diff --git a/packages/zowe-explorer/CHANGELOG.md b/packages/zowe-explorer/CHANGELOG.md
index 7758d94bd..ad0feee44 100644
--- a/packages/zowe-explorer/CHANGELOG.md
+++ b/packages/zowe-explorer/CHANGELOG.md
@@ -9,6 +9,7 @@ All notable changes to the "vscode-extension-for-zowe" extension will be documen
 ### Bug fixes
 
 - Fixed an issue where opening sequential data sets within favorited searches resulted in an error. [#3163](https://github.com/zowe/zowe-explorer-vscode/pull/3163)
+- Fixed an issue where automatic file extension detection identified file types incorrectly. [#3181](https://github.com/zowe/zowe-explorer-vscode/pull/3181)
 
 ## `3.0.0`
 
diff --git a/packages/zowe-explorer/__tests__/__unit__/trees/dataset/DatasetUtils.unit.test.ts b/packages/zowe-explorer/__tests__/__unit__/trees/dataset/DatasetUtils.unit.test.ts
index 7f79ff5e8..8fe99b035 100644
--- a/packages/zowe-explorer/__tests__/__unit__/trees/dataset/DatasetUtils.unit.test.ts
+++ b/packages/zowe-explorer/__tests__/__unit__/trees/dataset/DatasetUtils.unit.test.ts
@@ -34,6 +34,6 @@ describe("Dataset utils unit tests - function getExtension", () => {
         }
     });
     it("returns null if no language was detected", () => {
-        expect(DatasetUtils.getExtension("TEST.DS")).toBe(null);
+        expect(DatasetUtils.getExtension("TEST.DS.X")).toBe(null);
     });
 });
diff --git a/packages/zowe-explorer/src/trees/dataset/DatasetUtils.ts b/packages/zowe-explorer/src/trees/dataset/DatasetUtils.ts
index 1483cf89a..73444e362 100644
--- a/packages/zowe-explorer/src/trees/dataset/DatasetUtils.ts
+++ b/packages/zowe-explorer/src/trees/dataset/DatasetUtils.ts
@@ -75,14 +75,8 @@ export class DatasetUtils {
         const split = bracket > -1 ? label.substring(0, bracket).split(".", limit) : label.split(".", limit);
         for (let i = split.length - 1; i > 0; i--) {
             for (const [ext, matches] of DS_EXTENSION_MAP.entries()) {
-                for (const match of matches) {
-                    if (match instanceof RegExp) {
-                        if (match.test(split[i])) {
-                            return ext;
-                        }
-                    } else if (match.includes(split[i])) {
-                        return ext;
-                    }
+                if (matches.some((match) => (match instanceof RegExp ? match.test(split[i]) : match === split[i]))) {
+                    return ext;
                 }
             }
         }