diff --git a/src/vs/editor/browser/services/codeEditorServiceImpl.ts b/src/vs/editor/browser/services/codeEditorServiceImpl.ts
index 9169bfce8f5..f5826bda6ed 100644
--- a/src/vs/editor/browser/services/codeEditorServiceImpl.ts
+++ b/src/vs/editor/browser/services/codeEditorServiceImpl.ts
@@ -323,8 +323,9 @@ class DecorationRenderHelper {
 	public static getCSSTextForModelDecorationGlyphMarginClassName(opts:IThemeDecorationRenderOptions): string {
 		let cssTextArr = [];
 
-		if (typeof opts.gutterIconPath !== 'undefined') {
-			cssTextArr.push(strings.format(this._CSS_MAP.gutterIconPath, URI.parse(opts.gutterIconPath).toString()));
+		if (typeof opts.gutterIconUrl !== 'undefined') {
+			// escape at least the single quote, see https://www.w3.org/TR/CSS1/#url
+			cssTextArr.push(strings.format(this._CSS_MAP.gutterIconPath, opts.gutterIconUrl.replace(/'/g, '\\\'')));
 			if (typeof opts.gutterIconSize !== 'undefined') {
 				cssTextArr.push(strings.format(this._CSS_MAP.gutterIconSize, opts.gutterIconSize));
 			}
diff --git a/src/vs/editor/common/editorCommon.ts b/src/vs/editor/common/editorCommon.ts
index 3dac506d42b..793c91b1c23 100644
--- a/src/vs/editor/common/editorCommon.ts
+++ b/src/vs/editor/common/editorCommon.ts
@@ -3788,7 +3788,7 @@ export interface IThemeDecorationRenderOptions {
 	color?: string;
 	letterSpacing?: string;
 
-	gutterIconPath?: string;
+	gutterIconUrl?: string;
 	gutterIconSize?: string;
 
 	overviewRulerColor?: string;
diff --git a/src/vs/editor/test/browser/services/decorationRenderOptions.test.ts b/src/vs/editor/test/browser/services/decorationRenderOptions.test.ts
index 3d009c2647f..c67cb1d53c0 100644
--- a/src/vs/editor/test/browser/services/decorationRenderOptions.test.ts
+++ b/src/vs/editor/test/browser/services/decorationRenderOptions.test.ts
@@ -11,7 +11,7 @@ import {IDecorationRenderOptions} from 'vs/editor/common/editorCommon';
 
 suite('Browser Services - EditorLayoutProvider', () => {
 	var options: IDecorationRenderOptions = {
-		gutterIconPath: 'https://github.com/Microsoft/vscode/blob/master/resources/linux/code.png',
+		gutterIconUrl: 'https://github.com/Microsoft/vscode/blob/master/resources/linux/code.png',
 		gutterIconSize: 'contain',
 		backgroundColor: 'red',
 		borderColor: 'yellow'
diff --git a/src/vs/vscode.d.ts b/src/vs/vscode.d.ts
index a737c7c87af..b3b5164c49f 100644
--- a/src/vs/vscode.d.ts
+++ b/src/vs/vscode.d.ts
@@ -782,9 +782,9 @@ declare namespace vscode {
 		letterSpacing?: string;
 
 		/**
-		 * An **absolute path** to an image to be rendered in the gutterIconPath.
+		 * An **absolute path** to an image or an URI to be rendered in the gutter.
 		 */
-		gutterIconPath?: string;
+		gutterIconPath?: string | Uri;
 
 		/**
 		 * Specifies the size of the gutter icon.
diff --git a/src/vs/workbench/api/node/extHostEditors.ts b/src/vs/workbench/api/node/extHostEditors.ts
index 98e20ebfd63..500276ded61 100644
--- a/src/vs/workbench/api/node/extHostEditors.ts
+++ b/src/vs/workbench/api/node/extHostEditors.ts
@@ -163,7 +163,7 @@ class TextEditorDecorationType implements vscode.TextEditorDecorationType {
 	constructor(proxy: MainThreadEditorsShape, options: vscode.DecorationRenderOptions) {
 		this.key = TextEditorDecorationType._Keys.nextId();
 		this._proxy = proxy;
-		this._proxy.$registerTextEditorDecorationType(this.key, options);
+		this._proxy.$registerTextEditorDecorationType(this.key, TypeConverters.fromDecorationRenderOptions(options));
 	}
 
 	public dispose(): void {
diff --git a/src/vs/workbench/api/node/extHostTypeConverters.ts b/src/vs/workbench/api/node/extHostTypeConverters.ts
index 9aebafecfb2..7d2bc3ce463 100644
--- a/src/vs/workbench/api/node/extHostTypeConverters.ts
+++ b/src/vs/workbench/api/node/extHostTypeConverters.ts
@@ -12,7 +12,7 @@ import { stringDiff } from 'vs/base/common/diff/diff';
 import * as modes from 'vs/editor/common/modes';
 import * as types from './extHostTypes';
 import { Position as EditorPosition } from 'vs/platform/editor/common/editor';
-import { IPosition, ISelection, IRange, IDecorationOptions, ISingleEditOperation } from 'vs/editor/common/editorCommon';
+import { IPosition, ISelection, IRange, IDecorationOptions, IDecorationRenderOptions, ISingleEditOperation } from 'vs/editor/common/editorCommon';
 import { IWorkspaceSymbol } from 'vs/workbench/parts/search/common/search';
 import * as vscode from 'vscode';
 import URI from 'vs/base/common/uri';
@@ -155,6 +155,43 @@ export function fromRangeOrRangeWithMessage(ranges: vscode.Range[] | vscode.Deco
 	}
 }
 
+export function fromDecorationRenderOptions(options: vscode.DecorationRenderOptions): IDecorationRenderOptions {
+
+	const {
+		after,
+		backgroundColor, before, border, borderColor, borderRadius, borderSpacing, borderStyle, borderWidth,
+		color, cursor,
+		dark,
+		gutterIconPath, gutterIconSize,
+		isWholeLine,
+		letterSpacing, light,
+		outline, outlineColor, outlineStyle, outlineWidth, overviewRulerColor, overviewRulerLane,
+		textDecoration
+	} = options;
+
+	// properly convert the gutterIconPath to an url
+	let gutterIconUrl: string;
+	if (typeof gutterIconPath === 'string') {
+		gutterIconUrl = URI.file(gutterIconPath).toString();
+	} else if (gutterIconPath) {
+		// don't escape scheme-sensitive and there better don't
+		// escape at all, it would break http/data/etc links
+		gutterIconUrl = gutterIconPath.toString(true);
+	}
+
+	return {
+		after,
+		backgroundColor, before, border, borderColor, borderRadius, borderSpacing, borderStyle, borderWidth,
+		color, cursor,
+		dark,
+		gutterIconUrl, gutterIconSize,
+		isWholeLine,
+		letterSpacing, light,
+		outline, outlineColor, outlineStyle, outlineWidth, overviewRulerColor, overviewRulerLane,
+		textDecoration
+	};
+}
+
 export const TextEdit = {
 
 	minimalEditOperations(edits: vscode.TextEdit[], document: vscode.TextDocument, beforeDocumentVersion: number): ISingleEditOperation[] {