A system and method for virtualizing file extensions. The system includes a system environment, one or more virtual environments, and a shell extension. The shell extension detects a request to perform an action on a file in the system environment. The file has an associated file extension. The system environment includes applications for opening files. In response to detecting the request, the shell extension determines that the action is to open the file in the system environment and the file extension is not associated with any of the applications in the system environment. The shell extension queries the virtual environments to find an association between the file extension and an application, identifies at least one of the virtual environments in which the extension is associated with an application, and opens the file in a selected virtual environment.