--- a/jupyterlab_server/handlers.py
+++ b/jupyterlab_server/handlers.py
@@ -218,13 +218,17 @@
     # Handle federated lab extensions.
     labextensions_path = extension_app.extra_labextensions_path + extension_app.labextensions_path
     labextensions_url = ujoin(extension_app.labextensions_url, "(.*)")
-    handlers.append(
-        (
-            labextensions_url,
-            FileFindHandler,
-            {"path": labextensions_path, "no_cache_paths": no_cache_paths},
-        )
-    )
+    labextensions_kwargs: dict[str, Any] = {
+        "path": labextensions_path,
+        "no_cache_paths": no_cache_paths,
+    }
+    if hasattr(FileFindHandler, "follow_dir_symlinks"):
+        # `jupyter labextension develop` links the extension in from its source tree,
+        # and tornado >= 6.5.9 will not serve through such a link unless the handler
+        # asks for it. Only this route asks; /static/ and /custom/ stay strict.
+        # Older jupyter_server has no such option and leaves this out.
+        labextensions_kwargs["follow_dir_symlinks"] = True
+    handlers.append((labextensions_url, FileFindHandler, labextensions_kwargs))
 
     # Handle local settings.
     if extension_app.schemas_dir: