An nsIFile for the proxy file.
+ */
+function writeProxyFileToDir(aDir, aAddon, aId) {
+  let dir = aDir.clone();
+
+  if (!dir.exists())
+    dir.create(AM_Ci.nsIFile.DIRECTORY_TYPE, FileUtils.PERMS_DIRECTORY);
+
+  let file = dir.clone();
+  file.append(aId);
+
+  let addonPath = aAddon.path;
+
+  let fos = AM_Cc["@mozilla.org/network/file-output-stream;1"].
+            createInstance(AM_Ci.nsIFileOutputStream);
+  fos.init(file,
+           FileUtils.MODE_WRONLY | FileUtils.MODE_CREATE | FileUtils.MODE_TRUNCATE,
+           FileUtils.PERMS_FILE, 0);
+  fos.write(addonPath, addonPath.length);
+  fos.close();
+
+  return file;
+}
diff --git a/toolkit/mozapps/extensions/test/xpcshell/test_proxy.js b/toolkit/mozapps/extensions/test/xpcshell/test_proxy.js
new file mode 100644
index 000000000000..012a8fa5f211
--- /dev/null
+++ b/toolkit/mozapps/extensions/test/xpcshell/test_proxy.js
@@ -0,0 +1,106 @@
+/* Any copyright is dedicated to the Public Domain.
+ * http://creativecommons.org/publicdomain/zero/1.0/
+ */
+
+const ID = "proxy1@tests.mozilla.org";
+
+createAppInfo("xpcshell@tests.mozilla.org", "XPCShell", "1", "42");
+startupManager();
+
+BootstrapMonitor.init();
+
+// Ensure that a proxy file to an add-on with a valid manifest works.
+add_task(function*() {
+  let tempdir = gTmpD.clone();
+  writeInstallRDFToDir({
+    id: ID,
+    version: "1.0",
+    bootstrap: true,
+    unpack: true,
+    targetApplications: [{
+          id: "xpcshell@tests.mozilla.org",
+      minVersion: "1",
+      maxVersion: "1"
+        }],
+    name: "Test Bootstrap 1 (proxy)",
+  }, tempdir, ID, "bootstrap.js");
+
+  let unpackedAddon = tempdir.clone();
+  unpackedAddon.append(ID);
+  do_get_file("data/test_proxy/bootstrap.js")
+    .copyTo(unpackedAddon, "bootstrap.js");
+
+  // create proxy file in profile/extensions dir
+  let extensionsDir = gProfD.clone();
+  extensionsDir.append("extensions");
+  let proxyFile = writeProxyFileToDir(extensionsDir, unpackedAddon, ID);
+
+  yield promiseRestartManager();
+
+  BootstrapMonitor.checkAddonInstalled(ID, "1.0");
+  BootstrapMonitor.checkAddonStarted(ID, "1.0");
+
+  let addon = yield promiseAddonByID(ID);
+
+  do_check_neq(addon, null);
+  do_check_eq(addon.version, "1.0");
+  do_check_eq(addon.name, "Test Bootstrap 1 (proxy)");
+  do_check_true(addon.isCompatible);
+  do_check_false(addon.appDisabled);
+  do_check_true(addon.isActive);
+  do_check_eq(addon.type, "extension");
+  do_check_eq(addon.signedState, mozinfo.addon_signing ? AddonManager.SIGNEDSTATE_MISSING : AddonManager.SIGNEDSTATE_NOT_REQUIRED);
+
+  do_check_true(proxyFile.exists());
+
+  addon.uninstall();
+  unpackedAddon.remove(true);
+
+  yield promiseRestartManager();
+});
+
+
+// Ensure that a proxy file to an add-on is not removed even
+// if the manifest file is invalid. See bug 1195353.
+add_task(function*() {
+  let tempdir = gTmpD.clone();
+
+  // use a mismatched ID to make this install.rdf invalid
+  writeInstallRDFToDir({
+    id: "bad-proxy1@tests.mozilla.org",
+    version: "1.0",
+    bootstrap: true,
+    unpack: true,
+    targetApplications: [{
+          id: "xpcshell@tests.mozilla.org",
+      minVersion: "1",
+      maxVersion: "1"
+        }],
+    name: "Test Bootstrap 1 (proxy)",
+  }, tempdir, ID, "bootstrap.js");
+
+  let unpackedAddon = tempdir.clone();
+  unpackedAddon.append(ID);
+  do_get_file("data/test_proxy/bootstrap.js")
+    .copyTo(unpackedAddon, "bootstrap.js");
+
+  // create proxy file in profile/extensions dir
+  let extensionsDir = gProfD.clone();
+  extensionsDir.append("extensions");
+  let proxyFile = writeProxyFileToDir(extensionsDir, unpackedAddon, ID);
+
+  yield promiseRestartManager();
+
+  BootstrapMonitor.checkAddonNotInstalled(ID, "1.0");
+  BootstrapMonitor.checkAddonNotStarted(ID, "1.0");
+
+  let addon = yield promiseAddonByID(ID);
+  do_check_eq(addon, null);
+
+  do_check_true(proxyFile.exists());
+
+  unpackedAddon.remove(true);
+  proxyFile.remove(true);
+
+  yield promiseRestartManager();
+});
diff --git a/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini b/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini
index b47c1125cf28..c713e8f27bb0 100644
--- a/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini
+++ b/toolkit/mozapps/extensions/test/xpcshell/xpcshell.ini
@@ -30,6 +30,7 @@ skip-if = appname != "firefox"
 [test_XPIcancel.js]
 [test_XPIStates.js]
 [test_temporary.js]
+[test_proxy.js]
 
 
 [include:xpcshell-shared.ini]