diff --git a/src/vs/workbench/parts/extensions/browser/extensionsStatus.ts b/src/vs/workbench/parts/extensions/browser/extensionsStatus.ts
deleted file mode 100644
index 78d5f7be002c13b8ccc772f48d8b2ca0dbba42bb..0000000000000000000000000000000000000000
--- a/src/vs/workbench/parts/extensions/browser/extensionsStatus.ts
+++ /dev/null
@@ -1,61 +0,0 @@
-/*---------------------------------------------------------------------------------------------
- *  Copyright (c) Microsoft Corporation. All rights reserved.
- *  Licensed under the MIT License. See License.txt in the project root for license information.
- *--------------------------------------------------------------------------------------------*/
-
-import * as DOM from 'vs/base/browser/dom';
-import { IStatusbarItem } from 'vs/workbench/browser/parts/statusbar/statusbar';
-import { Disposable, toDisposable, IDisposable } from 'vs/base/common/lifecycle';
-import { IExtensionManagementService, InstallExtensionEvent, DidInstallExtensionEvent } from 'vs/platform/extensionManagement/common/extensionManagement';
-import { localize } from 'vs/nls';
-import { getIdFromLocalExtensionId } from 'vs/platform/extensionManagement/common/extensionManagementUtil';
-
-export class InstallingStatusItem extends Disposable implements IStatusbarItem {
-
-	private statusElement: HTMLElement;
-	private installingExtensions: string[] = [];
-
-	constructor(
-		@IExtensionManagementService extensionManagementService: IExtensionManagementService
-	) {
-		super();
-		this.statusElement = DOM.$('div');
-		this.statusElement.style.display = 'none';
-
-		this._register(extensionManagementService.onInstallExtension(e => this.onInstallingExtension(e)));
-		this._register(extensionManagementService.onDidInstallExtension(e => this.onDidInstallExtension(e)));
-	}
-
-	render(parent: HTMLElement): IDisposable {
-		parent.appendChild(this.statusElement);
-		return toDisposable(() => this.dispose());
-	}
-
-	private onInstallingExtension(e: InstallExtensionEvent): void {
-		this.statusElement.style.display = 'block';
-		this.installingExtensions.push(getIdFromLocalExtensionId(e.identifier.id));
-
-		if (this.installingExtensions.length === 1) {
-			this.statusElement.textContent = localize('installingExtension', "Installing {0}", this.installingExtensions[0]);
-		} else {
-			this.statusElement.textContent = localize('installingExtensions', "Installing {0} extensions", this.installingExtensions.length);
-		}
-	}
-
-	private onDidInstallExtension(e: DidInstallExtensionEvent): void {
-		const index = this.installingExtensions.indexOf(getIdFromLocalExtensionId(e.identifier.id));
-		if (index !== -1) {
-			this.installingExtensions.splice(index, 1);
-			if (this.installingExtensions.length === 0) {
-				this.statusElement.textContent = '';
-				this.statusElement.style.display = 'none';
-			} else if (this.installingExtensions.length === 1) {
-				this.statusElement.textContent = localize('installingExtension', "Installing {0}", this.installingExtensions[0]);
-			} else {
-				this.statusElement.textContent = localize('installingExtensions', "Installing {0} extensions", this.installingExtensions.length);
-			}
-
-		}
-	}
-
-}
\ No newline at end of file
diff --git a/src/vs/workbench/parts/extensions/electron-browser/extensions.contribution.ts b/src/vs/workbench/parts/extensions/electron-browser/extensions.contribution.ts
index 52a5da3d7a47881271870e1a18f2cdf4431204e3..c5e6add7d7724e412e23334f9325ebb24c27f70d 100644
--- a/src/vs/workbench/parts/extensions/electron-browser/extensions.contribution.ts
+++ b/src/vs/workbench/parts/extensions/electron-browser/extensions.contribution.ts
@@ -43,8 +43,6 @@ import { LifecyclePhase } from 'vs/platform/lifecycle/common/lifecycle';
 import { RuntimeExtensionsEditor, RuntimeExtensionsInput, ShowRuntimeExtensionsAction, IExtensionHostProfileService } from 'vs/workbench/parts/extensions/electron-browser/runtimeExtensionsEditor';
 import { EditorInput, IEditorInputFactory, IEditorInputFactoryRegistry, Extensions as EditorInputExtensions } from 'vs/workbench/common/editor';
 import { ExtensionHostProfileService } from 'vs/workbench/parts/extensions/electron-browser/extensionProfileService';
-import { IStatusbarRegistry, Extensions as StatusbarExtensions, StatusbarItemDescriptor, StatusbarAlignment } from 'vs/workbench/browser/parts/statusbar/statusbar';
-import { InstallingStatusItem } from 'vs/workbench/parts/extensions/browser/extensionsStatus';
 
 // Singletons
 registerSingleton(IExtensionGalleryService, ExtensionGalleryService);
@@ -224,8 +222,4 @@ CommandsRegistry.registerCommand('_extensions.manage', (accessor: ServicesAccess
 	if (extension.length === 1) {
 		extensionService.open(extension[0]).done(null, errors.onUnexpectedError);
 	}
-});
-
-
-let statusbarRegistry = <IStatusbarRegistry>Registry.as(StatusbarExtensions.Statusbar);
-statusbarRegistry.registerStatusbarItem(new StatusbarItemDescriptor(InstallingStatusItem, StatusbarAlignment.LEFT, 50 /* Medium Priority */));
\ No newline at end of file
+});
\ No newline at end of file
diff --git a/src/vs/workbench/parts/extensions/node/extensionsWorkbenchService.ts b/src/vs/workbench/parts/extensions/node/extensionsWorkbenchService.ts
index 2c9ffe5c97f809813f7ead815dac55cb1030c4d2..aa3991b96baed03492d7e6dc4192b68fd411c72e 100644
--- a/src/vs/workbench/parts/extensions/node/extensionsWorkbenchService.ts
+++ b/src/vs/workbench/parts/extensions/node/extensionsWorkbenchService.ts
@@ -35,6 +35,7 @@ import { IURLService } from 'vs/platform/url/common/url';
 import { ExtensionsInput } from 'vs/workbench/parts/extensions/common/extensionsInput';
 import product from 'vs/platform/node/product';
 import { ILogService } from 'vs/platform/log/common/log';
+import { IProgressService2, ProgressLocation } from 'vs/platform/progress/common/progress';
 
 interface IExtensionStateProvider {
 	(extension: Extension): ExtensionState;
@@ -345,7 +346,8 @@ export class ExtensionsWorkbenchService implements IExtensionsWorkbenchService {
 		@IURLService urlService: IURLService,
 		@IExtensionEnablementService private extensionEnablementService: IExtensionEnablementService,
 		@IWindowService private windowService: IWindowService,
-		@ILogService private logService: ILogService
+		@ILogService private logService: ILogService,
+		@IProgressService2 private progressService: IProgressService2
 	) {
 		this.stateProvider = ext => this.getExtensionState(ext);
 
@@ -536,7 +538,11 @@ export class ExtensionsWorkbenchService implements IExtensionsWorkbenchService {
 
 	install(extension: string | IExtension): TPromise<void> {
 		if (typeof extension === 'string') {
-			return this.extensionService.install(extension);
+			return this.progressService.withProgress({
+				location: ProgressLocation.Window,
+				title: nls.localize('installingExtension', 'Installing extension from VSIX...'),
+				tooltip: `${extension}`
+			}, () => this.extensionService.install(extension));
 		}
 
 		if (!(extension instanceof Extension)) {