diff --git a/stix2/observables.py b/stix2/observables.py
index 7a92813..137b388 100644
--- a/stix2/observables.py
+++ b/stix2/observables.py
@@ -916,7 +916,7 @@ def CustomExtension(observable=None, type='x-custom-observable', properties=None
                 'extensions': ExtensionsProperty(enclosing_type=_type),
             }
 
-            if not isinstance(properties, dict):
+            if not isinstance(properties, dict) or not properties:
                 raise ValueError("'properties' must be a dict!")
 
             _properties.update(properties)
diff --git a/stix2/test/test_custom.py b/stix2/test/test_custom.py
index 10baf7b..77598ca 100644
--- a/stix2/test/test_custom.py
+++ b/stix2/test/test_custom.py
@@ -366,7 +366,15 @@ def test_custom_extension_invalid_observable():
 
 def test_custom_extension_no_properties():
     with pytest.raises(ValueError) as excinfo:
-        @stix2.observables.CustomExtension(stix2.DomainName, 'x-new-ext', None)
+        @stix2.observables.CustomExtension(stix2.DomainName, 'x-new-ext2', None)
+        class BarExtension():
+            pass
+    assert "'properties' must be a dict!" in str(excinfo.value)
+
+
+def test_custom_extension_empty_properties():
+    with pytest.raises(ValueError) as excinfo:
+        @stix2.observables.CustomExtension(stix2.DomainName, 'x-new-ext2', {})
         class BarExtension():
             pass
     assert "'properties' must be a dict!" in str(excinfo.value)