--- a/browser/components/extensions/schemas/urlbar.json
+++ b/browser/components/extensions/schemas/urlbar.json
@@ -179,17 +179,25 @@
         "description": "An object containing the path to an icon, the title, button title, and link title to set on the contextual tip.",
         "properties": {
           "icon": {
             "type": "object",
             "optional": true,
             "description": "Specifies the default icon and theme icons",
             "properties": {
               "defaultIcon": {
-                "$ref": "manifest.IconPath",
+                "choices": [
+                  {
+                    "type": "string",
+                    "description": "A URL to an image (e.g. favicon's URL)"
+                  },
+                  {
+                    "$ref": "manifest.IconPath"
+                  }
+                ],
                 "description": "Specifies the default icon to use in the contextual tip."
               },
               "themeIcons": {
                 "type": "array",
                 "optional": true,
                 "minItems": 1,
                 "items": { "$ref": "manifest.ThemeIcons" },
                 "description": "Specifies icons to use for dark and light themes. Each item in the array is for a specified icon size."

--- a/browser/components/extensions/test/browser/browser_ext_urlbar_contextual_tip.js
+++ b/browser/components/extensions/test/browser/browser_ext_urlbar_contextual_tip.js
@@ -478,29 +478,67 @@ add_task(async () => {
   await add_onclick_to_element("link", true);
 });
 
 /**
  * The tests for below are for the contextual_tip's icon support.
  */
 
 /**
- * Tests that the contextual tip's default theme icon can be set.
+ * Tests that the contextual tip's default theme icon can be set
+ * to a favicon's url.
+ */
+add_task(async function test_set_icon_given_favicon() {
+  let win = await BrowserTestUtils.openNewBrowserWindow();
+
+  let ext = ExtensionTestUtils.loadExtension({
+    isPrivileged: true,
+    manifest: {
+      permissions: ["urlbar"],
+    },
+    background() {
+      browser.urlbar.contextualTip.set({
+        icon: { defaultIcon: "data:image/png;base64,SFRUUCBpY29uIGRhdGE=" },
+        title: "the title is required",
+      });
+      browser.test.sendMessage(
+        "ready",
+        browser.runtime.getURL("data:image/png;base64,SFRUUCBpY29uIGRhdGE=")
+      );
+    },
+  });
+
+  await ext.startup();
+  await BrowserTestUtils.waitForCondition(() =>
+    UrlbarTestUtils.isPopupOpen(win)
+  );
+  const iconURL = await ext.awaitMessage("ready");
+  const backgroundImageProperty = `url("${iconURL}")`;
+  const iconElement = win.gURLBar.view.contextualTip._elements.icon;
+  Assert.equal(
+    backgroundImageProperty,
+    win.getComputedStyle(iconElement).backgroundImage
+  );
+
+  await ext.unload();
+  await BrowserTestUtils.closeWindow(win);
+});
+
+/**
+ * Tests that the contextual tip's default theme icon can be set
+ * to the relative path of an icon.
  */
 add_task(async function test_set_icon_given_path() {
   let win = await BrowserTestUtils.openNewBrowserWindow();
 
   let ext = ExtensionTestUtils.loadExtension({
     isPrivileged: true,
     manifest: {
       permissions: ["urlbar"],
     },
-    files: {
-      "icons/icon.png": imageBuffer,
-    },
     background() {
       browser.urlbar.contextualTip.set({
         icon: { defaultIcon: "icons/icon.png" },
         title: "the title is required",
       });
       browser.test.sendMessage(
         "ready",
         browser.runtime.getURL("icons/icon.png")
@@ -536,19 +574,16 @@ add_task(async function test_set_icon_gi
   let ext = ExtensionTestUtils.loadExtension({
     isPrivileged: true,
     manifest: {
       permissions: ["urlbar"],
       icons: {
         "19": "extension_icon.png",
       },
     },
-    files: {
-      "extension_icon.png": imageBuffer,
-    },
     background() {
       browser.urlbar.contextualTip.set({
         title: "the title is required",
       });
       browser.test.sendMessage(
         "ready",
         browser.runtime.getURL("extension_icon.png")
       );
@@ -579,21 +614,16 @@ add_task(async function test_set_icon_gi
 add_task(async function test_themeIcons() {
   let win = await BrowserTestUtils.openNewBrowserWindow();
 
   let ext = ExtensionTestUtils.loadExtension({
     isPrivileged: true,
     manifest: {
       permissions: ["urlbar"],
     },
-    files: {
-      "icons/default.png": imageBuffer,
-      "icons/light.png": imageBuffer,
-      "icons/dark.png": imageBuffer,
-    },
     background() {
       browser.urlbar.contextualTip.set({
         icon: {
           defaultIcon: "icons/default.png",
           themeIcons: [
             {
               light: "icons/light.png",
               dark: "icons/dark.png",
@@ -686,23 +716,16 @@ const RESOLUTION_PREF = "layout.css.devP
 add_task(async function test_themeIcons_size_16() {
   let win = await BrowserTestUtils.openNewBrowserWindow();
 
   let ext = ExtensionTestUtils.loadExtension({
     isPrivileged: true,
     manifest: {
       permissions: ["urlbar"],
     },
-    files: {
-      "icons/default.png": imageBuffer,
-      "icons/light-16.png": imageBuffer,
-      "icons/dark-16.png": imageBuffer,
-      "icons/light-32.png": imageBuffer,
-      "icons/dark-32.png": imageBuffer,
-    },
     background() {
       browser.urlbar.contextualTip.set({
         icon: {
           defaultIcon: "icons/default.png",
           themeIcons: [
             {
               light: "icons/light-16.png",
               dark: "icons/dark-16.png",
@@ -803,23 +826,16 @@ add_task(async function test_themeIcons_
 add_task(async function test_themeIcons_size_32() {
   let win = await BrowserTestUtils.openNewBrowserWindow();
 
   let ext = ExtensionTestUtils.loadExtension({
     isPrivileged: true,
     manifest: {
       permissions: ["urlbar"],
     },
-    files: {
-      "icons/default.png": imageBuffer,
-      "icons/light-16.png": imageBuffer,
-      "icons/dark-16.png": imageBuffer,
-      "icons/light-32.png": imageBuffer,
-      "icons/dark-32.png": imageBuffer,
-    },
     background() {
       browser.urlbar.contextualTip.set({
         icon: {
           defaultIcon: "icons/default.png",
           themeIcons: [
             {
               light: "icons/light-16.png",
               dark: "icons/dark-16.png",