diff --git a/src/extension.c b/src/extension.c
index f4313156b..b9589b153 100644
--- a/src/extension.c
+++ b/src/extension.c
@@ -251,8 +251,21 @@ ts_extension_invalidate(Oid relid)
 bool
 ts_extension_is_loaded(void)
 {
-	/* when restoring deactivate extension */
-	if (ts_guc_restoring)
+	elog(DEBUG1,
+		 "%s: timescaledb.restoring=%s, IsBinaryUpgrade=%s",
+		 __func__,
+		 ts_guc_restoring ? "on" : "off",
+		 IsBinaryUpgrade ? "yes" : "no");
+
+	/* When restoring deactivate extension.
+	 *
+	 * We are using IsBinaryUpgrade (and ts_guc_restoring).  If a user set
+	 * `ts_guc_restoring` for a database, it will be stored in
+	 * `pg_db_role_settings` and be included in a dump, which will cause
+	 * `pg_upgrade` to fail.
+	 *
+	 * See dumpDatabaseConfig in pg_dump.c. */
+	if (ts_guc_restoring || IsBinaryUpgrade)
 		return false;
 
 	if (EXTENSION_STATE_UNKNOWN == extstate || EXTENSION_STATE_TRANSITIONING == extstate)