diff --git a/nbconvert/exporters/templateexporter.py b/nbconvert/exporters/templateexporter.py
index 2bf7001c1..ab922c0cc 100644
--- a/nbconvert/exporters/templateexporter.py
+++ b/nbconvert/exporters/templateexporter.py
@@ -213,16 +213,12 @@ def _template_file_changed(self, change):
         full_path = os.path.abspath(new)
         if os.path.isfile(full_path):
             directory, self.template_file = os.path.split(full_path)
+            self.extra_template_paths = [directory] + self.extra_template_paths
             # While not strictly an invalid template file name, the extension hints that there isn't a template directory involved
             if self.template_file.endswith('.tpl'):
                 warnings.warn(
                     f"5.x style template file passed '{new}'. Use --template-name for the template directory with a index.<ext>.j2 file and/or --template-file to denote a different template.",
                     DeprecationWarning)
-            if directory:
-                directory, self.template_name = os.path.split(directory)
-            if directory:
-                if os.path.isabs(directory):
-                    self.extra_template_basedirs = [directory]
 
     @default('template_file')
     def _template_file_default(self):
@@ -237,6 +233,7 @@ def _raw_template_changed(self, change):
 
     template_paths = List(['.']).tag(config=True, affects_environment=True)
     extra_template_basedirs = List().tag(config=True, affects_environment=True)
+    extra_template_paths = List([]).tag(config=True, affects_environment=True)
 
     @default('extra_template_basedirs')
     def _default_extra_template_basedirs(self):
@@ -549,7 +546,7 @@ def _template_paths(self, prune=True, root_dirs=None):
             except OSError:
                 pass
 
-        return additional_paths + paths
+        return self.extra_template_paths + additional_paths + paths
 
     def get_template_names(self):
         # finds a list of template names where each successive template name is the base template
diff --git a/nbconvert/exporters/tests/files/lablike.html.j2 b/nbconvert/exporters/tests/files/lablike.html.j2
new file mode 100644
index 000000000..ae01af1fd
--- /dev/null
+++ b/nbconvert/exporters/tests/files/lablike.html.j2
@@ -0,0 +1,4 @@
+{%- extends 'lab/index.html.j2' -%}
+{%- block body_footer -%}
+UNIQUE
+{%- endblock body_footer -%}
diff --git a/nbconvert/exporters/tests/test_templateexporter.py b/nbconvert/exporters/tests/test_templateexporter.py
index 4ab19c89a..e43171a82 100644
--- a/nbconvert/exporters/tests/test_templateexporter.py
+++ b/nbconvert/exporters/tests/test_templateexporter.py
@@ -272,6 +272,15 @@ def test_local_template_dir(self):
                 assert exporter.template_name == template
                 assert os.path.join(td, template) in exporter.template_paths
 
+    def test_local_template_file_extending_lab(self):
+        template_file = os.path.join(self._get_files_path(), 'lablike.html.j2')
+        exporter = HTMLExporter(template_file=template_file, template_name='lab')
+        nb = v4.new_notebook()
+        nb.cells.append(v4.new_code_cell("some_text"))
+        output, resources = exporter.from_notebook_node(nb)
+        assert "UNIQUE" in output
+
+
     def test_raw_template_attr(self):
         """
         Verify that you can assign a in memory template string by overwriting